A founder at $1M to $5M in revenue has three ways to get better at finance. Hire a fractional CFO to do it. Get coached to do it yourself. Or combine the two. The right answer depends on how complex your money is and how much of it you want to understand personally.
The running example
Take a founder with a $2.5M services business, twelve employees, a good bookkeeper on QuickBooks and no debt. Cash has been tight twice this year. The founder reads the P&L every month but cannot say which clients are profitable or how many months of runway are left. Neither option is obviously right here, which is why it is a useful case.
When to hire a fractional CFO
Hire when the finance work has outside deadlines or outside readers. A lender with covenants, an investor who expects a board pack, a raise in the next 12 months, a second entity, inventory, or a sale on the horizon all qualify. These are tasks where an error is costly and expertise is hard to fake. A fractional CFO at this size typically costs $3,000 to $6,000 a month. For our founder, the trigger would be signing a $500,000 line of credit or deciding to raise.
When to get coached
Get coached when the books are simple and the gap is the founder’s own understanding. Finance coaching and founder finance courses teach you to read the three statements, build a 13-week cash forecast, price for margin and run a monthly review with your bookkeeper. Prices on the programs listed here range from free model templates to a few hundred dollars an hour for one-to-one coaching, with group programs and courses in between. For our founder, coaching is the right first step: the problem is visibility, and a cash forecast the founder built is one they will actually update.
Coaching suits founders who like numbers, have the time to practice and expect to stay hands-on with finance for years. It suits less well a founder who will delegate finance permanently once the company can afford it.
When to do both
Both make sense in two situations. The first is a founder who hires a fractional CFO and wants to learn from them. Many fractional CFOs teach as they go; ask for it explicitly, and budget an extra hour a week for the founder’s time. The second is a founder who is not ready to spend $5,000 a month but expects to be soon. Coaching now means the founder will be a better buyer of CFO services later, able to tell a good forecast from a confident one.
A simple test
Write down the three finance decisions you will make in the next six months. If you can name them and they are mostly internal, such as pricing, hiring or which clients to drop, start with coaching. If they involve a bank, an investor or a buyer, hire a fractional CFO. If you cannot name them at all, that is the first thing a coach or a CFO will help you do.
The fractional CFOs and the finance coaching programs on this site are listed side by side for that reason.