What is a Fractional COO? And do you need one for your agency?


Marcel Petitpas

Marcel Petitpas

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Last updated Sep 7, 2022


What is a Fractional COO? And do you need one for your agency?

Last updated Sep 7, 2022 | 0 comments

Marcel Petitpas


A fractional chief operating officer is a great way to get senior operations leadership for your agency before you can afford a $200,000 per year senior executive. For agencies, a fractional COO can help smaller agencies get the strategic operations leadership they need and delay the need for expensive executive hiring until they reach a larger scale. Let’s dig into the benefits of leveraging part-time COO services or a full fractional COO.

photo of man and woman in an office with sticky notes on glass door

Benefits of an outsourced COO for agencies

Why exactly would we do that?


With a fractional COO, your agency leads and CEO can focus on the long-term vision for your company and how best to achieve that.

For instance, if your agency is in transition or trying to scale then a fractional hire will help accelerate that growth in a manageable way. Choosing a fractional COO is a way to hire an executive without the commitment and the price tag.

Clear Direction for Your Team

We’ve seen it time and time again – your agency isn’t big enough to hire on a full-time lead, and so the operational decision-making falls upon your senior (or sometimes, junior) Project Manager.

Big decisions are being made off the side of their desk, using bandwidth that they can’t really spare to think strategically. It is unfair and unrealistic to them, and ultimately isn’t benefiting your agency either.

By bringing on a COO, your project management team and more-junior operations folks can focus more on the execution of their role and less on the strategy behind it.

Picture this:

You’re the CEO, and we’re going to change the way that we price our services – changing from time & materials to a flat rate. There are a lot of strategic questions behind that move.

  • Does that change the way that we scope?
  • Change the way that we write contract language/terms into our SOWs?
  • Does that change the definition of a billable hour for our agency?
  • If yes, then how does it impact utilization?
  • How about the modelling we’re doing for our capacity of our team?
  • Does that change the way we’re setting up our time tracking tool?
  • What about how we look at our Average Billable Rate?

You get the picture. On the surface, it seems like this is a basic question. But from an operations standpoint, there is a huge chunk of the iceberg that lays beneath sea level.

Having a fractional COO in a situation like this can give clarity to the team on the road ahead. You want your team free to focus on doing what they do best – execution.

What does that mean for a small business or agency?

It means you can grow faster, have smoother operations, more profitability, better systems and fewer headaches. It also means that when you set out to find your next project manager, you’re not looking for someone with an unrealistic set of skills, allowing you to hire more efficiently.

woman at a desk doing fractional coo work


Each agency is growing and scaling at its own pace, on its own time. Therefore, not every agency needs a full-on COO. Bringing on a fractional COO allows you to choose exactly how much of their time you want. You want 30% of a COO? That’s totally possible. 70%? You bet. You’re bringing on a flexible decision-maker with 10+ years of experience without paying the COO’s salary. (and all of their counterparts, such as Account & Project Managers).

Another benefit seen by bringing on a COO is that they’re coming in and only spending a portion of their time at your agency. What about their other time? They are able to come to your front door, ready with a playbook and concrete, front-line experience. They’ve dealt with agencies just like yours before, and they know what has been working (and what has not been!) for other agencies. They will save you the time of having to learn these lessons yourself because they’ve likely already been through it on their own.

Low risk

Of course, what does all of this mean?

Well, it means you’re taking on significantly less risk. You’re not placing a bet – the fractional COO has a proven track record, with experience doing the exact same thing for other agencies (don’t be jealous).

Fractional COO contracts come with much more flexibility than adding a full-time COO to your payroll, with an off switch on a shorter time basis. Not to mention, the cost is appropriately “fractional” as well.

What are the focus areas of a fractional COO in an agency?

A fractional COO focuses on all agency operational matters to make your workload lighter so you can concentrate on your long-term business goals. However, we’re able to slice that into two broad categories:

Operations Strategy & Measurement/Data Systems

First, your strategic layer of operations will take a look at your business’s goals, services, all of the things the agency is setting out to do as a business, and decide how that impacts your operations. That means contract structure, pricing strategy, operational systems, scoping work, hiring people, measuring performance on projects, utilization, forecasting…you get the point. That is the spectrum of the COO.

And second, your COO is there to provide clarity on the data and if it’s set up to measure your success.

They are there to answer questions from a lense such as:

  • Are our systems set up to support and properly measure what the agency is doing?
  • Are our objectives being achieved?
  • Do we have feedback loops in place to ensure that is happening?
photo of woman at desk doing digital agency COO work

Example fractional COO services for agencies

A fractional COO can provide many of the following services for your agency:

  • Auditing the agency’s financial and operational performance
  • Their systems for tracking projects
  • Measuring data
  • Reporting on KPIs
  • Identifying gaps & opportunities to improve performance
  • Strategic Guidance
  • Pricing strategy
  • Delivery strategy
  • Resourcing strategy
  • Forecasting
  • Operational tools & systems
  • Metrics & Benchmarking
  • Reporting
  • Project Management
  • Organization
  • SOPs

What does a fractional COO cost?

If you’re a small business or agency owner thinking about bringing on a COO, you’re obviously interested in the cost of fractional coo services.

There are a lot of different forms a COO can take, and these different forms and ratios can impact price significantly. It can be a super fractional role to more of a productized service.

As a general rule of thumb, fractional COO services will be priced similarly to expert-level accounting or legal advisory services. You’re generally looking at $200/h or more for an experienced fractional COO to advise your company.

There aren’t many firms offering this kind of support, but our experience has been that retained services can range from 2-10k+ per month (depending on the level of service you require. Most agencies should budget for around $5k/mo (or roughly 1/3 of the full-time cost of a COO) at the onset.

What types of agencies should hire a fractional Chief Operating Officer?

Finally – a simple answer. Let’s dive into who should hire a fractional COO.

If you’re a business owner with less than 70 employees and nobody on your team has deep expertise and background in operations (and therefore you’re likely relying on your PM to fill that role) then a fractional COO is something you should look into.

Another thing to consider is the need for a fractional data operations team, like the services we offer at Parakeeto.

It will bring the expertise and talent into your organization for making sure systems, data and reporting are all thoughtfully designed, accurate and working smoothly as you scale. Fractional help in this area is a more affordable way to take that pressure off of your team (that is likely impacting their performance already)

Want to learn more about how Parakeeto helps agencies improve their profitability and operations? Schedule a call with one of our consultants below.

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