The Ultimate Guide to Hiring Fractional COO Services [2024]

A comprehensive guide to helping you decide if a fractional COO is relevant for your business, and how to find the perfect fit.

12 min read

Running a business is hard, especially for small and medium sized businesses. It requires qualities that include immense drive and patience, a compelling product or service, sufficient cash, and most importantly an effective team. In the last 5 years, bringing highly skilled executives into even small businesses has become possible, thanks to the Fractional space.

Many seasoned experts are now offering their insight to help businesses of all sizes to solve key problems, without having to commit to bringing on expensive full timers. While Chief Marketing Officers (CMOs) and Chief Financial Officers (CFOs) have become common place as fractionals, businesses are realizing the immense value a fractional Chief Operating Officer (COO) can bring to their businesses.

In this comprehensive guide, we'll navigate through the nuances of hiring Fractional COO services, covering every aspect you'll need to consider as you embark on the journey of determining whether a fractional COO could be the right fit for your team.

Understanding Fractional COO Services

What is a Fractional COO?

A Fractional Chief Operations Officer (COO) is someone who directly has had experience in hands-on strategic and operations roles, and works with a business on a part-time basis. They will have prior experience in similar full-time positions at businesses.

A COO's role is typically expansive, as they will have overseen most aspects of a business. A highly skilled COO will have led most functions/departments in a business, including operations (such as supply chain, procurement, manufacturing), HR, finance, sales, marketing, customer service, legal. Unlike more focused Fractionals, such as CMOs or CFOs whose expertise is limited to marketing or finance, COOs will be able to take a broad, business-wide view when tackling a company's most pressing issues because of their breadth of experience.

Fractional Chief Operations Officer vs Management Consultant vs Advisor

It can get confusing regarding the differences between these types of services.

  • Management Consultant: Typically brought in to provide strategic advice on a specific issue that is pressing for a business. Management consultants analyze the issue, and conduct industry-relevant research including speaking with outside experts to help propose solutions to the management team of a business. The Management Consultants a business will interact with are typically MBAs who immediately move into consulting roles. They mostly have no hands-on experience in running a business, so their recommendations will be sourced from industry research. They also will not have the capability or skill of implementing the recommendations they have proposed.

  • Advisor: Unlike Management Consultants, advisors may have relevant industry experience (if chosen correctly) and will be able to provide recommendations or strategic direction based on their insight into the industry. However, an advisor's interest will be to remain at a strategic level and not provide hands-on expertise to implement recommendations.

  • Fractional Chief Operations Officer: Unlike advisors and Management Consultants, COOs bring deep, hands-on understanding of running businesses in order to provide strategic advice that is based on practical experience. This experience can provide solutions and insight that is of a different level than what non-COOs could provide. Next, a COO is ready to roll up their sleeves to implement the strategic recommendations that have been provided. And important, they have the expertise to do so. This distinction makes them effective problem solvers and contributors to the execution of tasks, setting them apart in the realm of business leadership.

two women talking while looking at laptop computer
two women talking while looking at laptop computer

Exploring the Different Types of Fractional COOs

There are 3 main types of Fractional COOs that a business can choose from:

1. Execution-Focused COOs

These professionals excel in seamlessly running entire businesses or significant operational segments. Their presence allows CEOs to transition into visionary roles, focusing on broader strategic aspects. An execution-focused COO will have prior broad experience in running/managing a majority of departments or functions in a business. They excel in organizing and running teams, setting business priorities based on potential impact, creating efficient and scalable roles & responsibilities, and have a leadership style that is motivational for teams.

2. Project-Focused COOs

Project-focused COOs leverage their broad skill set to dive deep into specific areas crucial for business growth. A CEO may either give a blank slate to this COO to dive into each aspect of a business to determine what the roadblocks for scaling are for the business, or may have already identified a roadblock and will task a COO to solve this issue both strategically and practically.

Because of their breadth in knowledge, a COO could tackle any area in a business, ranging from B2C marketing to team culture development, to COGS improvement.

3. Interim COO Services

When businesses face transitional phases, such as a prior COO exiting before a new-hire is identified, an M&A event, or a need to upskill the current team, interim COO services can act as a flexible bridge. In this case, a Fractional COO steps in, provides deep strategic guidance and hands-on expertise to ensuring continuity without the long-term commitment, making them an invaluable asset for companies in need of targeted leadership.

The Areas Fractional COO Consulting Can Help With

1. Revenue Increase: B2C and B2B Marketing Strategy and Implementation

A Fractional COOs has deep experience in launching new products as well as finding ways to increase the revenue generated by existing products. They will analyze the current state of revenue for your business, identify gaps that are preventing the scaling of revenue, and then craft a relevant strategy and execute on it. This can include:

  • B2B: Setting up and leading an effective, KPI-focused sales team that implements cold-emailing and cold-calling best practices for B2B sales.

  • B2C: Defining and implement an end-to-end product launch, including determining your Ideal Customer Profile ("ICP"), creating a marketing funnel to find, convert, and retain your ICP, and execute on all the strategies behind this. This can include Search Engine Optimization ("SEO") for organic traffic increase; Conversion Rate Optimization ("CRO") for improving website conversion rates; email marketing automated flows; Facebook/Instagram, Google, and Tiktok paid advertising; influencer marketing, and more.

