Master Financial Management for Business Success with Matt Remuzzi

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, uh, 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, Matt Ramuzzi. Now I'm gonna read Matt's bio to make sure I get this right. He's done a lot of stuff. He started CapForge back in 2000 after being laid off from a venture-backed firm during the dot-com bust. And CapForge provides consulting with a focus on bookkeeping and other accounting services like tax prep, payroll, coaching and advisory services, due diligence, and business exits. Matt continues to work on growing the business while his team runs the day-to-day operations, and he ensures they're always providing 5-star quality and service to their clients. He's been a guest on dozens of programs and is always getting a great reception for being down to earth, good storyteller, and a 20-year entrepreneur and small business advisor. So Matt, welcome to the show.

Thank you for having me. I appreciate being here.

Yeah, absolutely. So you've Got obviously an interesting background, done some things and been around. Why don't you tell us a little bit of your story of how you got to where you are today?

Yeah, definitely. I always knew I wanted to be an entrepreneur. I just never knew what that was going to look like. And when I had the opportunity, in the sense of I got laid off from a job doing consulting, I thought, you know, maybe I could do some freelance consulting. I'll see how that goes. If it works out, cool. If it doesn't, well, I'll just Go get another job, right? So, luckily, it worked out. I found enough clients. I was able to kind of get in a groove there. And I never, you know, looked back. 25 years now, I've only worked for myself in that span of time, which is good because I'm not cut out to work for somebody else. I've been there. I've done that. I'm not a good fit. I cannot resist, you know, raising my hand and saying, hey, I think there's a way we could do this better, to the point where in certain meetings, I'd be told literally, shut up, Matt. Nobody wants to hear it. I'm like, oh, all right, I got to go somewhere where I can just, you know, call these shots myself. And I kind of, you know, I went from one thing to another, floundered around, did some things that worked, did some things that didn't work. Eventually, I bought a catering business, ran that pretty successfully, grew it, sold it. And I thought, okay, maybe what I'm— what maybe what I should be doing here is I'll become a business broker and I will find, you know, great businesses to buy. I'll cherry-pick the best deals, buy them for myself. Anything I don't want, I'll sell. I'll make a commission, right?

Ah, win-win.

So, what happened over the next 4 years was I ended up selling 36 businesses and I never found one that I wanted to buy. But what I did discover was over and over again, these businesses had just terrible bookkeeping, lousy accounting. That was the common thread in complaints because when you're a business broker, what you do is you say, hey, you know, in order to figure out what your business could sell for, what it's worth, let's take a look at the books. And the story was always, oh yeah, that, you know, I know they're 6 months behind. The bookkeeper quit. I didn't find a new one. Or, oh, my wife's cousin does our books. I know she doesn't know what she's doing, but it's my wife's cousin. So, what are you going to do? And there was always a story and it was always some excuse for why stuff was messed up, behind, inaccurate, late, didn't exist. You know, so I thought, okay, there's a, there's a huge demand here for quality bookkeeping at an affordable price with great customer service. Those things were missing. Let me— Yeah. Try that out. So I took a couple refresher courses in QuickBooks. I had my MBA accounting classes to kind of fall back on, and I jumped into it. And very quickly, it was able to get some clients, and my first immediate hire was an actual bookkeeper because you know I wasn't really that wasn't going to be my long-term position. So I was good at going out and talking to clients who are small business owners because I'd been doing that. Basically the last 12 years in different capacities. And, you know, kind of understanding their needs, their pain points around accounting, and then handing the work off, managing those projects, getting the work back to those clients, providing great service, you know, friendly, plain English sort of consultations, which is, you know, another thing that was sorely lacking. And, you know, over the next 12 years, I built the business to, you know, now we're almost 100 employees, clients in all 50 states, you know, heading towards 8 figures in revenue. So, You know, it's worked out. The thesis that the world needed better small business bookkeeping proved to be true. So glad to see that. But also, you know, it's been as much fun for me in figuring out how to design a business that could scale to this size as it has been actually delivering the service. And that, that's been as much of a challenge and as much of the fun as, you know, actually being involved in this. And so, um, I think, you know, that's something hopefully that we've got some ideas to share around today for the topic of the podcast.

