Fractional Finance includes the services of finance professionals such as Fractional CFOs.
They can also deliver part-time, and special project services.
Fractional Finance is a term that ambitious owners of businesses of all sizes and stages of growth should become familiar with. The greatest benefit however resides with those in the following stages:
Here's why:
In today's competitive business world, entrepreneurs of all sizes are constantly on the prowl for ways to arrange their cost structures in order to maximize their return on investment. In the past, the focus was mainly on facilities, equipment, and nurturing customer relationships. However, thanks to the rise of the Cloud, businesses now have the golden opportunity to broaden their horizons and apply these strategies across a wider array of expenses. One place where this "best bang-for-the-buck" can now place a fresh spotlight is on the ROI of human capital.
Larger enterprises have, until very recently, held a competitive edge over businesses on their journey of growth, by holding a virtual monopoly on highly trained professionals that have experience that would be invaluable if it could be obtained at an affordable cost.
In the realm of a business' finance function and needs, three factors bring the costs of such services down substantially at the individual business level. They are:
Except for those strategic skills that can only be effectively delivered in person by experienced finance professionals, all other components of an enterprise's finance needs can now be met working remotely. This boosts a finance professional's capacities, enabling them to share their expertise through fractionalization. The outcomes are extraordinary, presenting an immense yet surprising (to me anyway), as yet untapped potential for achieving faster and more significant results in a truly meaningful manner.
As mentioned above, all the finance-related functions and services that a business needs can now be fractionalized. These functions and services are:
Depending on a business' needs, any or all of these can be provided, individually, or bundled, and either in an ongoing manner, or for defined periods of time.
Imagine a grand rectangular board-room table, where business professionals gather to strategize and make important decisions. Among them, seated on the same side as the business owner(s), are Fractional Finance Professionals ("FFP"). On the opposite side of the table, you'll find the experts sought after for their technical knowledge in specific subject matter, such as law, tax regulations, auditing, and other jurisdictional matters. These professionals are bound by the legal and accounting regulatory regime, which, among other things, requires them to maintain an "independent" state of mind. While they play a crucial role in ensuring compliance, their effectiveness in providing the comprehensive finance services that businesses need to thrive may be limited. However, FFPs often oversee these service providers, ensuring that the business's financial operations remain on track.
Over the past three decades, I have had the privilege of offering Fractional Finance services, and during this time, I have witnessed an incredible transformation. Initially, it was a gradual shift, then it picked up momentum, and now, with the prominence of remote work spearheaded by Covid, it has experienced explosive growth. This evolution has empowered experienced, innovative, and tech-savvy financial professionals to provide invaluable enterprise-level guidance to ambitious entrepreneurs precisely when they need it most (and can finally afford it).