How to Become a CFO – A Step by Step Guide

How to Become a CFO – A Step by Step Guide

How to Become a CFO – A Step by Step Guide

Are you a financial professional dreaming of going freelance? Is your standard 9-5 leaving you feeling uninspired? Becoming a CFO could be the key to unlocking your potential and taking your career to the next level. A CFO is a vital role within any organisation, whether it’s a start-up or a PLC.

They’re at the heart of the company’s strategy and responsible for overseeing the financial running of the business. Becoming a part-time, interim, or full-time CFO could help you expand your experience, interact with new companies, and build a reputation within your specialist industry. It can give you the freedom to work remotely or specialise within an industry niche.

If you’re transitioning from another role within the financial industry, you might be finding it daunting to land your first job as a CFO. That’s where boutique recruitment firms like FD Capital come in. We specialise in matching talented financial professionals with start-ups and SMEs in search of the right candidate to help them scale their business.

Before you can start planning your career as a CFO, you need to know what to expect. As it’s a leadership role, being a CFO comes with its own unique set of challenges. We’re sharing everything you need to know in our guide on how to become a CFO.

Finding your first CFO role

Starting a new journey is never easy. You can expect to face a few hurdles in the early days of your journey to become a CFO. Before you launch yourself into the world of recruitment, you want to make sure you’re ready for the transition.

It’s always best to consider your options and preferences before starting your job hunt. Think of what type of company you want to work for and what would reflect your desired professional growth. Some CFOs like to help start-ups find their feet, while others enjoy the fast-paced nature of larger organisations.

The challenges you’ll face at both these companies will be drastically different – as well as undergoing different recruitment processes. If you’re transitioning from another financial position to the role of CFO, you may want to start by working at a start-up to gain experience. You’ll face less competition for these roles and be able to take a more hands-on leadership approach.

Whatever your preferences are, you’ll usually get quicker results by using a boutique recruitment firm. When you join their talent portfolio, you can tell them about the opportunities you would be interested in. If you want to specialise within an industry niche, they can look out for opportunities within that sector. Traditional recruitment firms won’t approach the recruiting process with this nuance or consideration of your specific circumstances or preferences.

Becoming a CFO

fractional cfoNot everyone’s route to becoming a CFO is the same. While some get there through internal promotions, others go through external hiring processes. The process by which you become a CFO will determine the experience and skills that you have when starting the job.

You may be head-hunted by another company after working at an accounting firm or consultancy. Alternatively, your start-up or SME may ask if you’re interested in being promoted to the role of CFO.  Your route to becoming a CFO determines your career transition and what skills and knowledge you’ll need to freshen up on before starting your new role.

The other factor to consider when thinking about your route to becoming a CFO is why the company is hiring for the position. Most CEOs approach the recruitment process with a specific purpose or problem in mind.

They may be hiring for a CFO as their company is rapidly expanding and they need someone to oversee the company’s finances, including fundraising. A company may also be hiring a CFO to offer a fresh approach to the business and to rework failing systems that are negatively impacting the running of the organisation. Thirdly, a company may simply be hiring because the current CFO is going on sick leave, having a career break, or retiring.

You want to consider why the company is hiring for the position as it’ll reflect on the roles and responsibilities of the job. Understanding why the company is recruiting a new CFO can help you understand what you need to do to hit the ground running and be an effective CFO.

Every CFO role is different

No two companies are the same. No two CFO roles are the same.

The role of CFO is just as different as the role of CEO. It will look drastically different depending on where the company is in its development. Your day will look different if you’re working for a start-up versus an established company with steady growth.

The skills and experience that a CFO needs will be determined by the company’s industry and culture. Many companies prefer to hire candidates who have experience within their industry niche, whether it’s health care, tech, or software development. As a first-time CFO, you’ll want to determine what industry your skill set is best matched to.

For your first position, you’ll want to start with an industry where you have prior experience. If your experience is within other financial positions, consider your specific skill set.

If you’re skilled at operational tasks, look for companies who want to get on top of their finances or who need a system overhaul to streamline their operations and reduce costs. If you have strong technical skills, you’ll likely be best matched with start-ups experiencing rapid growth.

You always want to consider the experience that the company itself wants. A successful CFO-CEO relationship is built on a mutual understanding of each other’s expectations and responsibilities. These responsibilities link back to the reasons why the company is hiring for a CFO.

They may want a candidate with the ambition to oversee a high-value fundraising strategy or a person with the interpersonal skills necessary to help build relationships with stakeholders throughout the industry. Whether it’s a start-up or SME, most companies will want a candidate with analytical and financial planning skills.

The role of CFO is also defined by the role and responsibility of other individuals within the leadership team, including the CEO. You want to be aware of the ownership structure of a company before you apply for a CFO position. Your responsibilities will be different at a company that is VC-funded versus a private or publicly owned company.

