Leverage a Part-Time CFO to Manage These 3 Critical Business Risks
As a business owner, you’re facing various business risks on a daily basis. If 2020 has taught us anything, it’s the importance of mitigating risk and being ready to pivot your strategy at any moment. How set up is your back-office team to help guide you? One of the pillars of a CFO’s responsibilities is risk management. If you’re not ready to hire a full-time financial team, consider part-time team members. Your Part-Time CFO will be the first line of defense in establishing and maintaining risk management.
When thinking about employee risk, there are two sides to think about: retention and engagement. Every business has a percentage of churn amongst their employees. For a successful business, you’ll want to keep your top employees happy and the churn percentage to remain low.
Studies have shown, people are leaving companies for more reasons than just more money. So, what do they need from their employer? Provide your employees with clearly defined career development paths. As a young person entering the workforce, allow them to fully understand all their options. Second, develop standardized check-ins with your direct reports to keep communication lines open at all times. Holding a performance review once a year isn’t enough. Be sure you are checking-in on a monthly, or even weekly, basis.
Employees with high engagement are much more productive than those with low engagement. Highly engaged employees feel a commitment and connection with the company and its future. How can you help employee engagement? Provide them with more responsibilities, let them gain new experiences, and make them aware of opportunities beyond their own department.
Risk of Change
Change is all around. Your industry may change, your customers may have a change of heart, and our economy is uncertain. Develop a process to stay in tune with changes in the marketplace, as well as continuously evaluating trends in your sales. How can you amplify a good sale result? What innovative changes can you make to stay relevant with customers?
A major part of this is reviewing multiple financial scenarios upfront, to determine the success of challenges you might face. Planning out these options before things become critical allows you to make rational decisions.
There’s always a concern about who is going to run the company when the president retires. But beyond that, what happens when another executive decides to leave? The biggest concern is around the transfer of knowledge, determining who the leaders should be, and how to pass on the same passion around the vision and mission for your organization. Delegation of responsibilities and leadership training programs can be put into place well before someone decides to leave the company.
These are only three of the many types of risks business owners can face, however with careful planning and the right expertise on-hand, you can create opportunities to minimize those risks, and even improve the success of your company.
Part Time CFO Services works directly with business owners to improve a company’s long-term financial health with part-time financial services. Click here to learn more about how our team of experts can help mitigate risk for your business.