Yeah, absolutely. So you actually raised up something that's really interesting. Having been a business broker, you know, one of the things that I hear consistently is that, you know, one of the best ways to improve the value of your business as an asset, as a resellable asset, is by documenting systems because if it kind of all lives between your ears. It's really hard for an external person to kind of validate, you know, that it's really there and that they could have success with it, that it's not just dependent on either the charisma or the brilliance of the current person running the business. And, you know, we talk a lot about building systems related to marketing, sales, and customer success. But I'm curious your perspective on that. Both, you know, from your background as a business broker and also as you work with businesses today and helping them to get their financial house in order, these accounting and bookkeeping systems. Tell us a little bit about what you see. What's your perspective there?

Yeah, that's a great question. And I think it's something that is drastically overlooked by the majority of sellers and even business brokers. But the example I usually use or the kind of the way I explain it to sellers Is imagine this scenario, right? You're walking into something brand new and you're already nervous and you're not sure if you can do it. You're not sure how it's going to go. You're putting a lot of financial resources, your own personal signature guarantee on this. There's 2 ways you could walk into it. One, you walk into the owner's office and what you see is a desk stacked to the ceiling with papers, papers on the chairs.

Right.

File folders all over the place, calendar from 3 months ago with scribbles all over the place. The phone's ringing off the hook. You know, the email, there's 400 unread emails. And he goes, no, no, come in. It's easy. You can take this over. You can run this. And you're looking at it going, oh my God, this is a nightmare. Versus you walk into the same office, the desk is pristine. There's a folder with colored tabs. Everything is lined up neat, clear. You know, it's very organized. And he goes, okay, let me show you. This is what you do on a Monday morning. And you open to the Monday page and there's the task and this is all you have to do. And here's the numbers you need. And here's exactly— you go, I could do that. I could see myself sitting at this desk and running this business because It makes sense. It's organized. There's an order of operations. There's a way to do everything. The mindset in the buyer between those 2 scenarios is obviously night and day, but it never crosses the seller's mind if they're scenario one, because that's just how they live. Like, normally stuff is on fire around here. That's just how we do it. You know, it always, every Monday, buy a new fire extinguisher because that's how the week's going to go. But to a buyer who's already nervous, already not sure, you know, maybe they're getting into— they've been in insurance for 25 years, right? And now they're getting in, they're buying an HVAC business or something like it's completely foreign to them. And then they look around and go, how the heck? I don't even know. Like, this guy doesn't know what he's doing. How is he going to show me how to run this thing, how to take it over successfully? This looks like a nightmare. And even if everything else on paper, on the financials looks good, The buyer's going to, you know what? Ah, so that's why you see a lot of people buy, you know, landscaping business or pest control business or, you know, something like janitorial business. I can learn that in 2 weeks with no, you know, no matter how messy the guy, like, okay, mop, bucket, check, right? We're good. But anything with any, even a hint of complexity where you walk in and at the same time see that they clearly are disorganized, clearly don't have systems in place, processes. They couldn't tell you. Everything lives in the owner's head. And, you know, God forbid the day after you buy it, the owner gets hit by a bus. You're like, well, that's it. You know, declare bankruptcy and move to another state. It's over. I won't be able to run this thing. So, you know, it's a huge value add to the sale to have everything organized, to have systems, to have documentation, to have a And a clean, organized operation that a new buyer can see themselves fitting into. It makes a huge psychological difference and it's hard to put on paper. It's hard to say the value of the business has gone up by X when you clean up your desk, but it truly is there.

Yeah. Well, you know what's funny is as you're talking, It also occurs to me, and one of the things that we see is not only does it increase sort of the resale value, but also clears the way to grow. Even if your goal isn't to get out, if your goal is just to sort of grow the operation, because if you think about that same scenario of, you know, let's say it's the head of sales, or maybe it's just your head salesperson because you're not quite big enough to have a head of sales. And his desk looks like that, and the phone's ringing off the hook, and the calendar is like that. It's really hard to hire another salesperson and have them come in and be successful because there's not a system. It's just one person figuring it out as they go every week versus if they can come in and be like, all right, here's how we, you know, find our new opportunities. Here's how we qualify them. Here's how we do our discovery to find out if we're gonna be a good fit or which product they need. And there's a well-worn path, then you don't have to find the most talented unicorn on earth to come into the job. You can actually find a good high performer that doesn't cost an arm and a leg and they can come in and come in and fit and work. And I imagine the same thing is true, you know, from the finance side as you layer in operational folks as well.

Absolutely. Yeah. I mean, it just— the benefits, I don't think you can understate the benefits of having a well-run organization to your ability to grow, ability to hire, and honestly, as the owner, the ability to take time off.

That's right.

