How a Fractional CFO Can Transform Your eCommerce Startup

Many eComm startups don’t need a full-time CFO in-house, especially early on in their tenure when resources are limited. Furthermore, it can be expensive to hire a full-time financial professional with the experience you need to facilitate growth within your eComm startup, not to mention having to also account for healthcare and other benefits. Conversely, when you work with a fractional CFO, you’re only paying for the services you need when you need them.

Think of a fractional CFO as a part-time CFO that exists externally of your startup and works with you on a contract basis. Like a full-time, in-house CFO, fractional CFOs provide strategic financial guidance and expertise, but at a fraction of the cost.

Understanding the Role of a Fractional CFO in eCommerce

Partnering with a fractional CFO allows your eComm startup access to high-level financial expertise but at a lower cost compared to hiring someone to work in-house. Most fractional CFOs will support your business for a set amount of hours per week according to the terms of your partnership. Some of the key responsibilities may include:

• Strategic financial oversight
• Budgeting
• Financial forecasting
• Financial planning
• Cash flow management
• Risk management
• Assisting leadership with strategic planning and decision-making

Key Benefits of Hiring a Fractional CFO for Your eCommerce Startup

There are several benefits of partnering with a fractional CFO for your eComm startup. Some of the top benefits include:

• Cost savings: Hiring a fractional CFO comes with significant cost savings compared to a full-time professional who works in-house. According to data from Salary.com, the average salary for a CFO in the United States is nearly $500,000 — a salary that’s nearly impossible for any startup to accommodate. At Graphite, our fractional CFO pricing plans start at $1,250 per month.
• Flexibility: When you work with a fractional CFO, you’re essentially paying for financial services as you need them. In other words, your startup can likely start at a base plan and then upgrade to plans designed to better meet the needs of your growing startup as you scale. It’s a very flexible relationship that’s designed to support startups over the long term.
• Access to financial expertise: Working with a fractional CFO doesn’t mean that you’re sacrificing expertise and experience. At Graphite, our fractional CFOs are seasoned professionals with years of experience. Additionally, we’ll be sure to pair your startup with a financial expert who has experience in your industry to better support your financial operations.

Services Offered by Fractional CFOs in the eCommerce Sector

A fractional CFO can do anything that a full-time CFO can do, except on a part-time basis. Some of the key services offered by Graphite fractional CFOs for your eComm startup include:

• Financial reporting and analysis of financial statements
• Cash flow management and optimization
• Bookkeeping, budgeting and financial modeling
• Fundraising assistance
• Investor relations management
• Implementing financial processes and financial controls

How a Fractional CFO Can Drive Growth in eCommerce

All startups have a goal of growing and capturing a share of the market in their industry, and a good fractional CFO can help drive growth for your eComm startup. One of the key responsibilities of a fractional CFO is to set financial strategy and run robust financial analysis, which can help leaders make better, more informed decisions about how to operate in the future.

The data-driven insights that fractional CFOs provide empower leadership to make decisions to improve profitability and market positioning. One example is Graphite’s partnership with Vital.io, a patient experience platform. As the startup grew and established market share in the HealthTech industry, it relied on Graphite and its fractional CFO services to help manage its finances. Its fractional CFO also sat in board meetings and provided strategic financial planning to help Vital.io take its operations to new heights.

Selecting the Right Fractional CFO for Your eCommerce Startup

You should select the fractional CFO for your startup the same way you would any other valued partner — by doing your due diligence and finding a partner that’s as much of a cultural fit as they are a financial fit.

It’s obviously important to consider financial experience and eCommerce expertise when selecting a fractional CFO partner, which you can learn based on references and past performance. But it’s arguably just as important to feel comfortable with the professional you work with for something as important as your startup’s finances. That said, you want to understand how best to communicate with them, what mediums to communicate with them over and weigh various other intangibles that constitute a good partnership. Additionally, you’ll want to discuss the level of service that your startup requires and the cost of such services to ensure it meets your budget.

Is a Fractional CFO the Missing Piece of Your eCommerce Success?

If your startup is struggling to manage its finances, overcome financial challenges, understand financial data, create budgets and set a financial strategy, then a fractional CFO could likely do you a lot of good. Fractional CFOs offer high-level financial service at a fraction of what it would cost to hire a professional in-house. At Graphite, we pair our fractional CFOs with expertise in the specific industries that the startups operate in to best serve them. All of our fractional CFOs only work with a handful of clients at once so they can dig into their partnerships and offer high-level service.

Could your eComm startup benefit from working with a fractional CFO? Contact Graphite today to learn more about how outsourced financial leadership can improve your startup’s financial performance.

Ready to Take Your eCommerce Startup to the Next Level?

Are you ready to partner with a fractional CFO to help manage your eComm startup’s finances? Graphite is here to help. Contact us today to learn more about our fractional CFO services and to schedule a consultation.

FAQs

What is the difference between a fractional CFO and a full-time CFO?

A full-time CFO is just that — an in-house CFO who works 40 hours per week for your startup and is paid a salary. A fractional CFO, conversely, is an external, part-time CFO who only works for your startup when you need them. Fractional CFOs are cost-effective solutions for startups that do not yet require full-time financial management or that do not have the resources to allocate to hiring a full-time CFO in-house.

How do I determine if my eCommerce startup needs a fractional CFO?

All startups need some type of financial expertise, and your eComm startup is likely to be no exception. There are a few different paths you can take. You or another one of your staff can attempt to manage finances in addition to all of your other duties, you can hire a full-time CFO or you can work with a part-time, fractional CFO. When it comes to cost-effectiveness for the services provided, the best value proposition for startups is almost always likely to be partnering with a fractional CFO.

What is the typical cost structure for fractional CFO services?

At Graphite, we offer different tiered plans for our fractional CFO services. Our plans start at $1,250 per month and can easily scale as your startup’s financial needs change.

How does a fractional CFO integrate with my existing team?

A good fractional CFO should aim to become an extension of your eComm startup. For startups that don’t have any financial professionals on staff, a fractional CFO may be responsible for all financial efforts. For those that have grown to a point where they have brought financial professionals in-house, a fractional CFO might be tapped to work on special projects, consult on various financial matters or help your startup improve its overall financial strength.

Can a fractional CFO assist with fundraising efforts?

Yes, good fractional CFOs are well-rounded financial experts who can help with your startup’s fundraising efforts. Their financial expertise alone is a big benefit to fundraising efforts. They can also help prepare the necessary documents, present your startup’s finances to potential investors and answer complex questions related to your company’s financial health.

What should I expect during the initial engagement with a fractional CFO?

The initial consultation is like any first meeting — we’ll get to know you and your startup and you can get to know us and our fractional CFO services. From there, we can discuss more specifics and, should you choose to move forward with Graphite, can discuss what plan tier is best for your startup at its current stage.