July 22, 2022
Read time: 3 minutes
Want to charge higher prices as a fractional CFO?
Then you'll need more advanced reporting including graphs and KPIs.
This is a BS myth that won't serve you or your clients well.
The (flawed) logic goes something like this:
• To charge higher prices you need larger clients.
• Larger clients expect more advanced deliverables.
• Advanced deliverables include more charts, graphs, and KPIs.
I understand why people think this. I used to think it too.
It's intuitive to think that:
Bigger client + Bigger Financials + Higher Rates = More Advanced Stuff From You
Right?
Wrong!
They don't expect more complexity.
They expect more from your perspective.
The value you bring as fractional CFO comes from your perspective. Not from the quantity or complexity of your dashboards and metrics.
We've helped numerous businesses scale from 6 to 7 and 7 to 8 figures. None of them have needed (or wanted!) more advanced "stuff".
A few years ago, we had a client that was skyrocketing from high 7 figures to 8 figures. They were seeing 30% YoY growth for several years in a row.
So we started adding more to their reporting.
A few months into the added stuff, the CEO says on one of our monthly CFO calls,
"This is all great... I guess. I'm not sure what most of it means though. Can we just go back to what we were covering before? I know what those numbers mean and what to do with them."
Oof!
Back to the basics.
When you start adding complexity, it confuses your clients (and it adds more to your work load).
Instead of creating more complexity, start forming more actionable perspectives around the fundamentals.
👉 Do not over think this!
Start by evaluating revenue, gross profit, net profit, and cash. Look at how key operational decisions are impacting each (for better or for worse).
• What do they need to start doing, stop doing, or do more of?
• Check their strategies and tactics for the next quarter or the next year. How will those impact the fundamentals? What has you feeling confident and what has you feeling concerned?
Here are a few other simple ways to bring your perspective to your clients
Tip #1: Look at industry benchmarks. Compare past performance along with projected performance to industry benchmarks. Are there any opportunities for improvement?
Tip #2: Identify industry trends. What are you seeing across the client's industry or even across your client base? Pull from your experience to give your clients a new perspective on what's happening in their business.
Tip #3: Connect the dots. Make sure you show your clients how their operational decisions are impacting the financials. They need to understand the key drivers and how to respond to them.
Remember, avoid the temptation to add complexity to your reporting. Your clients don't need it. Which means you've wasted time and money producing that complexity. Lose lose.
Keep the reporting simple but challenge yourself to go deeper with your perspective.
That's all for this Friday. Why you should avoid complexity and double down on perspective.
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Your coach,
Michael King
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