Posted: September 03, 2010

Six key questions to ask before hiring a CFO: part 3

The last three

By Marty Koenig and Keith McAslan

(Editor's note: This is the last of three parts. Read part 1 and part 2)

4. How will you proactively communicate with me on an ongoing basis?

Unfortunately, many CFOs do a horrible job of proactively communicating with their clients on an ongoing basis. The general thinking in the financial industry is that financial work is back office number crunching.

You want to look for a CFO who will proactively communicate with you regularly so you know what's going on in your business and you can go be the entrepreneur who focuses their time on company growth. If you are considering hiring a CFO who does not proactively communicate with his or her clients, think again. This CFO might be stuck in an old, outdated mindset that won't serve your needs in the best possible way.

5. Can I call about any financial problem I have or just about matters you have experience with?

In today's complex world, CFOs must keep up with a lot of changes. Solopreneur CFOs can only provide value from their own, limited experience. On the other hand, a CFO that has many other CFOs in their practice and their networks leverages the collective knowledge of hundreds or thousands of years experience. Having a massive amount of collective experience means these CFOs have seen just about everything there is to see and have been down the road many times.

We like to say that the novice white water rafter cannot see the big rock just under the water six turns ahead. The CFO that collaborates with his/her partners in a larger practice can see the rock because he/she has been down that river dozens of time. And he/she can help steer you away from the rock and keep you from wrecking the boat or getting injured.

Look for a CFO who has an ongoing service program or membership program in place so that you can pay a low monthly fee and be able to call with all of your legal and financial questions without being charged hourly for the consultation. And be sure that when you call, you'll get to schedule time to talk with your own personal CFO who you know and trust and not get passed off to one of any number of CFOs who happen to work in the office and may not know who you are or what's important to you.

6. What happens when I am ready to retire or transition the business?

This is a critically important question to ask yourself when beginning a relationship and a question that is far too often overlooked. Many business owners have not considered their ultimate exit strategy, whether it be to sell the business to retire, transition the business to a family member or merge with another company. The CFO who has worked with you as a trusted advisor is in the best position to provide sound financial advice to prepare the company in advance to ensure the highest enterprise value upon exit.

When you ask these 6 questions before hiring an on-demand CFO, you will know you are engaging a trusted advisor who will help you to make the very best decisions for your business, your employees and your family.

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