Fractional CFO Services: Beginner's Guide 2025

Hey guys, welcome to a quick training that we're going to do about fractional CFO services. So I created this video because I get a ton of questions about fractional CFO services. And maybe you're not fully ready to dive in on your education, but you want to learn a little bit more. That's what this video is here to do. So if you don't know me, hi, I'm Charles Lykoff. I've been a fractional CFO since 2017 and then prior to that I worked in corporate finance for 10 years. I was a full time W2 CFO of a middle market company and I quit that to do fractional CFO work all on my own. And it has been awesome since then. So I'm going to get into what is a fractional cfo? What do you do? How do you get started? What are the benefits to you and what are the benefits to your clients? So the first thing is, what is a fractional cfo? So a fractional CFO is a whole bunch of different things. There's a million different terms for it, right? Sometimes you'll hear fractional cfo, you'll hear advisory, you'll hear profit coach, you'll even hear consultants or right, financial consultant. They're all kind of the same thing. And if you want to get really nitty gritty, you can kind of compare each of these things. But realistically, when you're talking about one of these, they're all sort of the same thing. Now there's different groups that are different processes or methods or whatever, you know, especially when you look at like the profit first people. So maybe that doesn't super apply. But at the end of the day, you're providing financial experience to a business owner. So these are all sort of in the same kind of category. Now the kind of the services you can provide, you can do a whole bunch of things as a fractional cfo. And I want to kind of go over it. They're typical is like a budget and a forecast. You can get into working capital management, you can get into contract negotiation, cost savings, training the team, getting the loans. There's a million other things that you can do to bring your expertise so you don't need to think like, hey, I don't have 25 years of experience, I don't have three letters behind my name or two master's degrees. I can't be a fractional CFO. You're going to see why that's not true in here in just a second. Right? You don't need to do a ton of these things. And oftentimes your clients aren't even looking for all of these things. So don't be intimidated by the term. There will be people out there who will try and tell you because you don't have all those things. It's not true. Yes, I was a middle market CFO prior to turning fractional CFO as a full time, but I started doing it part time way before that. And to be honest, I don't have three letters behind my name. I don't have an mba, I don't have a cpa, I don't have a master's degree. Do I have a ton of corporate finance experience and did I help restructure, you know, billions of dollars worth of a business? Yeah, absolutely. But at the end of the day, when your typical clients in the 1 to 20 million dollar year range, half those skills that I have, I can't even use with them. Right. So what type of clients are you getting as a fractional cfo? Typically it's people who need the expertise of someone who has the real financial know how, but they don't really want to show out the quarter million or half a million dollars a year for a full time cfo. Right. And they, you really start getting about the switch to them trying to hire a full time CFO at about the $20 million year range. Sometimes it's before that, sometimes it's way after that. I've seen larger, but realistically this is going to be your bread and butter more likely like the 3 to 10, 3 to 15 range. If you want to be really specific. I typically serve clients into the 3 to 15 range on average. I think my smallest client right now is about $3 million a year. So if that tells you anything. But this, this range is generally acceptable. It also depends upon their margins. Right. The larger the margins, the lower this, this lower end spectrum can go because you want them to need a certain level of sophistication or requirements so you can get in there and charge the fees and actually help them get an roi. You can't get them an roi. Like you know, why are you there? So speaking of which, we're going to talk about the value proposition. So the benefits for businesses. A fractional cfo, you can provide cost savings, you can provide a bunch of expertise, you can provide some flexibility. What does that really look like? Right. They don't have to chunk out money for a full time W2 CFO. Right. So it's definitely cost effective and they're getting Expertise that they would not normally get and someone to really take a good eye into their business. And, you know, there's flexibility because if they don't like you, usually they can. They can get rid of you. So that's the value proposition for them. Now, when I'm getting in front of a client, usually there's two main drivers. There's really three. There's time savings, return on investment, and emotional peace and, or like mental clarity. So what do I mean by these time savings? Oftentimes, as a fractional cfo, you can help them get to their goal faster. You can help them get there. You can provide a lot more help, right? Maybe you can get their books done or analyzing it or figuring out, hey, what are three things they can do to grow their business. That's big on time savings, right? Return on investment. Usually when people hire me, I have paid for myself within the first 30 days almost every single time I've gone on a fractional CFO engagement because there's so many things wrong with their business that I can come in and clean up just a couple things, and I have more than paid for myself. You know, when you invest in a stock and you get a 10% return in a year, meaning you put $100 into a stock and it goes up to 110 by the end of the year, usually you're pretty darn happy. Well, they're getting 100% in one month. So no one's, no one's ever upset when they hire me. And so it's a massive value proposition for the client. And also financial clarity. A lot of people don't really know where they're going and how to get there. And so that to them is really, really big. And sometimes just providing that to them can give them massive peace of mind. Why the heck should you offer fractional CFO services? So the first thing, and this is this, my favorite part is high leverage, right? I'm getting paid for my brain. I'm not getting paid for my hands, right? I'm not laboring even when I am, I'm earning 300 or $1,000 an hour. Like this is. This is worth my time to do. I don't want a million clients. I just want a couple, right? And if it's just going to be me or just going to be you, you can earn a really good living doing this. I mean, 20 hours a week is $20,000 a week, right? Granted, it always doesn't work out like that, but it's high leverage. So getting the clients is Harder. But the earning part, that's. That's the easy part. You know, you're not going to be working for a little amount. So if you really care about the time spending time with your loved ones, friends, family, whatnot, fractional CFO is the way to go. There's a huge demand for it right now. I'm sure you see, it's all over the Internet, all over the place. Business owners are looking for it. It's becoming more mainstream. So if you want to learn more, it's getting easier and easier to do it. Also, I don't know if you've ever been pigeonholed into I'm just an accountant or I'm just a bookkeeper, or I'm just this. It really kind of elevates your status to that next level. As silly as that is, sometimes it's really valuable even when selling your other services. Also, this is a personal thing to me. The work is way more interesting. But I'm. I'm not a big compliance guy, as we saw up here. I have a corporate finance background, so not only was I not super interested in compliance, but I hadn't spent my career on that. So I'm going to talk a minute here about just getting started. There's a couple things you want to do in the beginning. You want to pick a niche, what services you're going to offer, getting the right price. You got to learn some sales skills because it's a little bit different in selling them. And then you got to get at marketing because you need to have appointments to sell the people at the right price for the right services and the right group of people. So there's a whole thing there. We have a system that we teach people that goes over all the things. If you want, you can go to profitsearchgroup.com call and find out some more information or just shoot me a message. I'm happy to talk to you about it, but I'm going to tell you this. If you're not doing fractional CFO services, you 100% should be tons of other people rolling it out. Now is a really, really good time to do so. There is a caveat. It's not for everyone, right? Some people don't like it, some people won't enjoy it. Some people, it's just not for them. But to be honest, it's changed my life. I will never go back to working for somebody else because of that. And I really highly recommend that if you're gonna get into growing your firm, this is the best way to do. So all you gotta do is go to profitsearchgroup.com call, there's a video there. You can find more information about what it looks like to work with us or learn some more information or just shoot me a message and we'll talk about it. Maybe it's a good fit. Maybe I can help you out. All right, Talk to you later, guys. Thanks.