Is Your Business Ready to Sell Tomorrow with Zachary Beukema

Welcome to the B2B Growth Blueprint podcast, where we talk with entrepreneurs, founders, and leaders at B2B services, tech, and SaaS companies to learn the systems and processes they've used to create success for their business. We'll also learn from marketing and sales experts to provide insights to help you grow your business. I'm your host, Mark Osborne, and the podcast is brought to you by Modern Revenue Strategies and their 10X ROI B2B Growth Guarantee. Schedule a free diagnostic call to learn the fastest path to double your B2B revenues in just 90 days. Hello and welcome to another episode of the B2B Growth Blueprint podcast. I'm your host, Mark Osborne, and today I'm very excited to welcome my guest. Zach Buchema is the founder of The Lighthouse Group, where he serves as a fractional chief financial officer and strategic advisor to growth-stage companies across many different sectors. He draws on experience at Jefferies, Raytheon, and creator economy standout Pearpop. He helps founders navigate capital raises, merger and acquisition activity, and operational scale-ups that unlock sustainable revenue. Zach also has taught advanced finance to professionals at firms such as Blackstone, Deloitte, and Lazard, and at top universities including Berkeley and Stanford, turning complex finance and business situations into clear, actionable strategy. Zach, welcome to the show.

Yeah, thanks, Mark. Thanks for the introduction and honored to be with you today.

Yeah, I'm excited about it and I've been looking forward to our conversation. So, but before we kind of jump in on some of the topics we've been chatting about, why don't you give our audience a little bit of a background of your story and how you got to where you are today?

Yeah, absolutely. Great question. So to kind of maybe provide context for that, I'd say simply what I love to do is come alongside folks, whether that's an individual founder or a company, And really help them get from point A to point B and really come alongside as a partner. What that's kind of looked like professionally over the years was starting out my career more in FP&A business development strategy at a larger corporation, kind of learning the groundwork, but then transitioning more to an advisory role at Jefferies in the investment banking kind of segment, and then really found myself wanting to. Provide value that was not just at the time of a transaction, but really ongoing operationally. And that kind of led me a bit more into the startup space. So I've been working more in the consulting advisory type practice over the last 5, 10 years. And with the launch of my firm back in 2018, focusing specifically kind of within that growth stage, but Academically, studied physics and finance, thought I was going to be an engineer and then transitioned to the dark side of finance. But what kind of led me there was really just like natural, I would say, inquisitive nature regarding businesses, but then also really felt like finance is the language for understanding business. And then from time to time, I'll find myself with a bit more technical founders, and sometimes that physics or more engineering mindset comes in to be helpful.

Yeah, I bet. Well, and especially what I've seen is it's really people that excel within the space are those that can think from a very systems and process-oriented perspective, whether that comes from an engineering background or finance and accounting. It's that ability to manage lots of different variables that's really important.

Agreed. Yeah. And generally, like, like to have a listening approach and come in, ask questions, really understand, because I find, you know, as you know, growth, it's not just a black and white formula or kind of binary situation. There's a lot of factors that can come into play. So having that listening approach, understanding key stakeholders, I find is really important before we go on and suggest action plans.

That's right. What's the phrase that, uh, it's, uh, prescription without diagnosis is malpractice?

Yeah.

Uh, and I, I like to think about that a lot before. And, you know, I, I see a lot of people that will come in and they're, oh, I know what your problem is. It's this. Like, how, how could you know that already? You, you haven't learned enough about me to know what that problem is. Uh, much less why this would be the right, uh, solution for it. So you and I were chatting a little bit before, um, and about the idea that is really starting to catch on in a lot of kind of operations of business, which is the idea that a great way to run your business today is through the lens of selling it tomorrow, whether that sell date for tomorrow is, you know, 2 months or 2 years or 20 years from now. If you're sort of following the same principles that make your business ready for sale at any given time, that gives you the flexibility to evaluate if you wanted to sell your business once the right buyer came along versus not being ready when those key moments come. And I know from a finance lens, you've got some specific, you know, sort of expertise and things that, you know, are key. Sort of very important for companies as they think about how do we make sure our finances really portray the value of the company and don't mask that in some way. And it's important for companies to think about running that way because you really want to maximize your, you know, sale price of value. It's not just the last year's worth of books, it's the last 5 years at least. And so it's better to just sort of run it cleanly from the start. Talk to us a little bit about some of those strategies and best practices there.

