How to Hire a CFO

Your company has reached $5 million in annual sales, and now you need a chief financial officer. Make sure you get a thinker and strategist, not just a number cruncher.

Instructions

Difficulty: Moderately challenging

Things You’ll Need:

• Executive Search Firms
• Calendars

1. Find out what a chief financial officer does. Review "CFO" magazine, talk to other executives about their thoughts and chat with major investors in your company.
2. Establish a clear idea of what you specifically need in the position and how much you're willing to pay.
3. Consider contracting with an executive search firm that has demonstrated experience in hiring financial managers.
4. Work with a venture capital firm if such a firm has invested in your business. The firm will have experience in hiring financial experts. It will also have a vested interest in your financial success.
5. Advertise in trade publications and other specialized media, including the Internet. Forget local newspapers.
6. Narrow the field once you have a predetermined number of candidates.
7. Test candidates, giving them real-life financial problems to evaluate. Press for solutions, opinions and advice. Look for strategic, big-picture thinking.
8. Allow board members and other managers to meet, chat with and perhaps interview the candidate. Get their frank impressions and feedback.
9. Narrow the field to two or three final contenders and decide which one best suits your needs.
10. Trust your gut and make the hire. If you're choosing between two finalists who are equally qualified, avoid ignoring your own feelings and subjective impressions about them.

Tips & Warnings

• Focus on candidates who have worked in a range of financial environments, including companies that may have survived and rebounded from financial setbacks such as downsizing.
• A good choice for a CFO is a certified public accountant who holds a master of business administration degree in finance. But remember, you want a strategic thinker, not a controller. A controller evaluates numbers, whereas a CFO identifies trends and suggests strategies and solutions.