Right? Because you— if you're the only one that understands how it works, how do you ever step away for more than a day and a half without the whole thing falling apart or everyone just kind of grinding to a halt? Well, we can't do anything till Bob comes back because Bob's the only one that knows how to do any of this stuff, right? Well, great. So, if you're Bob, you're like, well, I'm screwed. I mean, literally, some of the people that I would talk to about selling their business would say, the main reason I want to sell is I haven't had a day off in 5 years. Like, well, just imagine how that sounds to the new buyer, right?

Right.

Who's going to buy that? Who wants that? Like, you've never taken it? No, no. Like, I have to be here every day. And a lot of it is Just self-inflicted. They won't delegate. They don't understand how to delegate, or they've tried. Oh, I tried to give somebody a job once, but it didn't work out. They messed up. So it'll never work. Oh, employees are terrible. Maybe look in the mirror, right? That sounds like a you problem. That's not a world problem. So yeah, it's— there's many, many reasons to systematize and build processes in your business.

Yeah.

Not the least of which is being able to sell it for a higher value down the road.

Yeah, we have a phrase around here that systems set you free because once you've got a system, not only could someone else follow it so you could go on vacation, but also it also kind of sets you free from your worst self. You know, the day we're almost at the Super Bowl here, the day after the Super Bowl is the most called-in sick Uh, day of the year. Uh, now it happens to coincide with, uh, flu season. I think that—

Of course.

There also might be some brown bottle flu associated with that as well. But if you think about, you know, those days that you show up and maybe you're not at 100%, a system keeps you at 100%. It ensures that you do all of those best things. Uh, it doesn't sort of lock you down. It really sets you free. And, and I know that you do a lot of You know, this sort of systematizing as you help companies from an accounting and finance perspective. I'm curious though, you know, and you and I were chatting about this before, that a lot of people are like, oh yeah, I got a system. But then you get in and the system is, well, just get in and throw some elbows and figure it out.

Right.

You have some sort of examples of maybe where people thought they had a system and it really wasn't as strong or Maybe where you've discovered some unconventional systems as you've worked with businesses?

Yeah. I mean, we tend to find a lot of times that people, once they get to a certain size, will lay claim to having, you know, I know my numbers pretty well and I have goals and I have things that I watch. And then you just scratch the surface just a little bit and come to find out that really, there's really nothing much there. One guy telling me that, you know, oh, labor is one of the biggest components of my business, right? My payroll cost is a huge percentage of our revenue. So, I watch it like a hawk. Great. Let's take a look at the financials and see what that looks like. Literally, on the financials, there is one line, payroll expense.

That's it.

And I go, okay, so tell me a little bit about, you know, who works there? Well, we've got the operations people and the salespeople and the admin people. You got one line, payroll expense. So you're watching it like a hawk. How? Like a hawk that needs glasses from a long way away? Like, what kind of hawk is this?

Right.

So, right. So let's break it down into, you know, at least, right, sort of the billable versus non-billable in his situation, right? That kind of made sense. In other situations, you might have people who are, you know, contributing to the cost of goods sold. They're the manufacturing floor guys. And then there's the, you know, non-manufacturing There's lots of ways to do it depending on the business. But if you're really keeping an eye on it, then you'd want to know not just the total expense, right? That, okay, overall payroll is 55% of revenue, but how much are the people who are generating revenue versus the overhead people or the people contributing to the cost of goods sold versus the— right? Or if you, you know, you've got a roofing company, the people on the roof versus the people that go out and do the estimates versus the people who schedule.

Right.

You know, let's break some buckets out there and understand what's the capacity of each of these positions. And then that tells us how many roofs can we do and when do I need to hire more roofers? But I don't need more schedulers because the scheduler still has— and they go, oh wow, I never thought of it. Oh, that's— wow. Okay. Like, then what did that take me? 2 minutes to spit out, right? So in another, you take 30 minutes to kind of figure out how you're going to integrate that into the financials. And now you can watch much more closely. It's not payroll is 55% of revenue, but the roofers who work on my roofing business are 20% of labor. And then the, you know, the guys that do this and that, right? And that's how it stacks to 55% now. But what if I could get that to 50%? What does that drop to the bottom line? So, you know, those are the kind of things when I think when people say, oh yeah, you know, I know my stuff, I've set goals.

Yeah.

Okay, well, let's talk about that a little bit more. And a lot of times they're, oh, wow. Okay. Now let's say, you know, you've got a goal for the year, but how about for the quarter? Well, I don't know. I guess a quarter of the year's goal. You don't generally grow in a straight line, right? So, you know, and what does that mean for what's your hiring budget?

