Accidental CFO? How Charles Leikauf Escaped the Corporate World

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Welcome to Building the premier accounting Firm. I'm your host, Roger Knecht, president of Universal Accounting Center. This is a podcast dedicated to helping you as individuals start, build and operate successful bookkeeping, accounting, tax businesses. We're covering in this show various things that are related to your success, such as marketing, pricing, selling, staffing, training your staff. More importantly, onboarding your clients, servicing your clients, retaining your clients. Just a variety of things that you need to be aware of as you're actually taking care of and building what I refer to as the premier accounting business. In doing so, we actually want to get you paid what you're worth. So each and every show, I bring on the experts to share the insights that they have as to what it is that they're doing to actually build their business and help us actually focus on the things that in fact do matter. So here is going to be a great episode. This is someone that I've met and spoken to on a number of occasions. And Charles is a corporate finance guy that actually turned into a accidental fractional CFO after restructuring a $2 billion business and serving as the CFO. And of another, he escaped the corporate world and has since helped tens of actually, tons, I was going to say tens of thousands, tons of companies. As a fractional cfo, he found a way to escape the CFO corporate job. So now that he's done that, he's turned his finance skills into actually helping businesses. That has allowed him to give the time, the location, the freedom, if you will, to now go about and do other things such as helping other accounting firms offer CFO and CFO fractional services. Now in doing so, he's helping accountants, bookkeepers do the just the same as he has at Profit Surge Group. So, Charles, welcome to the show.

Hey, Roger, thank you so much for having me. I appreciate the introduction here. It's good to connect.

You're very, very welcome. Well, you're very accomplished. I think what you're doing is amazing. So let me do this and start with a little bit of background. Give us an idea of what brought you to the accounting profession to begin with.

Oh, gosh. So two kind of stories. What, what got me into the accounting profession. Right. I come from a corporate finance background and to be honest, when I was in school, I looked up all the degrees and the income earning potential and I saw the highest one was finance. I was like, I'm gonna go do that. Right. Typical, like high schooler thinking. That was my first thought. I went to the University of Florida, graduated, and I found myself in corporate finance. And so I ended up doing that for a number of years. That was a lot of fun. But I got into working to myself by kind of accident. So it's kind of weird how I'm here.

So with regards to your choosing, I can't say that that's too faulty logic. A lot of high school people, I'm sure just saying where's the money? Show me where the money is and I'll go that direction. So that makes sense.

Now.

When you got into school, graduated, obviously getting into fractional CFO work isn't an initial step. You had to get a little bit of experience there. Tell us about your career then.

So right outta school I ended up going for a leadership program. One of those like they move you every six months for years and years and years. You run manufacturing facilities. That was a lot of fun. I enjoyed it. I worked for a couple big companies. One is tech data. Right. They do 61 billion a year. The other one of the Siemens, they do well over €100 billion a year. And working for them was really cool. Right. The training budget was 200 grand a year per person. It's not what I started making out of school that would have been really cool. But the energy that they put into developing your skills. Right. And I found myself growing quickly and in a position where my job was going down to each manufacturing facility and either shutting it down or making it profitable. And so I got really good at slicing. Slicing and dicing financials. Wow. Right. Pulling operating levers to make businesses more money. And it was kind of trial by fire. Right. I kind of didn't have life for a long time. Ask my wife. She moved with me every six months for years. But I kind of found myself that path because it was like how do I work on the most interesting problems? And I found whenever there's a problem with a business, everyone's scared. They don't want to go into that business unit or that type part of the business. I'm like, let me go there because that's how I'm going to get promoted quicker.

Yeah.

And so that's kind of the, that's kind of the route that I took. It's a little bit against the grain, but it worked out for me really well.

You know I like your story because I actually can relate. When I graduated college, I was in a management training program and I had a similar experience. Wasn't multi billion dollar company, so it was a little different perhaps. But nonetheless I was trained. And one of the things that I found is just like you explained, when you went into something that was broke, that's where you could really thrive because there was nowhere to go but up. There was obviously so much going on that if you just came in and did the obvious, basically what some people were just unwilling to do, you were able to turn things around. And that's where I found a lot of my success. And so I went from department, department, department, basically doing what no one else was willing to do, but in my opinion was very obvious. And it was just one success after another after another. And I felt found myself taking on a variety of roles and responsibilities within the organization, such that within a number of years I had a wealth as it related to different elements or facets of the business model. And it took me from one company to another company. So similar to you, I got a good deal of experience in kind of a management training program, for lack of a better term.

It's funny, I always used to joke with my peers. It's like, Charles is only, you know, six restructurings away from global cfo, right? Like, if there was something going on that I could get in there. I've always had the thought of, like, how do I make more value for my employer and how do I capture a larger percentage of that as possible? Yeah, Grant, if you're saving someone $300 million a year, you're not even going to get 1% of that, right? But the whole thought is like, how do I make value? And I need to go to the things that are scary, right? The things that don't make sense, the things that are like, this group just fired 1500 people. How do I get in there and make it better so I become more valuable? So instead of playing the safe route, that's. That's kind of the option I chose. And my peers joked about it, but, like, I found something there that was like, really helpful.

