Three Lessons EVERY New Fractional CFO Needs to Hear

Hey, I'm just getting back to my office after being locked in a boardroom for 13 hours with half a dozen other fractional CFO firm owners. During our time together, I came out with three huge takeaways that I want to share with you and a word of warning that I think every fractional CFO needs to hear. Let's dive in. All right. The first big takeaway that came out of this group was that great CFO calls are a result of excellent preparation. One of the questions that kept coming up time and time again was, how do we make our services more valuable? How do we make our services less stressful for us? How do we keep our clients around longer? And so I started asking a lot of questions. But as we peeled the onion back, I found that some of the fractional CFOs were actually starting their preparation work, sometimes a few hours before the call with the client. I was like, wait a minute. What? I was talking about how, in my opinion, great preparation takes four to six hours, and this needs to be done three or four days prior to the CFO call. And several of the people in the room were like, well, why is that? Why is that so important? I mean, we can just, you know, take a look at the financials and put together a couple of things real quick and then jump on the call. And I think that preparation actually has to be a lot more involved with that. And it goes beyond just the financials because, yes, it's true that you do need to look at the financials. There's no two ways about that. You need to look at the financials in terms of past performance and last month's P and L and balance sheet and statement of cash flows. But then in order to have a really good CFO call, you've got to take those financials and you've got to marry them up with the, what I call operational realities of the business. What are those updated things that are happening, happening right now in the business, operationally speaking? And then you've got to take both of those, the financials and the operational realities of the business. And you've got to marry those with the short term and the long term goals that the business owner has. And once you do that, then you've got to kind of assemble this thesis for the month for your fractional CFO call, a narrative or a story, whatever you want to call it, and use that thesis to figure out what are the specific action items and takeaways that the business owner needs to have for the upcoming month. And not Just that you've got to have that, you've got to make it super, super simple. It can't be this complicated narrative where you're, you know, showing all these data trails and financial trails. It's gotta be this really concise thesis with a really concise narrative with a really concise set of one or two or three action items that are going to materially impact the business's ability to hit their short term and long term goals. In the business, in my opinion, you can't do that a couple hours before you meet with the client. And you certainly can't send that to your client ahead of time. And so that brought up the next question is, well, gosh, why are you sending that out ahead of time? And one of the things that I hear a lot of fractional CFOs talk about is a frustration with the fact that a lot of times our clients don't show up for calls prepared. They're kind of not really in the moment, they're not really present, they don't have really good questions ahead of time. And I know that that's frustrating, but then the question I have is like, well, what did you give them to think about ahead of time? What prompts did you give them? Did you ask them any insightful questions? Did you give them anything that they could use to actually be prepared for the call? And typically the answer when your clients aren't prepared, the answer to that question is no. And so what I think good looks like in terms of preparation for a CFO call is again about a week or so before the call. You've got time blocked off to look at the finances of the business. You are having conversations with the client around what's going on operationally in the business, good, bad and the ugly. And you're taking those two things and looking at the business's stated short term and long term goals, and both personally and professionally for the business owner. And you're coming up with a thesis for the upcoming month's calls. You've got four or five really important questions that you need to get sorted out on the call. And then you've got your forecast and projections updated and you have a very clear narrative of what needs to happen in the business and some very clear and specific action items. And all of that is sent to the client three or four days before the call so that they can be prepared. I recently did a super deep dive into how to prepare for a CFO call in the replay of that training is available for my members inside inner circle For a limited time. If you want to catch that training, if it's still available, click the link in the description below to check out my Inner Circle program. Another takeaway that will be helpful for many of you is that context matters when prospecting at conferences. There was a somewhat of a unique CFO in the group in that he loves going out and meeting people at conferences as a way of business development. So he's going to literally dozens of conferences a year. He's talking to hundreds of people. But he was a little bit frustrated because that time and effort wasn't resulting in getting qualified prospects, in getting them onto sales calls. And when we started peeling the onion back, one of the things that we found is that maybe he wasn't going to the right kinds of conferences. Let me, let me give you an example. Let's say that you tend to like working for tech entrepreneurs, or we'll just go with tech. Let's say you like working with tech entrepreneurs. And so you might say, hey, I'm going to go to ces, which is a massive conference for tech nerds in Las Vegas. Every year. It's probably the, the biggest in the United States. Each year it might be the biggest in the world. I don't know. It's certainly in the conversation for that. And so it is just chock full of tech CEOs, tech business owners, tech entrepreneurs. But you would probably struggle, I'm just guessing here, you would probably struggle to get a lot of leads there. And so the question becomes, well, why is that? Well, I think that's where we come back to context matters. You've got to put yourself in the mind of the attendee of, in that potential prospect and ask yourself, why are they at that conference? Well, if they're at a conference where they're playing with technology and putting their hands on some of the cool innovations that are coming down the pipeline. My guess is that they're not in the mindset to learn about how a fractional CFO can help them accelerate their business growth. They're not there for that. They're in a completely different mindset. And so then that begs the question, well, what are good conferences