Yeah, yeah. Thanks for framing that. So the way to kind of boil down this topic is really vision. So kind of operating in today with the end in mind. So with that said, I think vision kind of necessitates the understanding of who's the ultimate audience. Are we looking to sell? Are we looking to IPO? I'll kind of focus in this example on looking for a specific investor or trying to sell to a particular company and what they may be interested in. So when it comes to a process, investors, other businesses will generally want to hear from the horse's mouth versus an advisor like myself. At the same time, while the founder may be very aware of the product services, kind of business history, They may not exactly be aware of how to present the company's financials in a clear way. They may know how to talk about sales growth and things like that, but getting into certain concepts like operating cash flow or EBITDA, they may have less familiarity. So I think one, just being mindful of what is an investor going to be looking at. So the specific thing that I'd kind of like to highlight here is just profitability, whether that's like gross profit, EBITDA margin, et cetera. And the reason why this is important is because when an investor or other business is looking at making a potential acquisition, they're going to want to know, is it beneficial for me to put a dollar here for this business, or can I put that dollar elsewhere? And if that other business has better margins or is more efficient in terms of generating bottom-line profitability, you know, they may go elsewhere. So this one particular example, there was a business that was multi-entity and they weren't doing things incorrectly, but how the ultimately intercompany financials were being put together were kind of falsely portraying margins, making the business look not as good as it could be to those third parties.

Huh.

So initially, That's really just change of vantage point in terms of how we would look at something from an investor standpoint versus how the company may be kind of managed day to day with these 2 entities. So the solution really was just to take pen to paper and rebuild a transaction-level consolidated model, which ultimately applied correct revenue recognition and appropriately represented the margins of the business. So the kind of way that we felt like we made that impact to the client there was really presenting that business in the best light possible and not pushing away investors that would otherwise be interested in the business model because of like false economics with that prior presentation.

Well, and so you raised something really interesting there, which is, you know, sort of the difference in sort of perception and reality based on how it looks on the books. And I know, as you know, a lot of businesses, as they grow really quickly, they get into a position where it looks like they're closing lots of business, but they may not have the cash flow to support the investments that they need to make in serving this business, especially in businesses where you have to service the client for a while before you can invoice them. And you got to pay all the people that are doing the work or, you know, the materials that go into providing it. And I love this phrase. It's a great visual that, you know, like a business is like an alligator. It's always got to eat. So it's either eating the cash flow that you're feeding it or it's eating you alive. Talk to us a little bit about some of the challenges you've seen companies deal with this sort of cash flow and, you know, the actual situation with cash being different than how it might look on the books. And some ways that they can, you know, sort of approach that.

Yeah.

Yeah.

I like the alligator analogy there. But yeah, cash. I mean, they say cash is king in the finance world and what can happen. I mean, day to day with startups, quickly growing businesses, there can be assumptions around what's happening with different business units or members on the team. And sometimes that assumption can result in, say, the sales team or marketing team thinking they're crushing it, but On the operations side, we're having trouble collecting or we're maybe not even sending out invoices because we haven't communicated efficiently from, you know, one team to the next. So one concept that I'm sure you talk a lot about on your program is systemization. So ideally, if we're kind of eliminating potential for human error or manual processes, that's kind of one thing. But in this particular example, The client that I was working with had generally long sales cycles. So what could kind of happen was that money could be stuck in what I would call like a sales to billing handoff. So the sales team may go ahead and close a deal, update the CRM system, but then there was an issue with the communication between that team then in billings to go send out that invoice. So what was happening Was there was a little bit of stalled growth, and what was tricky is kind of where do we find this? So within within kind of my consulting practice, we typically be looking at certain things like accounts receivable aging. So what was interesting was when looking at this problem, it wasn't really showing up in the AR aging because the delay was actually happening between when something was closed in the CRM system and then when it was invoiced. So it was more. The invoice date was actually getting pushed back. So the solution was really trying to diagnose the bottleneck. Was it something with marketing, sales? Was it ops? Was it a system or was it just lack of information? So this kind of led to a lot of stakeholder interviews outlining processes to really understand like what's the current status, what's the ideal status, and what are ways that we can eliminate bottlenecks but also improve the data quality. so that we can make sure that we're collecting that cash that we think we're— that we should be able to bill based upon our revenue. What ended up happening, we were able to cut the company's days sales outstanding nearly in half, which ultimately allows the company to take that working capital and reinvest it into the business to lift future revenue and drive growth.

