CFO’s for Rent? The Cost of Outsourcing High Level Exec

This article is from the archives of the Wall Street Journal, and while a trend in recessionary times, it might be more true today.  What do you think?

For Rent: Chief Financial Officer
Firms Outsource a Top Job as Cheaper Than Hiring Their Own Executive

Updated Sept. 22, 2009 12:01 a.m. ET

This past year, Al Lovata, chief executive of Be Our Guest Inc., cut expenses for his party-equipment rental business by laying off staff and reducing workers’ salaries. He credits an “outsourced” chief financial officer with helping him prepare for the worst of the economic downturn.

for rentThe Boston-based company had sales growth in the double digits for the past few years, when revenue fell flat last fall. Now, thanks to the part-time CFO’s guidance, the company is stable with revenue down 20% to 30%, but profitability higher than in the previous months, he says.

If we hadn’t had this service, “we would still be struggling,” Mr. Lovata says.

Some small-business owners in need of accounting help to balance their books and guide them out of a financial black hole are renting CFOs rather than hiring them. The strategy comes at a time when the deep recession has forced small companies to look for money-saving alternatives that can yield good returns yet avoid substantial overhead costs.

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