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Fractional Executives: The Cost-Effective Solution for Small Businesses in Need of Expertise

Fractional Executives: The Cost-Effective Solution for Small Businesses in Need of Expertise

Fractional executives are experienced professionals who work part-time or on a project basis, providing expertise and guidance to help businesses achieve their goals. Often, small businesses need more resources and expertise, making it difficult for them to achieve growth and success. While hiring a full-time executive may not be feasible due to the costs involved, fractional executives can provide a cost-effective solution to this problem. 

A fractional executive differs from a consultant, but the difference may confuse some. Typically, a consultant will provide advice and guidance, but they are separate from your company. A fractional executive works alongside your team, helps in company operations, and is responsible for the outcomes of those operations. They are an extension of your existing leadership team. In most instances, a fractional executive provides all of the responsibilities to your company as a full-time executive.

Cost-effective Expertise

One of the most significant benefits of using fractional executives is cost savings compared to a full-time employee with a similar amount of experience. Hiring a full-time executive can be expensive. Fractional executives work on a part-time or project basis, meaning companies can save money by only paying for the services they need. Additionally, businesses can avoid the costs of recruiting, hiring, and training a full-time executive.

As explained in the FRACTIONALS UNITED BLOG, it is essential to explore the cost of an FTE (full-time employee) compensation plan compared to fractional monthly retainers. The data is eye-opening!

According to data gathered (March 2023) by, the median (50th percentile) core compensation (salary+benefits*) for the following C-Suite leaders is as follows:

  • Chief Financial Officer (CFO)- $558,999 ($46,583/mo) + 22% bonus
  • Chief Operating Officer (COO)- $622,672 ($51,889/mo) + 23% bonus
  • Chief Marketing Officer (CMO)- $464,651 ($38,720/mo) + 25% bonus
  • Chief Revenue Officer (CRO)- $408,619 ($34,051/mo) + 12% bonus
  • Chief Technology Officer (CTO)- $387,001 ($32,250/mo) + 15% bonus
  • Chief Human Resources Officer (CHRO)- $449,340 ($37,445/mo) + 25% bonus
  • Chief Talent Officer (CTAO)- $337,197 ($28,099/mo) + 20% bonus

Bonus comp and equity cash totals were excluded from this comparison since both are variable compensation, only sometimes guaranteed. The average percentage offered was noted instead.

The average monthly retainer for fractional executives starts at around $5,000 and goes upwards to $15,000 per month. Retainers vary depending on the experience, scope of work, and level of hourly commitment per month (i.e., 25%, 50%, or 75% commitment to the team/company). The retainer may be higher if the professional has more years of experience, is in high demand, or if the organization is in a large metropolitan area.

If we assume that any given fractional executive discipline is $10,000 per month, then:

  • Fractional CFO – 21% of an FTE
  • Fractional COO – 19% of an FTE
  • Fractional CMO – 26% of an FTE
  • Fractional CRO – 29% of an FTE
  • Fractional CTO – 31% of an FTE
  • Fractional CHRO – 27% of an FTE
  • Fractional CTAO – 26% of an FTE


Fractional executives offer businesses a high degree of flexibility. As part-time or project-based professionals, they can be engaged as needed, providing their expertise and guidance without the long-term commitment of a full-time employee. In particular, this flexibility is valuable for small businesses that may not need an executive full-time. Fractional executives can help companies to address specific challenges or opportunities as they arise without the need for a long-term commitment.

Experience and Expertise

Some projects require a subject matter expert — someone proficient in an area of expertise beyond your team’s knowledge and skillset. Bringing in a fractional expert with previous knowledge and experience on a specific deliverable will save internal resources while simultaneously providing internal training for your team. They have worked with many companies and industries, giving them a broad perspective on business operations and management. This experience and expertise can be valuable for small businesses needing more resources or knowledge to address specific challenges or opportunities. Fractional executives can provide guidance and support, helping companies to achieve their goals and grow their operations.

Fractional executives are experienced professionals who have spent years working in different companies and industries, gaining knowledge and expertise in various areas of business operations and management. They are experts in their field and deeply understand what works and what doesn’t work in different industries. They can bring their wealth of knowledge and expertise to small businesses, providing guidance and support on various aspects of the company.

