13 Hours of CFO Firm Building GOLD (in 11 minutes)

I'm a firm believer that the business owners at the top are collaborating while.

The ones at the bottom are competing.

That's why I'm about to spend the.

Next 13 hours with eight of the.

Most successful fractional CFO firm owners that I know. We're going to spend the entire day together talking about the things that are working in our firms, the biggest challenges that we're having in our firms, and.

We'Re all going to pour into each other to help each other solve our biggest problems.

Today, I'm going to do my level best to document everything that I learned.

Today so that you can apply the.

Lessons that I'm learning in your firm. What are we going to learn today? Let's find out.

So before I kick these meetings off, I like to take about 10 or 15 minutes to just sit down with my iPad and really brainstorm some of the winds that I've had since since the last time this group met. But also in some ways more importantly to me, like what are the biggest challenges that I'm having that I hope that this group can help me with? So what's on my mind for this particular meeting? Well, number one is we've really had a lot of success lately with business development and sales. And I'm really coming to this point where team is about to be my biggest bottleneck. We're about to hopefully sign one more big client today, maybe tomorrow. And after that we're probably going to be talent constrained. If I'm not able to hire another CFO or two in the next couple months, it's going be a really big problem for me. I want to get some feedback from the group today. What's working for them when it comes to finding fractional CFOs, what kind of outreach methods are they using to attract talent? I just want to understand what's working for them so that I can see what I can do differently. Number two is with hiring. I've really been thinking hard lately about the compensation model for fractional CFOs. Traditionally, I've done 40% of revenue to the CFO. I've had a couple of my coaches and mentors recently suggest that there might be some better ways to do that. Some ways that incentivize the fractional CFOs a little bit differently, that maybe takes into account longevity of client and some other things like that. So I just want to get some feedback from others on how they're compensating their team and finally is onboarding new clients. We've spent an inordinate amount of time over the last six months, really trying to figure out how can we reduce the length of time it takes to onboard new clients. And I've shared some of those lessons with you, some of those things that I'm trying. I'll link that video below if you want to check it out.

But I want to just kind of.

Throw out to the group some of the things that we've been trying, some of the things that we've been seeing, and really ask the group to poke holes in what we're doing and let me know if there's any gaps or any opportunities for improvement so that we can make that onboarding process both more valuable for our clients, but also to reduce the amount of time that it.

Takes to get the client fully onboarded.

And into that normal CFO cycle. So I think with a group like this, for the amount of time and money that we spend to be in groups like this, it's really important for me to be as intentional as possible.

And as thoughtful as possible ahead of.

Time so that I can get the most value out of everybody else in the room.

All right, man. I'm exhausted that we've literally been in this boardroom together for, gosh, the last 10 hours now, 10 hours straight with, I don't know, like 10 other seven figure firm owners. And we have covered so much great information today. Before I jump out of here to go have dinner with everybody, I wanted to take a moment to just share with you six lessons that I took away from my 10 hours with these other amazing firm owners today. And so I've just got my iPad down here with some notes on. I want to share those lessons with you because I want you to know, what are the firms that are growing the fastest with highest profitability? What are they thinking about? What challenges do they have? What are they talking about? So that you can apply some of these lessons in your firm as you ramp up to scale from wherever you're at today, up to seven figures or multiple seven figures. So first lesson that really came out of this today is that growth comes at a cost. Adding infrastructure as you scale takes money. I know that as fractional CFOs, we all know that. But then when it comes time to apply that to our own firms, sometimes we lose sight of the fact that we've got to do that. So investing in building a team ahead.

Of growth so that you can weather.

The weight of success without your firm getting crushed is so important. But clearly when you do that, margins and cash are going to take A hit. So you've got to be ready, prepare for that growth. As you're scaling from maybe one or two clients and you're thinking about getting up to 10, 20 or 30 clients, be thinking about the infrastructure that your firm is going to need so that you can support that weight that comes along with it. You don't want your firm to crash under the weight of your own success. So thinking about operations managers and other non production types of overhead, really important to plan for those things. So be thinking about that now. Number two, this is like that age old thing what got you here is probably not going to be what you need to get you there. So as an example, kind of two things come to mind. The first example is the processes that your firm used successfully. The scale from 100k a year to 400k a year to a million dollars a year. Those processes are likely not going to work once you get north of a million dollars. And a great example of that is like your onboard. You know, if you're only onboarding two clients a month, the process to do that successfully isn't going to work probably when you're onboarding eight clients a month. So really be on the lookout as you scale to identify those processes that just aren't working anymore. And don't be so married to those processes that work before that you're not willing to adapt, improvise and overcome. Another thing to think about in the world of what got you here isn't going to be what gets you there is around team. The team members that were just clutch so important in your firm's growth. When you are just starting and getting up to even half a million dollars, they might not necessarily be the right team members to get you to a million dollars or beyond. So why would they maybe not be those people? Well, when you've got a small team, maybe it's just you and one other person. Accountability is not nearly as important. Process and procedure adherence isn't necessarily that important. But once there is a team and people are counting on each other and there's information flow that has to happen in order to serve the clients at the highest level. You need people that really thrive with accountability and that aren't turn by having to use processes and procedures and CRMs and all those different kinds of platforms and it's okay if you find those people that they're just not a fit for the direction that your company's going, it's okay to lean into that as a necessary ending. It's just time to move on from those people. It doesn't mean that you failed or that they're bad people. They're just not the right people to get you where you want to go. The third thing that comes to the top today is building that first layer of leadership and supervision in your firm is key, is you start adding multiple accountants or bookkeepers or fractional CFOs to your team and you've got ops people and admin people. You're going to need a level of supervision in there to kind of manage them and lead them, because you just don't have the capacity to lead the firm, to be the visionary of the firm, to develop the strategic partnerships, all that CEO kind of stuff. And so you've got to think about building the leadership infrastructure to be able to lead those people and manage those people effectively, which means you've got to have the margins in your firm to.

