140. No BS Advice For Starting a Fractional CFO Firm in 2025

Foreign.

My name is Michael King and I've been running a fractional CFO firm for nearly nine years now. I've also worked with hundreds of other fractional CFO firm owners to help them start and scale their firms. Through all of this experience, I've learned five lessons that I wish somebody had shared with me nine years ago before I got started. These lessons would have made me millions of dollars in additional profit and and help me start and scale significantly faster. Today, I'm gonna share no BS advice for starting and scaling a fractional CFO firm faster. And just as a heads up, this episode might leave you rethinking everything. Lesson number one if you want to start or scale a fractional CFO firm, then you have to prospect and you have to sell. The number one reason fractional CFO firms fail is because of this exact lesson. And it's the reason my firm has almost gone under twice. So you're going to want to pay attention. But let's start with some common language first. Prospecting is the process of going out into the world and telling people what you do, who you do it for, and what problems you solve. The goal here is to get people interested in buying from you. Sales is the process of converting prospects, those people that you prospected to, into paying clients. No prospecting, no sales. No sales, no clients. No clients. No revenue. No revenue. No business. It's that simple. Now, I think it's important to talk about what prospecting is and how it's different from what some might think of as marketing. Marketing, while very similar in some ways to prospecting, is much more broad. Marketing includes everything from running ads on Google or Facebook, to SEO, to making content for social media, to putting up billboards with your company info on it. Prospecting is a is a form of marketing, but it's much more specific. So when I think about prospecting, it's much more focused. It could include anything from speaking on stage to appearing on a podcast, to attending networking events, going to conferences, working with referral partners, or maybe even, oh my gosh, cold calling potential clients. I've written several blogs on how to prospect, so if you want a deeper dive into how I think about prospecting, we'll include some links to those in the description below. If you're interested. There are a dozen or so different modalities to prospecting, and you'll likely be more comfortable or better suited for some than others. But at the end of the day, you you're going to have to pick one or more of those modalities and you're going to have to actually do the work. Then once you have the prospects or people that you have interested in your CFO services, you have to sell to them. You have to get on Zoom or on the phone or meet them in person and turn them from a prospect into a paying client. Those are both skills and they're both hard. But here's the rub. They aren't hard because they're complex. They're hard because they don't serve the ego well. Prospecting sales is a game for people that can deal with hearing no 10 times or 100 times more than they're going to hear a yes. And that's a very vulnerable thing. To be sure, getting no sucks, but that's the price of admission if you want to be in business and certainly if you want to scale a fractional CFO firm. Now here's the for real, real. Especially if you're thinking about starting a fractional CFO firm or if you're struggling to get traction in your firm today, the number one reason fractional CFO firms fail is because they're not willing to consistently prospect. It's not because their LinkedIn profile isn't optimized. It's not because their IG quote cards aren't bold enough. It's not because website sucks or because their forecasts aren't accurate enough. It's not because their CFO report doesn't have enough colors on it. And it's not because they have the wrong letters after their names. It's because they're not willing to prospect consistently. So the question you have to ask yourself if you want to build a firm is, are you willing to prospect? Now, the pushback I often get is, hey, why not just focus on the who instead of the how or the what. Why can't I just go out and hire somebody to do biz dev and sales for me? You can do that, and I hope that you do do that. But you can't do it successfully if you don't have a playbook for a biz dev or salesperson to follow. It's a huge misconception that you can just go out and throw money at somebody and think that they're going to magically come in and know exactly how to sell your CFO services. You've got to have a playbook. You have to figure out who it is that this salesperson is going to go out and sell to, what problems the prospects have and how your CFO services are going to solve those problems. You have to Tell the biz dev person where to prospect and how to prospect. You have to have a sales process for them to follow or they're just gonna suck up your payroll and eventually bounce because they're not getting any commissions. And this isn't just my opinion. I've studied this a ton and I've also talked to some of the best thought leaders in the prospecting and sales industries like Jeb Blunt and Carol Mahoney. They've been building sales teams for decades and they'll tell you you have to have the playbooks. Now, do your playbooks and strategies have to be perfect? Absolutely not. But you have to have a working model for somebody to come in and execute on. Now, all that said, I absolutely want you to hire somebody to handle prospecting and biz dev and salesfor. In fact, I'm doing that in my firm literally today. Which brings me to my second lesson. Lesson number two if you want to scale, you have to build a team. Now you can go down and do the solopreneur thing all day as a fractional cfo, you can likely earn a pretty decent income along