Strategic Guidance

Fractional executives provide strategic guidance to small and medium businesses. They help companies develop and implement strategic plans, identify new opportunities, and overcome challenges. Fractional executives also offer insights into industry trends and best practices, which helps businesses stay competitive and relevant. Their strategic guidance is valuable for small businesses that need more resources or expertise to develop and execute a comprehensive strategy.

By providing insights into industry trends and best practices due to their years of experience, businesses stay ahead of their competitors. Fractional executives develop and implement strategic plans that align with the company’s business goals. Fractional executives also identify new opportunities and overcome challenges that may arise, providing valuable guidance and support throughout the process.

Increased Productivity

Fractional executives help small businesses increase their productivity. They provide support and guidance to help companies to streamline their operations and improve their processes. Fractional executives also offer project management support, ensuring that projects are completed on time and within budget. Small businesses achieve their goals more efficiently and effectively by increasing productivity.

Fractional executives improve their processes and streamline their operations, making them more productive and efficient. They provide project management support, ensuring projects are completed on time and within budget. This can help small businesses save time and money, enabling them to focus on their core business activities.

Improved Decision-making

Fractional executives can provide valuable insights and expertise so that their small business clients make better decisions. They guide their clients in evaluating different options to make informed decisions based on data and industry trends.

Improved decision-making is a crucial benefit to a small business owner using fractional executives with years of expertise. Engaging a fractional executive to plan the approach and execution of a task objectively can be a massive benefit due to the fractional’s exposure to various industries and companies.

Fractional executives bring a fresh perspective and objective analysis, allowing small businesses to make informed decisions that align with their business goals. They help companies to identify areas to improve their operations and guide them in achieving their desired outcomes. With their vast knowledge and years of expertise, fractional executives have seen many different organizational structures, industry-specific problems, project management, and problem-solving strategies that will help them recommend a solution that the SMB owner may not have considered without their unique viewpoint.

Fractional executives are skilled at analyzing data and market trends to help businesses make informed decisions. They provide unbiased opinions on a range of issues, from developing a marketing strategy to deciding on a new product line. They can also help small businesses evaluate the risks and benefits of different options, guiding how to minimize risks and maximize rewards.

Fractional executives can also help small businesses navigate complex legal and regulatory requirements. This can be particularly valuable for companies operating in heavily regulated industries, where the cost of non-compliance can be high. The experienced fractional executive can guide on regulation compliance and avoid potential legal pitfalls, ensuring that the business operates within the law and avoid costly fines.

Another benefit of using fractional executives is that they can help businesses access new markets and customers. Fractional executives bring a wealth of experience and expertise in different industries and markets, which can be particularly valuable for companies looking to expand into new territories. They guide how to target new customers, develop marketing strategies, and establish new business relationships.

Fractional executives can also help small businesses build strong teams. They can assist in recruiting, retaining, and developing employees, ensuring businesses have the talent they need to achieve their goals. They can also provide training and development programs to help employees build their skills and improve their performance.

In addition to these benefits, fractional executives can provide valuable networking opportunities for small businesses. They often have extensive networks in different industries and markets, which can be particularly valuable for companies looking to establish new business relationships. Fractional executives can also provide introductions to potential investors, partners, or customers, helping businesses grow and expand their operations.

Finally, fractional executives can help small businesses develop a culture of innovation and continuous improvement. They can create a culture that fosters creativity and innovation, encouraging employees to think outside the box and create new ideas. They can also help businesses implement systems and processes that enable them to measure and improve their performance over time.

If you’re a small business struggling to achieve your goals, hiring fractional executives can be a game changer. These executives offer an affordable solution to the everyday challenges of limited resources and expertise. By bringing in fractional executives, you can benefit from their flexibility, extensive experience and knowledge, and strategic guidance. This can lead to increased productivity, better decision-making, and access to new markets and customers. Additionally, working with fractional executives provides networking opportunities and fosters a culture of innovation and continuous improvement. By leveraging the advantages of fractional executives, your small business can position itself for long-term growth and success.

Header Photo by August de Richelieu

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