If you're a Fractional CFO firm owner long enough, you'll eventually have to make some tough calls - literally and figuratively.

Today, I will share three of those tough calls and offer advice on how to tackle them when they inevitably arise. 

Before we dive in, I want to point out an essential business lesson that I tend to overlook, forget, or just choose to ignore:

We all face these calls at one point or another.

When facing these situations, I often engage in a mental battle of words with myself, saying that I'm a screw-up, I'm not good enough, or I don't belong. But then I'm reminded that these things are universal, and everyone faces them—it's just part of the game.

So, treat these experiences as tuition toward an education in business.

Let's dive in... 

I Can't Help This Client Any Longer

Sometimes, clients get into a season or financial situation in their business that you simply cannot help them get out of as a Fractional CFO. Try as you might; there is nothing more you can do for them, and keeping them as clients is actually doing more harm than good.

You: "What in the WORLD are you talking about, Michael?"
Me: "Great question, reader!"

I once worked with a client that took a 40% monthly revenue hit. It was sudden and was certainly not anticipated. No, it wasn't COVID but it sure felt like it! The company was already operating fairly lean and there just wasn't enough fat to cut to keep the business afloat.

Their ailment was insufficient revenue and the only cure was more revenue.

Despite all the projections, calculations, scenario planning, and coaching, the CEO just wasn't taking action. We realized that keeping our services on their P&L at that point was doing more harm than good, so we decided to end the relationship with the client.

It's still painful to make those calls. We want to see our clients succeed, but we have a responsibility to practice intellectual honesty once we realize that our presence as Fractional CFOs is no longer a net positive.

Move on when you know it's the right thing to do.

The Prospect Isn't a Good Fit

I have learned that the sales process should be just as much about the seller determining if the buyer is a good fit as it is about the buyer determining if the seller is a good fit. 

In other words, the Fractional CFO - Client relationship should be mutually beneficial, a win-win scenario.

During the sales process, there are times when you may recognize that a win-win situation is highly unlikely - and there are many valid reasons this happens.

For example, the prospect might:

• Be too early for you
• Not be able to afford you
• Require services you don't offer
• Require more touches than you're willing to offer
• Not want part of your services that you know are essential

I've been guilty of trying to justify reasons to take on clients when it's glaringly apparent that it's a square peg-round hole scenario. They never end well.

You must be comfortable noping out when your instincts tell you to walk away. 

Harsh Feedback From a Client

Have you ever opened your inbox and found an email from a client with a subject line that reads something like this:

Subj: We need to talk ASAP.

When you open the email, you see half a dozen bullet points explaining why they're not happy (irate even!) with your services.

You go down the list, line by line.

One of two scenarios is likely true:

1. You goofed. And you deserve every bit of what they've said.
2. You wholeheartedly disagree with some or all of what they've said. 

Now, they want to get on a call with you to discuss things.

Yikes.

If you're anything like me, your ego will immediately try to move you into a defensive posture - cleverly working to make excuses, deflect blame, and save face (even if they're right!).

Avoid this temptation regardless of which scenario is true.

When clients are unhappy, get curious instead of defensive.

Take the opportunity to get on the call with the irate client and hear them out. See what you can learn. What opportunities can you find to improve?

The good news is that if they're willing to talk with you on the phone, they likely want to salvage the relationship.

It isn't an easy call to make, but I guarantee there's value on the other end.

No pressure. No diamond.

Making tough calls is... tough.

But making tough calls is part of the job we all signed up for.

Try to remember:
• Practice intellectual honesty
• Your instincts will tell you when to walk away. Listen.
• Irate clients frequently reveal tons of insights.

See you next week.