Yeah.

I don't know. You know, then they come to me, can I afford to hire somebody? That's probably a good question. We should probably figure out the answer to that. You know what? So I think there's a lot of opportunity, not just in building general processes like, you know, how do we write an invoice or how do we create a customer estimate? But, you know, from the financial side, how do we know how much we should be spending on labor or supplies or insurance or marketing? What's the, what's the value of a customer? What's the value of a lead? How many leads does it take to get one customer? Those are all good numbers to know, and the more you're conversant in that, I think the easier it is to then spot problems early. We need about ten leads a month just to stay even. This this month we've only gotten six. Well, that explains a lot. That's why cash flow is getting tighter. Da da da da. So how do we? You know what's different? What how do we get back to ten leads? And then if ten leads is is worth so many sales, well, what how do we get fifteen leads? And then what do we need to flow through to that?

None of this is.

Hard or secret or anything. It's just either put the time in, and it's not a ton of time, but put the time in to do it and figure it out and then track it, or assign other people to be responsible for different sections of it. Or you know you're kind of winging it, which a lot of people can be successful winging it. But then when something goes wrong or they hit a ceiling, they don't understand. Like, I don't know. I don't know what's different. I don't know why I can't break through. I don't know why we can't get past this. I don't know why even though we It feels like we're bigger. I'm taking less home. There's answers to all those things. It just takes a little bit more effort to get the data out in a way that's useful.

Yeah. Well, and you create such a scenario of there's so many folks that are just sort of pulling their hair out, not knowing what's happening, and the time that they spend stressing about not knowing what's happening or You know, kind of running around trying to figure it out. If they took that time to sort of build the systems that allow them to do some forecasting, not only would they not, you know, have this, you know, sort of time suck of trying to figure it out the next month or the next, you know, time that it happens, but then they also get the peace of mind of knowing I'm confident I'm gonna hit my revenue forecast because I know that For every 10 leads I talk to, on average, you know, one of them turns into a proposal, and that proposal on average is about this size. And I close, you know, 3 out of, you know, every 4 that I present, and I've got enough leads in the pipeline. So I'm probably gonna hit that forecasted revenue, which means I can hire that new person, or I can at least make payroll, or whatever that scenario might be. But really having that, that system that's got feedback loops in it, not, not only just, well, here's a process of how you do something, but actually a system for generating an outcome. And we also see too that once that system gets, you know, sort of out and documented, it creates the opportunity for a lot more collaboration. Just as you said, you know, if you walk into someone's office and paper stacked everywhere, only Bob knows how to do it. Only Bob can improve things. Whereas if Bob's got it all written down, he's like, this is my best idea on what to do. Well, then Sally, Jim, and Joe can all come in and be like, what if you did X? And the whole thing gets better and it improves across the board.

Absolutely. Or you say, you know, Sally, Jim, and Joe, right? You're each responsible for getting to 10 on this, you know, on this metric, right, for this month. Great. Now each person has ownership and Sally and Jim got 11 and 12 and Joe only got 4. And you're like, all right, well, it's clearly Joe's It's not, you know, just we didn't get enough leads. Joe fell short on this. So how do we help train him? Or, you know, what, what happened there? And on you go. But it's, it's amazing to me. So often I'll have a conversation with a client and they go, man, sales are really down. Like, well, you know, how many leads came in this month versus the month when sales were good? Well, I'm not sure. Well, I mean, so I feel bad for you that sales are down, but I also feel like you're not— what are you doing to fix it? What are you doing to track it? What are you doing to, you know, to understand what happened? Maybe that 3 months ago was an anomalously big month and this is normal, or maybe this is down, but, you know, well, where did the leads come from? Ah, here and there. Okay. Well, I mean, so which— where are you going to deploy more effort in lead generation?

Right.

I don't know. I mean, I was going to call Like, you know, I was gonna call an agency and spend 10 grand with them.

Right? Yeah.

Okay.

Does it? So obviously, both of us are, you know, advocates and believers in systems. But I want to play a little bit of devil's advocate and tee you up here. I'm sure you have the, you know, the sensation from folks that you work with where they're like, I can't afford the time to document all these things, or You know, it's too much overhead. It's gonna, you know, turn it into, you know, too much of a hassle. What do you, what do you say to folks that sort of have that mindset and, you know, or sort of confront you with that pushback?

