Are you frustrated with the state of your organization's revenues?
Do you need confidence that you're tracking the right metrics?
Tired of flying blind without reliable sales processes and forecasts?
Need help interpreting the market and your performance data?
Is cash tight?
You're not alone.
A lot of small business owners are secretly embarrassed that they don't have a firm grip on their sales strategies and revenue forecasts. As a result, more and more of them are doing something about it.
These savvy leaders are filling that financial insight gap by bringing in sales leadership expertise. If your company is >$16M in annual revenue, you probably want to hire a professional full-time sales manager. If your annual revenue is less than <$2M and you employ >2 salespeople, you would benefit from fractional CFO services. There are other factors which can affect your decision to contract sales management services, but these are the general revenue and sales team numbers to provide you confidence that you're making the right decision when considering your economies of scale and ROI.
Interest in outsourcing specialized functional leadership is growing. The market acceptance behind fractional leadership is in higher-performing, more-efficient management driving results quicker than a small business can often find and afford in the open labour market. The return on such an investment is amplified considering all alternates present lower net outcomes due to additional opportunity cost, lower performance (despite higher real costs), and a lack of established systems and processes that a season, high-performance leader can bring to a small organization..
It is best to consider a "fractional leader" a member of the team, not outsourced nor contracted The fractional leader will help well beyond the boundaries of their role if you desired, including the alignment of systems, processes, and people that extending into the reinforcement or pivot of values, beliefs, and way of the organization; the culture. Accordingly, finding the right fit to support the vision of the business owner is important. If the vision of the owner needs clarity, the right fractional leader can help with strategic planning as a part of their role without a need for add-on consultants.
A prime example of fractional leadership and where the move to focused part-time professional assistance is the "Fractional CFO". The Fractional CFO concept started over a decade ago. Fractional CFO services have seen theivalue realized in helping SMB in the areas of accounting and finance. The concept is well accepted and below I share a graph showing the rise in the Google searches for "Fractional CRO" over the past 10 years. Specifically, you can see the increase over the last couple of years which is a value-adding phenomenon almost exclusive to the North American growth intense market.
PROACT Sales Management can be a critical factor as you continue to find ways to leverage your sales function to create competitive advantages, especially when competing with larger rivals and dealing with diseconomies of scale.
5 WAYS TO USE FRACTIONAL SALES MANAGEMENT TO YOUR ADVANTAGE
If you think a Fractional Sales Manager might be a good fit for your organization, you may be wondering how that relationship would work in practical terms. Here are some the most common questions asked about hiring fractional leader:
How many hours do fractional CFOs typically work?
Fractional Sales Managers and CROs may work anywhere from a half day per week to two days per week. Beyond Two days per week a company will have grown to the point of considering a dedicated, full-time sales manager. Succession planning can include coaching and mentoring a (Jr) Sales Manager or Sr. Salesperson for a gradual transition of reducing time for the Fractional Sales Manager.
How much will I pay for fractional CFO services?
This topic was briefly discussed on a previous BLOG post. Interim Sales Manager vs. Part-time Sales Manager
Most providers will create a custom quote based on your specific needs and scope of services provided. As an example, PROACT Sales Management service can include a Sales Best Practice Audit or Sales Process Design, or both included as components Complete Sales Management program. A big part of what PROACT assess, develops and transforms is the "DIGITAL" aspect of how buyer relationships are nurtured, customer lifecycles are managed, and the holistic integration with the organization.
The traditional consultant engagement can range from $1,500-$3,000 per day. Contrast that with hiring a full-time Sales Leader at >$200,000 per year (salary + bonus + benefits), and you'll easily save up to 85% by outsourcing to a part-time Sales Manager. Most Fractional Agreements begin with aa assessment on an one-time engagement to minimize risk and build comfort with the Sales Manager. The assessment is normally followed by an agreement in scope and time based upon the findings of the assessment and goals developed by the CEO/Owner and the Sales Manager.
When would be the best time for a seasonal business to bring in a fractional leader?
This answer could go either way, but it's worth thinking through. It might be good to bring in a fractional leader during peak season because he can be available in the heat of the moment. Conversely, it may be better to bring in a fractional sales manager during your downtime because you'll get more value during slower months and the planning, training, forecasting, and all other relevant development can be executed.
What are the first few tasks a fractional sales manager should complete during a revenue crisis?
A recent report by JP Morgan Chase Institute found that less than 25% of small businesses have enough cash buffer to last 62 days, while the recommended buffer would cover them for three to six months. If you're experiencing a revenue crisis, it would be good to understand the likely agenda of an incoming fractional sales manager. Here are the first four tasks a fractional sales manager might complete to help you keep the ship afloat.
- Establish revenue management tools (weekly, Monthly, and quarterly revenue forecasts (Sales and Cash) to understand the severity of the situation and forecast a projected duration.
- Identify and present options for converting sales, capturing low hanging revenue, and generating cashflow (this may also include managing commercial cost drivers, stretching payables, selling assets, pulling in receivables, etc.). This task will include prioritizing actions for preserving and producing cashflow from both the commercial function as well as operations, and other departments.
- Be prepared to re-"ASSESS" daily and/or weekly depending on the severity of the crisis for and "DEVELOP" new actions as dictated by the situation to "TRANFORM" into a sustainable, more efficient, stronger organization.
- Once the company is back on its feet, the sales manager will establish appropriate reporting to provide more advanced warning mechanisms so that you can adjust quickly enough to avoid another crisis.