Are you ready to elevate your accounting firm and offer high-value services that clients are eager to pay for? Many firms are expanding their offerings to include fractional CFO (Chief Financial Officer) services. This allows them to provide strategic financial advice without the cost of hiring a full-time executive. It’s an opportunity to truly impact businesses and get paid what you’re worth.
This blog post explores how to build a premier accounting firm by offering fractional CFO services. We’ll cover everything from getting started to marketing, pricing, and delivering exceptional value.
The Accidental Path to Fractional CFO Success
Charles Leikauf, a corporate finance expert, accidentally discovered the fractional CFO world. After restructuring a $2 billion business and serving as a CFO, he transitioned to helping numerous companies with their finances. His journey highlights that sometimes the most impactful career shifts come unexpectedly. What began as helping one business owner in a Facebook group evolved into a thriving business. Charles recounted his journey in full on this episode of the Building the Premier Accounting Firm podcast:
Charles’s initial reluctance underscores a common misconception: that small businesses can’t afford high-level financial expertise. He soon found that many businesses are willing to pay for strategic advice that significantly impacts their bottom line. His experience shows the value of being open to unexpected opportunities.
From Corporate Finance to Entrepreneurship
After graduating with a finance degree, Charles entered a leadership program. He quickly gained experience in turning around struggling manufacturing facilities. This high-pressure environment honed his skills in financial analysis and operational improvements. The experience was intense, requiring frequent relocation and long hours.
Despite the challenges, Charles thrived on solving complex problems. He actively sought out struggling business units, viewing them as opportunities for rapid advancement. This proactive approach set him apart. It ultimately paved the way for his transition to entrepreneurship. He saw the potential of applying his corporate finance skills to help smaller businesses.
The Spark: Answering a Facebook Post
While working at Siemens and feeling overworked, Charles’s wife encouraged him to respond to a finance question in a Facebook group. Initially hesitant, he eventually connected with a marketing agency owner needing help with budgeting and forecasting. He proposed a price that he thought was absurd. To his surprise, she immediately accepted.
This moment was a turning point. Charles realized small businesses were willing to pay for expert financial advice. This realization forced him to quickly set up his business infrastructure. It underscored the demand for fractional CFO services and the potential for a lucrative career outside the corporate world. It also highlighted the importance of listening to your wife!
Scaling the Business and Making the Leap
Charles’s initial client owned a marketing agency and was skilled at growing e-commerce businesses. Recognizing his expertise, she referred him to her clients. He soon found himself with multiple clients, eventually becoming the full-time CFO for one of the larger ones. He found himself making more money on the side than at his full-time job.
Despite his success, Charles hesitated to leave the corporate ladder. The perceived security and career path kept him in place. However, a negative experience at a new CFO role, coupled with the realization that his side income matched his salary, finally pushed him to take the leap and pursue his entrepreneurial venture full-time.
Serving the Accounting Profession
Having built a successful fractional CFO firm, Charles shifted his focus to helping other accounting firms offer similar services. This transition came about when a bookkeeper he occasionally contracted for expressed interest in learning how to offer higher-value services.
Charles initially hesitated to teach others, believing in the adage “those who can’t do, teach.” However, he soon realized that teaching requires even greater expertise and a deeper understanding of the subject matter. He discovered a passion for empowering other accounting professionals. He also found that the impact he could make on their businesses was far more rewarding than working for large corporations.
What is a CFO Service?
Defining CFO services can be challenging because there is no regulatory body dictating specific requirements. However, the core of fractional CFO services lies in providing trusted business advice that increases profitability and cash flow. It involves leveraging your unique skills to help businesses make more money than they spend on your services.
Typical services include budgeting, forecasting, working capital management, margin analysis, and risk management. The specific services offered should align with your expertise and the client’s needs. Focus on delivering value that makes a tangible difference in your client’s financial performance.
The Essential Elements of CFO and Advisory Services
CFO and advisory services extend beyond basic bookkeeping and accounting. They involve understanding and advising on a business’s overall model. A primary focus is on cash flow. This includes managing payables and receivables to ensure the business has sufficient funds to operate and cover expenses.
