How Hiring Fractional COO & CFO Leadership Support Can Maximize Small Business Growth
Are you at the point of wanting additional strategic support on the executive level but cannot manage the cost to support their salary?
For CEOs aspiring to build a dynamic executive team without the hefty price tag, “fractional” executive support is a game-changer.
In this blog, we’ll share the secret hack to being able to hire a team of executive finance and operations wizards to your team for a fraction of the cost.
Let’s start with the basics: What is Fractional Leadership?
Just like the name suggests, “fractional” executives are qualified, experienced professionals who only spend a fraction of their time with your business. They essentially split their time between small companies rather than working at just one.
This flexible approach provides small businesses with invaluable executive support, a strategic and cost-effective alternative to full-time hires.
Understanding the Chief Fractional Roles Available
Fractional executives come in all types - Chief Operating Officers (COOs), Chief Financial Officers (CFOs), and many more.
The Boutique COO specializes in both operations and financial fractional support, so we’ll break for the main roles of the fractional COO and fractional CFO: what they actually do, how much they cost to hire, and what to ask about when hiring them.
What is a Fractional COO (Chief Operating Officer)?
Chief Operating Officers (COOs) handle all things operations, per their name, which can vary based on what your business does.
Common Responsibilities of a Fractional COO
Chief Operations Officers handle all things people and systems.
Operational Strategy: Developing and implementing operational strategies aligned with the overall business goals.
Process Planning: Streamlining and optimizing various business processes to enhance efficiency and productivity.
Resource Allocation: Efficiently sourcing materials and ingredients and allocating those resources such as manpower, technology, and finances to support business objectives.
Manage Service & Product Creation: Overseeing new initiatives that span across various departments to ensure they are completed on time and within budget.
Overall Strategic Planning: Collaborating with the executive team to contribute to the overall strategic direction of the company.
& much more!
The way we look at it is like this:
CEOs (a.k.a. You, the business owner) are the ones who typically have an idea, but aren’t quite sure how to make it a reality.
COOs (your right-hand man) are the ones with business background and experience in roles operating within the company to know what can be leveraged to make your ideas a reality
They really can bring a wealth of experience and expertise and can adapt their operations skills to the specific needs of your business.
What is a Fractional CFO (Chief Financial Officer)?
Now that you have your operations humming along thanks to your new fractional COO, you may be wondering - how much money will this actually create for our company?
Summon the CFO.
Common Responsibilities of a Fractional CFO
Chief Financial Officers handle all things money and finances.
Financial Planning & Analysis: Develop and execute financial plans, forecasts, and budgets aligned with the company's strategic goals.
Budgeting & Cost Planning: Establish a budget and maintain robust internal controls to safeguard the company's budget and ensure accurate financial reporting.
Financial Reporting: Prepare and present accurate and timely financial reports, including income statements, balance sheets, and cash flow statements, for internal and external stakeholders.
Financial Modeling: Designing out vast spreadsheets that will help you understand what to expect for your future finances.
Pricing Strategy: Reviewing your margin and prices to make sure you’re making enough money to keep your lights on.
& much more!
How Much is a Fractional COO or Fractional CFO?
If hiring a full-time chief operations officer, you may end up spending 6-figures per year on their salary. At the low end, that’ll be about $8.5K per month. If you hire a fractional COO, it will generally cost you $50-100 per hour, and you can use only as many hours as you need. Assuming you don’t need 170 hours from your COO per month, there are some HUGE savings to be had working on a fractional basis.
Like COOs, the average Chief Finance Officer (CFO) will also require well over 6-figures to cover their full-time rates. Going the “fractional” route, you can bring those costs down to $50-100 per hour
If you partner with the right fractional COO and CFO, they’ll also adjust those hours depending on what your business needs in the different seasons. This way you only invest when you need their leadership.
How to Hire Your Fractional Executives
Now, if you believe this might be the right solution for you, listen up! Here are some important actions to take while hiring your fractional COO and/or hiring your fractional CFOs, to make sure you’re working with someone who is right for your small business:
Define Your Business Needs: Clearly outline your business's operational and financial requirements that you’ll be needing help with, so you know what questions to ask when you meet potential candidates.
Interview References: Seek fractional executives with relevant experience and a track record of success. If you feel their case studies are not detailed enough, see if you can talk to one of their current small business clients to get a deeper understanding of what it’ll be like to work with them.
Understand the Scope of Work Commitment: With flexibility of utilizing fractional executives, there is typically some sort of limit. Make sure you ask about the maximum hours your business can get support and how the meeting structure will look like. If you need to have a more flexible program, ask for custom options to see how much they’re willing to adapt to your business needs.
⚡PRO TIP: Look at their education AND experience ⚡
When choosing the fractional executive for your business, pay attention to confirm they actually have a lengthy background. Make sure they have the right education and experience working in different types of financial processes, so they can handle your business situation.
Ready to elevate your executive team?
If hiring a fractional executive team sounds like the right move for you to begin leveling up your business and getting help working through some major headaches, we’d love to have the chance to chat with you.
The Boutique COO has vast experience working with many different types of industries and worked on projects that go beyond just simple support—we also get in there and help you DO the work.
Schedule your free strategy chat with us or read through some case studies of how we’ve supported businesses like yours.
