SME’s Hiring CFO’s - What could possibly go wrong?

Hiring a CFO is one of the biggest decisions a growing SME will make.

Get it right, and you unlock better decisions, stronger financial control, and the ability to scale with confidence. Get it wrong, and the impact can go far beyond finance - affecting growth, investor confidence, morale and can even slow the journey down.

So, where do SME’s trip up most? Trace Co-Founder Gareth Cowan identifies the most common issues SME’s face when hiring a CFO, and how to overcome them.  

1. Waiting too long

A lot of businesses delay hiring a CFO. It’s understandable — cash is tight, and founders often feel they can “manage” finance themselves for a while.

But by the time a CFO is brought in, things are often already under strain:

• Cash flow is unclear

• Financial controls are weak

• Visibility is limited

• Opportunities (like funding) have been missed

The Lesson: a CFO adds the most value when they’re preventing problems — not firefighting them.

2. Not being clear on what the role is

In an SME, “CFO” can mean a lot of different things. That’s where confusion creeps in.

Some businesses try to cram everything into one role. Others borrow job descriptions from large corporates that simply don’t translate.

The result? Misaligned hires — like bringing in a technical accountant when you really need a strategic partner, or vice versa.

The Lesson: if you’re not clear on what you need, you won’t hire the right person.

3. Prioritising ‘big-name’ experience

Candidates from blue-chip companies can look impressive on paper. But big-company experience doesn’t always translate well into an SME environment.

In large organisations, CFOs often have:

• Established teams

• Mature systems

• Clear processes

In SMEs, it’s very different. You need someone who’s hands-on, adaptable, and comfortable building things from scratch.

The lesson: someone brilliant in a corporate environment will often struggle in a lean, fast-moving business.

4. Overlooking Cultural Fit

A CFO isn’t just another hire — they quickly become a key partner to the founder, the board, investors and external advisors.

Yet many SMEs put too much weight on credentials and technical expertise, and not enough on personality, communication style, and values.

The lesson: if there’s no cultural alignment, even the most technically capable CFO won’t succeed.

5. Looking for that “perfect” candidate

It’s easy to fall into the trap of wanting it all — strategy, execution, fundraising, systems, operations… all wrapped into one hire, and within budget.

But true “unicorns” are rare.

The lesson: unrealistic expectations slow the process down and can cause you to overlook strong, well-rounded candidates.

6. Being Too Cost-Focused

Budget matters — there’s no getting around that. But hiring a CFO based purely on cost can be a false economy.

This often leads to:

• Hiring too junior

• Compromising on critical skills

• Passing on high-impact candidates

• Paying someone less than they are worth

The reality: a weak CFO doesn’t just fail to add value — they can actively cost the business more over time.

7. Not Properly Testing Strategic Ability

A CFO’s job isn’t just reporting numbers — it’s helping shape the future of the business.

But many SMEs struggle to assess qualities like:

• Strategic thinking

• Commercial awareness

• Confidence to challenge decisions

Instead, they rely too heavily on CVs or technical interviews o very often a referral that is not properly tested.

The lesson: you might hire someone who can track performance — but not influence it.

8. Overloading the Role

In smaller businesses, it’s tempting to bundle everything under the CFO — finance, HR, IT, legal, operations.

Versatility is useful, but there’s a limit.

The lesson: stretching the role too far leads to burnout, diluted focus, and underperformance.

9. Not Building Support Around Them

Even the best CFO can’t do everything alone.

Some SMEs hire a senior leader but don’t invest in:

• A finance team

• Systems

• Processes

This leaves the CFO stuck in day-to-day tasks instead of focusing on strategy.

The lesson: without the right support, you’re underutilising your most senior financial hire.

10. Misaligned Expectations

Many CFO hires fail not because of capability, but because of misalignment.

Common gaps include:

• How involved they should be in decisions

• How much autonomy they have

• Their role in fundraising or strategy

The reality: if expectations aren’t clear from the start, frustration builds quickly — on both sides.

11. Rushing the Process

When the need feels urgent, some businesses cut corners — fewer interviews, less due diligence, quicker decisions.

But this is one role where speed can be expensive.

The lesson: a rushed CFO hire is a high-risk move that’s often costly to fix later.

12. Not Considering Alternatives

Not every SME needs a full-time CFO straight away.

Yet many go straight to a permanent hire without considering:

• Fractional CFOs

• Interim support

• Specialist advisors

The reality: there are more flexible (and sometimes smarter) ways to bring in financial leadership.

Key takeaways?

The wrong CFO can slow you down, create friction, and introduce risk. The right one can bring clarity, improve decision-making, and help you grow faster.

For SMEs, it’s not just about hiring a CFO — it’s about hiring the right CFO, at the right time, in the right way.