Be able to afford them.

So really be thinking about that when you're thinking about your compensation models and things like that today, because you're going to have to pay for them. You don't build that leadership layer out, you're going to hit a glass ceiling. You're going to plateau. So be planning for those things today. Fourth thing that came up today multiple times was how important it is documenting your sales process. How does a prospect flow from the time they come in as a lead all the way through the sales process? You want to document the things like what questions are you asking? In what order are you asking those questions? Why are you asking those questions? You've got to get all of these things documented so that one day you can hand over that prospecting and sales process to somebody else. You've got to get it dialed in, you got to get it systematized so that you can hand it off one day. Another lesson learned from having a really well documented sales process is your onboarding process actually becomes 50% easier because you've been intentional about the questions that you ask, the reason for asking those questions. You're documenting those questions throughout the sales process. And then you're able to just hand those answers off to your operations team so that they can onboard the client so much more quickly and effectively. So important to have that sales process documented out. Literally everybody that was in the room with me today is working to document that out, or they've already got it documented out and they're reaping the rewards from it. Number five referral partners continue to be the best and hottest leads. So leveraging somebody else's network is so much easier than trying to build your own network from scratch. And so actually, let me take a step back. What's a referral partner? A referral partner is somebody that is maybe in your niche or that serves your ICA already. They've already got the audience, they've already established trust with them. And then you work with them and they put you in front of their audience. They're using their goodwill to say, hey, you need to work with this fractional CEO over here. This fractional CFO is amazing. I trust them. You need to work with them. And so when I talk about a referral partner, that's what I'm talking about. Somebody that's got an existing audience that they can put you in front of. So when you're leveraging those referral partners, they've already got that trust. And so when they make a referral to you, normally those leads are super hot because the lead already has the trust of the person that's referring you. They've normally identified some type of need. And so your job then at that point is to just get them across the finish line. So the trust is already there, the need is already there. You've just got to get them across the finish line. I would say that everybody in this group, at least three quarters of the people in this group, they're actively seeking out and building more referral partners. Most everybody in this room has multiple referral partners that they're nurturing and working with on a regular basis. So the people in this room that are already over that seven figure mark, they're not out there necessarily trying to build an audience from scratch. They've already got the referral partners that have the audience. They're just trying to leverage those relationships. That's how they're able to scale so much faster than if they were trying to build their audience on their own. The sixth and final thing that I'll share with you today, I just keep learning this lesson over and over again, is that you got to find your tribe. The amount of knowledge and experience that I was able to learn from today would have taken me years to figure out. Maybe I never figure out some of the things that we talked about today. We're talking about owner's comp, we're talking about compensating CFOs, we're talking about leadership layers, we're talking about marketing and affiliate partnerships and how do we incentivize them. We're talking about these big things here that are tens and hundreds of thousands of dollars of consequence. How long would it have taken me to figure out all of those things on my own? I don't know, but I know it would have taken me longer than. So I really want to encourage you. If you haven't found your people, if you haven't found your tribe yet, then go out and find it. If you're still looking for your tribe, maybe check out my Inner Circle program. I'll include a link down below. You can check it out for your first month for just a dollar. But we've got about 300 other fractional CFOs inside the inner Circle. It's a private Slack community. It's exclusive just for fractional CFOs, maybe just like you who are just getting started and are kind of just scaling up to a 200,000, $300,000 mark. So if you're in that just starting up to under 300,000 in revenue, this might be a great opportunity for you to come and join that tribe and learn from what some of the best in our industry are doing. All right, I'm going to go have dinner with these guys and see if I can learn a little bit more before we wrap up today. I hope this was helpful. Can't wait to see you next week.