In this episode of Portus Wealth Advisors' Charting Opportunities, Greg Brown of Cardinal Finance shares his extensive experience on the role and value of a Fractional Chief Financial Officer (CFO) for growing businesses. He delves into when it makes sense for a company to engage a Fractional CFO, what business owners should expect from such a relationship, and how to identify the right fit for their specific needs.
Greg Brown explains common red flags indicating a business might need a CFO, such as being consistently profitable but cash-poor, facing indecision due to a lack of financial data, or business owners losing sleep over financial uncertainties. He outlines his approach to initial client interactions, often starting with a specific project to understand the business and build rapport, rather than relying on checklists. Brown also discusses typical referral patterns from CPAs and banks, often triggered by growth challenges or the need for more sophisticated financial oversight to make key business decisions.
A significant portion of the discussion focuses on the pros and cons of hiring a Fractional CFO versus a full-time CFO. Brown highlights advantages of fractional support, including cost-effectiveness, access to higher-level expertise than a company might otherwise afford, and a broader perspective gained from working with multiple clients. He also addresses trade-offs, such as potential limitations on priority setting, bandwidth for very large projects, and the understanding that a fractional role may be a stepping stone to an eventual full-time hire as the business scales. Key attributes for a successful Fractional CFO were emphasized, including an accounting-oriented background, being intentionally in the fractional market (not just between full-time jobs), and having experience relevant to the client's current stage and future aspirations, such as growth or an exit strategy.
Greg provided practical insights into engagement structures, typically month-to-month, allowing flexibility for both parties. He shared examples of successful outcomes, like guiding a company from inception to a $60 million sale and helping businesses navigate financial distress or better understand their core business model and profitability drivers. Conversely, he also discussed scenarios where engagements don't work, often due to misaligned expectations, an unwillingness from the business to change, or foundational issues a CFO alone cannot fix. He stressed the importance of the business owner's commitment and clear communication, advising business owners to seek a Fractional CFO who not only has the technical skills but also makes them feel more at ease and brings a sense of calm to their financial oversight.
A HUGE THANK YOU to Greg Brown! HIs detailed explanation and real-world examples offer invaluable guidance for business owners considering how to strategically enhance their financial leadership and decision-making.
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Greg Brown - The Role of a Fractional CFO | Charting Opportunities
ORIGINAL MEDIA SOURCE(S):
Originally Recorded April 9, 2025
Charting Opportunities: Season 1, Episode 7
Images courtesy of: Greg Brown and Cardinal Finance