Welcome back to our Fractional Leadership series, if you missed the last post on maximizing return on investment, check it out here.
We have highlighted what fractional leadership is, how you know it might be right for you, and how you can maximize your return on investment in a fractional engagement. And we saved the most important for last...
If you're impatient, you can skip right to the Recap
What's in it for you?
Save on Labor Costs
Costs for everything are rising, including wages, making it harder for small businesses to compete. So you have a choice - hire an entry level employee who can grow with you, and invest in their training, and hope they stick with you. Or opt for an experienced fractional leader that's already been trained by someone else! If you don't need a full-time executive in that capacity, a fractional leader can be a cost-saving solution.
According to Forbes "The fractional business model saves payroll thousands of dollars or 30-40% over hiring a full-time employee." Let's do the math, instead of $150,000 in salary, you could be spending $45,000 - $60,000 to access the same experience.
Save on Overhead Costs
Fractional leaders can work in person, but they don't require their own office. They also have their own laptop and don't require a cell phone allowance.
No Taxes or Benefits
Fractional leaders work as independent contractors, so you're not paying Social Security, Medicare, Unemployment Insurance, and other employer taxes. You're also not paying for health and dental insurance, 401(k) plan, providing PTO. They handle their own training and development.
More control over your costs
Your payroll-related costs are one of your biggest ticket items, and they remain constant regardless of any fluctuations in revenue. With a fractional leader, you can adjust their hours based on current needs, similar to part-time or temporary workers but they come with executive expertise.
Avoid reputational risk
There's often hesitation in the hiring process and it's centered around "what if we make the wrong choice". Stakes are higher with high-level positions. With a fractional leader, you have complete control over their visibility and reporting structure. It it doesn't work out, you can end the engagement, say they were interim, and no one needs to know any of the details.
Lower risk exposure
A fractional leader isn't an employee. I'll let you fill in the rest, especially if you're in California.
Happy with increased workloads
Think about the difference between when you tell employees they'll have to pick up the slack for an open position... And when you tell a service provider that you have another project for them. Night and day!
Avoid Trial and Error
This wisdom is from our friend Henning Co-Founder of Vendux, LLC. "I frequently hear from Founders that their sales team underperforms, that they had to hire and fire reps again and again, that their sales team is ‘nice’, yet not ‘delivering,’ and that they as Founders don’t really understand their salespeople. These are telltale signs of an expensive trial-and-error because of inexperienced sales leadership."
We've barely scratched the surface. As many business owners and fractional leaders as there are, there are equally unique and powerful benefits to be gained from the right fractional engagement. Do you have any to add? Please share in the comments!
Recap
Save on labor costs - Save on overhead costs - No taxes or benefits - More control over your payroll costs - Avoid reputational hit - Lower risk exposure - Happy when you increase their work load - Avid trial and error
Ask Yourself:
"Have you ever faced a challenge in your business that could have been navigated more smoothly with experienced leadership?"
"What areas of your business could benefit most from the expertise of a fractional leader?"
"Can you imagine overcoming a major business hurdle with the help of a seasoned expert, without the long-term commitment?"
That's a Wrap
Next month, we'll explore a different topic related to business revenue growth. Subscribe so you don't miss it. Still wondering if fractional leadership might be right for you? Schedule a quick 15-minute chat to explore.
Rise of Us is a practice run by Summer Poletti, specializing in revenue growth: sales, strategic partnerships, customer success, marketing alignment. We generally work with financial services and SaaS companies from $2MM - $20MM ARR and help them plan and execute for their next stage of revenue growth. We concentrate on strategy, coaching, and organizational alignment.
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