Actual Combat: How Do Start-Ups Choose CFO?

For any enterprise that is in its infancy or a start-up, the most important question before them is what type of people they should hire to serve as their CFO.

CFO is a crucial position for an enterprise that is still in its infancy. However, at present, many enterprises fail to realize the importance of this problem correctly.

Many companies, of course, focus their attention on the technology or product development of the company, which will directly affect the type and quality of products or services developed by the company.

Generally speaking, the company's CEO is not a financial person. They do not understand or are familiar with the complicated financial information.

Those who can appear in front of CEO and apply for CFO positions are often the first to impress people.

In fact, it is easy to find people with very rich work experience, but such people are totally unsuitable for CFO.

In my opinion, when choosing a suitable CFO, there are 5 aspects that need attention: qualification (Qualifications), background (Background), personality (Personality), ability (Competencies) and company business environment (Company business environment).

If a CFO without these 5 qualities is to be an enterprise, their existence can sometimes even threaten the survival of an enterprise.

For startups, how to choose a suitable CFO is a very important issue.

In fact, whether a person is a suitable candidate for CFO is not necessarily related to whether he has a university degree or not. Even a CFO candidate with a high degree of education is not necessarily qualified for the job.

But for those companies who want to expand their businesses rather than just run a small family business, a person with professional financial qualifications is the most basic requirement.

Most CFO candidates need to have 3 professional qualifications, namely, CPA, or the equivalent title of China, the qualification of Registered Financial Analyst (CFA) or the equivalent title of China, and the master of Business Administration (MBA).

A CFO with these 3 different kinds of professional qualifications is usually able to have distinctive values and capabilities.

CPA has a very professional ability in the accounting field.

However, the general registered accountants lack or even have no relevant business experience, and little is known about the financial problems or business problems of large enterprises.

If they work for a small company or a large company, their work will be very effective, but they can only focus on the correctness of the figures. It is difficult for business, human resources and most other matters to be considered, and it is very difficult to have professional advice.

If a start-up employs a certified public accountant, especially an experienced accountant, there may be some exceptions, but most of the less experienced CPA can only focus on financial data.

We usually call this kind of technology CFO.

Registered financial analysts tend to focus on two aspects of Finance and evaluation, not accounting.

Although registered financial analysts do not pay much attention to accounting problems, they still have a thorough understanding of valuation, and they also have a deep understanding of financial problems in business.

Of course, a registered financial analyst should first be trained in a financial service environment similar to an investment bank, and there is a certain difference between the training and the actual operation of a traditional manufacturing entity product or the provision of non-financial services.

Therefore, a registered financial analyst is usually more rigorous than most CPA.

We usually call this kind of value CFO.

The general MBA will focus more on business, not just financial issues in a narrow sense. Usually, such a person does not qualify as an accountant, or at least not.

A related degree.

But the general MBA will have more extensive vision than CPA and registered financial analysts, and the views on many problems will be more comprehensive.

But if you want MBA to be able to take up CFO positions in start-ups, they usually need to find a regular accountant to help them do some pure accounting work, but this combination means increasing costs for those small companies.

We usually call this kind of business CFO.

If a company is founded for a very short time or a very new company, it needs more CFO for its role as an important partner in the development of the company's business. It is a CFO that can find business partners for the company, raise capital, meet business customers, and at the same time enable them to have confidence in the development of the business.

In this case, a business type CFO with master of business administration should be a better candidate.

If the enterprise is in the late stage of development, it will need a CFO that can control the accounting operation. At the same time, it can leave the company's business development problems to CEO and marketers, which means that those technology CFO will be more suitable for these companies.

If an enterprise is already in the stage of financing and planning to go public, or in a financial related field, then a value CFO with certified financial qualifications is the best choice.

Of course, people with different professional qualifications are suitable for a company at different stages of development. What is mentioned above is just a general rule.

In addition to the elements mentioned above, there are many other factors that need to be considered.

Generally speaking, financial and financial talents who apply for CFO positions can be divided into 4 types according to their different backgrounds. They are 4 kinds of talents who work in accounting firms, auditor offices, operating headquarters outside large companies, and operation departments of large or small companies.

People who have worked in accounting firms or auditor offices are usually better trained than those who have run financial positions, because they have many clients, so they will encounter many different situations in their work that require them to resolve.

However, these people often lack more business experience and flexibility than those who have run a financial position.