Perfect. This is good. So what took you then? The entrepreneurial route? Why go about leaving the corporate world and actually starting a business?

You know that that's a really good question. I would see on the Internet. I read all these books, like, I'm sure you've read like the four hour Work week or things like that. And I'm like, okay, cool. How do I do that? And I'm sitting there and I worked for Siemens at the time, and I'm working what feels like a million hours a week. And it's funny, my wife, one day, this is on her, like, sixth move around the country, approaches me, she's like, hey, Charles, I. I Saw this lady in this Facebook group, and she asked for finance help, something about a budget. I was like, okay, that's cool. That's cute. Like, that's nice. No, thank you. And, you know, she's like, you. I think you should send her a message. You should talk to her. She, like, she. She knows what she's going. She knows what she's doing, and so go, no, Lucy. No, thanks. I don't want to talk to her. So I go to work next day, and I come home, and she's like, well, did you send the lady a message? It was like, no, I didn't. No. Like, you don't understand. I work for a big business. Small businesses can't afford me. It's not worth my time. Like the. The group that I worked for at the time, $40 million a year was like a rounding error. Yeah, right. So, like, a small. Small business is like dust. Like it doesn't exist. And I thought my skills only applied to that. And after three days of her, like, frankly bugging me, when I got home, I was like, fine. Like, I'll message the stupid lady in the stupid Facebook group about the stupid finance problem. And so I. I like. You know how, like, some offices have little phone booths that you can kind of hide away in?

Oh, yeah.

So I went hit away in the little phone booth during my lunch break, and I got the lady on a zoom call. This is in 2017. And she told me she has a finance problem. She need help with, like, a budget, a forecast, should, a marketing agency. They were doing like, one and a half, maybe, maybe 2 million a year. And I was like, all right, well, I can fix some of the utilization problems, like, some of the operational things that they had. Right. But from a finance perspective. And so at the end of the call, I, like, told her a price that. That, like, there's no way that someone would say yes to this. Like, I just. Absolutely absurd. Because I wanted to prove my wife right. Like, this is a waste of my time. Again, a much younger, more arrogant Charles. Yeah, there's a story in this which is, listen to your wife, but we'll get there. And so I told her I'd be like, you know what? It's going to be 7,500amonth. It'll take me six months to cover this. Just paid today. And so I sit there, and she goes, okay. And my first thought was, what Should I have charged her instead? Like. Like, what? Could I have said more? Right. That was my first thought. My next thought is, I have no Way to, like, take a payment. Like, I don't have a business. I don't have. I have, like, an LLC from, like, an E commerce store. I had that. I tried. That didn't work out. I was like. And so I knew I had to write down her credit card number. And then so on Monday, I tried to open up a Stripe account and, like, run her credit card. And apparently Stripe won't let you do that. Like, your first transaction. They won't let it be $48,000. Like, that's. That's insane. So I had to build, like, $2,500, like, every other day for a couple weeks. And so that's how I became a fractional cfo. And it's funny, I'd like now when my wife gives me a piece of advice, like, I just listen to her. I don't. I don't, like, argue with her or think I'm too good for. And that's kind of how I got started on this route, which is, again, I got here by accident. Like, I. I wrongfully thought small businesses couldn't afford to pay real fees.

Well, one of the things that I'm taking from that is, yes, listen to your wife. I have a similar experience where she was advising, and from a career perspective, she just saw things differently because I was kind of stuck in the weeds of it all. So I can relate to that. But as it relates to kind of starting your business and asking for the amount and them saying yes, Yeah, I would imagine a lot of the people listening can really relate to the fact that there are those instances where you do charge at least what you think is fair. Perhaps it's what you think you're worth. But at the same time, you were in a situation where you were saying, I was going to ask for an amount that I didn't really expect them to say yes to anyways. And at the end, they say yes, and there is that gasp of, oh, crap, what did I get myself into? Not only do I now need to kind of fulfill. They're agreeing to this, but at the same time, it's, how do I actually now run the transaction? And like, you're explaining, I think there are a number of us who, when we started our businesses, find ourselves in those awkward situations of, okay, what did I just now tip over? And there's this domino effect of, okay, all these things got to be taken care of. Not only do you need a merchant account to charge the card, but you're gonna have to go start up a business. You're gonna have to now do all these various things. When am I gonna find the time? I've got a day job, so this is kind of humorous. Learn the turnkey process for starting and building a successful accounting business. It's in this course so you'll actually experience four specific trainings that part one, your business plan, everything you need to know to get started. Part two, how to price your services. The pros and cons of different methods and the best way to price your services that are both profitable and professional marketing and selling your services so that you can actually be top of mind. But more importantly, how to actually be seen as a trusted strategic advisor. And last of all, mapping it all out, five principles in running a profitable business so that you can be both competent and confident in the services you're providing. Learn now what it is you can be doing to start and build your own successful accounting, bookkeeping or tax business. Go to the episode description and there get the information you need to take advantage of this today. All right, so I'm kind of curious, what was that experience like as it relates to, you've got one client, why go get a second? I mean, was it, was it something that you got a second before you were done with that first relationship, or did you have a favorable relationship and say, oh, maybe I ought to do that a second time?

