148. How I Plan to Grow my CFO Firm in 2025 (+225%)

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Was an absolute banger of a year for my fractional CFO firm, KFE Solutions. This was capped off by adding a little over $750,000 in annual recurring revenue in Q4 alone. Now, going into 2025, we've got big plans that are going to help us grow by another 230%. However, none of those plans will work if we don't nail one critical element, which means I'll end up missing out on a half a million dollars of net profit. So today, I'm going to break down our three pronged strategy for 230% growth in 2025, and I'm going to let you know what one thing might cause it to all come crashing down, but more on that later. But why do you care? Well, you can apply this three pronged strategy to your firm whether you're just getting started or if you're already generating six or even seven figures of revenue in in your firm today. For those of you that don't know me, I'm Michael King and I've been running a fractional CFO firm for almost nine years. In fact, I'm still in the trenches with you guys running my firm today. I also make videos like this one to help you start and scale your firms. And so what is my plan for adding 225% to the top line this year? Like I mentioned, we've got a three prong strategy that we're really confident about. And the first part of that strategy is just good old operational excellence. In 2025, we're going to double down on three components of operational Excell in particular. First, we're going to focus on fast but highly effective onboarding for our new clients. I've learned over the years that as goes onboarding, so goes the rest of the relationship. And the faster that you can get to that first true value delivery with your clients, the more likely that they're going to end up staying around for a year or two years, even three years. So that means that you have a ton of financial incentive to get clients onboarded, to get them onboarded fast, and to deliver big value during that process. One of the ways that we found that we can best accomplish this is by doing onboarding in person. And so for the past year, we've been experimenting with in person onboarding. And what we found is that sending the CFO to visit the client in person is the best, most effective way to develop trust fast, but also to get into the details of the business and to start finding opportunities to add value now sure, going in person takes a lot of time and it adds some overhead. But the rapport, the trust, the insights and the speed to value far outweigh the time and financial cost associated with a visit. Now look, I spent about eight years not doing in person onboarding, so I'm certainly not not saying that you have to do in person onboarding. But I have found that it makes life so much better for everybody, including the fractional CFO and the client. Now, the sweet spot that we found through our testing is that onboarding should take one to one and a half days. Anything less than that and you don't have enough time to do meaningful work and to really get the trust factor kind of dialed in with the client. But when you start going beyond one and a half days, it starts to become burdensome for the client's operations. But listen, even a great onboarding process really doesn't matter if you and your team aren't delivering a great product month in and month out. Which is where we come to the second focus area for operational excellence, which is process discipline. My firm operates off of seven clearly defined playbooks which we call the CFO Academy. It's literally our operating system for how we deliver our CFO services. One of the hardest parts about being a fractional CFO is figuring out how to build a scalable, profitable business model around it. Trying to figure out how to serve clients at the best price and at the highest level without having to work 60, 80 or even 100 hours a week. Over the last nine years of running my firm, I've cracked that code and I've put everything that I've learned into the CFO Academy. The CFO Academy is my flagship seven week course specifically designed to show you exactly how I run my fractional CFO firm. This is the no kidding behind the scenes processes, checklists and tools that my firm uses literally every day. The CFO Academy is broken down into seven playbooks where I cover everything from sales processes to new client onboarding. I also walk you through how to prepare for monthly clients, client calls, and how we handle project work. It's literally everything you need to run a profitable scalable, fractional CFO firm. If you're ready to start scaling your firm, charging more money and working fewer hours, then click the link below to learn more. Or you can Text Academy to 1469-515-8087 if you have any questions. And the best part is that it comes with a 30 day money back guarantee. If you don't love it, let My team know within 30 days and we'll refund every single penny. I can't wait to see you inside. In fact, if you're interested in learning more about those playbooks and how you can implement them in your firm, you can go to the cfoacademy.com there's been about 350 other fractional CFO firms that operate their firms off of the CFO Academy right now. So. Okay. Shameless plug. Sorry. Not sorry. Anyway, we're spending an incredible amount of time and money and energy making sure that our team is fully trained and equipped to execute the CFO Academy playbooks in their day to day work in 2025. We're also implementing an entire review process where the senior leadership on our teams reviews client calls and we're even putting a grading in system in place so that we have a metric driven feedback system for our team. This is going to help us identify service related gaps and put plans in place to close them. Operating from a set of systems like this is something that literally any firm can implement for regardless of your size. It's gonna help ensure that you're being as efficient as possible, but also making sure your clients are getting a consistent product. Having an operating system like this in place also makes onboarding new team members exponentially faster and easier. And it helps elevate your firm as a place that really kind of has its act together, which means you're gonna be able to attract even better talent. However, having the best laid plans for service delivery don't matter if your clients aren't