The demand for biotech CFOs has increased dramatically over the last few years. CFOs who fit the optimum profile for biotech companies, namely strong performers with a track record of demonstrable outcomes, sitting public CFO, IPO, and biotech industry experience, simply outpace supply.
Since a full-time CFO typically earns over $350,000 annually, startups and small firms with little funding often decide not to hire a CFO when they need one.
Former CFO David Johnston not only addresses your question on whether a part-time CFO is right for your firm but also lays out some compelling arguments in favor of this strategy. Here are some benefits of employing a part-time CFO for your biotech.
An Expert in the Resource You Must Have to Succeed
When trying to get off the ground or expand, cash flow problems are inevitable. You will probably require another investment round within the following 18–24 months, even if you have just successfully raised funds for your R&D.
While some businesses may try their hand at fundraising on their own, those with loftier goals should seek the expertise of a Chief Financial Officer (CFO). With a part-time CFO, you have access to your own private consultant.
Time to Do What you Do Best
A part-time CFO can handle relationships with partners, shareholders, lenders, and investors because they know everything there is to know about money and capital. As a bonus, this help will free up some time in your schedule so you can spend more time running the business.
Provide Expert Direction
Forecasting
Proper forecasting can result in a more solid business from the start in a small biotech. Taking advantage of a CFO’s financial expertise can assist a company in understanding profitable areas that should receive its attention, where to invest resources, how well the company has performed in the past, and how to steer its finances.
Tax Planning
Regardless of the size of your business, taxes can be a difficult process, but giving the responsibility to a CFO ensures proper ethical tax planning every year.
Cash Flow Management
For small businesses, managing cash flow effectively can be challenging, but it is essential to the overall financial health of a company. By monitoring and analyzing cash flow projections, evaluating how much cash a company now has, figuring out what it will need in the future, and prioritizing spending, a CFO may help manage and help maximize cash flow.
Risk Management
Risk management is one of the most important things a CFO does for a small business. This is because, with their financial knowledge and business experience, they can spot problems or possible problems before they happen.
David Johnston has been a senior financial leader for more than thirty years. Johnston was most recently the Chief Financial Officer at the oncology-focused biotech company ImmunoGen, Inc. in Waltham, Massachusetts. He is the owner of dbjconsulting LLC, which helps new life science businesses with money and strategy.