So what's interesting is she owned a marketing agency and she was really, really good at growing her clients. Businesses like they, they're mostly e commerce clients. And one of the things that she had me work on but she needed help with is she didn't know how much she could charge her clients. And so she's like, hey, can you sit down and look at the financials of one of my clients so we can reverse engineer? How much can they actually afford? Right? Like she was growing companies from 300,000 a year to like 15 million a year. Amazing woman, right? She's still a really good friend of mine today. Like I, you know, this is a photo of us hanging out in New York here. And so turns out she was growing her clients really successful when she's like, can you do for me what you did or can you do for my clients what you did for me? And then I suddenly had one client and then I had another client and then I had another and then it became the full time CFO of like her, one of her larger ones that was doing like, you know, 40 million or so. And so that's how I ended up with a whole bunch in the beginning. Right? So you have five six, seven people paying you five, you know, $8,000 a month. A couple years goes by and you're like, I make more on the side than I do for my actual job. What am I doing actually having a 9 to 5 now. So that's, that's how I kind of got into it.

Well, that actually leads to, the question I was going to ask is now that you've got the clients coming on, at some point you've got to make a decision of my day job needs to go. It's either holding me back from the potential that I have, or more importantly, I don't have the time to take care of the clients I'm getting and I've got to make this change. So you say that was basically about two years into this experience.

Let me see. I started taking clients in 2017. I left my full time job at the end of 2021. Right. So it was a little bit of a slow kind of, kind of gain. Like I wasn't fully convinced to get off like the corporate ladder. Like, I was like, you know, when you're on the corporate, like you're on the path and if you get off the path, you can't ever get back on the path.

Oh, yeah.

And so I was worried about losing that. And I became a CFO of a smaller company. Again, middle market, small compared to where I was prior. And at the end of the year, I worked for some people that were, frankly, I have nothing nice to say, right. Not super ethical. I'm budgeting for litigation instead of figuring how to serve the customer better. And I was commuting by plane every week to work. Like I worked in Atlanta and I lived down here in Fort Lauderdale. And I developed like hives in my arms from stress and like a stomach ulcer. And at the end of the year, I looked at my salary, which was nice, and I looked at what I made helping clients on the side, and they were the same number. And I was like, why do I do this? I don't need this money. And so that's the moment where I was like, all right, I'm going to go all in on working for myself.

Very interesting. Yeah. I've got a client of mine right now, he has an accounting business that he's growing. It's growing quite significantly. But he's also got a day job. And so he's at this, you know, he's working nearly 100 hours a week, more than 40 with one, more than 40 with another. And he's got that, that need to make a decision. So it's just a timing issue. When do I make that leap? And so he's doing very well. And I, I know why he's not making the decision.

He's.

His wife is expecting and they want the insurance. So that's kind of holding him out. But clearly that's going to be that, that I think that thing that's going to tip once he's had that child, he's going to then be able to say, I think I can justify moving on. So here's where I'd like to go next is with regards to your business, there's one thing to go out there and obviously be successful servicing your clientele. Why did you flip to now say you wanted to now serve the accounting profession and likewise help them be successful as fractional CFO providers?

You know, it's funny. So we do both still a fractional CFO firm, still have clients, still build out financial models. But is it two and a half, three years ago now, I sat down with one of the guys who I did a little bit of bookkeeping contract work, like for some of my clients. He'd hop on when I needed a little bit extra help and he was like, charles, what do you, what do you do? And I was like, oh, well, like fractional cfo, we do this, we charge that. He was like, what? Really? I was like, yeah, like you take a look at my actual books. Like this is what we do. He's like, huh? I was like, well, I could show you if you wanted. And I didn't. I've never, I never like thought about that or teaching people advice. I was always like, oh, like, you know, I want those who can't do teach. Which again is totally incorrect now that I teach, knowing that you have to be even better if you teach than actually the doing. Just a variety of people need to be able to understand it with different modalities. But I sat down with him, he's a bookkeeper, had a small business, you know, and I said, okay, I can help you. I have no idea how much to charge you. I have no idea what it costs, but like I can show you a better way to do things. So I sat down with him and I said, let me, let me play mad scientist in your business here. Give me two months and any extra money I make you is mine. Anything after that, like all the recurrence yours, right? Let me, let me just try something. Like it needs to be some skin in the game. But like, honestly, I don't know even know if this will Work, so I can't charge you. And so all the things I've been doing for myself, like you and I have talked about Facebook ads before and everything else, like the sales process, upselling, fractional cfo, the correct pricing. I did all these things with them, and I worked with them for a period of 60 days, okay? And we took them from 4,000 to like 8,800amonth, which is pretty sweet. Not bad for 60 days. But I also helped him sell like $23,000 in like one off projects. And that's when he's like, oh, I get it, right? And I saw that and I worked with him for like two months, and I realized I think I have something here. Maybe what works for me works for other people. How do I figure out how to help them? Because I don't know about. For you, but you work. You work for a big company, right? When you get a good result for them, who benefits? It's the shareholders, right? Who are air quotes? The shareholders. I don't know. My case for Steam, it was a bunch of people in Germany, right. That I've never, probably will ever meet, or a faceless, voiceless thing. If I save them $300 million a year, who cares, right? Or if I save the company, who's doing 30 or 40 million dollars a year? Million bucks, like, cool, they can buy another Lamborghini again, who cares? Nobody lives. Has changed. If I take someone making $4,000 a month to $10,000 a month, that's that extra vacation. That's sending your kids to school. That's the stability, right. That's the ability to pay for the new baby coming. That feels a hell of a lot better. Yeah. And so when I saw that, I was kind of addicted. Like, how do I. How do I help more of these people? It's way more fun. So that's kind of how I got there again, not by accident was totally like, you know, by coincidence. Yeah.