Yeah, I mean, and one of the other things I hear all the time along the same lines is, oh, you know, well, I'm not really a numbers person, as if I was gonna ask them to do trigonometry or something. Oh, you know, what's the square root of the cosine? Well, you can't tell me that off the top of your head. No, this is Is 10 bigger or smaller than 12? Because last month you had 10 leads and this month you have 12, right? So a lot of it's just counting and then comparing. Is this bigger or is that bigger? So no, you don't have to be a numbers person. If you got past second grade, you've got all the math you're going to need for this. And honestly, the, the time and effort it takes to put something like this in place is a fraction of the rewards you're going to benefit. From doing this, right? So if let's say you know you're even a million dollars in revenue to take ten hours to put systems in place to track just just even sales and leads, right? And value of customers and track that and say okay this month did we get more or less than last month? And if it was you know when where did they come from and what happened, right? And just that nothing else. Maybe even Forget expenses and payroll and everything else. Just track that. And you can then see incremental improvement and you get to $1.2 million, $1.5 million the following year, right? Was that worth the 10 hours if it was even that long that it took to even just kind of sit down and say, okay, here's what we're going to track. Here's how we're going to track it. Put it in a very basic Excel spreadsheet and then compare it each month to the previous months that you've collected.

Yeah.

I mean, if you don't feel like that was worth it, then yeah, you know, I don't know how much more I can help you, but don't imagine it's like, oh, I got to go back to school for 2 years to learn how to— no, no, no. These are very simple implementations. No math beyond counting really required. And it's so powerful to see. It's like if you said, well, I'm going to lose weight, but I'm never going to weigh myself.

Right.

How do you know? And I'm also not going to count any calories, right? So, you know, I don't know where I'm at. I don't know where I was. I don't know where I'm going, and I don't know what I'm eating, but I'm hoping to lose weight. Oh, good luck, right?

Yeah. Hope is not a strategy, right?

Yeah.

Well, you've obviously got tons of great stories here, and we could chat all day, but I got to be mindful of your time. But before I let you go, why don't you tell us something that's on the horizon for you and Cat Forge that you're excited about?

Yeah. So, I mean, along— this is very timely for us because along these lines, what we've really worked on the past year and are kind of rolling out this year is we've taken what has been more of an ad hoc service of helping people with things like forecasting and cash flow projections and setting up KPIs. And because that was always a little hard to explain and different people sort of took different runs at how they wanted to do it than giving them too many options and making it hard to decide. What we really decided to do is like most people need mostly the same things. So, we really kind of productized the offering around the advisory service. And now, it's much easier for us to deliver because it's the same things for each client, big or small, right? And there's still a little customization and still a little fit to the business. But by and large, it's the same thing on our side, which makes it easier And less expensive, more cost-effective for us to deliver. And so now we're really kind of rolling it out to a lot of our clients because honestly, every single client could use it to some extent. Most of them are not doing it or not doing it nearly to the level they could be. So what I'm excited about this year is being able to really offer exactly what we've been talking about to the vast majority of our clients, big and small, and various levels of growth and, and, you know, size and everything else so that they can have this system more of a plug-and-play than sort of a bespoke, let's build it for you setup, and really start to see the value. And then my hope is, as at least some of them see, oh wow, this is really helpful, they'll want to dig in more, and then we can do more and build more. But even if they just do it at this base level, like, they're going to be 10 times better off than if they did the old seat-of-the-pants method. Which is sort of the default that everyone goes with. So, for 2025, I'm excited to be able to roll out this exactly kind of what we've been talking about, advisory-level service for, you know, as many clients as want to take us up on it at a very, you know, cost-effective price point for their size of business to really help them see that the value of adding that.

That's fantastic. So, for our audience that's listening and they're like, Yeah, I have been running this by the seat of my pants, and I really would benefit from having some of these systems in place. Sounds like CapForge has put something together that might be a fit for me. How should I get in touch with you? What's the best way to engage, Matt?

Honestly, the best thing to do is check out the website, capforge.com. It's got a ton of info on our services, pricing, you know, and all that. And then from there, whether you prefer phone call, email, the contact form, you know, you can also find us on LinkedIn and all those places too. Start at the website, figure out if it seems like a fit from there, or just go ahead and, you know, schedule a consult. Consult's always free and see if we can be of service. And I have a feeling if you're running a business, we probably can.

Awesome. Well, Matt, thank you so much for taking the time to join us today. I really enjoyed our conversation.

No, I appreciate your having me. Thank you.

All right. Talk to you more soon.

All right. Bye.

Thank you for joining this episode of the B2B Growth Blueprint podcast. We hope you've gained insights to grow your business. 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.