Why Scaling CFO Firms MUST Have Defined Packages

I've found one huge problem that's holding CFO firm owners back from consistent growth lately. It's not marketing and it's not sales. It's actually the lack of a scope of work for CFO services. In today's episode, I'm going to walk you through the four problems that your firm might encounter if you don't have a defined scope of work for your CFO offerings. And you're going to want to stay tuned until the end of this episode because I'm going to reveal the scope of work that my firm uses for our most popular CFO offering. Let's dive in. Foreign. Welcome to the CFO Report where I talk about starting, scaling and optimizing fractional CFO services. Recently, I had two very interesting phone calls. One was with the owner of a multiple seven figure firm and the other was with the owner of a six figure firm. While these firms are very different in terms of size, they both had the same struggle. They were both struggling to scale their firms predictably. Now, if you're anything like me, you probably assumed that they were either struggling with marketing or sales. But I quit quickly realized that both of these firms had marketing and sales completely locked down. They were awesome at it. I started getting curious and I asked a ton of questions. And what I realized is both of these firms had the same root cause for their struggles. And it was the fact that they didn't have a defined scope of work in place for a defined CFO service offering. And what I mean by that is they go and they sell a CFO service package. And within that package they say we're going to do x, y and z, 1, 2, and 3 and we're going to charge this much for it. Neither one of those firms had it. What they were doing was kind of created as we go based on the needs of the client. And then they were coming up with a scope for that client and a price for that client. And what I found in both of these cases, both of the firm owners were really creating four problems for themselves by not having this lockdown scope of work and service package for their CFO services. So when I think through these four problems, what I'm seeing is the fact that they really don't have any processes and procedures in place that they can hand their team to make this all kind of scale predictably. Today I want to walk you through what those four problems that not having a defined scope of work and service package can create for your firm. And like I said before, I'm going to Share with you the scope of work and service package that my firm offers on our most common package. And the cool part is it's not as complex as you might think for what we charge for it. So you're definitely going to want to stick around to hear what that package includes. So what are those four problems that not having a defined scope of work and service packages creates for your firm? Well, the first one that we kind of uncovered is the fact that pricing is really hard when you're doing everything all willy nilly in a la carte. Why is that? Well, at first you don't really know how long it's going to take to deliver the service because every client is different, all the clients needs are different. You never kind of figure things out because it's always new with every single client you get. And because you don't know how long it's going to take to deliver the service. It's like, how do you ever come up with a model for figuring out how much to charge them? You either guess on a fixed price and you hope that the price is in alignment with the value and that you're not, you know, overworking your people for too little money. Or maybe you consider an hour billing model. And I think if you're anything like me, like the idea of billing hourly is horrible. It just gives me so much headaches because you've got to figure out things like time tracking and, you know, all of that kind of stuff. And then it becomes unpredictable for you and your client how much you're going to charge each month again if you're on that hourly billing model. So pricing becomes a big challenge if you don't have a defined CFO service offering with a defined scope of work. The second problem that starts to come up is hiring gets really hard when you don't have a defined scope of work, a defined offering. Why is hiring hard? Well, first, it's really hard to figure out your firm's capacity when every client has a slightly different scope of work or maybe a very different scope of work. You don't know how many people you need on your team at any given time. And because you don't know how much time it takes to deliver any service, it's hard to figure out when you need to start thinking about hiring. When should you post the job posting and when do you need to have interviews done by and when do you need to have your new hires onboarded and trained so that they're ready to go before you're at capacity? The other thing that's challenging around hiring is when you don't have that defined scope and those defined packages, it can become really hard to figure out what skills you even need to hire for. If you're sometimes offering M and A guidance as an example, and sometimes your packages include audits or, you know, whatever the case might be, it's really hard to know what type of skills that you need to hire for. And it makes it very, very challenging to kind of figure out what you need to do to grow your firm. The third problem that I saw with both of these firms is the fact that they had a hard time with TR training and onboarding new talent. And the reason for that is, you know, you don't have a specified scope of work. How can you tell them how your firm does things? How can you train them and show them what the expectations are? Because it's different with literally every single client. And what I found that happens when that is true is each CFO on your team ends up producing a different product or different results for your clients. There's inconsistencies that go on. It's really hard to manage your team, to give them feedback, to understand what what's going on with the service that they're providing. Because everyone is having to do everything a little bit different with their own signature on it. And while that can sound good, that you do want to have, your CFO is bringing their own perspectives and things to the table. I also have found that over the years, when you don't have that consistency