Yeah. Well, what you're doing is you're speaking my language. This is exactly what we do as we work with other accounting firms and literally help them implement various strategies to build their business. So this is really quite fun for me. Now the question I want to ask is, what is CFO service? What is that fractional CFO offering that we're taking to the marketplace? What is it that we're doing with businesses that they are willing to pay for? How would you describe it?

So I get that question all the time. And here's, here's, here's the thing. And this is Maybe not a palatable answer, but there are no CFO police, right? There is no CFO standard service. There is no anything. Like, you're not going to be like dragged out of the street and beaten naked because you didn't offer a budget, right? Like, there is no set formal thing. There's no regulatory body, right? So people are always consumed to like, am I going to get CFO wrong? The answer is, no, you're not. Now, there are things that are considered typical. Typically it's a budget forecast providing that space of being a trusted business advisor, usually on small businesses, it's focusing on growing cash flow, right? Profitability, some margin analysis, a little bit of risk. But at the end of the day, you have a certain set of skills. I have a certain set of skills. There are people listening to this who are way better at certain aspects than I am, right? Whether they're really good at tax or whatnot. We all have our own individual skills. And it's figuring out to me, as a prior corporate finance guy, if I can make someone more money in their business with my advice, how do I make sure I do that so I can make them way more than I cost them? That's the essence of a fractional CFO and providing that air of a trusted advisor. What your skills are is how we fit in to make something unique. But it's typically budget forecast, working capital management, margin management, a little bit of risk providing that trusted advisor space. That's what I would say if it was a canned answer. But the real answer is it depends on what you know how to do and depends on what your client needs.

You know, I appreciate you putting it that way. In fact, the starting with, it's not really a regulated thing that you need to worry about the CFO police coming out and seeing whether or not you do do or did a specific service. That's a good to start. What I would add, however, to the explanation, and I liked what you said, is the way we describe it is CFO and advisory services first of all involve beyond the bookkeeping and accounting that's typically going on, the fact that you're actually servicing the business as it relates to their business model. And first and foremost, you're beginning with the cash flow. So you're dealing with things related to payables, receivables, how long the company is retaining the cash, whether or not they've actually got monies to run the business, cover payroll and so forth. And so that cash flow really goes to the business model itself. Are they charging enough? Are the pricing models. Correct. With regards to payroll, are they paying people appropriately? And what I find is when you get into that role as a CFO advisor, you're helping the business owner makes really some business decisions that impact not only the accrual side of business, but the cash side of the business. And that's really where they appreciate the perspective that we can bring to the business model because they're very excited about the product or service that they offer, about marketing it, selling it, providing it. What we're trying to say is here's what you need to do this profitably in order to be profitable. You've got to, when you get a, A, let's say a purchase order, you've got to collect this much down so you can cover your cogs, so that you can take care of the payroll needed to actually deliver the product in time. And at the end of the day, you're not fronting as a bank the funds to actually cover this business model. And they start to get their wheels turning because they're appreciating this perspective you're bringing, which is a cash emphasis. The other thing I think is important from a CFO perspective is the capital. You're basically saying, is there enough funds to run this business? And so you might be involved with what they're doing as it relates to going out to banks and getting lines of credit, maybe getting some business loans, maybe getting venture capital or, you know, PC type money. And all of a sudden what's happening here is you're getting their input as, or you're providing the input that they're missing as they're trying to run their business. And so that CFO role becomes quite critical. And they can't afford to pay somebody to be on staff full time to do this. And that's where that fractional part comes in. Would you add anything more to what I said?

I think you nailed it. Right. One of the first things you mentioned is it's not just bookkeeping, it's not just accounting, it's not just taxes. It's how to help them make better ideas to make more money. Yep. Interestingly enough, one of the things that I find to be really important, and maybe I'm getting a little too nerdy here, is I teach all my CFO clients, like the E Commerce brands that I help, I teach them time value of money.

Oh, love it.

Right. They're like, oh, if I, you know, say your cost of capital is 30% a year for small business and we're guesstimating here, right? There's no, there's no whack for their equity. But say their cost of capital is 30%. Let's just say it's two and a half percent a month. Thereabouts. They're like, well, if I pay 60 days early, I get a one percent discount. Okay, well, you're destroying, you know, one and a half percent of value. Right. It may not, it may be economic value instead of accounting value, but your money is worth something over time. Explaining that to them and then explaining, you know, some of these, some of these more unscrupulous loans they get, like merchant cash advances and you, you show them what the true APR is of those, which is 73, 75, 80%. Really? Because, you know, it's the fee based. Right. But you truncate the fee and make it over a short amount of time. It's really dangerous. And so just providing that level of education of like, how do you make better decisions and teaching them the time value of money, if you can teach that to your clients, they're going to be so well prepared that it's going to be super helpful whether they stay on engagement with you or not. That is an educated business owner and they're thinking with their finance brain now if they understand time value of money. That's my favorite thing to teach to accountants and to my CFO clients because you can really have them make way more. That's like my favorite thing.

Oh, you know, you're reminding me of a story of a client that I worked with and I did something very, very similar to this. And I'd like to share it real quickly because I think it illustrates this point very, very well. Basically, he was running a business and a lot of the interactions that he had with his clients where he would, it was him selling to them. And a lot of the people he sold to were in, in the business sense, friends. And so what was happening is over of as he got clients, would he ask for a down payment on the purchase of the product that they were acquiring from him, he would actually become more and more lenient and oh, you can pay me later, you can pay me later. And he was, he was not inclined to actually collect up front the funds where when he first got clients, he was more likely to say, okay, well, you have to give me 25, 50% of the product purchase up front. Well, what ended up happening is he found himself now fronting a lot of the monies needed to produce the products, and he was getting paid in the rears. And so he got into this Horrible cash situation. And my point is, is he started leveraging not only credit cards, but also a line of credit that he had and a business loan that he had. And all this was going on. And I basically said, okay, we've got to address this. And one of the things that I think you're missing is what you just described. And all of a sudden what happened is he started to realize one he had. He had to take the approach of having a policy of saying all sales had to have 50% up front. He had to have the cash infusion so that he could have the capital he needed to pay the payroll and produce the product that he didn't have to front. So he all of a sudden realized, I have to not be so kind, I've got to get that 50% up. Okay, that was the first thing. The second thing is as to using the money he needed to see that with the credit card, he actually had 30 days or as many as 45 days of interest free cash that he could actually leverage in his business. Where if he was using his line of credit, that interest was accruing on a daily basis. If he leveraged it on the business loan, if he used that fund, obviously he's got the money that he's got available and there's an interest payment there due, but he was using the funds incorrectly. He would take the line of credit before he would take the credit card payment. And he was using the cash so that he was paying unnecessarily the interest associated with those, those funds. Well, we got it so that he was able to leverage each of these assets. The cash that he had in the bank, the capital that he had in the, in the business, the business loan, his credit cards. He was able to prioritize, okay, which do I use first and then when do I roll to the next? In that simple business model change, he found that his business went from being cash poor and he was always having to go into these various lines of credit into being cash positive, simply because he saw the value in getting the cash up front. With the 50% down, he was able to leverage the 30 to 45 days with his credit cards. He was actually with his payables to talk to some of the vendors and see if he could get better terms. So he got like net 30 relationships. Now all of a sudden he was getting paid in full for product that in the past he was chasing to try and get the money to pay his own bills. It was a phenomenal change of events. Three to six months later, he was on Cloud nine. And he was walking in here just saying, you changed my business model. So does that sound familiar?

I've had this conversation so many times. And the cool thing is that was, what, a 30 minute conversation for you to explain that to him.

Oh, yeah.

Completely changes business in half an hour of your time. Yep.

And that is the relationship of the CFO understanding the business model, how cash works, and leveraging the capital in the organization. That's not what a bookkeeper does, that's not what a tax person does. It's not what accountant. An accountant does. It's what a fractional CFO does. So I think that's a great distinction that we're helping kind of draw here between. What are those services we're offering when we step into that CFO realm?

Yeah, absolutely.

All right, so let's do this. You get a client and one of the common things is, is you get an agreed upon, you know, term of, here's what the services are and so forth. How do you deal with scope creep?

So usually, right. In scope creep, we find is it's solved in how you sign on the client. It's solved in the sales process. It's not really solved on the back end. The back end's a lot harder. You're already friends, you already work with them. Occasionally it's easier to be like, ah, just say yes and just let it slide. And you know, kind of like with this story you just imagined, you say yes enough and you're like, oh, I'm yes in myself into cash flow, negative territory. So what I found is the easiest way to stop scope creep or people giving you ridiculous demands or pinging you all the time or whatever it may be. We all, we all deal with issues with that as a service provider is how do you set up the relationship in the sales process? So for example, if you sell on Zoom and somebody comes onto the Zoom call and they don't have their camera on, the very first thing I say is, I can hear you, but I can't see you. Go ahead and turn on your camera and we'll get started now. So that does one thing that's really specific. Right. If your camera's off and my camera's on, I'm presenting to you. My status is lower to you. Right. Someone who I have perceived higher status of, I can tell what to do and they will give me additional time, they will give me additional services. Right. Do you have a business mentor you look up to, like a Jeff Bezos or Neon Musk or something? Do you have someone like that in your mind?