2. Expense Reduction: Retooling Processes and Supply Chain Optimization

The Fractional COO will analyze every aspect of your supply chain to find the most efficient and cost-effective ways to improve your Cost Of Goods Sold ("COGS") in order to improve your business's profit margin. This can include revamping procurement teams and their processes; directly negotiating contracts with 1st and 2nd tier suppliers; finding and qualifying new and more cost or customer efficient 3PLs, Contract Manufacturers, or co-packers; implementing should-cost analysis to take your current gross margin to what ideally it should be; performing in-depth data analysis to identify your customer base locations and how to optimize shipping routes to take advantage of efficiences, and more.

3. Team Impact: Implementing Efficient Company Systems and Team Culture

Many businesses have grown despite their lack of streamlined, efficient processes. Typically at some scale, these inefficient processes will lead to missed revenue/profit opportunities and/or burnout for the team. A Fractional COOs will use their experience to deep-dive into company-wide processes, roles & responsibilities, and departmental organization in order to implement an operating system for the company that is relevant, motivational, and could solve roadblocks to scaling.

There are many "off-the-shelf" operating systems for a business, such as EOS (Entrepreneurial Operating System), but a skilled COO will be able to understand what is specifically relevant for a business, and create a system that will work best for them. The goal will be to create a highly motivated and accountable team culture (both at leadership and employee levels) that actually makes a difference to revenues and costs.

4. M&A, Fundraising, and Finances: Raising Equity, Successful Exits, and Cash Flow Management

Skilled COOs have deep experience with managing the finances of a business. This can include:

  • Preparing for an exit: Work with the business owners to determine their exit goals, and deep dive into every aspect of the business to restructure it for achieving these goals. This can include finding the paths to increase EBITDA multiples that a business valuation will be based on, making the company less dependent on the owner's involvement, or retooling the business's capital structure.

  • Mergers and Acquisitions ("M&A"): Identifying when is the right time to search for add-on acquisitions to a business in order to create new revenue channels, improve efficiencies, or add missing skillset/talent to the team. bring to M&A, fundraising, and financial management. Explore their role in raising equity and debt funds, preparing for successful exits, and managing cash flow and profit margins for the business.

  • Fundraising and Cash Flow success: Performing data analysis to look at historical cash needs for the business, predict upcoming needs based on seasonality and growth plans, and execute on debt or equity fundraising to bridge the gaps.

When is the Right Time to Hire a Fractional COO?

Many events could trigger the need to bring on a Fractional COO to the team. Here are some common ones:

Startup Ready for Scaling

If you've raised capital and are poised for growth, hiring a Fractional COO can professionalize operations and prepare the business for scaling.

Established Business Facing Challenges

For established businesses experiencing stagnation or a decline in revenue or profit, a Fractional COO can bring outside expertise to reignite growth.

Founder/CEO Shifting Focus

When the founder or CEO wants to shift focus to the overall vision and direction of the business, a Fractional COO can lead the execution of day-to-day operations. This will free up time and mental space for the founder/CEO.

Specific Business Needs

If there's a specific area in your business that requires expertise that doesn't already exist in-house, a Fractional COO with hands-on experience can be brought in to address these needs effectively - whether in revenue generation, expense management, or team culture and performance improvement.

shallow focus photograph of black and gray compass
shallow focus photograph of black and gray compass

The Unique Value of Fractional COOs

Industry Insights and Collaborative Learning

One of the unique values Fractional COOs bring to a business vs a traditional full-time COO is their expansive industry insights. By working with multiple companies, they gain exposure to a variety of sectors, allowing them to identify trends, challenges, and successful strategies. This breadth of knowledge can generate fresh ideas, capable of steering your business with a well-informed, forward-thinking approach.

In addition to their individual experiences, when a Fractional COO is part of a firm such as ScaleUpExec, there is a multiplicative knowledge benefit derivied from the shared insights of other COOs/management in the firm. Firms typically have internal group sessions where COOs poll each other for insights into solving challenges they are working through with their clients. The combined knowledge of a team of experts ensures that each COO can draw from a reservoir of insights, bringing a heightened level of expertise to your business challenges.

Adaptability in a Dynamic Landscape

In the fast-paced business environment, adaptability is crucial to survival. Fractional COOs, with their exposure to various business models and operational challenges, are well-versed in navigating change. Their adaptability becomes your business's strategic advantage, ensuring it stays ahead of the curve and resilient in the face of uncertainties.

What Size Companies Can Typically Benefit?

The Ideal Scale for Fractional COO Services

Companies with a workforce ranging from 5 to 150 employees are often in the sweet spot to benefit from Fractional COO services. This can include:

  • Startups that have secured at least $750k USD in funding and are on the cusp of scaling.

  • Established businesses in the $1M - $15M USD revenue range looking to rejuvenate their top or bottom line.

What Industries Can Benefit from Having a Fractional COO?

The versatility of Fractional COOs extends across industries. ScaleUpExec's team, for instance, brings deep hands-on experience in leading companies across Tech, SaaS, Real Estate, CPG, E-Commerce, Manufacturing, Services, and Retail businesses.