happy. Which is why we're also rolling out customer feedback calls. These are scheduled calls that the entire senior leadership team, including myself, are making to our customers. Each quarter, we're scheduling a 15 minute call with every single client with the sole intention of finding out what's working and what isn't. I'm going to be honest, sometimes the feedback stings a little. It can bruise the ego. So just be prepared for that. But this shouldn't be about stroking your ego. This is about a commitment to quality service in getting better as a fractional CFO and as a fractional CFO firm. So my advice is, even if you're a fractional CFO, make it a priority to have that 15 minute call once a quarter or maybe twice a year to get feedback. Oh, and here's a pro tip. Don't try to lump this feedback into a regularly scheduled call. I found that the clients, they tend to give much more honest feedback and blunt feedback if you have a dedicated Time on the calendar just to talk about customer satisfaction. Oh, one other pro tip. If you get really good feedback on these calls, like the client is clearly a super fan, this is a great time to ask if they have any referrals for you. It's okay. You can thank me later. Operational excellence is a really smart place to focus, because when you don't do a great job with operations, you end up turning clients. And while churning clients is a bad thing that will kill growth, it is not in and of itself a thing that's actually going to be a catalyst for future growth. In fact, this reminds me of a story that really hit home for me last year. I was sitting down with one of my sales mentors, Jeb Blunt. He was in Dallas with me, and we were talking about my firm and going through my goals and all the things. And after he asked a bunch of questions, he takes a pause, and he looks at me and he says, michael, would you like to know what the literal, number one problem you have in your business is right now? Now, Jeb's a pretty straight shooter, and he doesn't hold back. So I kind of gulped, and I looked at him, and I was like, sure. So he looked at me, and he says, listen, if you can't solve this, you're never going to reach any of the goals that you just shared with me. The problem that you have is that you are the only person in your entire company that knows how to sell. And you cannot scale yourself too far beyond what you've already done. In fact, I would argue that any business that only has one person that knows how to sell isn't really a business. I'm going to be honest. This really stung because I think on a lot of levels, I knew he was right. I knew that I needed to bring in somebody else that could sell. And that leads me to our second strategy pillar for 2025, which is scaling sales. Ever since that talk with Jeb last year, I have invested literally tens of thousands of dollars and hundreds of hours of my time getting ready to hire our first sales executive, which. Drumroll, please. We just did. In fact, I'm onboarding that sales executive right now as I make this video. So the big idea for 2025 is that I want to add about 24 to 35 clients this year alone. That should generate somewhere between an additional 2.5 million and 3.75 million in new annual recurring revenue. So how are we going to get there? Well, our sales executive is going to be focused on some key prospecting and Sales activities. First, he'll be phone prospecting literally every single day. And yes, that means cold calling. He's estimating that he's going to need to make about several thousand cold calls in 2025 to hit his sales targets. But his responsibilities don't end there. He's also going to be focused on LinkedIn prospecting, attending industry conferences, and going to local networking events that we know our niche will also be attending. While our new sales executive is still onboarding, his goal is going to be to find new leads and tee them up to me, and I'll handle the discovery and sales calls. For now, as he gets his legs underneath him, we're going to start transitioning to the point that he's actually handling the discovery calls and finally the sales calls as well. Ultimately, he'll end up owning the entire sales process, from prospecting to nurturing to. To discovery calls to sales calls. Literally the entire process, cradle to grave. So you might be asking yourself, where does that leave me as the CEO? Am I going to be completely removed from the entire sales pipeline? Well, the short answer is absolutely not. In fact, my goals this year are, number one, hand off 85% of the discovery and sales calls as quickly as possible without sacrificing quality. Number two, I want to speak at three to four targeted conferences or large workshops this year that are full of our ideal client profiles. I know that speaking is hands down the best way of keeping us at the top of our industry as financial thought leaders. Third, I'm gonna still manage our major relationships and partnerships. And let's be honest, I really enjoy the entire sales process. So I'm sure I'm gonna still handle a few sales calls from time to time, but we'll see. Now, you might be listening to this and saying, okay, Mike, I don't have a salesperson. I can't do all of this stuff. And I would say, yeah, you're absolutely right, one person can't do all of this, which is exactly why I hired somebody. So what can you do? If you're a smaller firm or even a one person firm, the best advice I have for you is to pick one thing or maybe two things that you can do to consistently prospect. And you really need to do it at least three times a week, if not every day during the week. You've got to keep leads coming into the top of the funnel or you're dead in the water. You'll constantly be fighting the lead and client rollercoaster of drama. And you probably know exactly what I'm Talking about it goes like this for a while. You're riding high with all of these clients. You've got the revenue you need, the profit, and the cash that you need. And then over time, one or two clients, maybe they leave, or maybe you decide that you're ready to bring in a couple of extra clients, and you look around and you realize, oh, my gosh, I don't have literally anybody in the funnel right now. And so what do we do? We start freaking out. We start doing all the LinkedIn posting, we start trying to go to local networking events, and we start to get really desperate to get more leads and more clients in