Most of the founders and CEOs of startups don’t believe in the need for a CFO and the general thought process is to take support if need be during fund raise from some one from their known circle as the startup ecosystem is well connected and try and raise the funds by using their network to get introduced and also for IM preparation etc. When it comes to finance for a startup, founders focus on more pressing needs: What’s my burn rate? How long is my runway? How does our annual recurring revenue (ARR) look? How much more money do we need?
From my personal experience after meeting many founders it isn’t until a startup reaches some success — systematic product launches, consistent revenue that the thought of having a CFO comes into the mind . But the pressure from the investors of providing regular MIS and the difficulties in getting the data because of non structural accounting , getting multiple tax notices because of wrong returns or other non compliances and inability of the current team to accurately project thee cash flow and manage the actual cash flow by following up for collection and managing vendors etc. often results into all such pressures mounting on to the founders and they have to do al this instead of managing and establishing their business which is their core and most important job.
As far as large organizations are concerned they always have a CFO but generally they have a controller , FPNA Head , Tax Head etc who are capable of running the show efficiently for stop gap and therefore even if there is no CFO for an interim period the regular work specially the process driven work goes on but in start ups this expertise at second level is not there which makes the role of CFO very important. While I agree that the CFO and other CXOs should be hired only when the business has grown to a considerable volumes but the best way to manage their finances in the most efficient and economical way is to utilize the service of CFOs who have wide experience of 15 to 20 years in large corporates and work as freelancers on part time basis with SMEs to set up their processes and systems and also help with funding , tax policies and work with founders in developing strategy .
Generally Part Time CFOs work with the organization till it reaches a level of maturity and then if the founders want also help in identifying a good CFO to takeover as a full time CFO for the company. This process ensures that the systems are build from Day 1 so that it can be replicated for growth and expansion in no time and also the Fund Management including Fund Raising is being worked out and planned in advance so that the promoters know about the same and they can work with the CFO or otherwise to raise the same. The teams also get a proper hand holding and training which helps them performing their task correctly and efficiently and the founders also get a sounding board / adviser with whom they can discuss various ideas and try and do the SWOT and business case .
Contributed by: Mr. Manesh Saroj Jhunjhunwala, Lead CFO team member of CFO4SME. He can be reached at 9323432262 or firstname.lastname@example.org
Every year, June 5 is celebrated as World Environment Day with a new theme. This year the theme is “Connecting People to Nature“. This theme implores us to go outdoors and appreciate nature’s beauty and importance, and take forward the call to protect the planet Earth. Last year’s theme, “Zero Tolerance for the Illegal Wildlife trade” encouraged a fight against wildlife crime.
The day is celebrated to raise global awareness about the significance of a healthy environment and to solve various environmental issues by implementing some actions to protect nature and Earth, leading to a positive and healthy environment for all. World Environment Day is run by the United Nations Environment Programme (UNEP).
Here is what you can do on World Environment Day: