This is a straight glossary of the terms that come up constantly in fractional executive work, in Australia and everywhere else. Twenty five terms, plain definitions, no padding. If you're a founder working out whether you need a fractional CFO or an interim COO, or a fractional executive trying to explain your own business model to a client for the first time, this is the reference. If you want to talk to people actually doing this work, the Fractional Exec Community is where they hang out.
Roles
Fractional Executive
A fractional executive is a senior leader who works for a company part time, usually somewhere between one and three days a week, doing the same job a full time exec would do on a smaller footprint of hours. They sit in strategy meetings, own outcomes, and run their function. They're not a consultant who hands over a slide deck and leaves.
Fractional CFO
A fractional CFO is a part time finance executive who runs the numbers side of the business: cash flow, forecasting, board reporting, fundraising support, and the finance function itself. Founders bring one in once the business has outgrown a bookkeeper but doesn't yet have the revenue to justify a full time CFO salary.
Fractional CMO
A fractional CMO is a part time marketing executive who owns positioning, brand, demand generation, and the marketing team, without sitting in the business five days a week. Good for a company that needs marketing leadership but isn't ready to carry a full time salary for it.
Fractional COO
A fractional COO is a part time operations executive who builds the systems, processes, and reporting a scaling business needs and usually doesn't have. They're the person who turns "we're growing but it feels chaotic" into an actual operating rhythm.
Fractional CTO
A fractional CTO is a part time technology executive who owns architecture decisions, engineering hiring, and the technical roadmap for a company that needs senior technical judgement but doesn't have enough engineering work to justify a full time hire.
Fractional VP Sales
A fractional VP Sales is a part time sales leader who builds the go-to-market engine: process, playbook, pipeline, hiring, and forecasting. They run the sales function hands-on, they don't just advise on it from the sideline.
Interim Executive
An interim executive is a full time hire brought in for a fixed, usually short period, most often to cover a gap such as a departure or a leave of absence until a permanent replacement is found. The difference from fractional is time commitment: interim is full time hours for a defined stretch, fractional is part time hours on an ongoing or open-ended basis.
Consultant vs Fractional
The difference between a consultant and a fractional executive is accountability. A consultant advises and hands you a recommendation. A fractional executive owns the outcome, sits inside the team, makes the calls, and is still there when the plan meets reality.
Engagement & Pricing
Retainer
A retainer is a fixed monthly fee paid for a set amount of a fractional executive's time or availability each month, regardless of exactly how the hours land week to week. It's the most common pricing model in fractional work because it gives both sides predictability.
Day Rate
A day rate is a fee charged per day worked, used instead of or alongside a retainer when the work is project based or the days aren't consistent from week to week. Always confirm current market day rates directly with the exec or community you're sourcing from rather than relying on a figure you read somewhere online.
Engagement
An engagement is the entire working relationship between a fractional executive and a client business, covering the scope, the pricing model, the term, and the deliverables. When someone talks about "landing an engagement" or "how many engagements they're running," this is the unit they mean.
Scope of Work
A scope of work is the plain description of what a fractional executive will and won't do inside an engagement: the function they own, the deliverables, the boundaries. It's the document that stops "can you also just quickly..." from quietly expanding a two day a week role into a five day job.
Statement of Work (SOW)
A statement of work is the formal, usually signed document that sets out the scope, fees, term, and conditions of an engagement between a fractional executive and a client. Where a scope of work describes the job, the SOW is the contract that makes it official.
Working Model
Portfolio Career
A portfolio career is a working life built from several part time roles or income streams rather than one full time job. Most fractional executives run a portfolio career by design, stacking two to four client engagements instead of chasing a single employer.
Moonlighting
Moonlighting is doing paid work on the side of a full time job, usually without the employer's knowledge. It's a different animal to fractional work: fractional executives are usually running their own registered business openly across multiple clients, not hiding a side gig from one employer.
Bench (Talent Bench)
A bench is a pool of vetted fractional executives that a community, agency, or network can draw on when a client needs a specific function filled. Being "on the bench" means you're in the pool of people who get considered and referred for matching opportunities.
Utilisation
Utilisation is the percentage of a fractional executive's available working time that's actually billed to clients. A fractional exec running three clients at two days a week each is close to fully utilised; someone with one client and a lot of spare capacity has low utilisation and needs more pipeline.
Ramp / Ramp-up
Ramp, or ramp-up, is the period at the start of an engagement where a fractional executive is learning the business, the systems, and the people before they're operating at full effectiveness. Good proposals name this explicitly and set the expectation that month one output looks different to month three output.
Runway
Runway is how long a business can keep operating at its current spend before it runs out of cash. Fractional executives get pulled into runway conversations constantly, because a fractional CFO or COO who can extend runway or forecast it accurately is often the whole reason the engagement exists.
Advisory Shares / Equity
Advisory shares or equity is a stake in the company offered to a fractional executive or advisor instead of, or alongside, cash. It's common with early stage startups that are cash constrained, and it should always be treated as a bonus on top of a fair market rate, not a replacement for one.
Fractional vs Part-Time Employee
The difference between a fractional executive and a part time employee is structure. A part time employee is on payroll, has one job, one manager, and employee entitlements. A fractional executive runs their own business, invoices multiple clients, and carries their own tax and insurance obligations.
Embedded vs Advisory
Embedded means a fractional executive is inside the business doing the actual work: running the team, making decisions, executing the plan. Advisory means they're outside giving input and recommendations without operational authority. Most fractional work is embedded; that's the whole point of the model over traditional consulting.
Go-to-Market (GTM)
Go-to-market, or GTM, is the plan for how a company gets its product in front of the right customers and converts them, covering positioning, channel, pricing, and sales process. It's the most common reason founders bring in a fractional CMO or fractional VP Sales, because GTM problems are usually the actual reason growth has stalled.
Business & Legal
Fractional Practice
A fractional practice is the business a fractional executive builds around their own services, including how they price, pitch, contract, and manage multiple clients at once. Treating it as a practice rather than a series of one-off gigs is what separates fractional operators who last from the ones who burn out chasing the next client.
ABN / Sole Trader vs Company (AU)
In Australia, a fractional executive needs an ABN to invoice clients, and has to choose a structure to operate under, most commonly sole trader or a company. Getting the structure right affects tax, liability, and how professional your invoicing looks to a corporate client, so get advice from an accountant before you lock it in rather than defaulting to whatever's fastest to set up.