When should a growing company hire its first CFO?

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A growing start-up has a lot on its plate—from raising funds and building the back office to designing and launching products and services. At the beginning, the owner may handle all these activities personally and gradually hire additional staff to help.

Why is understanding business finance so important? Without knowing the numbers, you wouldn't know if your venture could be financially successful, whether things are on track, or whether an initiative is worth pursuing. That said, when should a business owner stop acting as the finance executive and hire the first CFO?

Hiring is always a judgment call—though sometimes the evidence is clear enough to make a swift decision. Hiring a full-time CFO is different, primarily because it doesn't come cheap.

Business owners can consider engaging a fractional CFO first to consult on executive-level finance matters, balancing the need for finance leadership with cost optimization. Once the business finances have reached a certain level of stability and sustainability, business owners can think about hiring their first CFO.

If you're navigating growth and need finance function guidance, contact VMC.

VMC's views are general insights—not one-size-fits-all advice. Every company's situation is unique.