Dear Advisor: How do i get into fractional executive consulting?

Originally published on January 2023, updated for relevancy in March - May 2023

So you’re considering pivoting from your full-time executive role into fractional executive consulting? Welcome to the club!

While my fractional executive consulting is still evolving (and there are many things that could be improved), here are some things I’ve learned along the way; hopefully this helps you evaluate if fractional executive consulting is right for you, what to expect and where to find clients.

Finding your Niche

Before I started my consulting practice, for almost 10 years, I was (typically) a 1-person Data Team, doing end-to-end analytics to help businesses make $$$, by making data actionable. I enjoyed working for the tiniest start-ups as well as the global companies, covering all the major industries (including healthcare, fashion, online advertising, market research, finance, media and entertainment, manufacturing and social media).

In my interview for “Authority Issues” podcast (episode 66), I share my non-linear path to falling into Data and AI strategy as well as management consulting.

Virtually every time, I wished that the company that hired me started earlier on their data strategy – or that I had a seat at the table to guide them (way) before a project kicked-off. This way, they could avoid the costly mistakes I’ve seen so many other companies make, and to advise them on their data product strategy from the very beginning, rather than trying to put out super urgent, high-priority, constant fires.

This prompted me to start my practice. As you may have already read elsewhere (e.g. Jonathan Stark, Rochelle Moulton, or the book "Book Yourself Solid"), you’ve heard that you need a consulting niche, beyond "fractional consultant". What are your strengths that you can help companies with?

As a fractional Chief Data Officer, my niche is a work-in-progress, and is arguably somewhat broad, focusing on these 3 areas:

Guiding a company on the first- or last- mile of using data/analytics/AI strategy to improve their product-market-fit.
Interim Head of Data, (fractionally) filling-in the gaps on the executive team by advising on product strategy, mentoring the Data team, and helping hire a full-time replacement.
Educating early-stage start-ups on how they can establish and use a data/AI strategy for go-to-market and product-market-fit.

What will be your niche (v.0.1), that you’ll be fine-tuning over time?

When to Start

You’re probably eager to get started! I’m risk averse, so I’d recommend first trying out a very small fractional engagement with a client on the side, to see if the "grass is greener" or if you may actually like becoming a fractional consultant full-time, juggling executive roles for multiple clients.

How to Start and What to Think About

I share advice on what to think about when starting your consulting business here, including EIN, business license, how much to charge, what to do when a client doesn’t pay you, etc.
To help you decide if you should incorporate, please see my advice here.
As a solopreneur, some weeks I may end up wearing all the hats, including CEO, Finance, IT, Legal Intern, Marketing, Sales, and (of course) the fractional CDO one.
- - I highly recommend finding a lawyer and tax advisor you trust, to help you navigate each consulting agreement and potentially equity terms.

To offer the most flexibility and the least risk for both sides, I’ll go on record to say that I (still) mostly charge hourly, where a portion of the hourly rate can be in equity. I say "mostly", because I also have a handful of productized services, which can be booked and paid for through Calendly (with a Stripe integration); there are very structured meetings with specific booking criteria, intake questionnaires and outcomes.

For example, I have a fee-based session on pitch deck due diligence.

I’ve found that as a fractional executive, it’s easier to justify your prices, especially since you're still arguably more affordable than a full-time executive, which most start-ups can’t afford to pay market prices for full-time executive hires. Now you also get a seat at the table!

Where to Find Clients

While I’ve been a fractional executive for over 2 years, I’m honestly still looking for a repeatable channel. Here’s where I’ve found prospective clients.

Word-of-month from your network of friends, former colleagues, etc.
Attendees of your talks (which surprised me, because I’m terrible about including a CTA)
Conferences where potential clients go
I’m happy to share that because hiring fractional executives is becoming more of the norm, you may get referrals from other consultants with complementary skills. You can find them via via:
- Fractional executive networks (some of which are fee-based)
- Networks for consultants, including:
  - - (free) Statistical Consultants
    - Conference for Statistical Consultants
- Accelerators, where other fractional executives are mentors. To break into this, (honestly) just reach out to them! They’re always looking for mentors.
Investment funds, who are looking for CxOs to mentor and advise their portfolio of start-ups
Job boards for fractional/interim (and full-time executive) roles, including:
- - ExecThread
  - Bolster, which has its own article on "How Fractional Executives Drive Startup Growth"
Slack/Discord communities with specific channels where members look for freelancers/consultants
For interim roles, if someone reaches out to me via LinkedIn/email for full-time roles, I tell them to keep me in mind for interim – or, if I see that a company is having a really hard time hiring for a full-time Data leader, then I’ll reach out to see if they need someone in the interim.
- - Demand for Interim Head of Data roles seems to have picked up with the "great resignation"

Why they Hire You

Reason 1: Cost

One of the biggest reasons that companies may be considering hiring fractional executives over someone full-time, is the difference in costs between a monthly retainer for a fractional executive and cost it takes to hire an executive full-time.

Reason 2: Breadth of Expertise

Another reason is that they may not know whom they need/should hire. I’m a fan of complementary intake meetings to see if there’s an opportunity to collaborate – and to scope out at a high-level, what the goals for that collaboration can look like. I’ll admit, this can be a number of meetings – and sometimes the conclusion is that the prospect has no idea what they want – or they want to do everything. At which point, I’ll typically share a few of my blog posts on how to prioritize and also recommend that they may want to consider hiring me to help them prioritize, or someone else – and for full-time.

By helping them identify what their pain point actually is, and why they need it solved now, this helps set-up the collaboration for success, and (as a side effect) also helps me draft the objectives of the collaboration at a high-level in the consulting agreement.

By hiring a fractional executive, whom, often is used to wearing multiple executive hats (sometimes solely because we run our businesses), they can get even more value in hiring one fractional consultant than 2-3 full-time executives in a much longer executive search process (and cost).

Parting Advice

I’ll be remiss if I don’t talk about the pros and cons of consulting:

Pro + con: you set your own schedule :)
- - To improve my productivity, I started to time-bucket my prospective client meetings to a handful of times per week
  - Calendly and Zapier are my friend
Pros:
- - ability to turn down potential clients that don’t fit my values or mission
  - ability to work in a variety of industries at the same time, uncovering trends/patterns that are industry-agnostic, which helps me be a better advisor and consultant
Cons:
- - You have to find your clients
  - Your revenue stream may be a roller coaster of highs-and-lows
    1. - To smooth it out, I pay myself a fixed monthly amount that's, a recurring transfer from my business to my personal account
  - As a consultant, you typically don’t get to iterate, but advise on a feature of a prototype
  - As a fractional executive consultant, you won’t get to be knee-deep writing code for a key product feature
Consider offering referral fees; here are mine.
Make it easy to pay you.
- - I have a Calendly Pro account to be able to connect Stripe for my productized services, which collect payment at the time the session is booked.
  - I use whatever invoicing platform they prefer; if they don’t have one, I send links to pay by credit card via Stripe.

Since I’m always looking to meet other consultants with complementary skills, let me know who your ideal clients are and how you help them -- who knows, maybe you just might get a referral. :) Good luck!