Another defining factor is the company culture. As CFO, you want to hit the ground running by quickly becoming part of the company culture. CFOs sit at the heart of the leadership team, and you want to be able to build positive relationships with employees at every level, including the senior leadership team.

You don’t want to forget the role that a CFO plays within the wider leadership team. CEOs are often looking for the missing piece of their leadership puzzle. They’ll want a candidate who brings a fresh perspective to the table with skills that aren’t already in their leadership team. You’ll want to consider what unique skills and experience you can bring to a company when applying for the role of CFO.

The professional challenges you’ll face

Finding your first CFO position can feel like an uphill battle. You’ll want to ensure you’re ready for the role and have the experience and knowledge that companies will be working for. You want to know how you can pitch yourself to organisations and what your USP is. Choosing the companies that you want to target, whether its start-ups or SMEs, can help you identify the challenges you’re likely to face.

Your experience – or lack thereof – is likely to be the first challenge you’ll face. The diversity of the CFO’s role means that most companies will want a candidate with extensive experience, including negotiating in a boardroom. If you’re transitioning from a lower role within the financial sector without leadership responsibility, you may find it difficult to showcase this experience.

Don’t let a lack of experience discourage you from applying. There are dozens of ways that you can gain experience without holding the role of CFO. You can attend courses, volunteer at organisations to take on leadership roles, and ask for more responsibility in your current role to showcase your leadership potential.

You don’t want to forget that becoming a CFO brings leadership responsibility with it. You’ll be expected to oversee the financial department, including managing a team of individuals. If you’ve never held leadership responsibility, you may find the transition from an individual employee to a leader a difficult one to make. You’ll be given a different set of responsibilities, including delegating tasks and giving feedback to the employees within your department.

The role and responsibility of being a CFO will be more far-reaching than any other position you’ve held. Your daily activities will look different from what you’ve done before. Along with financial planning, reporting, budgeting, and forecasting, you’ll be responsible for stakeholder management, compliance, and governance on behalf of your organisation. While this may feel like another mountain to climb, understanding the role and responsibility of a CFO can help you prepare for your new responsibility.

The personal challenges you’ll face

It’s not just professional challenges that you’ll need to be prepared for. You can expect to face personal challenges as well when becoming a CFO. Most senior leadership professionals face a range of personal challenges when they are going through the next stage of their careers.

Even the most confident financial professionals can feel overwhelmed or suffer from imposter syndrome. While leadership comes with influence, you can’t automatically expect to have the influence you need from day one. It’s a struggle all CFOs face when defining their role are becoming comfortable with their new responsibilities.

Understanding the personal challenges that you’ll face can help you prepare for the role of CFO and lower your potential to suffer negatively in terms of your overall wellbeing a professional performance. You’ll also want to build a network of people around you – both professionally and personally – to help you overcome these challenges. A mentor can be an excellent way to help you understand and manage these challenges.

What this guide will have shown you is that determining your readiness for the role of CFO can make or break your success. You need to be ready to overcome the challenges you’ll face when applying for your first position as a CFO, as well as the personal and professional challenges you’ll face when you get the role.

Are you ready to become a CFO?

Readiness is key to securing the role of CFO. While each CFO position is different, you want to ensure you’re ready for the challenges you’ll face and the responsibilities you’re expected to undertake. Being ‘ready’ for the role of CFO will look different for each position and company. No two CFOs are alike, either in their approach or their responsibilities.

If you’re thinking of becoming a CFO, you may be wondering what you can do to make yourself more prepared for the role. It’s easy to become overwhelmed by the process and to think you can’t overcome the challenges you’ll face.

Here are a few actionable steps you can take to prepare you for the role of CFO:

  • Work with a mentor who has experience of working with or as a CFO. They’ll be able to help you identify the skills and experience you’ll need to gain, as well as the characteristics you want to develop to secure a CFO position.
  • You want to find a starting point by determining what your current skills and experience are. Doing this can help you see where your experience falls in relation to other first-time CFOs and to identify areas where you need to build your experience.
  • Identify the personal challenges you’re likely to face and put a plan in place to overcome them. If you have a history of imposter syndrome, working with a mentor or on your mental health can help you prepare for these challenges.
  • Don’t forget about your personal brand. You want to develop as many networking opportunities as possible. Networking not only allows you to build your contacts, but they’re also an opportunity for you to get constructive feedback on your progression to the role of CFO.

The position of CFO is one of the most exciting in an organisation. You have a front-row seat to the growth and development of a company, as well as playing a leadership role. While there are challenges that you’ll face, there are actionable steps you can take to overcome them.

One of the best ways to secure your first CFO position is to work with a boutique recruitment agency. At FD Capital, we’ll work with you to find the organisation where you begin your career as a CFO.

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