the way doing it. But this episode is the no BS advice for scaling a firm. And you can't scale a firm without a team. One of the biggest misconceptions that is being promoted on social media right now today, is especially on LinkedIn, is the concept of the solopreneur. You've probably seen the people touting their multiple seven figure businesses that they're running as a solopreneur. It's misleading at best because none of these people are actually doing it solo. They all have a team behind them. The team just happens to be 1099s and subcontractors instead of full time employees. Now you might be asking yourself, how do I know this? I literally talk to these people. I'm in masterminds with them. I'm in private slack groups with them. I text some of them from time to time and they all have teams or all of them. If you want to scale, you have to be willing to build a team, whether that's a team of subcontractors or employees. I think that that willingness to build a team is probably the biggest bottleneck to actually scaling. I was talking with a really hardworking fractional CFO the other day. She's handling six fairly large clients all by herself, including the FP and a scheduling client meetings, all the things. She's answering all of her own emails. She's also keeping up her own books and she's Trying her best to prospect four to five times a week. And the cool part is that it's actually working. That also means she's also handling sales calls as well. She slacked me to let me know that she's working 50 to 60 hours a week and she's burning out. My response was, I bet you are. I told her that she's got to get some help, but she didn't know where to start. Should she hire another fractional CFO or somebody to do the FP and A? I told her that I think her first hire should be an assistant. A great assistant can help with things like emails and calendars, but they're also going to help you get your life organized and prioritized and keep you focused on the right things. The pushback I usually get when I talk about this is like, oh, I just don't get that many emails or have that many calendar requests to need help. It just won't add that much value. And I'm like, no, if that's all you're delegating to an assistant, it's probably not worth it. Now, the purpose of this episode isn't to do a full walkthrough of what an assistant can or can't do for you. If you want to know my entire playbook, you can check out Dan Martell's book called Buy Back youk Time. My team literally just does exactly what he lays out in the book and it's great, but you have to be willing to trust your assistant to do more or you're not gonna get more. Now, once you have your life in order, then you can figure out who to hire next. In most cases, that's probably gonna be your first fractional cfo. If you wanna scale, remember this old African proverb? If you wanna go fast, go alone. If you wanna go far, go together. When it comes to generating CFO reports for my clients, my firm has two non negotiables. The process has to be accurate and it has to be efficient. That's why my firm only trusts Giacon. At its core, Giacon is a data connector between accounting platforms like QuickBooks and Xero and Google Sheets. But Giacon is so much more than just right out of the box. You're going to get hundreds of templates for all the reports that CFOs and accountants need to run for their everyday workflows. Everything from balance sheets to PNLs to AR aging reports. Or you can use Giacon, like my firm does, to create our custom CFO reports every single month. My favorite part about G Accon is that you can set it up to automatically create all of these reports. That means every month I'm getting fresh reports with fresh data ready to deliver to my clients. And because G Accon is automated, that has completely eliminated the need for my team to download data from QuickBooks, upload it into Google Sheets, and manually apply formulas. All of those things that take up a lot of time and are prone to errors. In fact, GFON has completely replaced all the other tools, services and workflows that we were using to generate CFO reports. GCON is literally our one stop shop for making all of our CFO reports automatically every single month. If you're ready to start saving time and reducing errors, then you need to check out GFCON right now. Be sure to use the link in the description below to save 30%. That means you can get started with GFCON for as little as $28 a month. Join my first and over 10,000 other firms and Trigon today and that brings me to lesson number three. It's nearly impossible to work a full time job and to scale a firm. It goes back to the old adage one butt sitting in two saddles doesn't feel good and it certainly doesn't work well. And that applies to business as well. If you're spending 40 hours a week as a full time employee of somebody else's company and you're trying to do all the things that you've got to do to start and scale a fractional CFO firm, it won't feel very good and it certainly won't work out well. And I think there's three big reasons why. First is the obvious. One time we've all got the same 24 hours in a day and there's only so much that you can do in that time. If you're working eight to nine hours a day at your day job, you just don't have that much time left over for your firm. Sure, you can burn the candle from both ends for a season, but you'll eventually burn out, which is a recipe for failure at your job and at your company. Everybody loses. Your employer, your clients, your family and yourself. Yes, you can work part time building your firm, but growing a firm demands a lot of your time if you want it to take off. If you just want some side hustle money, you can probably do that part time forever and make some good change, but you're not gonna be able to scale. The second reason one Butt and two Saddles doesn't work