In the last few years, the ways in which small businesses are run, and what it takes for them to be successful, has come into greater focus for many entrepreneurs because of how difficult the economy has been. It seems that one trend that came from this changing attention to detail is that more independent companies are hiring financial professionals to make sure everything is running as smoothly as possible.
Today, more than half of mid-sized small businesses – those with between $1 million and $20 million in annual revenues – have a chief financial officer or controller on their payroll to help manage the company’s finances as wisely as possible, according to a new survey from the Wall Street Journal and Vistage International. In fact, about 25 percent say they have a controller, while another 5 percent say they not only have a CFO, but also a vice president of finance.
“A lot of it was to have a stronger financial base to the outside world,” Oshkosh Door president and chief operating officer Gene Miels told the newspaper when asked about the decision to bring such a professional on board.
Other changes in the industry?
However, about 1 in 5 companies polled said that they still pay outside companies or contractors to deal with their finances on an ongoing basis to this day, the report said. But there’s also a growing appetite for hiring someone to do that as their day-to-day job, so that they can be more focused on finding ways to make their companies run more efficiently in the future, both by boosting revenues and cutting expenses.
At that point, though, it becomes an issue of having the money to hire such a worker, and while the hope is obviously that this person’s job function would end up paying for the position itself, that might not always be a realistic goal, the report said. Entrepreneurs therefore have to make tough decisions about their finances even before they seek to hire such a worker on a permanent basis.
Owners who are thinking about such a switch and looking for ways to trim the fat from their budgets might want to consider the benefits of finding more affordable small business insurance. If they can cut costs on errors and omissions insurance policies, among others, they might be able to save thousands annually.