for getting prospects? Well, when I think about conferences that I attend, I'm looking for conferences that are specifically focused on business growth. I'm thinking about conferences that are there to help with team building or to help with leadership. Because in that context, business owners are there and they're more receptive to those ideas that are gonna help them grow their business. And that's exactly what you're doing as a fractional cfo. And so if you're trying to figure out what networking events to go to, if you're think about which conferences to go to, maybe even which podcast to go on, or which webinars to be part of, really ask yourself what is the context or the mindset of the business owner that's going to be involved in one of those activities and just make sure that it lines up with what it is you're trying to do. And I think you're going to find that you'll have a lot more success in those time investments and money investments into those various endeavors. A third big topic of conversation at our one day mastermind was when it comes to processes, procedures, systems and automations, where should I start? And so one of the CEOs that was in this group, he said, look, I know I need to put more effort into processes and procedures because frankly, I don't really have any right now. And he's like, I just don't know where to start. He's got this whole long list of all kinds of things that need to be processed out. And I think it's a really smart question. And the advice that I gave to him was start where your current bottleneck is right now. And when I'm thinking of bottlenecks, I'm thinking in terms of like, what are those processes that you have internal to your that are kind of so out of whack right now that it's costing you time and money, or maybe even quality control for your CFO services to your clients and start there. So let me give you an example. Let's say that right now you, your biggest problem is you don't have enough leads. And so you wouldn't want to start by documenting your process for new client onboarding, because that's a problem that you don't have right now. You're solving for a problem that doesn't exist. So take your time and your efforts and put them towards, hey, how do I process out? Getting more leads faster. Or maybe the problem is you've got a bunch of sales coming in the door, you've got a bunch of new clients, but the onboarding process is taking so long that it's ticking off your new clients, they're churning, they're firing you before you even get to their next full month of service. That's when you would want to start putting your time and efforts into defining your onboarding process, putting systems in place so that it becomes more efficient and more effective in other Words really start with like where your bottleneck is now. And as you solve that bottleneck, what you'll find is over time, that solution is going to create or expose a problem in another area of your business. Once that next area comes up, shift your efforts over and solve that problem at that time. The final takeaway that I want to share with you is kind of just an acknowledgement that being a fractional cfo, certainly being the owner of a CFO firm is, it's taxing. It's hard. I think as I sit in more of these rooms with more and more CEOs of early stage firms and later stage firms, it's kind of this common theme that it's just really hard. Running a fractional CFO firm, we get punched in the face a lot. Now granted, a lot of times those punches that we take, they're of our own doing. Maybe we had the wrong processes and procedures or we didn't have them. Maybe we delivered a substandard quality of CFO calls and that results in clients firing us or telling us that our services suck or that we shouldn't be in business. Sometimes we deliver great services and we just have crappy clients. And that's hard too. But my point in sharing this is you're going to get punched in the face as a firm owner, you're going to take some blows. And if you're not careful, those punches will start to wear you down. It'll start making you question yourself. It'll start making you ask if you belong in this game, if you should even be doing this kind of work. And one of the natural consequences of us just asking those questions of self doubt, maybe it's imposter syndrome for you. One of the natural consequences of that can be that we start to shrink or minimize our ambitions. We start to tell ourselves that, hey, when I started this, I wanted to create a firm that looked like this. And I just don't know that I'm cut out for that now. And so maybe I belong down here. Maybe I was trying to work with a client that was at a particular size. And maybe I just don't have the experience or I don't have what it takes to serve those clients. And so instead of serving eight figure clients, maybe I'll serve seven figure clients. Or maybe instead of serving seven figure clients, I'm going to just go back and work with multiple six figure clients. And so all of those are kind of under that same umbrella of just shrinking our ambitions. And I just want to encourage you today, if you've been punched. If you've taken some of those blows to the chin or to the gut and you're feeling knocked down, don't give up, don't shrink down, don't minimize your ambitions. Maybe you just need to go back and kind of ask yourself, how do I level up? How do I unlock that next level of service? What are the specific problems that I'm facing right now? And maybe you need to go out and find somebody that can help you solve those problems. The worry is if you shrink your ambitions, if you minimize your goals too long, you're going to burn out. It says you're going to find that it's not really worth staying in the game if you're playing down here. Because the effort and the time in the sweat and the tears, we don't really get any bloodshed as fractional CFOs, but the proverbial bloodshed, if you will, it just isn't worth it. If you're going to just play small for the same amount of time and effort, you could go to work for somebody else and maybe even make more money with a whole heck of a lot effort. But I know that the work that you can do, the impact that you can have for not just for your clients and not just for yourself, but for your families, is worth it. So if you're feeling knocked down, if you're, if you're feeling that imposter syndrome, if you're feeling like you don't belong, instead of minimizing your goals or shrinking down, and certainly instead of giving up, go and see if you can find somebody that can help you level up and solve whatever that problem is that you're facing today. I thank you so much for allowing me to have the privilege of your time. If you'd like to know more about my masterminds, or if you're interested in joining me for an upcoming mastermind, just Text mastermind to 469-515-8087. As soon as information drops about our next cohort, you'll be the first to find out. In the meantime, I can't wait to see you back here next week, my friends. I'll see you then.