Consultant FAQ

I’ve been coaching and mentoring other CFOs who want to start a practice since 2015. Our first discussion starts with the three distinct roles of new service providers in this space.

Contractor
Consultant
Coach

This order is not random. Many CFOs start with one client, replicating what they did in their prior W-2 role with their first client. The only difference is that they control the outcome and how it will be achieved.

After two or three more clients, the new CFO slowly becomes a consultant because they generate new intellectual capital in unique ways to solve client problems. They slowly start migrating from doing the work to providing the roadmap to solutions they have created.

I’ve just described my origin story. My first client in 2001 paid me about $60,000 annually, and I was ‘just’ a contractor. I looked like an employee. I acted like an employee. I could have been an employee. Legally, I was a contractor. I had four other clients then, and I was a contractor for them too.

I estimate it took me about five years to say I was a consultant. I was starting to create some simple yet robust frameworks that were effective to the point where my clients referred me to their peers. That’s how much they liked my tools.

As I slowly transformed into a consultant, I never became someone similar to a BCG service professional because of these and other notable differences:

I never use contracts.
NDAs are not necessary.
I never use engagement letters.

These guiding principles are based on core values that I developed as I gained more and more confidence during the first five years of my new practice.

I’ll unpack these three points in the FAQ section, but first, let’s go back to the contractor discussion.

I’m No Longer a Contractor

Around 2006, I quit being a contractor. Contractors do the work that needs to get done where gaps exist in a business.

Some will say there is a fine gray line between CFO contractor work and consulting.

The way I delineate between the two types of work is by who does the implementation. In the contractor role, the CFO service provider will do the implementation work.

As a consultant, I do not do implementation work; rather, the team I work with does. I’m creating the roadmap and adjusting it on the fly. I monitor and mentor team members as we move from point A to point B.

Based on my role as a contractor, I’ve had to say ‘no’ to several opportunities.

For instance, I’m a founding partner of a national coaching firm implementing open-book management practices. Our president wanted me to provide financial leadership to a new client. There was one stipulation. I would have had to take a 40 percent haircut on what I charge clients. I politely had to excuse myself from that situation, as that would have meant returning to being a contractor. Plus, I do not give away value, just as my clients do not either.

Contractor work is fun and exhilarating. There’s nothing wrong with that type of work. There’s nothing wrong with partnering with another professional services firm, either. In my case, that’s not my business model.

As Dan Sullivan would say, I have a unique ability to provide tools and frameworks that help CEOs reach their maximum potential. As a contractor, I am required to turn my back on that unique ability.

Questions and Answers

Let me answer some questions I have received over the past twenty-plus years that are spread across the contractor and consulting spectrum.

I believe in the golden rule. I’m not too fond of contracts because a person’s word should be good enough when trust exists in the relationship. Contracts are sometimes critical, but not in an advisor-CEO relationship. If I don’t like contracts, why should I insist my clients sign them?

Am I being naive? I completed my first third-party gig in 1993, and I made about $7,000 on that project. There were no contracts. There was only an agreement over the phone with the CEO. I never forgot that simple business lesson. Contracts in this context are for people who run their businesses based on fear and what could go wrong. That’s not a good way to start a business relationship.

Incidentally, I bill my clients monthly. After the first week, I ask my client if they like my work and want me to continue. If not, they owe me nothing. That continues after the second and third weeks. At the end of the fourth week, I ask if they want my invoice. I’ll let you guess my batting average on the answer.

Let me clarify. If a client wants me to sign an NDA, I will. It’s happened about five times across some hundred clients I’ve served since 2001.

An NDA is useless. It has no teeth in it. These boiler-plate documents typically miss vital reps and warranties that I will typically add on my new client’s behalf. But they don’t notice. They are just going through the motions to get me on board.

Once I’m on board, I’ll coach the CEO on handling an NDA in the future and even work with their attorney to redraft the documents they have probably never bothered to look at.

While I have frameworks that I guard closely, my only asset is my name. If I do anything to tarnish my image, I’m out of business. Search my name on Google, and you’ll see the various sites where my name is attached. That’s twenty years of hard work that I don’t want to go down the tubes.

