When Does Your Bakery Actually Need a Fractional CFO?
By ProfitWise - a Visa Business Plans company
At some point in a growing bakery, the questions start to change.
At first, you want to know whether the books are up to date, whether payroll is covered, and how much the business made that month.
Then the bakery grows.
Maybe you’re no longer selling only from the storefront. A few restaurants start ordering your bread. A hotel wants pastries delivered every morning. Corporate catering is picking up, and someone approaches you about supplying baked goods to several locations.
Suddenly, knowing what happened last month isn’t enough.
Now you’re trying to figure out whether that hotel contract is actually worth taking. It sounds great to sell 300 pastries every morning, but you’ll need another baker to come in before sunrise, more ingredients, additional packaging, and possibly another delivery driver.
You know the contract will increase revenue. What you really need to understand is what it will do to the business.
That’s usually where the difference between bookkeeping and financial management becomes much clearer.
A good bookkeeper can tell you what happened. Your books should show how much you sold, what you spent, what you owe, and where the business stands financially.
As the bakery becomes more complex, though, owners often need help using that information to decide what comes next.
Maybe you’re considering buying another commercial oven because production is reaching capacity. Before spending the money, you’d like to know whether the additional volume will justify the investment.
Or perhaps your wholesale business is growing faster than the storefront. That’s exciting, but wholesale pricing and margins can look very different from selling a croissant directly to a customer at the counter. More volume doesn’t automatically mean the bakery is making more money on that part of the business.
This is where a Fractional CFO can start becoming useful.
At ProfitWise, our Fractional CFO work starts with the financial information that’s already being produced through the bookkeeping. Then we use those numbers to help owners think ahead. We can look at profitability by different parts of the business, forecast cash needs, evaluate a major purchase, model the financial impact of hiring, or help determine whether a new contract makes sense before the owner commits to it.
The word “CFO” sometimes makes small business owners assume this is something only large companies need.
It isn’t really about the size of the company. It’s about the decisions the owner is being asked to make.
A neighborhood bakery with one location and a fairly predictable operation may be perfectly well served by good bookkeeping and a CPA. If that same bakery starts adding wholesale accounts, catering, delivery, more employees, new equipment, or another location, the owner is making decisions with much larger financial consequences.
At that point, looking backward at last month’s reports only gets you so far.
You also need to start looking forward.
That doesn’t mean every growing bakery needs a Fractional CFO tomorrow. It means there comes a point when the financial questions become more complicated than “How did we do last month?”
When you find yourself asking more often, “What happens to the business if we do this next?” you may already be getting close.