the door, and none of it seems to work. And on those rare occasions when you do get a sales call, they can just, like, smell that desperation dripping off of you. And so your effectiveness on sales calls tends to go down. And it's drama, drama, drama. Eventually, after a while, you get the client or a couple of clients, and you start feeling a little bit more comfortable again. And so what do we do? We stop prospecting. And then the cycle repeats. We end up losing a couple of clients here or there, or we decide we want a couple more, and that whole process just repeats all over again. That's the roller coaster of drama. You know exactly what I'm talking about. The antidote for all of this is consistent prospecting. I'm telling you, it's the. It's the medicine that cures the cancer. And I would say if you don't do Anything else in 2025, I want you to commit to prospecting daily, or at least weekly. It will change your firm and your life forever. And I say that as somebody that has learned these lessons the hard way. But I've also seen the fruits of what daily prospecting can do. In fact, the success I had in 2024 simply doesn't exist had I not committed to prospecting earlier in the year. All right, so the goal as it relates to sales is, let's call it about $3 million in new annual recurring revenue in 2025. And that means somewhere in the neighborhood of 30 clients at $8,000 a month to get there. And that's a great plan. However, we're going to need a few more fractional CFOs to handle all these new clients. Which brings us to the third pillar of our strategy, which is recruiting and hiring. If your goal is to ever get to a place where you're not handling any clients, or maybe you just don't want to be the only one handling clients, then you're going to need a team, which means you're going to have to hire. But hiring fractional CFOs can be risky and expensive if you're not careful and intentional about it. Think about it. If you hire a new CFO too fast, and by too fast, I mean hiring before you have clients for them to handle, then that means that you're going to have unused labor capacity. And that means that you're going to be leaving a ton of profit on the table. But if you hire too slowly, that means you can't take on new clients, which means you could end up leaving hundreds of thousands of dollars in revenue or even hundreds of thousands of dollars in net profit on the table. Both of those things suck. And that's where the relationship between sales and operations becomes super important. You or your sales executive, if you have one, really have to know your sales pipeline numbers inside and out. You have to understand that based on today's prospecting and sales activities, how many new clients is your firm expecting to land this month or this quarter, next quarter, or later this year? On the other hand, operations has to understand their capac capacity inside and out as well. They need to be able to answer questions at any time around how many clients they can take on, how long until their newest CFO is onboarded, and when they'll be ready to take on new clients. Questions exactly like that. But when sales and operations come together and have a strong collaborative relationship, you can start to easily determine when it's time to recruit and hire additional CFOs. I've actually been thinking about recruiting and hiring a lot like a sales funnel. Prospecting, nurturing and closing. Prospecting is where I'm reaching out to potential new fractional CFOs on LinkedIn Sales Navigator. I'm literally looking for full time CFOs that have experience in our niche. I'm connecting with them and having conversations with them to generate awareness in the fractional CFO market and to generate interest in potentially working with my firm. The reality is that very, very few of these CFOs are immediately interested in just quitting their jobs to join us, which is where nurturing comes in. These are the ongoing conversations where I'm educating them on the industry and telling them about our company and our culture. And finally, closing is where I'm eventually trying to get them to formally apply for our company and to go through our interview process and ultimately make them a job offer in hiring them. It takes time to go through this process. Just like the sales and Prospecting process. Now, just like with sales, I'm learning that if I wait to recruit until we need a new cfo, we're already behind. And so, based on our goal of around 30 new clients this year, and assuming a CFO can handle anywhere from eight to 10 clients, and our need to be able to onboard anywhere from two to five clients at a time, I suspect that we're going to need to hire anywhere from four to six, maybe even seven new fractional CFOs this year. And based on my experience hiring fractional CFOs, that means that we're going to be interviewing anywhere from 20 to 30 fractional CFOs in person, which means we'll be evaluating hundreds of applications and resumes. I literally don't have the bandwidth to do all of that, which means I'm anticipating that we're going to need to hire a part time recruiter in 2025 that's working 10 to 15 hours a week. And this is mind blowing to me because I never imagined that we would be in a position to need a recruiter in the company. So to recap, our three pronged strategy for adding $3 million to our top line in 2025 is this. Number one, operational excellence with a strong focus on onboarding, process discipline and customer feedback. Number two, scaling our sales, and number three, recruiting and hiring. I'm really confident in this plan and I know that if we can nail it, 2025 will be by far our best year ever. But there's one thing that could cause the entire plan to fail even and end up with me leaving potentially a half a million dollars of net profit on the table. So what is that potential issue that could cause the entire Death Star to blow up before our eyes? Our new sales executive has to absolutely crush it. And that's why I've invested so much time and money into learning how to hire and onboard a sales executive over the last year. And I'm going to be honest, the entire process of hiring a sales executive was a huge learning curve for me. And there were so many things in that process that I completely, completely didn't expect. 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 Podcasts, 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.