I do.

Okay. If you had 30 minutes with him, would you have your camera off?

No.

Would you not come prepared with questions?

No.

You're gonna, you're gonna stop talking. You're gonna ask the shortest, most well thought out question. You're gonna write down every single word. You're gonna move on to the next thing. You're going to use every single little second of his time. And then you wouldn't think about asking for another second it without being paid for or thanking him or whatever, because you're valuing it. And so when you start the sales process with things that, with things that lower your perceived status to them, they're more inclined to treat you in a different way. And so that little thing of like Charles, it's their camera, maybe it's not working or whatever. There's all these little micro things that happen in the sales process. Like having a four call sales process. Here, here's the introduction. And then we get your books and we come back and here's my slide deck and my presentation. And then you, here's a thing, go, go ahead and sign it in a couple days. When you have that, it's showing you your time's not valuable. It's showing that your process is too long. It's showing that you don't really have your stuff together. Maybe you organize and I gotta have the slide deck. If you change your sales process and you have the better relationship with people because there's three statuses that you can have, right? The three frames of status, there's superior, right? They look up to. There's equal or friend frame and then there's inferior, right? You can tell people what to do who are inferior. You can ask your buddies for, I can help out a friend move this weekend. You can ask them for favors. If someone has a superior frame than you, you are not going to ask those things. And so figuring out how to have that superior frame of the trusted advisor that you're supposed to be makes scope creep a lot harder to do. And it literally happens on the very first second you meet someone. Yeah. Right. So you're married, right?

I am.

Okay. When you first meet it, how many, how many times do you get to meet your wife? In the beginning you have one first impression, right?

Oh yeah.

Better not screw it up.

No.

So that's, that's my thing of how we stop scope creep is it usually is a sales process problem that bleeds into your relationship. Started off right, it's a lot easier. And then when People ask you for extra stuff. Yeah. If you want to give them extra stuff, sure. But if not, say, hey, like that's out of scope, you know, that'll be this, I'm happy to handle that for you. It'll be this fee. It's up to you. Yep. Usually they say yes or they'll say say no. There's plenty of things we offer that are out of scope. Hey, that's this cool or you want, you want me to take care of it or you want to do it yourself? It's going to be this much.

Yeah. One of the things I'd like to add to this is three things that we do to really address this ourselves. And I agree with you. First of all, it's a positioning. One of the things that I do is really emphasize the fact that you're having a peer to peer relationship with this person. You own a business, they own a business, your peers, you have a skill, they have a skill. And you're basically coming together to address a problem, a situation that that business owner is experiencing that you have the means to help them address. And so when I have that equal footing with them, I feel that there's a lot more respect that goes on because now they're not seen as if I'm trying to pitch them something, ask them something. We're trying to collectively together address something that needs to be resolved that they're experiencing. So that's really a positioning type thing. And it goes to what you're talking about. And I like how you said the, the, the having the camera on during the actual conversation and so forth. Those things are all very, very helpful because you're now seeing them person to person. I think that's very important. The second thing is as it relates to explaining services, we have turns of, engage of the terms of the engagement. Very clear within the, the written engagement that we actually provide. It's very specific through the process, what it is we're saying we're going to do in this relationship and that that engagement that we're going to have has certain deliverables that we're working towards. This is what we're trying to accomplish. And as clear as those can be, then you can avoid scope creep because we're working towards a very specific game. And that brings me to my third thing. It's having a very specific process that you're going to bring to the table. When you have a 12 to 18 or more long engagement. It's very obvious what the ninth month for us is with the client. We know exactly what we're going to be doing with that business. Now, all these things are subject to being adapted based on the client's needs. But we're able to say that over the years of having served clients, we have a process that we follow that is successful. Therefore, we're not going to intentionally deviate from what we know works. So this is what you're going to experience with us. And because there is that process, it really does kind of limit scope creep. Because we've got a very specific thing that we've talked about addressing and doing implementing in your business. Let's follow what works. Now, clearly there are things that come along and that cause scope creep because every situation can be unique. But I'm going to say every business actually falls into the same type of thing. We're trying to focus on revenue, we're trying to focus on expenses. We're trying to focus on net profit. We're trying to focus on EBITDA and value. These are the things that we're trying to address. What are these things that are off topic? Well, they're things that we would like to discuss and we can do so, but let's get back on the task at hand. So those are some of the things that we try to address and that's how we try to handle it. Get your free copy of the book in the Black nine principles to make your business profitable. This is a how to guide for accounting professionals to work with their clients and actually implement proven processes and systems to ensure that their clients make profit a priority. It is in this book you'll actually learn how to map the business and in fact make marketing, accounting and production a priority within your client's business. You also learn the wisdom pyramid, how to actually take the information you're providing to your clients and effectively use it so that they can make more informed business decisions. This book is designed to help you communicate more effectively with your clients and in fact have them see you as their profit and growth expert. Get your free copy now of the ebook today in the Black nine principles to make your business profitable. Here's the question I want to ask now regarding marketing. A lot of times people, they see CFO services as one of three things. One is marketing and selling it. The second happens to be asking for that sale which we've kind of addressed. And then the third is the fulfillment. I want to go to the marketing and selling. What advice do you have for someone that is trying to go out there and offer CFO services as it relates to marketing it, selling it Pricing it.