It's so funny, and I've heard the phrase before that the patient dies at shift change, which is, you know, sort of this idea of when there are these kind of strategic handoffs, whether it's from marketing to sales or from sales to operations, it's such an important inflection point. And yet so often it doesn't get the attention that it deserves. And from a business perspective, sometimes because There's this elation of, we just closed this big deal. And so then it's 2 weeks before it's been kicked off and it can't be closed in the CRM until it's kicked off. And we can't start our 30 days before we send out the invoice until that kickoff date is captured in there. Or, you know, we're sort of violating our rules of revenue recognition. So it's so crazy how little things like that can make such a big impact on a business.

Totally. And just to kind of add some color there, I think the way I think about like the fractional CFO role or, you know, helping out with FP&A is really keeping a pulse on business because the finances are really a result of what's happening in the day to day. So they're more of a kind of a lagging indicator in a way of what's actually happening. So I kind of view it as, as my role to keep a pulse on that. business and then ultimately raise some of these red flags to the individual stakeholders and then talk about how can we get ahead of this versus having a cash crunch, you know, down the line. But the way we kind of see a lot of these issues surface is really in those numbers in the financial model.

Right. So I'm curious, in that example that you had, was the— did the company sort of experience like We feel like we're closing all these deals, but there's no money in the bank account. Or were they just kind of moving along and then they had this, you know, sort of like sudden midnight panic attack kind of experience?

Maybe a mix of both with different stakeholders. But I think, you know, in a startup, it's very much everyone, all hands on deck. So a lot of times, like, the sales team is just running off to the next deal, and that's no fault. They're kind of trusting, and I think a good team trusts one another to kind of carry the rest of the deal forward. So if the handoff is kind of assumed, it's most efficient for them to run off to the next deal and kind of assume that the rest of the process is being handled correctly. So yeah, I'd say kind of a mix of responses per how you articulated it, but that's where I kind of view, again, like I said, where the finance org can really come in and lend a hand and come alongside. And, you know, put on their sales hat, put on their marketing hat, and just understand what different parts of the company are experiencing to really like be a value add versus someone who's like nicking someone on the wrist of like, you shouldn't be spending this here or there. I very much view finance versus how can we put money to the most efficient place in the business at the right time for that collective long-term strategy.

Yeah. I mean, that makes tons of sense. And you've talked a little bit about how, you know, fast growth companies experience some of these, they're kind of just sort of growing pains, but that kind of implementing systems and process is a good way to sort of mitigate or at least identify those growing pains early. I know one of the growing pains that a lot of businesses experience is that, you know, as companies start to grow and as they start to feel like, hey, we're not fighting to keep our head above water anymore, we're now, you know, fighting to swim faster than, you know, everyone else or to swim to this, you know, beautiful destination that we see over there. But oftentimes as it grows, some things happen with finances. Like you go from, you know, the founder that takes pride in spending as little money as possible on everything because it's, It's their baby and they want to keep it going to maybe the next round of, you know, hires or employees are a little less judicious with some of that, which can create some of these cash crunch challenges or, or really just kind of create some misalignment between the vision for the company and how it's, you know, operated and how it is actually operating. As you've worked with companies to help them grow, You know, from kind of phase 1 into, you know, sort of the subsequent phases as more people come in, what are some of the ways that you've seen companies successfully wrangle some of that sort of bloating of operational expenses and things like that?

