I'm So Glad We Had This Time Together
Most likely, only readers in my same age range will recognize the title. Long, long ago on a television set far away, Carol Burnett would end each of her shows with a song. One of the lines of the song is the title of this edition. The song described the happiness the show brought to her and the sadness she felt when the show was ending. Such is the life of a fractional professional. Given the fact that I am a fractional CFO (FCFO) this article will look at this topic through that lens.
As a FCFO, I've had the privilege of partnering with many incredible businesses, working with them through periods of growth, navigating financial challenges, and helping them achieve their strategic objectives. Every successful partnership has a natural lifecycle and as the Greek philosopher Heraclitus once noted that the only constant in life is change (I am not smart enough to know who said it, I had to Google it). That thought captures the essence of a career in the fractional world. With a few possible exceptions, when we start working with a client we know that if we do our job successfully, we will work our way out of a job.
It is true that some fractional professionals have left the fractional world to return to the world of a W-2 employee – usually to work fulltime with a client. This certainly does happen, but the majority of FCFOs I know, once they have experienced the fractional life, prefer the benefits that fractional work can provide. While there are many benefits, knowing every engagement will end elicits mixed emotions. However, ending an engagement does not have to be a negative event. In fact, it should be the capstone event to a successful partnership with our clients.
We are all well aware of the benefits that a FCFO (or other fractional professional) can provide to a company. A fulltime CFO and a FCFO may provide many of the same the same services; however, the cost of a fulltime CFO can be too much for a startup or small company to absorb. So, instead they work with a fractional CFO to obtain the skills and experience they need at a more palatable cost.
As the FCFO and client relationship grows, factors may be introduced that could result in a client looking to transition from a FCFO to a fulltime CFO. Typically, there are two factors that lead to the client’s migration from a FCFO to a full-time CFO and both factors are actually good problems.
Time - Most FCFOs have multiple clients and as such, we have a certain amount of time we can dedicate to each client. As the client grows, they will most likely need more time than some FCFOs can provide
?Success – During the engagement, our client will hopefully increase its revenue, growth and profitability. This growth can provide the client with the funds needed to hire a full-time CFO
?As these factors become apparent to us, it is a bittersweet moment. On one hand, we have hopefully had a positive impact on our client’s growth and profitability. On the other hand, we realize it is in the client’s best interest to hire a full-time CFO – effectively ending our involvement with the client, but we recognize that a full-time CFO is ?the next logical step in the client’s growth journey. Sometimes, our clients may not be aware that a change might be in their best interest. As a trusted advisor, it is incumbent on us to discuss our thoughts with our clients and to assist them as they migrate into the full-time CFO phase. Our help could include:
Acknowledging the need for a full-time CFO
o?? Financial strategies implemented during our engagement
o?? Documentation regarding any models and budgets we have implemented
o?? Ongoing initiatives and KPIs
o?? Recommendations for the full-time CFO’s first 90 days
o?? Write the job description based on their needs.
o?? Participate in interviews to assess candidates’ technical expertise and cultural fit.
o?? Provide guidance on competitive compensation packages.
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While we always want to do what is in the best interest of our clients, there are potential benefits for being the agent of change and ?facilitating our clients transition to a full-time CFO.
?Final Thoughts
?Recognizing when it’s time to transition a client from fractional to full-time leadership is an essential skill for any fractional professional. It’s not about losing a client—it’s about setting them up for continued success. Doing the right thing is never the wrong choice
By proactively identifying the signs and guiding them through the process, we establish ourselves as a trusted advisor who prioritizes the best interests of the businesses we serve. And as our clients grow, so will our reputation and our opportunities in the ever-expanding fractional frontier.
Stay Ahead of the Curve: Follow These Minds
Podcast/Video:
Clara CFO Group "10 Things your Fractional CFO should be doing for you"
Article Worth Reading :
The Finance People - "When to Transition from a Fractional CFO to a Full-Time CFO" https://www.thefinancepeopleuk.com/blog/when-to-transition-from-a-fractional-cfo-to-a-full-time-cfo