By: Craig Macfie
October 18, 2024
A career as a fractional CFO is emerging as an option for finance professionals with the right mix of experience and entrepreneurial spirit. Covid helped propel the option forward as business owners were forced to become more comfortable with remote based service providers. Businesses of many sizes can benefit from having a part-time CFO. The business hires someone with CFO-level experience for a fraction of their time and a fraction of the cost. One year ago I started my fractional CFO firm specializing in farms and agribusinesses. Here’s what I’ve learned so far.
1. Manage your schedule. Fractional CFO (fCFO) is an emerging market. For example, picking one day per week (Ex. Mondays) wouldn’t work in the ag industry. The growing season is a particularly poor time to book appointments.
2. Standardize Processes. You can’t do something different for everyone. Similar to accounting firms, you will need to standardize your key processes. The difference is your processes are forward looking.
3. It's different than management consulting. Unlike management consulting, with fractional work, you’re embedded into the company similar to a part-time employee. Their problems are your problems. You get to wear the company hat, and that’s pretty cool.
4. Onboarding takes time. Think about how long your learning curve was at your last full-time job. Since fCFO is a part-time role, it’ll take some time getting up to speed with new clients. Identifying the business owners goals early on will ensure alignment. Get an early win. Keep moving the ball forward.
5. Bookkeepers don’t get enough credit. Bookkeepers won’t be replaced by AI anytime soon. The reason? Small business owners will still have messy records. However, the bookkeeping job is being made more efficient by automation and OCR invoice reading technology.
6. I don’t need to be your accountant. There’s good CPA firms in the marketplace. There’s not enough fractional professionals providing financial leadership. When done right, fCFO will compliment your accountant and improve their efficiency. Hiring a fCFO comes as at extra cost, but consider the cost of going through another year without a formal budgeting process.
7. Educate before you consult. This quote comes from one of my mentors, Dick Wittman. Sometimes people need to hear things several times. Better buy in will be achieved if clients understand why. Start with why.
8. Specialize. Professionals develop niches. So should fCFO’s. I picked agriculture, it’s in my jeans.
9. Get comfortable being uncomfortable. One of my core values is growth. If you want to stay in your lane, fCFO might not be for you. Accounting, financing, strategy, succession, and governance are a few of the disciplines you will be exposed to. You don’t need to be an expert in everything, but you will need to provide leadership for your clients.
10. The dashboard is bigger than the rearview for a reason. Credit for this quote comes from the singer Jellyroll (not one of my mentors). In my years in public accounting, I was always more interested in what the farm was doing next year as opposed to doing the historical accounting.
11. Don’t let perfect be the enemy of progress. For fCFO's, the story of the business is more important than the numbers being perfect. Bookkeepers need to reconcile to the penny, materiality is much bigger for fCFO's. See the forest through the trees.
12. Executive leadership and accountability is needed. The typical farm business owner is wearing many hats. Having a fractional executive to come along side to bounce strategic decisions off of and hold you accountable can be invaluable.
Komentarze