that comes with processes and procedures, the clients start to notice month over month that things are calculated a little different, things are presented a little different, and it really diminishes the perceived value of what your team is bringing to the table. The fourth problem, that's that not having a defined scope and a defined service offering presents is forecasting for your own firm becomes really hard. And I kind of alluded to this earlier, is you look at your growth goals, you sit down and you think of your bhags. And if you're an EOS firm like we are, you've got your 10 year plan and your three year and your one year plan, you're looking at all of these different things. When you don't have consistent understanding of what growth looks like, when you need to hire, how much you're going to pay people, what the skills need to look like, it becomes nearly impossible to do a good job or to do an even like remotely accurate job forecasting your firm. And so it becomes this thing where you're Constantly extinguishing fires around, bringing people on and managing people. You really don't know what works. But what is true is that when you do have those consistent scopes work in packages, it's a whole lot easier to be able to look at your current client roster, to look and see how often you're adding new clients and when those things are true. And you also understand what it takes to hire in the scope of work and to train. You're then able to say like, okay, I know that it takes 60 days from the time that I hire somebody to get them on the team, to get them trained on our scope of work, to fully get them into our culture and know how to do everything before they can handle a client. And so then we can do backwards math to figure out, all right, if we're adding two clients a month, which is my firm's current goal, we're adding two clients a month. We see our current roster, we know that our growth rate is here. And if a CFO can handle 10 clients now, we know that we need to start looking for our next CFO hire sometime in the next 30 days, because our current CFOs are going to be at capacity in 90 days. And that'll be about the time that we need our next CFO to be ready to handle their first clients. So everything becomes a lot easier when you've got that ability to understand, here's our scope of work, here are the processes and procedures we use to do that, because we have both of those things in place. We know how many hours it takes for a CFO to deliver on those services. We know who to hire for, we know what skills they need to have. And because of all of those things, we know how to onboard them, we know how to train them, we know how to manage them and make sure that a consistent, consistent, amazing product and experiences delivered every single time. And we're also able to forecast our firm's growth and make really smart decisions on when it's time to go recruit, when it's time to hire, how long it's going to take to onboard, and when they'll be ready to handle their first clients. It just makes life so much easier. And so for my firm, it's been a no brainer for several years now to have that locked in scope of work, those locked in pricing packages, because everything is better for us, for the CFOs and for our clients. So what is the scope of work that my firm uses for our most popular CFO services package? Well, my firm actually offers three packages. We have CFO Core, which is our most popular. We have CFO Advanced, and our CFO Executive or EOS package, which is our high end. But by far our most popular package is our CFO Core package. And we've dialed this in and simplified it over the years to make all of those things true that I talked about earlier. We want to just have a really consistent product. We want everybody on our team to understand what's required of them and how to do it with excellence. And, and we want our customers to have a consistent product every single month. What does that scope of work include? Well, the first thing that our clients get on our CFO Core package is what we call our monthly CFO report. We have a report that's in a Google sheet that has tabs. Every client has about the same tabs. There's a couple nuances in there, but by and large, all of our clients have the same exact tabs. And so every month we deliver our CFO report via a 60 minute call with our clients, where the CFO and the clients walk through this CFO report tab by tab in the same order every single month. Now, it's important to mention that the conversations on each of these tabs will change by month, and they do change by clients, depending on what seasons they're in, what challenges they're having, what difficulties they're having, what their goals are. The conversations change, but the flow of those conversations is always the same. The way that we analyze the financials is always the same. The way that we deliver the information to the clients, it's always the same. So we have a lot of processes and a lot of procedures, a lot of checklists surrounding the CFO report, surrounding the process to get ready for the CFO report. And so all of our CFOs know exactly what goes into preparing and delivering and supporting those CFO calls. And so everyone on the team knows how long it takes for one client to prepare, deliver and support those CFO reports. So the second thing that they get on our CFO Core package are bi weekly check in calls. These are 30 minute calls that typically happen bi weekly on the weeks that we're not having the CFO report. So you'll go two weeks CFO report, two weeks check in call, two weeks CFO report, et cetera, et cetera. And on those calls they're 30 minutes long. Our CFOs typically don't do a lot to prepare for those calls. Those calls are more in place for our clients to ask more tactical Things for us to check in and find out if there was anything significant or meaningful that happened since the last CFO call. And just to make sure that everyone's on the same page and everyone has an opportunity to ask questions to be heard and get whatever support they need in between the CFO calls. The third thing that's included in that scope of work is our clients get Slack support, Microsoft Teams or email support. This is our client's opportunity for those things that pop up, those emergencies that happen to be able to reach out to their CFO and say, hey, I've got this question or