If you’ve ever found yourself wondering whether your startup needs a CFO but can’t justify the cost of hiring one full-time, you’re not alone. Many founders reach that critical inflection point when the business has outgrown hacked together spreadsheets and needs strategic financial guidance, but isn’t quite ready to take on the salary of a full-time executive. And this is when finding someone who provides fractional CFO services can come to the rescue.
If you are not sure what a fractional CFO is or what the costs of hiring a fractional CFO are, then this blog is for you. We will break down fractional CFO fees, services and whether or not hiring one makes sense for your business.
While you can learn more about the specific details of what a fractional CFO does here, essentially, a fractional CFO is a part-time or outsourced Chief Financial Officer that helps with strategic financial decisions, for example, with KPIs or metrics, cash flow or fundraising. CFO’s handle financial modeling for startups and other businesses, pitch decks, and due diligence, while ensuring smooth investor relations and board reporting.
Whilst all of this may sound great, how much should you expect to spend when hiring a CFO? How much does a fractional CFO cost?
There are several factors that influence fractional CFO pricing, the costs usually vary depending on the scope of work, the CFO’s experience, as well as your industry. That being said, here’s a general breakdown:
Fractional CFO’s for startups and small businesses in the UK usually charge £1,000 to £1,500 + VAT as a daily rate or £2,000 to £8,000 + VAT as a monthly retainer. Geography is a factor that influences prices as well, for example, while in the UK monthly retainer is £2,000 to 8,000, in the US prices can vary from $3000 to $10,000 per month. There is also an option to discuss custom pricing based on your goals – for example, when your goal is a fundraising sprint or M&A preparation, you might be able to structure a different fee with your CFO service based on the scope of the project.
Some fractional CFOs work one or two days a week, others are on-call only during critical business periods. The right setup depends on your stage, structure, and specific pain points, which are critical to discuss at the initial stages of engaging with a fractional CFO.
Here at EmergeOne, our experience comes specifically from placing the right fractional CFO from our team in your business – we specialise in VC-backed startups and scale-ups from seed to Series B. We are trusted by VC’s, which you can see first hand by checking out our podcast – Nothing Ventured – approximately 700,000 monthly listeners across YouTube, Spotify and other platforms where our founder Aarish Shah connects with his guests, talking about the usual challenges VC-backed startups face when it comes to financial decisions for small businesses and relationships with investors.
Since launching, we have successfully implemented fractional CFO support in dozens of businesses, some examples of which include AutoGen A.I, BioCorteX, ThinkSono, and GoInstore (whom our team took through a 9 figure exit) as well as many more. These businesses have found real value in using our fractional CFO services and found the cost difference between the fractional CFO and full-time CFO hugely beneficial from a VC-backed start-up perspective, but especially – with our experience working with scaling businesses. Many have mentioned our deep knowledge in the area and the way in which we care deeply about the companies we work with, priding ourselves on bringing strategic finance to teams, not just helping out with spreadsheets.
If you want to learn more about how we can help your business, do not hesitate to get in touch by either calling, emailing us or filling out our contact form here. Let’s see how we can help you grow your business better!