well is because running a company also demands a lot of your attention and mental bandwidth. Admittedly, there's nothing easy about building a fractional CFO firm. In addition to doing the actual CFO work, you also have to do CEO work. You've gotta do the biz dev and sales work. You've gotta do your own admin work. All of those things require significant context switching. And context switching is extremely mentally taxing. The more you jump around from thing to thing, the more of a toll it takes on your brain and your energy. Again, you end up burning out faster, and nobody wins, least of all your new company. Finally, there's a security that comes from having your W2 job that's not going to serve you well in your business, and that security keeps you complacent. In some ways, being a business owner is a little bit like being a caveman. In order for the caveman to survive, what did they have to do? They had to leave the cave. They had to go out and hunt animals and find animals. They had to kill those animals. They had to drag the animals home, and then once they got them home, they had to clean those animals up and cook them so that they could eat. They had to do that in order to survive. And the same thing is true in business. You've got to learn how to go out and prospect. You've got to learn how to turn those prospects into clients so that you have money to survive on. Now, if those cavemen had somebody that was like prehistoric Uber that was delivering food to their cave three times a day, then they wouldn't ever have that hunger and that necessity to go out and learn how to hunt and kill. And the same thing is true in your business. If you've got the security of that W2 job where you know you're going to get a paycheck twice a month. You don't ever have that necessity, that need to have to learn how to go out there and build your business and make your business run. What I'm trying to say is that if you know that the W2 paycheck is always going to come in, then you have no meaningful incentive to to learn how to get clients and run a firm. You stay a hobbyist. I can tell you from personal experience that once that W2 paycheck is gone and now you have to go out and learn how to hunt, it lights a fire underneath you like no other. If you want to scale a firm, set yourself up with some financial security, but then burn it all down and force yourself to leave the cave and learn how to hunt. Lesson four, the hard work isn't in the complexity. It's in the consistency. There's nothing inherently complicated about running a fractional CFO firm. In fact, you've probably already mastered the most complex part of it. You know how to do the forecast and the projections and WIP reports and inventory management. You understand the KPIs and how to apply them. Maybe you even know a thing or two about tax codes. That stuff is complicated. Running a firm isn't nearly as complicated as any of that, really. Running a fractional CFO firm boils down to just seven components. Write these down. Number one, prospect to get leads. Number two, close leads to get new clients. Number three, deliver a great onboarding experience. Number four, deliver a great month to month experience and add value. Number five, go overboard with great customer service and client communications. Number six, develop processes and procedures to make sure that all of those things are on repeat. Number seven, hire great people to execute those processes and procedures. There's really nothing complicated about any of that. The hard part is making sure that you do it consistently every day, with every client. It's easy to get sidetracked and squirreled into other things that don't contribute to one of those seven components. If you're doing something else, you're likely doing the wrong thing. I wish somebody had laid it out for me like that nine years ago. I spent so much time just screwing around and spending time on things like websites and charts and graphs and making my forecast more accurate. Those things can be hard and they're certainly time consuming and. But the truth is, none of that matters. Just hit those seven components consistently and keep your firm as simple as possible and the rest of your life will be exponentially easier. Lesson number five, you've got to get comfortable with imperfection. This was and still is the hardest business lesson for me to master. And I wish somebody had beat this idea into my head nine years ago. I really wanted everything that I did to be perfect. Like, I wouldn't even get started on something until I had a 12 point plan in place, templates and SOP and everything was ready to go. But what I've learned is that perfection is just a myth. And it's the number one thing that will keep you from even getting started. The truth is that the process of getting started and making mistakes is what actually makes you better. It's not in the planning, it's in the doing. You've got to just get in the game and start getting experience. In fact, today I look at business more like the pursuit of mastery rather than a pursuit of perfection. Mastery is attainable while perfection is impossible. If you want to scale a firm, you've got to come to grips with imperfection or you'll never even get started. Now, I'm certainly not advocating for mediocrity, but what I am saying is that you've got to figure out how to embrace good enough. And the good news is, if you're the kind of person that struggles with perfectionism, then odds are that your standard of good enough is probably more than good enough for your clients. All right, my friends, I hope you found this episode helpful. If you did, it would mean the world to me if you would leave a five star review on Apple Podcasts, Google Podcast, Spotify, wherever you're listening to this episode. In the meantime, I can't wait to see you back right here next week. I'll see you then.