So when you start offer CFO services, it's a little bit more challenging. And here, here's why. Right when you go ahead and you take care of bookkeeping, having your books done properly generates the financials which generates a tax return which is required, right. There are some negative consequences if you don't file a tax return. There are no enforce outside external negative consequences that are typically associated with not having fractional CFO services. You and I know them as you don't have a trusted advisor. You probably have cash flow problems. You have the, the instance of robbing Peter to pay Paul to give your buddy like a, you know, a better payment terms. They don't see that oftentimes. Usually they're not problem aware, they're certainly not solution aware. And so selling fractional CFO services can actually be a little bit more challenging because everybody got to file taxes, right? So you own a, you own a business. Cool. Congrats. You know you have to file taxes. It may be a surprise, you have to have your books done to file taxes. But when you're like, oh, what's the CFO thing? I've often got like, I have an accountant. Cool. Can your accountant tell you how much it's going to be in your bank account six months from now? No. Maybe we should have a conversation. And granted, you know, I don't have the crystal ball or whatever, but we can get pretty close with the forecast. And so when I'm giving advice on getting good at selling fractional CFO services is your sales skills actually has to be a little bit more polished now. The value provide is a lot higher, but people are usually driven by problems and they may not even know that they have the problem. So you need to demonstrate the problem on the call. Right? There's a, there's an old formula like problem, agitate, solve.

Yes.

So what is the problem? Why are you here? What does your cash flow look like on the call? What's going to happen if we don't solve this? Right? What's going to happen to your goals? How long did it take you to get here? How long did you think it took you to get here? That's the agitate part, like digging deeper. Why is this important to you? Solve? Well, working with me, we have a, you know, a 13 week cash flow that we provide that allows you to make the best decisions possible for your business to manage it. So you're no longer wondering, can you make payroll? Right. So you don't have to have that conversation with your staff. Hey, I Can't make payroll and they don't have to go home and say to their wife, hey, John, couldn't pay me today, right? I don't know how we're going to pay our bills. That's not a conversation you're ever going to want to have. Oftentimes people when they think of sales. You ever heard the phrase, when you want to sell a drill, sell the hole? Have you ever heard that before? Okay, they're missing something in that. There's there, there, there's benefit solution and then there's outcome. They're missing the outcome. So, okay, I want a hole. So. Or I want to sell a drill. $50 drill, so I sell the hole. You need a hole. Holes are the best thing ever. Why? What's the outcome for the hole? The hole is as soon as I walk into my house, I look over to the right and there's a photo of my family there. That photo is a hole that I put a nail in that I hang that picture frame on and I like, I feel good and I feel connected to my family when I look at that photo. So if you want to sell a 50 drill, sell the hole. If you want to sell a 500 drill, sell the feeling of what you get when you look at the photo of your family. And so that's where people get it wrong, is as a fractional cfo, we're saving their business. We're saving them from having that conversation of, I can't make payroll, we're saving them from, hey, I got to sell my business for 4 million when I really should have sold it for 8 because I made poor financial decisions. Those are impacting people's lives. We think it's commonplace because we're thinking of the financial terms. We're not thinking of like the actual outcome terms and just realizing that you can provide so much more benefit that you probably forgetting that you're providing. Like, you change people's businesses every day and, and you change their lives every day. Sometimes it's easy to forget because you do it so often.

Well, what you're describing there is something I can really relate to because you're right, when it comes to sales, there is a greater need for skill as it relates to selling CFO and advisory services than perhaps bookkeeping, accounting, tax type services. Because there is a pain, typically a need. It's regulated, there's deadlines and so forth. But when it comes to CFO services, it's more opportunity, more often I've actually sold the services based on the potential of what it is. They realize they could be doing if they had a little bit more direction and insight than what they're able to achieve right now on their own. And so that opportunity is what's really driving them more so than some pain that they're experiencing.

Now.

I have taken a few clients where they're actually struggling with cash flow, where they're struggling with their business model not working. They're. They're appearing on the outside to be busy, but they're just not making money. And so they're realizing, I need some help because this is going to unravel pretty quickly here and I'm going to go bankrupt. But it's more often that person saying, I think I'm doing okay, but I really think I could do a lot better. And I don't know how to take my business to that next level. And I need somebody from a CFO perspective to help me come figure out the business model, fix what isn't broken, but. But what could be better. And that whole opportunity cell is a little bit different than the pain cell because there isn't a deadline, there isn't something that's broken that needs to be fixed. It's not like something's bleeding out. That right there isn't what's going on. That opportunity is what the potential is that they're trying to solve and experience with the CFO services. So I like that. The next thing I'd like to do is ask something a little personal. You've traveled quite a bit with your CFO or with your previous corporate wife work. What was your favorite place to live?