These services also involve analyzing pricing models, payroll structures, and capital management. As a fractional CFO, you help business owners make informed decisions that impact both the accrual and cash aspects of their business. Your guidance can significantly improve their profitability and financial stability.
The Importance of Time Value of Money
One critical concept fractional CFOs can teach their clients is the time value of money. This involves understanding that money available today is worth more than the same amount in the future due to its potential earning capacity. This concept helps clients make better financial decisions, such as evaluating the true cost of loans or the benefits of early payment discounts.
Teaching clients about the time value of money empowers them to think critically about their finances. It prepares them to make informed decisions that improve their long-term financial health. It helps them avoid costly mistakes like accepting unfavorable loan terms or forgoing beneficial discounts.
The Story of a Business Model Transformation
One example of how fractional CFO services can transform a business involves a client who struggled with cash flow due to lenient payment terms with his clients. Over time, he stopped requiring down payments, which led to him fronting the costs of production and getting paid in arrears.
By implementing a 50% upfront payment policy and prioritizing the use of credit cards for interest-free cash flow, the client was able to turn his business around. He also negotiated better payment terms with vendors. Within months, the business went from being cash-poor to cash-positive. He understood how cash works and how to use capital. This transformation highlights the impact of strategic financial advice on a business’s bottom line.
Preventing Scope Creep
Scope creep can be a challenge in any service-based business. The easiest way to prevent scope creep is to set clear expectations during the sales process. This includes establishing your status as a trusted advisor from the outset. This is done by setting boundaries during the sales process, and having clear, written agreements.
During initial conversations, maintain a superior frame by demonstrating expertise and setting expectations for how you work. If new requests come, you can say “That’s out of scope.” Clearly define the deliverables and processes in your engagement agreements to keep the focus on the agreed-upon objectives.
Three Ways to Handle Scope Creep
- Positioning: Emphasize a peer-to-peer relationship. This is done by highlighting that you both own businesses and are coming together to solve a problem.
- Clear Engagement Terms: The terms need to specify the services and deliverables of the engagement. This will help you avoid any potential scope creep.
- Specific Process: A specific process will provide you with a guideline to limit scope creep.
Marketing and Selling CFO Services
Selling CFO services requires a different approach than selling basic accounting services. Clients may not be aware of the problems that a CFO can solve. They may not realize the opportunities they’re missing. You need to be skilled at demonstrating the value of strategic financial advice.
Focus on the outcomes you can deliver, such as improved cash flow, increased profitability, and better decision-making. Use the “problem, agitate, solve” formula to highlight the challenges clients face and how your services can address them. Focus on the “outcome terms” of working with you by emphasizing how you change their lives.
The Art of Opportunity
While many sales rely on addressing a pain point, selling CFO services often involves highlighting the potential for growth and improvement. Clients may be doing okay. They may just need help taking their business to the next level. Frame your services as an opportunity to achieve greater success.
This opportunity-based approach requires you to paint a vision of what’s possible with your guidance. It includes emphasizing the potential for increased revenue, reduced expenses, and improved overall business performance. This may include helping them to sell their business for more money!
The Unexpected Charm of Cincinnati, Ohio
When asked about his favorite place to live, Charles surprised everyone by mentioning Cincinnati, Ohio, as a close second to his hometown of Fort Lauderdale, Florida. Despite having traveled extensively, he found Cincinnati’s vibrant atmosphere, beautiful springs, and unexpected charm to be quite appealing.
This personal anecdote highlights that sometimes the best experiences come from unexpected places. Just like his accidental entry into the world of fractional CFO services, life often presents opportunities where you least expect them.
Final Thoughts: Take the Leap
Charles leaves us with a powerful closing thought: Don’t let self-doubt hold you back from trying something new. Whether it’s offering fractional CFO services, improving your marketing skills, or exploring new opportunities, take a chance and see what’s possible.
His journey from corporate finance to entrepreneurship was filled with unexpected twists and turns. These led to a fulfilling career helping other businesses thrive. So, take that leap, message that strange lady in the Facebook group, and see where it takes you. You might just change your life forever.
To help you get started, Charles offers a free CFO blueprint. This is a coaching program that guides individuals on how to start, offer, and scale their financial services business using fractional CFO and advisory services.
