The boom in startups has created more demand for CFOs and other finance executives than ever before. That’s good news for financial executives. It can leave inexperienced employers floundering, though.
If you’re at the head of a new startup or enterprise, then you may be aware of the importance of having the right finance executive. At the same time, you’re under pressure to make the right choice.
After all, this person will be handling the company’s money and financial affairs. That’s not a small role to fill, and it’s one with a lot of responsibility.
Before you hire a finance executive in your business, consider these 11 factors.
1. Evaluate Your Needs
The very first thing you should do is think about your needs. Every business is different, so “the right candidate” will look different.
You might think that every business needs someone to handle finances, so it’s all the same. Handling the finances in a major banking firm is different from working on a shoestring budget.
Your industry plays a big role in finances. Do you need someone who’s good at sourcing capital or leveraging debt? Do you need an executive who has worked with tight budgets or turning around slumping firms?
Tax incentives and other opportunities might be available to your business. Do you need someone who knows how to write a grant proposal?
You’ll even want to consider how large or small your operations are. If you’re not very big, then you may want to hire someone in a part-time capacity. That may be all your budget can handle.
Looking at your needs before anything else is a great first step to finding the right person.
2. Create a Strategy to Find the Right Person
Now that you’ve thought about needs, you have a better idea of what your ideal finance executive looks like. Your next challenge is actually finding this person.
You’ll want to create a strategy for how to find a CFO. This could include an overview of your process, as well as specific interview questions.
You’ll also want to think about where to look for your next finance executive. You might want to look on LinkedIn or run an ad in the paper. There are more specialized sites you can use to search for executive-level candidates.
Don’t forget the power of connections either. Networking is never a bad idea, and it could pay off as you go on the hunt for a financial executive.
3. Consider Your Job Offer
The next consideration in how to hire a finance executive is to think about what you’re going to offer them. Why would this person want to come work with you?
If you’re hiring someone part-time, you might want to advertise flexibility. A more flexible opportunity might appeal to someone with a young family or a passion project on the go.
What will you offer in terms of compensation? Startups may not have massive budgets, so you might not think you can offer a decent salary. Don’t forget about benefits and other forms of compensation, like stock in the company.
Finally, don’t forget “perks,” like flexible working hours, extra vacation time, sick days, and more.
4. Write a Good Job Description
Now you know where you’re going to post your job ad, what your compensation offer looks like, and a bit about your ideal candidate. It’s time to think about the job description itself.
Part of how to hire a CFO successfully is making sure your job ad gets noticed. A good description is key. You can emphasize the skills, experience, and personality needed to thrive in this role.
You can also make it clear what kind of company you are, as well as what opportunities there are with you. A good description can help you find more qualified applicants.
5. Make Sure to Limit Power
Before you bring anyone on board in a financial executive position, you’ll want to outline responsibilities. It’s helpful to define the position in your business, especially if this is the first time you’ve hired.
You’ll also want to think about limitations on the power of the finance executive. The person who controls the budget often has a great deal of power in a business, even if they aren’t the owner or CEO. Think about the checks and balances you’ll put in place to keep this person honest.
6. Think about Industry Knowledge
Now you’re likely looking over some applications or reviewing the profiles of a few finance executives.
As you look over their qualifications, you may want to note who has experience in your industry and who doesn’t. Someone familiar with your industry may be a better pick. They may know more about the nuances of budgeting or special tax requirements and so on.
Of course, choosing someone who has a background outside your industry can also be a boon to a business. This is especially true if you’re in a new or emergent field. Prabir Purohit, who has worked in banking and energy, notes executives from these areas often bring process and order to startups.
7. Look for an Experienced Finance Executive
If you’re still wondering how to choose a finance executive, you’ll want to take a look at overall experience as well. You’ll want to pay particular attention to the executive’s track record with companies in financial situations like yours.
Consider a company that’s just declared bankruptcy. Most companies are then sold or undergo restructuring to try and get them back on track. This often signals a change in executive management.
An executive who has guided several companies through similar situations might be your best bet.
If your business is booming, then someone who has experience successfully managing growth situations may be a better fit.
8. Consider Educational Qualifications
Next up, you’ll want to give some thought to finance executive qualifications. Experience is good, but you also want to know your new financial executive has formal training.
Not all qualifications are the same, and not all degrees are equivalent. For those who will be in the C-suite, you’ll want to make sure they have appropriate training in management.
Educational background can also inform someone’s approach to finance. Someone who has a background in law will approach financial management one way. Someone with a specialization in accounting or other areas of finance will take a different approach.
9. Think about Continuing Education
Continuing education may be more important than experience in some ways. Look for someone who is constantly interested in learning more.
Executives who are willing to continue updating and developing new skills are more likely to be on top of the latest trends. They may also be more driven than their peers, and they may be more open to a collaborative environment.
Willingness to engage in ongoing learning can also signal how someone approaches work. Is this a person who sees new experiences as exciting opportunities to learn? If so, they might be excited by the prospect of teaming up with your business.
10. Test Out Digital Savvy
Before you hire a financial executive, you’ll likely want to test out their digital savvy. Why?
If you’re a tech startup, the reason is obvious. You want someone who understands your product and your industry.
Even if you’re not in the tech industry, though, digital know-how is important. There are plenty of rules that financial firms need to follow to keep consumer data safe. If you handle any sensitive financial data, then you might also be subject to some of these rules.
The executive should have a good understanding of your cybersecurity needs, as well as what they can do to help your firm stay safe.
11. Make a Plan for Working With Them
Finally, you’ll want to take a few minutes to consider how you’ll work with the financial executive you hire. Will they come into the office for each shift, or can they work remotely? How will you communicate with them?
You’ll also want to think about how their performance will be evaluated once you’ve brought them on board. Giving some thought to this now will help you build a better relationship with the finance executive you do hire.
Finding the Right People for the Right Roles
Finding the right finance executive can be a challenge, even at the best of times. By considering these 11 factors beforehand, you’ll have an easier time finding the right fit for your business.
Maybe becoming a finance executive could be your next career move. Maybe you’re looking to turn your passion into a career or even your own business.
No matter what your career ambitions are, we have insightful articles that can help you find the perfect role!