In many cases, there can be benefit in bringing on a COO who has minimal experience in your specific industry but has deep expertise in a range of other industries. They could bring a fresh outside perspective, which we've seen can often bring non-typical returns for a business.

Tips for Conducting Effective Interviews

The entire interview process is important when looking to hire a Fractional COO. At ScaleUpExec, we execute on a proprietary, robust vetting process that we've developed over the years to ensure we only have the top 1% of COOs on our team. This reduces the risk level for success for our clients relative to them hiring an independent contractor on their own.

When conducting the interview process, consider:

Reviews and Testimonials

Dig into their professional history, seeking reviews and testimonials to gain insights into their track record. Sites such as can be trusted sources for reviews, vs. using less trusted sources such as TrustPilot (which is surprisingly easy to post fake reviews on) or what is written on a COO's personal website.

Relevant Experience

Ensure their past experience aligns with your business needs. We've found that it's not critical that their experience is directly in your industry, but sometimes it can help. However, a Fractional COO should have a breadth of knowledge directly leading departments. Additionally, they should have hands-on experience, and not just executive-level experience. You'll want to ensure that your candidate is willing to roll up their sleeves. We've also found that COOs who have had entrepreneurial or CEO experience in the past are able to add a different perspective and expertise to a COO role.

Team Support

Evaluate whether the COO works independently or has a support team. If they are in a firm of COOs, the support and perspective they receive from their peer group of COOs as well as their personal experience working with a variety of businesses and industries will help ensure an outsized prospect of the results they will bring to your business.

Communication Skills

Effective communication is key. A Fractional COO must be able to articulate strategies, motivate and guide your team, and collaborate seamlessly with existing leadership. This means that they must have significant managerial experience, including project management experience in their past.

Problem-Solving Approach

Look for a problem-solving mindset. A Fractional COO should not just identify issues but be able to propose and implement effective solutions. During the interview process, you can pose a set of situational problems and see what logic and insight from their experience they use to come up with potential solutions.

Where to Find Fractional COOs

Finding the right Fractional COO involves exploring various platforms and approaches. If doing it by yourself, it can be time consuming to find the right fit. Many of the business we've worked with at ScaleUpExec previously conducted a search themselves or with a recruiting firm that was 6 months - 1 year in length without success. Once they found our firm, they had a COO in their team in 1 week.

Upwork: Affordable Entry-Level COOs

Upwork is suitable for finding entry-level COOs at more affordable rates. You will be able to find freelancers that are based across the world and their pricing and reviews can be easily determined. However, thorough vetting is essential to ensure their expertise matches your business needs. In our own experience, even when we found freelancers on Upwork with good reviews, we realized their real world experience level was low, and hence the potential impact they could have on our business was less.

Toptal: Top-Tier Freelancers

Toptal boasts a pool of top-tier freelancers, including seasoned Fractional COOs. Toptal also performs an extensive vetting process before a COO is listed on their site. Their rates are typically 2x of what a COO firm will charge ($450 to $550 per hour) and you only get an independent contractor (i.e. not the benefit of a COO gaining insight from other COOs in their network).

LinkedIn Job Posts: Casting a Wide Net

LinkedIn is the most extensive database for executive talent. You can either manually search for profiles that have "COO" in their title, or create a job post. Both paths can be effective, but will involve extensive screening and management processes, requiring time to find the right fit.

Fractional COO Firms (e.g., ScaleUpExec): Accessing Vetting and Expertise

Opting for a top-tier Fractional COO firm provides access to highly vetted and experienced COOs backed by a team of experts. ScaleUpExec, for instance, conducts a proprietary and extensive vetting process for each of the COOs on their team that has been developed over the course of years, and has internal systems to share best practices and assist each COO with gaining from the experience of other COOs on the team - overall helping to improve the chances of success for each client.

person sitting in a chair in front of a man
person sitting in a chair in front of a man

How Much Can You Expect to Pay for a Fractional COO?

Understanding Fractional COO Rates

Fractional COO rates are typically structured as flat monthly retainers based on the project's scope and level of involvement needed. These rates often equate to an hourly fee ranging from $200 to $350, depending on the COO's level of expertise and project scope. Outside of this monthly retainer or hourly rate, there are no employment taxes, benefits or other typical overhead that an in-house employee requires. Hence, you're only paying for valuable time used, and not for vacations, water-cooler talks and such. This cost-effective model ensures businesses get top-tier talent without the financial commitment of a full-time hire.

Conclusion: Elevating Your Business with Fractional COO Services

Rather than a management consultant or advisor, hiring Fractional COO services can bring a hands-on part-time executive to help scale your business to the next level, or to get a stagnant or declining business back on track to growth.

Whether you need a COO to drive company-wide execution, or a project-focused expert to address specific challenges, Fractional COOs offer a versatile solution. By understanding the nuances of their roles, identifying the right time to bring them on board, and following effective hiring practices, businesses can harness the power of Fractional COO services for sustained growth and success in 2024.

See if ScaleUpExec's Fractional COO Service is the right fit

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