this came up, can you give me a quick answer so that they don't feel like they're going to have to wait at least two weeks before their next CFO call or their next check in call so that they can be heard. Now, one thing that I don't have on this list that a lot of people ask about is, well, what if your clients need additional calls or support outside of the biweekly calls or those monthly CFO calls? And what I'm going to share with you, you is normally a shock to most people that we offer this and that is the fact that in our signatures on our emails, we include a link to our calendars through Calendly and what we tell clients is, hey, if an emergency pops up, if there's something that cannot be discussed via Slack and you can't wait until your next CFO call or your next check in call, just book a call with us using this link and we are happy to hop on a call with you and go over whatever is going on. The reason that so many people are surprised that we offer this, this is because the default concern is that clients will take advantage of it, that clients will be on the phone with you and like overusing that and it'll become this huge burden to have clients constantly hopping on a call with you. But what I would tell you is, you know, we've been doing this, gosh, I think going on five years now that we've had this scope of work for our core package and we never have clients take advantage of it. And I think the reason for that is if you go back to anything that I've ever taught on sales calls, one of the things that I hit on is the fact that you've got to start setting boundaries and setting and managing expectations right on the sales call at the end of the call. So as I'm going through this same scope of work with our potential clients on a sales call, I'm talking to them about the fact that they'll have that calendly access. And I start telling them right then and there on the phone call that the expectation for using that calendly link is that it's used for emergencies and that I know that they're a busy executive, we're busy executives, you know, over here doing this and that that shouldn't be taken advantage of of because of the fact that I established that as like an emergency thing that, you know, you should only use when, you know, the poo has really hit the fan. Business owners tend to really respect that and it has literally never been a problem. So my challenge for you is if you don't have a set package for your CFO services, if you don't have that scope of work in place, I would really encourage you to consider if you're thinking about growing this year or if you're trying to grow and you're struggling with operations and team, it may be symptomatic of the fact that you have either a, an undefined scope of, of work, you know, it's kind of a la carte, if you will, and you're figuring out on a per client basis, or perhaps it's the fact that you have too many scopes of work, you have too many packages. Like I told you before, we only have three packages. And those three packages, that's the same scope of work, the same price for literally any client we work with. And it's been that way for years and years. So if you're struggling to grow, I would ask, you know, take a look at your scopes of work and see if you can really narrow those down. Maybe pick just one to start with and get really, really good at executing on that one scope of work with that one price package. And then as you get good at that, you can add more. One of the big myths that I hear is, hey, Mike, if we only have one service package or if we only have two or three packages, clients aren't going to want to work with us. What I'm here to tell you is the opposite of that is actually true. You look like you have your, your game together. You look like much more of a professional when you tell clients, this is how we serve you. This is what it's going to cost, this is what you're going to get. This is the value proposition. This is how we can work with you. The right clients will respect you more for it and they will pay more for it, because when it is locked in, they know at least subconsciously that you've probably got your act together and it's really dialed in and highly valuable. I hope this episode was helpful for you today, my friends. If you are a CFO and you're looking to grow your firm, I want to encourage you to check out the CFO Accelerator live happening in Dallas, Texas May 16th through 18th. If you haven't heard, this is the first and only in person conference held exclusively for virtual and fractional CFOs, to the best of my knowledge, ever in the history of the world. And it's happening right here May 16th through 18th in Dallas, Texas. We're going to be focused on three big things at this event. Number one, I'm going to be talking about CFO technical skills. I'm going to give you some advanced skills that I haven't shared with you any of my audiences before that will help you from a technical perspective. But we're also going to be focused on CFO leadership skills. These are the skills that you need to get your clients to move forward and take action and really buy into the things that you're sharing with them in your reports, in your forecast and in your projections. And third, we're going to talk about CFO firm building. These are the CEO skills that you need to have to build a team to put together the processes and the procedures to really create the firm that works for you and not the other way around. This is not your typical accounting conference where there's going to be a bunch of vendors and a vendor hall and you're going to walk around and make awkward networking conversations. No, we're going to do a lot of work. I'm going to be on stage for around 25 hours over three days, literally pouring seven brand new frameworks out there for you. Things that I've never taught anybody before. It's going to be awesome. And it comes with a money back guarantee. At the end of day one, if you haven't received at least five times the value of what you paid for your ticket, I will give you your money back on the spot. That's how confident I am that that this is going to be a game changer for your firm. If you're interested, check out the cfoaccelerator live.com I will include a link in the comments section below. In the meantime, I can't wait to see you back right here next week on the CFO reports, my friend. See you then. It.