The CFO Decision Every Growing Business Faces
At some point, every growing business needs serious financial leadership. The spreadsheets that worked at startup stage become inadequate. Financial decisions grow more complex. Investors and boards demand sophistication. The question isn't whether you need CFO capability—it's whether to hire full-time or engage fractionally.
This isn't a simple cost comparison. Both models can work brilliantly in the right circumstances. The key is understanding which circumstances match your situation.
What a CFO Actually Does
Before comparing delivery models, let's clarify the CFO role. A Chief Financial Officer provides:
- Strategic Financial Leadership: Long-term financial planning, capital structure decisions, M&A evaluation
- Financial Operations Oversight: Accounting, reporting, controls, compliance
- Performance Management: KPIs, budgeting, forecasting, variance analysis
- Stakeholder Management: Investor relations, board reporting, banking relationships
- Risk Management: Financial risk identification and mitigation
- Team Leadership: Building and developing the finance function
Both fractional and full-time CFOs can deliver these capabilities. The difference lies in capacity, presence, and cost.
Full-Time CFO: When It Makes Sense
The Case For
High Transaction Volume: If you're executing multiple acquisitions, fundraising continuously, or managing complex financial operations, you may need daily CFO engagement.
Large Finance Team: Managing a finance department of 10+ people requires significant leadership time. Full-time presence enables effective team development.
Intensive Stakeholder Management: Public companies or those with extensive investor bases need CFOs available for frequent stakeholder interactions.
Complex Operations: Multi-entity structures, international operations, or highly regulated industries may demand full-time financial leadership.
Culture Building: If finance needs to become a stronger part of your company culture, daily presence accelerates this transformation.
The Costs
In the UK market, full-time CFO compensation typically ranges:
- Base salary: £120,000 - £200,000
- Bonus potential: 20-40% of base
- Benefits and pension: £15,000 - £30,000
- Employer NI and overhead: £20,000 - £40,000
Total annual cost: £175,000 - £310,000
Plus recruitment costs (typically 25-30% of salary), onboarding time, and the risk of mis-hire.
Fractional CFO: When It Makes Sense
The Case For
Scaling Businesses: Companies between £2M and £30M revenue often need CFO expertise but not full-time capacity. Fractional fills this gap perfectly.
Specific Initiatives: Fundraising, M&A preparation, system implementations, or financial restructuring may need intensive CFO input for defined periods.
Finance Team Exists: If you have capable finance managers handling operations, you may need strategic oversight rather than day-to-day leadership.
Budget Constraints: When CFO expertise is essential but full-time investment isn't feasible, fractional provides the capability within reach.
Uncertain Growth: If your trajectory is uncertain, fractional provides flexibility to scale leadership up or down as needs evolve.
The Costs
Fractional CFO engagements typically range:
- 1 day per week: £30,000 - £50,000 annually
- 2 days per week: £55,000 - £85,000 annually
- 3 days per week: £80,000 - £120,000 annually
Typical engagement: £50,000 - £80,000 annually
No recruitment fees, no benefits costs, flexibility to adjust engagement as needs change.
Head-to-Head Comparison
| Factor | Full-Time CFO | Fractional CFO |
|---|---|---|
| Annual Cost | £175,000 - £310,000 | £50,000 - £120,000 |
| Availability | Daily presence | 1-3 days weekly |
| Commitment | Long-term employment | Flexible engagement |
| Time to Hire | 3-6 months | 2-4 weeks |
| Experience Breadth | Deep in your context | Broad across contexts |
| Team Leadership | Full management | Strategic oversight |
| Stakeholder Access | Always available | Scheduled availability |
| Exit Flexibility | Notice periods, severance | Contract terms |
The Hybrid Path
Many businesses find value in a progressive approach:
- Start Fractional: Engage a fractional CFO to establish financial leadership, build foundations, and clarify ongoing needs.
- Evaluate Requirements: After 6-12 months, you'll understand actual CFO capacity requirements based on real experience.
- Transition If Needed: If needs justify full-time, the fractional CFO can help recruit and onboard a successor, ensuring continuity.
This approach reduces risk, provides immediate capability, and informs the full-time decision with actual data rather than assumptions.
Questions to Guide Your Decision
- How many hours weekly does your business actually need CFO-level attention?
- Do you have finance staff who can handle operations with strategic oversight?
- What major financial initiatives are planned in the next 12-24 months?
- Can your budget support full-time CFO compensation?
- How certain is your growth trajectory?
- Do stakeholders expect full-time CFO presence?
Making the Right Choice
There's no universally correct answer. Full-time CFOs provide depth and presence that some businesses need. Fractional CFOs provide flexibility and value that others find more appropriate.
The worst choice is delaying CFO capability because you're uncertain which model to choose. Both options deliver strategic financial leadership. Start with the model that matches your current circumstances, and remain open to evolution as your business grows.
At fractional.quest, we connect UK businesses with experienced CFOs for both fractional and full-time opportunities. Browse our network and find the financial leadership your business needs.