174. How to Build an Unfair Advantage as a Fractional CFO

Does it seem like some fractional CFOs have an unfair advantage? They do less work, but somehow manage to get all the best clients at the highest prices. Well, you're right. They do have an unfair advantage. But don't worry, I'm here to let you in on all their secrets. I'm Michael King, a fractional CFO firm owner who has mastered this strategy over the last 10 years, taking my run rate to a million dollars and beyond. Today, I'm handing over my formula for success in the form of four actionable insights. By the end of this video, you'll have the playbook of the elites and finally be able to even the playing field. Secret number one, the riches are in the niches. The vast majority of elite CFO firms have cornered a very specific niche. They enjoy qualified referrals from their ideal clients and steadily grow their network within that niche. Niching down is a surefire way to separate yourself from the pack. In fact, 73% of all fractional CFOs that I surveyed haven't found a niche. And look, I get it. I didn't even know what a niche was until just a few years ago. I thought a niche was just picking an industry. But over the years, I've refined that definition. For me, niching is the strategic act of narrowing your focus so that your marketing referrals and operations become easier and more profitable. It's really that simple. And it doesn't matter if you say niche or niche. All you need to know is that niching puts your firm on easy mode. You make more money, get more referrals, and operate more efficiently. I can personally attest to these benefits because that's exactly what niching has done for me and my firm. If you don't know my story, I fired all of my clients back in 2019 and started fresh. Part of starting over meant defining my niche. Long story short, Niching took my firm's fees from $500 a month in 2019 to $10,000 a month today. I transitioned from being a jack of all trades, taking on any client with a pulse and a dollar, to focusing exclusively on construction companies with annual revenues of 8 to 75 million dollars. Remember, you don't need to pick the perfect niche today. You just need to start the process. But if you're still hesitant, let me calm your fears and bust some of the common myths around Niching. Myth number one, Niching is going to limit your opportunities. Look, this could not be further from the truth. Niching actually opens more doors than it closes businesses don't want a jack of all trades when you're charging high fees. They want a master. Be that master and your opportunities will never be limited. Myth number two, I'll get bored with a single niche. Trust me, you won't. No two clients are the same. And there's going to be unique challenges and opportunities every single day. The more my firm has niched down, the more exciting things have gotten. Every day is different. Myth number three, My current clients are too broad. I'm going to ruin things if I pick a niche. Nope, Your current clients won't care if you pick a niche. In fact, they don't even need to know. Just keep delivering the same amazing stellar services and things are going to be fine. Myth number four, there aren't enough clients in my niche. I mean, think about it. How many clients do you actually need? 10 clients gets you to 500,000 to a million dollars in revenue. I'm confident that you can find at least 10 clients in any niche. And in fact, I've never encountered anybody who has done the market research and walked away thinking that their niche was too small. It just doesn't happen. If I pick the wrong niche, my business is doomed. Okay, take a deep breath. Picking a niche isn't forever. You're not getting married. This is a 6 to 12 month test as part of a larger process. Remember, it took my firm years to get our niche to where it is today. But our monthly fee is now 20x what it was when we first started. The key is to get the ball rolling so that you can build that momentum. Alright, Niching myths busted. Consider that your niche. Slap your wake up call to put yourself in the top 27% of earners. And when you combine niching with this next secret, you can start gaining on the top 1% of fractional CFO firms. Secret number two, realize that you cannot do this alone. Once you start to narrow down your niche and the referrals start piling up, you simply won't have the resources to scale at your current size. This might not be your problem today, but it will become your bottleneck sooner than you think. There's only so many hours in a day and only so much that you can do as a single fractional cfo. One person can't wear all the hats for multiple clients and scale a business. I mean, think about it. Would you be able to handle your current workload if it suddenly doubled or tripled? Probably not. So what do you do? You do what I did. Hire the best fractional CFOs that you can find. And that leads me to secret number three. The best hire the best. The setup here is simple. Hire fractional CFOs working full time in your niche, train them in your current systems, and then assign them to your clients. But since you want to be a top 1% fractional CFO firm, you you have to hire the best CFOs. This is not the time to bargain hunt for any fractional CFO with a pulse. If you want to win the race, you have to hire thoroughbreds. Best in class CFOs. Mediocre people. They want to work with other mediocre people. And that's fine. But that's not you. At least not anymore. You get to decide the kind of team that you want to build. And the caliber of people you bring on will determine the caliber of clients that you attract. A better team means better clients, and better clients mean higher fees. Then, once you hire your team, put quality assurance into place so that you can be confident your clients are getting the the most value and the best service possible. The results are unreal. You're going to make more Money, your fractional CFOs are going to make more money and your clients get more value and direct access to the best talent. That's the cheat code the elite use to get a leg up on the competition. They hire the best people to handle the bulk of the work, allowing them to focus on landing more seven figure clients. Meanwhile, everybody else is left fighting for scraps. But what if I told you there's another way to free up even more of your time while providing the ultimate value to your clients? Does it sound too good to be true? Onto the final secret. Secret number four. You must coach your clients. Once you have your niche picked out in the best fractional CFOs handpicked, you might think that you can just set it and forget it. But the truth is your clients will still reach for the phone whenever they're indecisive about something, which is most of the time, Whether it's buying a 3D printer or hiring new staff. They'll contact you or your team to run the numbers. And those questions will start to add up and chip away at your sanity until you add this final ingredient. The real magic happens when you coach your clients to make better financial decisions on their own. You train them how to think about the numbers instead of you doing the thinking for them. This empowers your clients to run the numbers internally so they can confidently make informed decisions without reaching for the phone every single time. Enforce that behavior and over time their confidence will grow. Now, when you get on your monthly CFO calls, they're already 90% of the way there. They've done the napkin math internally and just need some reassurance so they can pull the trigger. That leaves you and your team more time to discuss big picture strategic goal setting and and less time figuring out how much Jim from Marketing can spend on lunch next month. The firms that coach their clients save a ton of time and energy making it the best kept secrets of the elite. So there you have it. You now have the playbook of the elite firms right at your fingertips. So niche down, hire the best people and empower your clients to make better financial decisions on their own. 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.