Yeah, great, great question. So where I'll tend to see this initially is maybe when I'm doing diligence or going through constructing a financial model for a client. And I'm looking at wine margin, for instance, and kind of knowing generally like what should be best, best practices or kind of industry standards for that particular cost center. Right. And then that will kind of start to lead additional analysis to, you know, is this headcount related? Is this more software related? What's resulting in this additional expenditure? How are we with our like Travel, travel budget as well. And then you were kind of alluding—

Okay. Yeah.

You were kind of alluding as well to just the founder, how the founder would maybe steward money with that ownership mindset versus an employee down the line having a bit more of an employee mindset where they're less maybe careful with, with how they're stewarding that capital. Ideally, there's certain systems and processes in place But a lot of times we're growing quickly and our operating expenses could be bloated with inefficient or legacy tools, slow internal approval processes where it's like one certain bottleneck and that bottleneck happens to be meetings all day. So, you know, things are needing to get approved, but they're not because the stakeholders not available. So what I'll tend to do is kind of Look at where are we putting our money to work and what's ultimately the return on that investment. Also, like, where's their inefficiency or pain point? So this kind of goes back to some of those stakeholder interviews where, and this happens over time and is iterative, but as you're kind of uncovering things, so maybe you see that margin that looks a little bit worse than you would expect, then potentially talking to different folks within each of those departments. And getting sense of like, hey, how do you feel about the software usage? Is there any software that you're aware that we're using that we shouldn't be or that's duplicative? And you'd kind of be surprised with what you end up finding. So a lot of times there's low-hanging fruit there and the changes really aren't that difficult. It's just identifying where, where's the, the most impactful change. So what that looks like is You know, just auditing what we're spending from a software standpoint usually. And then also like, are there any bottlenecks in some of our systems within a particular department or within how leadership is currently managing or overseeing different aspects of the business? So typically what we'll look to do is invest or reallocate costs to more higher ROI channels and then improve decision-making cycles. This one particular example went from like nearly 2 weeks to days. So that can have a real business impact just in terms of improving profitability with net margin and really like reinvesting into the business to drive that quarter-over-quarter growth.

Yeah, I mean, you can't, you don't have the cash to invest in the key places, or, and especially if it's sort of being siphoned off by these sort of Vampires, if you will. And one of the things that I see in the marketing and sales space is, you know, over the last 10 years, there's been such a proliferation of software tools that do some kind of neat things. Maybe they're not mission-critical things, but they're kind of neat. And so you layer in, oh, I got this new tool that, you know, tells me the best time of day to, you know, post my social and this other new tool that tells me the exact kind of language to use in my emails to my key buyers and this other new tool. And each of them is, you know, $8, $10, $18, $25 a month. And that's supposed to add up really fast, but it sort of feels like, you know, just vampires just kind of sucking the life out of it. Do you see that across organizations? I mean, I see that in marketing and sales. And so I know that that's a challenge and an issue there. Do those same types of things exist within kind of the operations or the finance or kind of accounting centers of companies too? Or is that something that's more specific to marketing and sales?

Yeah, great question. I don't want to make a definitive statement, but what kind of comes to mind is I would say more of the software-heavy departments. I think you'd probably see that a bit more often, whereas like accounting operations, you kind of pick your accounting system, you know, Bill.coms, your QuickBooks, et cetera. There's maybe less additional incremental tools for some of those roles, but that does happen. I'd also add sometimes when there's turnover within specific departments relatively quickly, and if there wasn't communication between the outgoing and incoming people, there can be just general unawareness where that person's just not aware of what's being used because they're not seeing invoices from that software tool. So that's where like, kind of this close, close the loop, departmental reviews with the finance team can be helpful. And I kind of just view it like spring cleaning, you know, look what's in the closet, look what you haven't touched for months, and, you know, potentially get something new, get rid of it, and just refresh kind of your overall systems to make sure they're set up for the current stage of the business.

