As a startup founder or small business owner, you get used to wearing many hats. But as your business gains traction, there comes a time when you need to delegate responsibilities and lean on experts for insights and strategy.
When it comes to finance, if you want to grow faster, avoid costly mistakes, and secure investment, you may need to toss one of those hats to a Chief Financial Officer (CFO).
However, the cost of hiring a full-time CFO can range from £150,000 to £200,000 a year — and that’s before including benefits, bonuses, and equity. For many bootstrapped startups and SMEs operating with razor-thin margins, that sort of salary just isn’t feasible.
That’s why hiring a virtual CFO has become a popular alternative. You get access to strategic financial expertise without the high costs and overheads of a full-time hire. In fact, you can hire a virtual CFO from as little as £100/hour.
In this post, we explain how much a virtual CFO costs, what affects the price, and how to maximise the return on investment (ROI) of hiring one. But first, a quick overview.
A virtual CFO is a remote, strategic hire who typically works on a part-time or fractional basis.
But why hire a CFO?
The main benefit of a CFO who works remotely on a reduced basis is price. A virtual CFO is cheaper than a full-time CFO (which we’ll explain in more detail in the next section). However, there are a few other benefits:
The cost of hiring a virtual CFO can range from £100 per hour to £15,000 per month, depending on the contract, scope of work, and expected outcomes.
This is still significantly less than hiring a full-time CFO, which can run to £200,000 a year (before benefits, bonuses, and equity).
When it comes to calculating costs, the first thing to decide is how you want to structure the engagement. Here are the standard pricing models used by virtual CFOs (individuals and firms), the associated fees, and what’s typically included in each tier:
Fee range: £100 - £350/hour
What's included:
Fee range: £900 - £2,500/day
What's included:
Fee range: £2,500 - £15,000/month
What's included:
Fee range: £1,500 - £8,000+
What's included:
*Note that high-profile projects or the need for specialisms, such as mergers, acquisitions, or exits, may command higher fees.
The cost of hiring a virtual CFO will largely depend on your company’s growth stage and the scope of responsibilities you need handled — but there are a few more factors to keep in mind. Consider the following when deciding what you require from a virtual CFO:
Are you a pre-seed startup looking for basic cash flow guidance, or a Series A company preparing for board meetings and investor scrutiny? Mature SMEs looking to scale often require more hours and deeper involvement than a company at the start of its journey.
Simple forecasting or budgeting is one thing. Fundraising support, M&A prep, or financial due diligence is another. The broader and more strategic the scope, the higher the fee.
CFOs working in SaaS, fintech, or e-commerce often deal with more complex metrics and stricter regulatory requirements, which can increase both the time required and the overall cost.
Will you need weekly meetings, in-depth reports, and active planning, or just quarterly reviews and light oversight? Pricing often reflects the level of involvement and output required.
If your business operates in different markets and time zones, a UK-based virtual CFO will likely charge more to cover late-night calls or meetings with US investors, and vice versa. Consider aligning your hire with the timezone that requires the most focus.
A virtual CFO is an investment designed to drive your business to the next level. Whether it’s a short-term engagement to help you get a grip on cash flow, or something longer-term as you prep for a funding round or an acquisition, the return on your investment will depend on how you manage the hire (both before and during the engagement).
Here are a few ways you can maximise the ROI on a virtual CFO:
Before you start searching for a virtual CFO, make sure you have an idea of what you want to accomplish. Do you need better cash visibility? Fundraising support? A pricing model to break into a new market? Starting with clear goals will help your CFO focus on high-impact priorities from the outset.
It can be tempting to overbuy and opt for a retainer out of the gate, but you don’t want to pay a virtual CFO to twiddle their thumbs. Be honest about what you currently require to avoid scope creep.
For example, if you’re pre-seed, you may only need a few hours a month to help with cash flow or budgets. Meanwhile, an established Series A company might benefit from a more regular weekly arrangement to help with forecasting, strategy, or investor relations.
The last thing you want is your virtual CFO to spend time (and money) chasing down facts and figures about your business. As part of their onboarding, give them access to real-time financial dashboards, reporting platforms, cash management tools, and any other resources you have that might help them uncover insights and drive strategy.
While a remote hire, like a virtual CFO, can feel distant, you must avoid treating them as just a service provider. Instead, think of them as a strategic advisor and keep them informed about your business decisions, upcoming hires, product or service changes, and potential opportunities or challenges.
The more context you can provide to your CFO, the better insights and strategy they can offer.
If you don’t feel ready to commit to a long-term arrangement like a monthly retainer, you can always start with a short, fixed-fee project. Working on a pricing model or investor pack together can give you a low-risk opportunity to test the relationship.
Now that you know how much a virtual CFO costs and what affects the price, the next step is to find the right one for your situation. Here are a few ideas to inspire your search, or you can read more about how to find a part-time CFO in this article.
The cost of a virtual CFO depends on the length of engagement, the scope of responsibilities, the complexity of your industry, and your desired outcomes. Short-term arrangements can start from £100 per hour, while longer-term retainers can cost anywhere from £2,500 to £15,000 a month.
The clear benefit of hiring a virtual CFO is that you get expert-level strategy and insight without the high costs of a full-time hire. However, you still need oversight when it comes to business cash.
Insignis is an award-winning savings platform that gives you (and your virtual CFO) complete clarity as you grow. Learn more here.
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