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A business of a certain size cannot function without a CFO. The financial processes become too complex, and there’s even a reputational hit that you’ll take for being a company without a CFO. How do you find a CFO?
It’s even more complex than you think because being a CFO in healthcare and being a CFO in the food industry are not the same. Neither is being a CFO of a 1,000-employee company and a CFO of a team consisting of 200 people.
In other words, aside from just finding a CFO, what you need is to find the right person for your specific enterprise and industry.
1. What Are You Expecting from Your CFO?
The responsibilities of a CFO are numerous, and they depend on the field. They’re one of the main examples of why you want someone with sector-specific expertise on your team.
For instance, one of the main responsibilities of a CFO is fundraising. Well, in a field like IT, fundraising sometimes involves managing a crowdfunding campaign, which is a lot different than sitting behind the negotiating table with venture capitalists or angel investors.
Then, there are so many complex financial operations where industry-specific experience is important. Coordinating sales in a company that produces exercise equipment and chess pieces (where all or most purchases are one-time) is much different than a SaaS model.
The third major responsibility to consider is growth/expansion. You see when your income starts growing, you might climb into the next tax bracket. It’s not just your income that will increase but your expenses, as well.
Also, even if they’re ready for the list of tasks that you have for them now, what happens when your enterprise expands and your business model evolves into something different? You want someone who has been through this. Even if they weren’t CFO in their last enterprise, you want someone who was high enough and close enough to see this first-hand.
2. Looking in the Right Place
Where do you find a CFO with the right sector-specific experience? The shortest answer would be that you conduct a CFO executive search on the adequate platform. Going through a specialized agency is your best bet, even if it ends up costing you a small fee. Just think about it: you’re picking one of the highest-ranked executives in your enterprise. So what if the hiring process ends up costing you a bit more?
You can also open up a job posting on platforms like LinkedIn, Jobrack, etc. The thing is that everyone is there. Even if you don’t find someone via this platform, the person that you end up hiring definitely has a LinkedIn. Provided that you were very specific when writing a job description and making a posting, chances are that they’ll see it and find you. It only takes you a few minutes to write all your requirements in a post (you probably already have them somewhere).
There’s one more way to find the right person. Namely, you can look for a CFO at other companies. Just keep in mind that if they’re in a firm that’s a direct competitor, they might have signed an NDA, which will prevent them from working in a business like yours for a year or two after quitting their previous job.
3. Qualities that You’re Looking For
A lot of entrepreneurs allow themselves to get pigeonholed into focusing on work history and experience. Those are, beyond doubt, the most important things to look at, but they can’t be the only thing that you base your decision on.
Instead, you need someone with the right set of traits and characteristics. First, you need someone with the right strategic vision. You need someone who understands where you want your company to be in a year and in 10 years and someone who will help work with you to make that happen.
Second, you want someone who is great at risk management. Every idea that you have will carry with it a potential risk and a potential reward. You need someone who can tell you if the risk is worth the reward. The way they do this is through astute observation and careful projection. They analyze the best-case scenario, the worst-case scenario, and the most likely scenario. This is the so-called three-point estimation.
Also, keep in mind that this is a position of a high executive so make sure to find someone who can be effective in a leadership position.
Lastly, you need someone who can adapt to all the needs of your business. Their role is a dynamic one, and you want someone who will be there for the long term. Changing a CFO is a major obstacle on the path of any enterprise, so look for someone you can imagine having a future in your company.
4. Define Unique Requirements
You must start by getting familiar with the role of a CFO because you have to know what goes into the job description and what doesn’t. The role of a CFO is not one-size-fits-all. It differs from one industry to another and from one business size to another.
Sometimes, you’ll have to define your own unique requirements. What is it that they’ll have to do in your business that they didn’t have to do at their current job? Tell them in advance, and ask them if they’re fine with it.
The reason for this transparency is the fact that you’re hiring them for the long run. They’re not just some random entry-level employee. Giving them a random duty that they never agreed to and that is not implied by their position can result in them leaving. This would be a serious problem, so make sure that you’re as transparent as possible.
Also, be realistic. They probably have too much on their plate by default, which means that you can’t just senselessly add more tasks without any decline in performance or additional job dissatisfaction. In other words, before adding this requirement, consult someone with experience in the field and ask for their opinion.
Ideally, you would find someone with experience in your industry and someone who’s worked in a company that’s of a similar size to yours. Still, don’t just focus on this one thing. Check if they have the qualities that you’re looking for and be upfront about special requirements you may have.