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