Small Businesses and Fractionals
Fractional team members are all the rage these days with small businesses, and there is a good reason why. There is a wide range of what a Fractional CXO can help small businesses do, as described by other articles on this site regarding regard to COOs or CFOs. But, specifically for micro or small businesses, would a Fractional help you?
Let’s start with the basic thought process. Hiring a Fractional at any level helps manage the budget. It would be impossible for small businesses with less than 25 employees, to have a $300K salary on the books, even for a spectacular Chief Operating Officer who runs the whole business. And, the owner probably doesn’t need that much help and experience for a business that size.
But, without Fractionals, the owners of small businesses are stuck doing all the work themselves. They are fulfilling the roles of CFOs, COOs, CIOs, CPOs, CROs, CSOs, and CTOs. (I could continue with the alphabet, but you get the gist.) Not one of those roles needs to be filled by a full-time person in a company that size.
Full Time or Fractional?
Owners might think they should go look for an up-and-comer to help them, but then they are also guiding and directing the person who they need for guidance and direction. With a Fractional, small businesses get years of experience because the role is part-time without the high price tag.
Fractionals can go beyond the c-level suite as well. We used to call these part-time employees, subcontractors, or freelancers. Graphic designers, social media experts, project managers… do small businesses really need people in those roles as full-time employees?
Collecting a bunch of Fractionals to help you in your business can impact growth tremendously. All that wisdom at your fingertips, without the huge overhead!
Fractional COOs for Small Businesses
Let’s take, for example, what a Fractional COO might do for very small businesses of various sizes.
At 50 people, an owner likely needs a 1- to 2-day-a-week Fractional who has direct reports. The Fractional COO would help by advising and creating reporting in many areas, would help in developing the culture, identifying risks and opportunities, project management of high-level projects, and strategic planning.
But, at 10 people, owners of small businesses likely just need help getting out of the day-to-day. You can hire by the hour, usually, for these services or at low retainer rates. Before the owners can get to those bigger picture areas noted above, they need someone to advise on things like:
- what the best project management software tool is
- how to implement it
- where there are gaps in the processes (if you have them!)
- how to hold your team accountable
- and, how to make the business run without the owner in every detail
Owners might also need to create job descriptions and some of those non-C-level Fractionals to help execute the work. Essentially, small business owners need help learning how to scale and extricate themselves from the details.
Midrange small businesses (think 10-49 employees) need help with clarifying what those great employees are doing, correcting communication to prevent silos in departments (likely created by those great employees unintentionally), and making sure owners know what those amazing leaders are doing so their gap can be filled should they leave. At this stage, culture and leadership issues might also be becoming challenges.
Choosing the Right Fractional
Small businesses might only be able to afford one Fractional at a time – and that’s ok. But, how does an owner decide?
Fractional CFOs or COOs are usually the first hires. But Fractional CMOs are up there. It might be valuable to have both. Many Fractional CFOs working for small businesses will bring a range of services with them, from bookkeeping to taxes and being a trusted advisor.
Fractional COOs can range from consultants who give strategic advice (but the owner implements the work) to teams similar to the Fractional CFO team – with a COO, process development expert, and project manager for example.
Fractional CMOs will usually need to pull in a team to help execute against their recommendations because everything is so specialized these days. Everything needs an expert from website design and development to social media strategies to physical direct mail.
Small businesses likely need a full array of services as it helps remove burdens from the owners’ task lists. So, owners need to be certain what range of services they will be getting with the Fractional they hire.
About the Author
Susan Fennema is the Chaos Eradicating Officer (CEO) of Beyond the Chaos, a consultancy helping small business owners extricate themselves from their day-to-day business operations so they can grow their businesses and get their lives back. She and her team have served over 100 small businesses. With 30+ years of operations/project management experience in professional service industries, Susan is on a mission to improve American society exponentially. When not making multi-course dinners, she enjoys Texas A&M football games and Blackhawks hockey. She lives and works from her home in McKinney, Texas, with her husband and their dog, Shelby.