The Moment We Realized We Actually Needed a Virtual CFO!

As a founder of any startup, you face those moments when you realize that your company is struggling with many things, whether it is related to the financial sector, management, or cash flows. So, in that case, what is the role of a virtual CFO for startups in helping your company out of that situation?

In a startup company, there are many situations where many founders get stuck. Due to which they spend a lot on handling that situation. But due to not having proper facilities, their business was shut down.. But don’t worry, in that situation, the signs your business needs a virtual CFO surely come to the help of these companies. Mainly, those moments are related to financial complexity or facing strategic decisions in which they get stuck and look for a better person, like when to hire a virtual CFO.

A virtual CFO helps a startup company with its full potential. He provides high-level financial services at a very low amount of cost, which is harder to get from a full-time CFO because he charges more and resources. In comparison to other services, a vCFO provides senior-level financial guidance on a flexible, remote, and more cost-effective basis. Makes it a top-level service for many startups and medium-sized businesses.

1. Some Hard Moments for a Virtual CFO Startup Company

Before going further, learn about some of those hard moments that totally disturb a startup company. Hard moments mean facing issues and problems in running a company smoothly. Especially these moments affect the founders the most.

Hard moments include securing funding and managing cash flow, operational challenges like building the right team and managing time, and market-related issues like a lack of demand, intense competition, and the need to always adjust to changes. These are some hard moments that fully affect a startup company the most.

Now, learn briefly about these moments:

Challenges with finance

1. Problems with finding and securing adequate capital for a startup company. Having poor financial management can also lead to cash problems, even with a good idea.
2. Founders start feeling when they invest much of their money in their startup company.

Operational challenges

1. Founders also face issues with finding and hiring good employees who perfectly work for their company. Time management also becomes a constant struggle, especially for founders.
2. When a small business is growing rapidly with adapting to many things, then many challenges also come with it. Failure can be mostly related to a business plan that is either absent or flawed.

Problems with the market and strategy

1. Hard moments also include checking the demand for your products or services is a crucial and often difficult step. Due to not having proper marketing and sales can lead to a lack of customers and brand awareness.
2. Competing with your competitors, particularly those that are highly established and have more resources, also presents a major challenge. It is required for a startup to adapt to new market changes and unexpected events, which can be tough.

Challenges with employees and leadership

1. Sometimes in a startup company, leaders start feeling lonely, due to which they doubt their abilities. Making clear objectives and maintaining alignment with co-founders and the team is challenging.
2. For startup founders, having intense pressure also leads to burnout, which affects their personal and family life. And due to not having a proper mentor can leave founders struggling to make decisions and learn from others’ experiences.

2. 7 Signs that Your Company Requires a Virtual CFO

1. Improper cash flow – When you know that your revenue is coming, but don’t know where it is going. So, in that case, a virtual CFO for startups provides accurate cash flow forecasts and provides you approach to working capital management.
2. Issues in accounting and financial statements – If you have a bookkeeping service, but your basic financial data is not properly summarized with actionable insights for decision-making, then it means that you require a vCFO. He translates complex financial information into clear, customized dashboards and KPIs.
3. Accountant is not enough – If you go with an accountant, it only focuses on day-to-day transactions and tax compliance, but realizing the value of outsourced virtual CFO services provides a strategic, forward-looking financial roadmap. And works like a financial team in your company.
4. When you are preparing for a milestone – in terms of raising a funding round, preparing a purchase, or a merger. So, for that, you need a financial person who easily handles these things, then in that case also a virtual CFO services can prepare your business for investor due diligence.
5. Financial tasks take time – If you are a startup founder, and spending your maximum time understanding your financial tasks. Then you require a financial expert. A vCFO perfectly suits you in this case, also. If you are bogged down by compliance issues, reviewing spreadsheets, or managing the finance department.
6. Facing problems related to Compliance and risk – At that time when your startup achieves growth, you might face regulatory filings for tax, labor, or other areas, which timely become more complex mistakes which leading to costly penalties. Because a vCFO ensures your financial operations are robust, compliant, and well-governed.
7. Your company is growing rapidly – Rapid expansion might exceed your current infrastructure and financial procedures.  To support your expansion and make sure it’s sustainable, a vCFO can put in place the scalable systems, controls, and reporting you need.

3. Those Businesses that Require a vCFO During a Hard Time

Learn about those companies that face hard moments many times and require a virtual CFO for startups to solve their problems. Mainly, many businesses require a person who handles their company during its hard moments. But there are some sensitive businesses, such as startups and SMEs with limited internal finance teams, companies experiencing rapid growth or preparing for funding, and organizations that want to focus on strategy over day-to-day accounting. Whether these companies face rapid growth or get stuck in their problems, that’s why these businesses always look for the best person.

Learn Why SMEs are Shifting to Virtual CFO Solutions

Suppose a company is facing high or rapid growth, then in that situation, it gets stuck in its work and management. And those companies that are counted in startup businesses, then no doubt they surely require a virtual CFO for startups, due to having a limited budget and management under a high amount of pressure.

1. Startup companies – Those companies that require financial foundations, create investor-ready materials, and scale efficiently may employ a CFO virtually.
2. Small to medium-sized enterprises (SMEs) – Those businesses with limited financial staff can also get access to expert, high-level financial guidance at a lower cost.
3. Rapidly growing companies – This includes those companies that are expanding rapidly, and their financial complexities increase, so for these also the virtual CFO services provide them a perfect services during their rapid growth.

4. Struggling with Issues: Go with LegaRaasta’s vCFO Service!

At LegalRaasta, we work with business founders and manufacturers to deliver a range of services that they actually require. Need virtual CFO service for startups? We make the process straightforward, whether you’re running a startup or managing a growing company. Business owners and sellers count on us because we clear the hurdles, just real results. To be honest, there aren’t too many trustworthy virtual CFO providers in India out there. But we’ve become a household name for making the process very simple. And that’s not all. We offer GMP certification, company registration, registration of LLPs, NBFCs, and more.