Doing all the work by yourself as a CEO can be overwhelming. If you're struggling to manage day-to-day operations while also planning for the future, hiring a Fractional COO might be the solution you need. So, how much does a fractional COO cost? And what does a fractional COO hourly rate look like?
If you’re not careful, the work could end up being too much to handle, and both you and your company will suffer as a result. You may have heard about this powerful solution – a Chief Operating Officer (COO), whose job description includes getting rid of all of your problems, leaving you to focus on the long-neglected development of the business.
But what is a COO, and how can it help you? And do you need to have them always on the clock, or can you just call on them when you need to?
WHAT IS A FRACTIONAL COO?
A Chief Operating Officer is the second-in-command of the company.
More specifically, a fractional COO is a business professional who works under a fractional COO contract, offering their services as needed.
Their services can be acquired part-time, often at an hourly rate or monthly retainer, through fractional COO firms or as individual consultants. Compared to a full-time COO, fractional COO consulting services can be tailored to your current needs without draining your finances.
They’ll be your best friend – the Sam to your Frodo, a helping hand for when things get too tough. More specifically, a fractional COO is a business professional with many years of experience, refined skills, and a vast network, who is willing to work in a temporary capacity. Their services can be acquired part-time, for an hourly rate that would typically correspond to the salary of a full-time COO. The difference is, a fractional COO is completely temporary, offering their services as needed and they can tailor their services specific to your current needs. Compared to the alternative of a COO that’s always on the clock, this constant expense can be a financial drain and burden, even though they may not be needed 24/7.
WHAT ARE THE BENEFITS OF A FRACTIONAL COO?
1. THEY GENERALLY WORK REMOTELY
Typically, COOs like to accessorize their fancy suits with a fancy office, costing you time, money, and space. Fractional COOs, however, tend to work remotely, offering more of a consultation-based service, and thus not requiring a full office to work out of within your company. This can be far more convenient for you, especially since one of the incentives of hiring a fractional COO compared to a traditional COO is the benefit of not frivolously spending money.
2. THEY AREN’T HIRED LIKE TRADITIONAL EMPLOYEES
We’ve all been there – the grind of finding the right candidate for your company; the long hours spent reading resumes, interviewing, all to potentially hire someone that may not be right for you. As fractional COOs act more as contract workers, the hiring process is simplified significantly – HR usually doesn’t have to get too involved. This can make the hiring of the position far quicker, cheaper, and less of a hassle. Additionally, as they are contract employees, fractional COOs do not require executive benefits, bonuses, or perks. The way you hire them seems almost illegal, given how many traditional hurdles you no longer have to jump through.
3. THEY PROVIDE A ‘TRIAL’ EXPERIENCE SO YOU CAN SEE WHAT IT’S LIKE
Fractional COOs are like a very healthy romantic relationship. You can take things slowly, a trail run if you will. So, you can figure out if and what your long-term intentions are with them, before you fully commit to something. They’re there when you need them, and not too pushy when you seem to be ignoring them. You’re new to this whole thing, they get it; and so they’re fine to be there as long as you need them to be – and if you want to commit to a full-time, serious relationship, they’ll make the whole process seamless and remove any stress involved.
4. THEY CAN MAKE THE TRANSITION TO A FULL-TIME COO FAR EASIER
As weird as it may sound, the fractional COO aims to lose their job. They focus on building your company to the point where you can hire a full-time COO, even assisting in finding you a replacement for them when the time finally comes. Additionally, they’ll show you exactly what the full-time COO should do once they are hired within your company. Hopefully, after a trial period with the fractional COO, you will have a deep understanding of the potential benefits a full-time COO can bring, should you decide to bring one onboard.
5. IT’S EASY TO LET THEM GO
Fractional COOs are contract workers and will be most likely working in an entirely different state to you. So, if you’ve decided that the role just isn’t working for you, the phone call that so many managers dread making will be casual, simple, and easy. Letting an executive employee go can also, typically, be an uphill battle – riddled with cost and legal issues that no one has the time or patience to deal with! On the flipside, letting a contract employee go is child's play in comparison.
HOW DO I KNOW IF I NEED TO CONSIDER HIRING A COO, FRACTIONAL OR FULL TIME?
Although it depends on the company (some may need a COO immediately while others may never need one), there are a few key indicators that you should consider employing someone to do your hard work for you.
1. YOU’RE MICROMANAGING TOO MUCH
Ask yourself this, do you spend your days working in your business or on your business? If it’s the former, you may be in dire straits; “Operations” is literally a COO’s middle name – they can seriously help you out in managing the day-to-day operations of your company. Leaving you to instead work on your business.
2. EVERYDAY IS A STRUGGLE
It’s natural, unfortunately, that running a business can be hard. But the minute that you begin to suffer from an overwhelming amount of work, your business may also suffer. Many CEO’s have too high an ego or pride to admit that they can’t do everything by themselves. But I can assure you, no one is expecting you to do everything for your company. Learn your limits, and don’t be afraid to consider delegating tasks to a highly skilled and competent COO.
3. YOUR LEADERSHIP TEAM IS LACKING
While you may be the figurehead of your company, coming up with new ideas and devising ingenious strategies for the future, you may notice that it’s lonely at the top. Without a grounding, challenging, and pragmatic voice in your leadership team, this can be a risky way to model your leadership within your company. You may find that a lot of your ideas and critical projects can become too fantastical and unrealistic. COO’s excel in logistics and practicality – they may be the only employee in your company that has a holistic birds-eye view of what the business can achieve, and they have the knowledge, network, and skillset to make your crazy dreams a reality.
4. YOUR COMPANY NEEDS TO GROW SUBSTANTIALLY BUT... IT ISN’T
It’s natural that you may not be great at everything, especially when you have to do everything within your company. Logistics and operational planning can be essential to expand and grow your business, but if you don’t have a professional to coordinate it, you may find that your business is hitting plateaus in its growth. If you notice this, consider a fractional COO – they can give you key advice and make small changes that have a substantial impact.
If implemented effectively, hiring fractional COOs can have a significantly positive impact on your company. This is why fractional COO consulting can be so effective – they offer an external, unfiltered, and unbiased look at your company – fixing problems you may not even be aware of.
This is why fractional COOs can be so effective – they offer an external, unfiltered, and unbiased look at your company – fixing problems you may not even be aware of. When the time comes for you to hire a full-time COO, it’s even more vital that you choose the right person; it’s very likely that they could end up running the company once you’re gone. Luckily, business doesn’t necessarily run like a monarchy – and the heir you choose for your company can be someone that understands the ins and outs of every facet.
Hopefully, this guide provides you with a thorough understanding of the COO position and the benefits of fractional COO services. If you've been contemplating your workload and considering how to better manage your operations, ask yourself: “Should I hire a fractional COO?”
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