Could a Virtual CFO Benefit Your Restaurant Business?

Could a Virtual CFO Benefit Your Restaurant Business?

You’ve grown your restaurant business, but you’ve reached a point where you’re no longer satisfied with the quality of financial insight and expertise you have at high-level operations. It begs the question:

Would it be worthwhile for your business to bring on a virtual CFO?

Do you need a CFO at all?

To determine the answer, let’s take a step back.

The Context: The Value of CFOs

“Do I need a CFO?” is a question that would rarely have been asked in any capacity before the 1970s. That’s when the role first rose to prominence as a response to the increasingly complex financial and regulatory logistics faced by larger corporations.

In the ensuing decades the position gained prevalence almost exponentially, as visible in the chart above; by the 2000s, the vast majority of firms employed a CFO. The role grew, too, from origins in data translation to direct, high-level input into overall business strategy by the close of the century.

Then the internet was created, and the CFO role changed again to enable accommodate virtual performance. It’s no longer necessary for CFOs to work on-site, or even to be employed in-house. Insights and expertise can be shared and managed virtually.

For all of its evolutions, though, the value of the CFO position, virtual or in-house, still lies in its ability to provide financial insight that informs organizational decision-making.

So, to answer our question: if your business needs better financial insight, you may need a CFO. Still not sure whether that applies to you? Let’s unpack the value of financial insight to find out.

Does your restaurant business deal with complex financial logistics?

For modern restaurant businesses, the most basic rationale for using a virtual CFO service is the same rationale that spurred corporations to hire CFOs in the 1970s: CFOs are a way to successfully navigate financial complexity.

As businesses grow, financials get more complex – there’s simply more going on. That’s true across industries. Growing businesses that could once be serviced by a single bookkeeper or a general accounting firm may begin to require more advanced support and a higher level of expertise.

For restaurant businesses, financial complexity can also increase as a consequence of the business model. Many restaurants are highly leveraged, with significant amounts of debt, and, accordingly, accounting must be conformed around bank requirements.

A CFO can be helpful in managing compliance to regulations – which is important, considering a lack of compliance almost always leads businesses into a death spiral.

Could your restaurant business benefit from support in negotiation?

As businesses grow, so do the stakes of negotiations.

Vendors, for instance, are engaged in bigger and more impactful contracts. The capacity for loans and debt increases. And, often, equity questions and opportunities arise.

All of these situations require financial negotiation skills that many restaurant business owners don’t specialize in. It’s one thing to be familiar with the idea of private equity firms; it’s another thing entirely to negotiate equity stakes when sitting across the table from a potential partner.

In cases like these, it’s incredibly helpful to have backup in the form of an experienced CFO – somebody who understands the fine print and can stand up for your business’ interests to make sure that the best deals are being made (and the wrong ones are prevented).

Could your business benefit from deeper financial strategy?

Finally, in addition to handling complex logistics and assisting in negotiations, CFOs can and should offer deep strategic insight that impacts business decisions.

For instance, a CFO can advise strategic paths to reduce debt, propose operational efficiencies, or prevent against equity decisions that could be unwise. In this role, in addition to illuminating financial context, CFOs also help to illuminate the best path forward.

The Answer

If you couldn’t benefit from deeper financial insight, you may not need a CFO.

However, if your organization could benefit from financial insight that drives decision-making in any of the three contexts listed above, bringing on a CFO is a good choice.

So, how do you choose between an in-house or a virtual CFO?

Virtual CFOs offer the added benefits of increased flexibility and reduced costs. For many restaurant businesses, employing a full-time, in-house CFO simply doesn’t make sense – but missing out on top-level financial insight doesn’t, either. Choosing a virtual CFO is the most efficient way to access high-level financial insight at an efficient cost. This may even take the form of project-based consulting.

When choosing virtual, though, it’s important to choose a solution that can deliver the expertise required.

Your virtual CFO should:

• Be an industry veteran, with a background in high-level finance. If an organization promises “CFO services” without staffing anyone of comparable experience, they probably won’t be able to provide a valuable level of expertise.
• Be calm and reasonable, but also be able to lay down the law. You want a CFO who can play the financial game and win to your advantage.

Boost Your Restaurant Business with Virtual CFO Services

At Global Shared Services, we’ve found that access to top-level financial expertise is one of the major differentiators that separates the businesses that succeed from the ones that don’t. Our mission is to empower restaurant and technology firms with that expertise. That’s why we’re proud to offer virtual CFO services in addition to the general F&A services we also provide.

With a team built on years of top-level, industry-relevant expertise, when you choose our virtual CFO services you’ll get access to powerful financial insight that can drive your business forward – plus our industry leading restaurant accounting services as needed.

Want to learn more about our virtual CFO services? Let’s talk.