All it takes is one negative comment from a client, and my practice could be over. Doing great work when no one is looking far exceeds a few meaningless and shallow paragraphs on an NDA.

I’ve never been asked this question, but I’m including it for CPAs asking about CFO services.

Before a CEO hires me, I have a value conversation from twenty minutes to several hours. The duration depends on the frustration level of the CEO.

Once that conversation ends, they know they are looking at the person who can get them unstuck from one or more issues they are dealing with. That’s why they always ask, “When can you start?”

Do we talk about timeframes? Yes, but there are no guarantees. And that’s why I do not create engagement letters. They stymie creativity and get in the way of extra work I always provide and don’t charge for.

That’s the beauty of being a small-town consultant instead of BCG. Consulting work is based on trust, respect, and urgency. I’ve already stated there is no contract. The client has little to lose. If they are not happy, the engagement without an engagement letter ends.

I’m a closet project manager. I use powerful project management tools, so inherent accountability is baked into my client work. It’s just not formalized in an engagement letter.

It’s tempting and in a big way. I’ve already provided an example above, and I turned it down. I do not believe in giving away value for free unless I choose to do so.

I would love to do some serious turnaround work with only one or two businesses, which would demand all of my time. Those projects are hard to find without the right referral network. That means alignment with a turnaround firm. If I do that, then I will shut down G3CFO. I’m not ready to do that just yet.

I’m thankful when a placement firm asks if I can serve one of their clients. I’d love to, but I’m not the right fit based on the guiding principles that have served me well over the past twenty years.

I never considered myself a coach until I attended the Strategic Coach for three years. Along the way, I listened to Daniel Harkavy, Michael Hyatt, a close friend with Table Group, Gary Harpst, and many others. Perhaps I was a coach and didn’t know it.

I’ll never forget when Robert Myers of RKV Technologies once said, “Mark, I get more out of you in one hour than I do a full day at Vistage.”

That and similar comments validated I was more than a consultant. I was coming to grips with the fact that I was a highly-paid friend who served as a priest, philosopher, prophet, and protagonist for every team member of my clients.

I don’t hold myself out to be a business coach, but nearly ninety percent of my work is coaching instead of consulting.

I could speak for hours on this topic.

First. let’s address title inflation. I appreciate that Ron Baker quoted me in his last book on the definition of a CFO:

A CFO is any senior business leader who can step into the CEO role for one full year without sales, profits, enterprise value, or the company’s culture decreasing – increases could even occur on the CFO’s watch.
Mark Gandy

Furthermore, a CFO works in a public company. Most private businesses do not have officers in their businesses. A business founder or owner may choose to give the CFO title to their head of accounting, but they generally have no idea what that title means or entails.

Am I a part-time CFO? Regarding the hyphenated term part-time, no, I’m not. My clients think I serve them full-time. That’s an art.

Am I their CFO? No. I provide no fiduciary services for them. I don’t sign documents on their behalf. I’m their financial and business performance expert who probably knows marketing, sales, and operations better than anyone on their team, with rare exceptions.

Instead, I’m a consultant who used to be a CFO, a controller, a VP of Finance, an Internal Audit Director, and a grunt at KPMG and RMS McGladrey. My firm’s name is for marketing purposes only.

It depends on who you ask. I do nearly all the leg work with bank work because delegating to someone on my client’s team is rarely practical.

However, I own the roadmap. My close rate on all loan projects since 2001 is 100%. I’ve never had a client loan go bad at a bank. Accordingly, my playbook is unique and hard to replicate.

While I’m doing most of the work, I consider it consulting.

That’s a great question. I now have a different perspective on modeling and analytics than five to seven years ago.

I rarely showcase my tools during my CEO value discussions. Instead, they appear on the scene as I start rolling out deliverables.

Once they get the financial modeling and data analytics bug, we start looking for ways to add team members who can take my tools and apply them full-time as employees.

Do I build models? Yes. Do I build visual analytics for better decision-making? Yes. But that’s not my primary business model. It’s a means to an end with the goal of my client adding the necessary resources to expand my work in these areas full-time.

Still Have Questions?

Did I miss a question? Do you need additional clarification? If so, drop me a line on this page.