The topic of fractional executive services has gained substantial traction in late 2023 and throughout 2024. The concept of a part-time CEO, CFO, COO, etc., can be very effective for many startups, fast-growing entities, and those too small to hire a permanent executive. However, unless your company hires a fractional executive to fill the void of a departing officer until a new hire is in place, the real focus should include another essential concept: integration.
Fractional services usually focus on strategic planning, decision-making, analysis, financial reporting, operational issues, or accounting processes. They usually involve experts in business administration, taxation, legal issues, CPAs (accounting and finance), and operational aspects such as supply chain management.
However, most of the more prominent business challenges are actually symptoms of a bigger problem underneath. Think of the old saying, “Where there’s smoke, there’s fire.” It’s easy to see and fight the “smoke” without ever recognizing the “fire,” the actual issue(s) that need to be addressed.
A common challenge many business clients face involves complex issues such as plans to conduct business internationally. The round table of experts can include many different disciplines, such as a business attorney to help with contracts and the creation of new entities (or re-organization of existing entities), an international tax attorney, an expert in worldwide supply chain and distribution issues, and a CPA to assist with updates to existing accounting processes and the implementation of a new chart of accounts.
The lawyer makes specific recommendations regarding entities and corporate transactional structures. The tax attorney makes contrasting recommendations about how, when, and where gains and losses are to be realized. A CPA without international expertise will miss many specific accounting practices, structures, processes, and reporting necessary to capture transactional details across multiple entities in several foreign jurisdictions. And no one has developed an actionable plan for how these “solutions” will be implemented.
Let’s consider another scenario: your company has been approached by a large corporation to discuss acquisition. It will take a lot to prepare your company for acquisition while protecting its valuation and attractiveness. Governance and compliance must be managed to ensure your corporate entity is in good standing and all corporate documents are up to date. Several financial reports, including a balance sheet and financial statements, will be required. Ultimately, the process will include an inspection of the books and underlying accounting systems. All parties must complete extensive due diligence checklists and analyses.
In these scenarios, the client faces multiple conflicting recommendations and no real action plan. What’s missing?
The short answer is “integration.” Complex business issues require the integration of business, legal, tax, accounting, and operational expertise. The right answer will involve a blended solution that balances all aspects of the issues at hand. It will also include planning and managing a solution to be implemented across multiple areas of the company. This is why it is crucial to seek a fractional executive services provider with a broad base of services and disciplinary expertise to approach your unique business problems, challenges, and opportunities and tailor a customized, integrated, and actionable solution to accomplish your business objectives. In most cases, this will require the integration of legal, tax, accounting, and business advisory services to achieve the most successful outcome possible.
You may only require fractional services for a short time to fill in the gaps of expertise within the business ownership groups. However, in most cases, fractional services will require the ability to integrate multiple areas of expertise, as well as the skill to identify required steps and ultimately implement agreed-upon solutions.
Business is all about the integration of multiple skill sets. You have challenging business questions and opportunities you want to engage. Look for integrated fractional service providers covering each of these essential business disciplines with decades of local, interstate, and international business experience and expertise.
Are you attempting to clear away some of the smoke, or do you want to extinguish the fire?