When Should a Company Hire a CFO?
Growth Stage, Revenue Size, and Business Complexity

Hiring a Chief Financial Officer (CFO) is one of the most important leadership decisions a company will make. Do it too early, and you risk overspending on a role you don’t yet need. Do it too late, and financial blind spots can slow growth, damage credibility with investors, or even put the business at risk.

There is no single “correct” moment to hire a CFO. The right timing depends on three intersecting factors: growth stage, revenue size, and operational complexity. Understanding how these factors evolve can help founders and CEOs make a clear, confident decision.

What a CFO Actually Does (Beyond Accounting)

Before talking about timing, it’s important to clarify what a CFO is not.

A CFO is not:

• A bookkeeper

• A payroll processor

• A tax preparer

Those are critical functions, but they are usually handled by accountants, controllers, or external firms.

A CFO is responsible for:

• Financial strategy and long-term planning

• Cash flow management and forecasting

• Capital structure (debt vs. equity)

• Fundraising and investor relations

• Financial risk management

• Budgeting tied to strategic goals

• Providing decision-grade financial insights to leadership

In short, a CFO helps leadership answer questions like:

• Can we afford this growth plan?

• Where are we leaking cash?

• What happens if revenue drops 20%?

• Are we ready to raise capital or acquire another company?

The need for these answers increases as a business grows.

Growth Stage: The Most Important Signal

1. Early Stage (Pre-Revenue to Early Revenue)

Typical profile:

• Founder-led finance

• Pre-revenue or <$1M annual revenue

• Small team

• Simple business model

At this stage, hiring a full-time CFO is usually unnecessary and inefficient.

What you do need:

• A reliable bookkeeper or accounting firm

• Basic financial statements (P&L, balance sheet, cash flow)

• Clear visibility into burn rate and runway

Founders often manage finances themselves here, and that’s okay—as long as the basics are accurate and timely.

Better alternative:
A fractional or part-time CFO for a few hours per month can help with:

• Cash runway planning

• Pricing models

• Early investor conversations

• Financial hygiene before scaling

2. Growth Stage (Product-Market Fit Achieved)

Typical profile:

• Consistent revenue growth

• $1M–$10M annual revenue

• Hiring accelerates

• Marketing and sales spending increases

This is where financial mistakes start to get expensive.

At this stage:

• Cash flow becomes harder to predict

• Hiring decisions directly impact burn rate

• Revenue may grow faster than profits

• Investors or lenders start asking tougher questions

If the company is growing quickly, leadership needs forward-looking insights, not just historical reports.

Signs you’re approaching CFO need:

• You’re reacting to cash problems instead of predicting them

• Budgeting feels disconnected from strategy

• Fundraising conversations feel uncomfortable

• Financial reports arrive late or lack clarity

• The CEO spends too much time on finance instead of growth

Common solution:
Many companies successfully use a fractional CFO here—someone senior who can build systems, forecasts, and investor-ready reporting without the cost of a full-time executive.

3. Scale Stage (Preparing for Serious Expansion)

Typical profile:

• $10M–$50M+ annual revenue

• Multiple departments and leaders

• Aggressive growth targets

• External capital involved

At this stage, the question is no longer if you need a CFO—but how soon.

Financial decisions now shape the company’s future:

• International expansion

• Pricing and margin optimization

• Debt financing

• M&A activity

• Long-term incentive plans

• Board-level reporting

A full-time CFO becomes critical because:

• Financial strategy must be embedded in daily decision-making

• Leadership needs a strong counterbalance to growth optimism

• Investor confidence depends on financial leadership

• Risks multiply with scale

Bottom line:
Once complexity and revenue reach this level, a full-time CFO is usually the right move.

Revenue Size: Helpful, But Not Enough Alone

Many founders ask, “At what revenue should we hire a CFO?”
The honest answer: revenue is a guide, not a rule.

That said, common benchmarks are useful.

General Revenue Guidelines

• Under $1M: No CFO; use accounting support

• $1M–$5M: Consider fractional CFO support

• $5M–$15M: Strong candidate for fractional or full-time CFO

• $15M+: Full-time CFO is often necessary

However, two companies with the same revenue can have wildly different needs.

A $5M SaaS business with predictable subscriptions may be simpler than a $3M manufacturing company with inventory, suppliers, and thin margins.

This is why complexity matters as much as revenue.

Complexity: The Hidden Trigger

Complexity is often the real reason companies hire a CFO—sometimes before revenue milestones are reached.

Common Complexity Drivers

You likely need CFO-level leadership if you have:

• Multiple revenue streams

• International operations

• Complex pricing models

• Inventory and supply chains

• Regulatory or compliance requirements

• Multiple legal entities

• Debt covenants or investor reporting obligations

Each layer of complexity increases financial risk and decision difficulty.

A CFO helps simplify:

• Which metrics actually matter

• Where profits are really coming from

• Which growth initiatives are sustainable

• How to structure the company financially

When complexity rises, relying on gut instinct becomes dangerous.

Fundraising: A Major Inflection Point

One of the clearest signals to hire a CFO is serious fundraising.

Raising institutional capital requires:

• Detailed financial models

• Clear unit economics

• Credible projections

• Confident answers to tough questions

Investors expect financial leadership. Even if the CFO isn’t in every meeting, they usually:

• Build the models

• Prepare materials

• Stress-test assumptions

• Help negotiate terms

Trying to raise a large round without CFO-level support often leads to:

• Weak valuation

• Loss of credibility

• Poor deal terms

If fundraising is a priority, CFO support becomes less optional.

Fractional vs. Full-Time CFO: Choosing the Right Fit

Fractional CFO

Best when:

• Revenue is growing but still moderate

• Complexity is increasing but manageable

• Budget is limited

• Strategic guidance is needed more than daily oversight

Pros:

• Lower cost

• High experience level

• Flexible engagement

Cons:

• Limited availability

• Less embedded in company culture

Full-Time CFO

Best when:

• Revenue and complexity are high

• Daily financial leadership is required

• Company has a board or institutional investors

• Long-term strategic finance is critical

Pros:

• Deep involvement

• Strong leadership presence

• Faster decision-making

Cons:

• Significant cost

• Requires careful hiring

Warning Signs You’ve Waited Too Long

Some companies delay hiring a CFO until problems are obvious. Common red flags include:

• Constant cash surprises

• Missed forecasts

• Poor visibility into margins

• Founder burnout from financial stress

• Investors asking questions leadership can’t answer

At that point, the CFO role becomes reactive instead of strategic—and that’s a costly mistake.

Final Thoughts: Hire for the Future, Not the Past

The right time to hire a CFO is rarely based on a single number. It’s about where the company is going, not just where it is today.

Ask yourself:

• Is financial decision-making becoming harder?

• Is growth creating risk as well as opportunity?

• Are we planning months ahead—or just reacting?

If finance is starting to influence every major decision, CFO-level leadership is no longer optional.

Hiring a CFO—fractional or full-time—is not a sign of bureaucracy. It’s a sign that the company is serious about sustainable growth.

Done at the right time, it becomes one of the smartest investments a company can make.