Your business is growing. Financial complexity is increasing. You need CFO-level strategic guidance, but does that mean hiring a full-time executive?
For most growing businesses, the answer is no. At least not yet.
Here's how to decide between a full-time CFO and outsourced (fractional) CFO services.
The Cost Reality
Let's start with the numbers.
Full-Time CFO Costs (2025)
- Base salary: $200,000 - $350,000
- Benefits, equity, and bonuses: Add 30-50%
- Total compensation packages: $350,000 - $500,000 annually
That doesn't include recruiting costs (often 20-30% of first-year salary), onboarding time, or the risk of a bad hire.
Fractional CFO Costs (2025)
- Hourly rates: $175 - $350/hour
- Monthly retainers: $3,000 - $10,000
- Annual cost: $16,800 - $120,000 depending on engagement level
Most early-stage companies need 8-10 hours of CFO support monthly. That's $1,400 - $3,500 per month, or roughly $20,000 - $40,000 annually.
The savings: 80-90% compared to a full-time hire.
When Each Option Makes Sense
Fractional CFO is Right When:
- Revenue Under $15 Million: Most businesses at this stage don't have enough financial complexity to keep a full-time CFO occupied. You need strategic guidance, not 40+ hours per week of CFO time.
- Specific Project Needs: Fundraising, financial restructuring, system implementations, or preparing for an acquisition benefit from experienced guidance without permanent overhead.
- Scaling Operations: You're growing but not ready for the commitment of a C-suite hire. A fractional CFO can build the financial infrastructure you'll need.
- Testing the Role: Not sure exactly what you need? Working with a fractional CFO helps you define the role before committing to a full-time search.
Full-Time CFO is Right When:
- Revenue Exceeds $25 Million: At this level, financial complexity typically justifies dedicated leadership.
- Daily Strategic Decisions: If major financial decisions happen multiple times per day and require immediate input, you need someone in the building.
- Investor or Board Requirements: Some funding sources require a full-time CFO as part of the deal terms.
- Building a Leadership Team: If you're assembling a complete executive team, a full-time CFO plays a different role than an outside advisor.
Beyond the Cost Savings
Fractional CFOs offer advantages beyond price:
- Immediate Value: Full-time hires need 3-6 months to fully onboard and understand your business. Experienced fractional CFOs bring proven frameworks and deliver value from day one.
- Diverse Experience: A fractional CFO works with multiple businesses across industries. They bring best practices from a variety of situations. A full-time CFO may only have deep experience in one or two companies.
- No Overhead Burden: Fractional CFOs provide their own tools, software, and professional development. No equipment costs, no office space requirements.
- Flexibility: Scale up during busy periods (fundraising, audits, year-end). Scale down when things are stable. Try restructuring that with an employee.
- Reduced Risk: If the relationship isn't working, changing fractional providers is far simpler than terminating an executive.
What a Good Fractional CFO Provides
Expect more than number-crunching:
- Strategic Financial Planning: Long-term financial modeling, scenario analysis, and growth planning.
- Cash Flow Management: Forecasting, working capital optimization, and treasury management.
- Fundraising Support: Pitch deck financials, investor materials, due diligence preparation.
- Financial Systems: Implementing accounting software, establishing KPIs, building dashboards.
- Team Development: Mentoring your bookkeeper or controller to grow into more responsibility.
- Board and Investor Relations: Preparing materials and attending meetings as your financial expert.
Making the Transition
Many companies start with fractional CFO services and eventually hire full-time.
A good fractional CFO will:
- Help you define the full-time role when you're ready
- Build systems that a full-time CFO can inherit
- Assist with the hiring process
- Support the transition period
Some even convert from fractional to full-time if both parties want to continue the relationship.
The Bottom Line
For businesses under $25 million in revenue, a fractional CFO almost always makes more financial sense than a full-time hire.
You get experienced strategic guidance at a fraction of the cost, with flexibility to scale as your needs evolve.
Save the full-time CFO hire for when your business truly demands dedicated executive leadership. Until then, fractional services deliver better value.