Similarly, those who once held non operational financial roles at headquarters can see problems from a higher level. However, they usually lack relevant operational experience, and they also need a lot of financial support.

Financial controllers from large companies often need more support because they have never played any financial role alone.

On the contrary, those who come from small companies often do not need any financial support. But if the company is a small family business or a local service enterprise, these people are likely to lack high level skills, which is what a sophisticated early stage enterprise needs.

So it really depends on what your goal is.

In general, the financial talents of large enterprises are the most unsuitable for start-ups because they need support and have never worked in enterprises that lack capital or break funds. They do not know how to operate in such an environment.

People with accounting and auditing background may be more suitable, but you have to make sure that they will not be overly dogmatic in their way.

The personality of any CFO candidate is a very important indicator.

Basically, financial personnel often have some notable occupational characteristics, which will have a negative impact on enterprises at the initial stage.

Finance and finance attach great importance to the basis of rules and regulations.

This sometimes means that these people have very strict personality because they satisfy their need for structure.

Their occupational diseases are rigid and rigid, and this is a big problem for start-ups who need flexibility.

The second occupational disease of financial personnel is to be afraid of taking risks.

Of course, people of any type of finance do not like risk, but financial type personnel especially object to risks.

In the early stage of the business, you need a financial person to control CEO and management team to pursue risk too much. But at the same time, this person must know clearly that he has to take some risk to achieve the profit goal for the enterprise.

Finding a CFO that balances risk taking and prudence is a very difficult task.

Most technology oriented financial personnel are not excessively capable in some areas.

This includes communication skills, non personal functions and teamwork.

But in the early stage of the business, these abilities are far from professional accounting skills.

A relative lack of communication and compassion is an advantage to some extent, because it makes them more objective.

But from another point of view, this may cause great destructive power to the enterprise, resulting in the functional problems of the enterprise, making it difficult for the enterprise to accomplish or fail.

Of course, there are some financial talents who possess these skills.

A small proportion of financial talents are outgoing. They like to deal with people and have good communication skills.

But you need to be very careful because it is ridiculous that extroverted CFO often lacks professional skills and prudence as a good CFO.

Another important ability to look for CFO is good judgement.

Even if the candidate has very high level of financial knowledge, professional skills and intelligence, it does not mean that he has good judgement.

Many decisions related to finance and finance need to have a correct judgement on how to adapt to financial regulations, systems and standards.

These decision factors may also include complex business, human, emotional, spiritual and other soft indicators that have important influence on the establishment of powerful enterprises.

When examining a CFO candidate, good judgement should be above the professional skills and qualifications and IQ, because if CFO does not have good judgement, it may lead to big risks in the operation and finance of the company, which will affect the morale and efficiency of the staff.

For a family

Its business environment is also one of the important factors determining which type of CFO it chooses.

First, there are different types of CFO that an enterprise needs at different stages.

If it is a very early enterprise, business CFO is more suitable than technology CFO.

However, when the enterprise started its second stage, that is, the development stage, the company's revenue and expenses grew very fast.

Good financial situation is particularly important for enterprises, when enterprises need a good technical CFO.

If an enterprise is financing, it will also affect the type of CFO that the company needs.

If it is a debtor enterprise, creditors want the company to have a technology CFO or value CFO.

But for venture capitalists, they appreciate business CFO better.

If an enterprise is ready to go public, CFO will not only need to be good.

It also requires good communication skills.

Many CFO do not like to make speeches in public, but for such an enterprise, there is a CFO who is good at giving speeches, and can give investors, shareholders and retail investors confidence. It is a very important asset.

In the environment of listed companies, investors and shareholders are often looking for a CFO that they trust, can balance CEO, relatively independent and can control risks.

This is a fact that can not be questioned, though CFO in many Chinese enterprises has relatively less power due to cultural factors.

Different types of markets require different types of CFO.

If a company is in a technological market with high level of innovation and new product development, it needs a CFO that adapts to the innovation culture, accepts high risks and does not overestimate expectations.

In the consumer market, including retail, food and other services, CFO should be more focused on very detailed level and very sensitive to costs.

These two types of CFO have obvious differences in qualification, background, personality and ability.

As with all important jobs, finding the right CFO is difficult.

But it is very important to pcend technology and pure professional elements when making decisions.

Finally, the success of an enterprise, its value, prospects and the authenticity and integrity of its tasks also depend on selecting the right person for this position.

For more information, please pay attention to the world clothing shoes and hats and Internet cafes.