Yeah, makes total sense. When it's, it's those dust bunnies in the corner that are eating up, eating up your profits that can really make the difference. So you're obviously an expert in a lot of really interesting areas and we could talk about it all day, but I gotta be kind of mindful of your time. But I want to sort of, you know, for our audience that's listening, like, wow, This really makes a lot of sense, and Zach's really an expert. Tell us a little bit about your practice and like, who are the types of folks that you work with and specifically how you help them?

Yeah, yeah, great question. So I would say all this kind of problem solving is just personally exciting to me. I think there's a lot of learning, really love learning company cultures, the specific problem that they have in mind. Sometimes what's fun is initially we think You know, we're solving the first problem and then there's kind of other things that we'll uncover in the process. But what that kind of lends itself to is being fairly industry agnostic, have a lot of different clients within different spaces and have kind of worked across a broad series of industries over the years. But sometimes someone may need help with just a specific financial model for a certain capital raise or type of transaction that they're looking at. Um, or they may be an early stage startup that has really never put together a model and they need to really think about the viability of their business. Do I need to raise money? Um, if so, how do I go about, about that? But really to be one of the first, um, I would say financial advisors for those early stage founders all the way up to a maybe more established, but yet growth stage business that You know, maybe they have a controller or an accountant or a small finance team, but they need an additional partner to come in and be able to lift more heavy weight where sometimes the day-to-day operations for those finance teams is already fairly overwhelming and they just don't have time to really look at things with the same lens that I've had, as well as just having a different perspective, having worked with different investors. and things over the years, ultimately to be able to really provide, I would say, a holistic service from the finance lens. So hopefully that answers the specific question. But I would say generally like fractional CFO type services or bespoke one-off services such as financial modeling, preparing for some type of M&A events, or just general advisory. So That's how I kind of articulate that.

Fantastic. Well, so for our audience that's, you know, listening and thinking they could use some of this in their business, what's the best way for them to get in touch with you?

Yeah, they can go to thelighthousegroup.com, which the actual URL is the LHGRP, a little bit of alphabet soup there, the LHGRP.com, and they can select to book a complimentary strategic consultation or also fill out an intake form that just kind of gives me a sense of what they're looking for and ultimately just making our subsequent conversations much more efficient. They can also find and connect with me on LinkedIn as well. Zachary Biukama at the Lighthouse Group. Got it.

So tell us a little about that complimentary strategic consultation. Well, what exactly is that?

Yeah. So ultimately I mentioned earlier the importance of asking questions and really understanding kind of where a client or potential client is, what they're looking for, what their problem is. And in that session, regardless of whether we would decide to work together or not, post that call would kind of give them my best insights into what direction or what they should pursue. And ultimately with With my business, I would never want to be in a situation where I'm working with someone that I'm not the best fit for. So have a wide variety of other advisors and partners in my network that if I'm not the right fit, would love to you know connect that person with and really make sure that what they're looking to address as far as their need is actually being met. But really just a quick thirty-minute consultation, probably ten fifteen minutes of. questions, me recommending potential, some ideas, and then discussing if those feel like a good fit and whether or not it would make sense for the two of us to continue on discussing a potential engagement.

That's fantastic. And I appreciate that offer. So I'll actually put the link to schedule that consultation in the show notes so that folks can just click there in the show notes and get to it. But Zach, thanks so much for taking the time to join us today. I really enjoyed the conversation.

Yeah, likewise. It was an honor to be with you. Had a lot of fun and wishing you the best and also your listeners. And just know you provide a lot of value and just actionable insights with not only your insights, but also the guests that you have on the show.

Thanks so much, Zach. Talk to you soon.

All right. Thanks.

Thank you for joining this episode of the B2B Growth Blueprint podcast. We hope you've gained insights to grow If you enjoyed this discussion, please rate, comment, like on your favorite platform, and share to others who will find it useful. Do you know a CEO, founder, or leader at an early-stage B2B services, tech, or SaaS company who would like to be a guest and share their story? Send us a note. Let's schedule a conversation.