What is a Fractional CFO?

Why did you want to start your own business? Chances are it’s not because you just loooved handling finances. You didn’t dream about bookkeeping and weren’t lured in by the idea of minimizing expenses. In fact, in your ideal business model, you’d probably have somebody else to take care of those things for you.

In corporations and larger businesses, that “someone” is a Chief Financial Officer or CFO. But smaller businesses, like the medical practices I work with, don’t have the need or the means to hire a full-time CFO. 

That’s where a fractional CFO can be the perfect solution. 

Just what is a fractional CFO? And what difference do they make? In this post, I’ll explain what a fractional CFO is, what they can do for your business and how you can hire one for yourself.

  1. What is a fractional CFO?
  2. What’s the advantage of hiring a fractional CFO?
  3. 3 Examples of a real fractional CFO at work
  4. How to find/hire a fractional CFO

What is a Fractional CFO?

Tile letter on red rack in word CFO

A fractional CFO is an outsourced financial expert. 

This is a person with experience and skill in all things money. They’re able to help you scale your business and remain profitable. They know how to raise capital, minimize debt and structure your business for long-term financial success.

A fractional CFO is hired for a season or on a per-project basis. They step in when needed and provide professional finance and accounting help without the cost of a full-time contract.

What’s the Advantage of Hiring a Fractional CFO?

A female financial advisor is making recommendations

A fractional CFO can make a world of difference for small and midsize businesses. 

Hiring one is the most cost-efficient way to get a financial expert on your team. Not only will they be able to do the things you don’t want to do, they’ll do them better than you could on your own.

That’s because a fractional CFO simply knows things you don’t know. They have years of experience uncovering and solving problems, so you get wisdom from someone who knows what works and what doesn’t. If you’re facing challenges or trying to scale your business, that expertise is invaluable. They’ll be able to organize and optimize your books, decide when it’s time to hire an employee or coach you on your pricing structure.

When you have that value on your team, you are free to focus on the things you do best. With more time, flexibility and focus you can enjoy growing your business.

3 Real Examples of a Fractional CFO at Work

person getting financial advise through graph examples from a fractional CFO

Let’s make this even more concrete though. Here are 3 examples of how I’ve served clients as a fractional CFO.

  1. A client came to me for help with a rebrand. She was reevaluating her products and services. I stepped in and audited her product mix. We dove deep into each offering and uncovered the profitability of each one. I was able to advise her on pricing and she was relaunched with new financial clarity.
  2. A clinic needed help interpreting their financial reports. These doctors were brilliant and had healthy number of patients, but were struggling to pay themselves well. When they hired me I reviewed their expenses and streamlined their cashflow. With my help, they were able to finally pay themselves what they deserved.
  3. Many clients come to me for help implementing the Profit First System. With my experience as a certified master, I’ve been able to help them set up the right bank accounts and allocation percentages for their business. In the end, they were able to go from bleeding cash to profiting every single month.

How to Find and Hire a Fractional CFO

CFO shake hands with new client

So how do you find a fractional CFO?

My recommendation is to test the waters first. Talk to people you know in your industry and ask who they’ve worked with. Read testimonials and look for people that mention the same issues you’re facing. You want a fractional CFO that has earned credibility helping others similar to you. Search for someone with a proven system and years of experience.

If that research turns up a promising candidate, give them a call. This is someone that will work closely with you and your business, so you want to make sure they are a good fit. Consider personality and ask them about their approach to working with you. Only hire someone if you feel there is good alignment between you.

With the right fractional CFO, you’ll be able to take your business to new heights. Here’s to healthy profits.

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