So my favorite place to live is actually where I was born. Okay. Which is Fort Lauderdale, Florida. So I've lived all over the east coast. I lived in Ohio, all over the place. One of the things I noticed when I traveled for work is like anywhere you live, there's like three main determinants. If you're working for somebody else. Right. It's like the office. Right. The. The job, there's the people and then there's the location. And I never found somewhere that I like. Takes all three. So the second I started work for myself, I moved back down to my hometown, which is here in Fort Lauderdale, which is my favorite place if I have to go to a second favorite place, not the place I was born, because it's kind of a cop out. Like, Florida's great. Yeah. Believe it or not. Cincinnati, Ohio.

Nice.

Really nice there. There's 2 million people. It's a major city. I had no idea. You know, Florida I hear I have to move to Ohio. And I'm like, I get there. They have this thing called spring. Like we just have hot and wet hot. They have, they have seasons there. And in the spring there, a lot of their trees are, are like flowers. Even like the big trees are flowers. So everything blooms and it's beautiful.

Nice.

That was really nice. That was really cool. So second would have to be Cincinnati, Ohio. And I like, never thought I would say that, to be honest.

I love it. No, that's the, the unexpected. That's what I was hoping for. So that was very, very good. Well, here's what I'm going to do. I'm going to wrap this up and really kind of bring this full circle and I'm going to come back to you for a closing thought. So in doing so, I want to share with our audience that there's actually a free offer here that we're going to make available that I'd love for you to take advantage of. Basically, what Charles is offering is a CFO blueprint. It's basically a coaching program where he's helping individuals learn how to start, offer and scale their financial services business by using cfo, fractional, fractional CFO and advisory services. So check it out. You go to the episode description and find there the link that you need to go to in order to take advantage of that. In addition, I want to offer basically a book that is called you'd strategic accountant. It's here that you actually learn what it is you need to be doing in order to offer CFO and advisory services to complement the things that you're already doing as a bookkeeper, accountant, or tax preparer. It's here that we are actually going to teach you what are called the three core accounting services that your clients expect from you as it relates to working in their business. And it's something that actually positions you as what we refer to as a profit and growth expert. It's here that you can literally find out what it is you can be doing to become the premier accounting firm in your area. In addition, I suggest you also get the book called your profit and growth expertise expert. It's her where we talk about not only the CFO and advisory services, but the business coaching role that you can take with your clients to literally help them take their companies to another level with the services that you can offer as their profit and growth experts. So check out those opportunities by going to the episode description and taking advantage of them there. Now, as it relates to the conversation with Charles, one of the things that I really appreciated is the fact that in high school he just basically said, where's the money? And that's where I'm going to be headed. And he clearly did a great job choosing it. Because to work with multi billion dollar companies in a, in a financial role capacity was awesome. I loved how he was able to share that he was kind of the fixer going from one situation to another where he was able to actually step in, make those hard decisions and more importantly, turn some businesses around, saving the companies millions upon millions of dollars. And I think that's very, very important. But to also listen to his wife and hear the wife say, hey, could you reach out to this person, see if you can help them? And on a dare, I'll dare say it's a dare, on a dare, going and saying, yeah, I'll go off into the little phone booth room here, make a phone call, see what I can do. And then on a whim say here's, here's what I'm going to ask. I'm going to ask for $7,500 month and more importantly, ask for it all up front over a six month engagement and then, oh, lo and behold, they're going to actually agree to it. Oh, how do I pay this or charge this credit card? Love that part of the story. I think that was quite fun and more importantly, somewhat relatable for a lot of my listeners now as it relates to growing the business. Clearly I'm grateful that we were able to talk about not only what CFO services are, how those are different from bookkeeping, accounting and tax services, but how it's more of an opportunity sale, really recognizing that for us to show our value and help our clients realize what it is we're doing for them. It's not just task that we're taking care of for the client, but more importantly, it's a service we're bringing in that really can turn their business model around and help them become a lot more profitable and more importantly, help them build their business with an exit in mind so that they can really get paid what they're worth in the sell of their companies. So I think this is really kind of the big picture perspective that we're bringing to the table here. And the thing that I was grateful that we were able to end on is the fact that he, he does like Cincinnati, Ohio. That's one of the things that I think is really good. I am a Four Seasons guy. I love having that, that variety during the year. Even though one of my favorite Places to go is Fort Lauderdale. I was there recently and it's quite fun, so you can't miss it. So, Charles, with all that being said, what is a closing thought you'd like to leave?

First off, super grateful to have you here, right? Super grateful to be here, I should say. My closing thought is a lot of times the thing that stops people from trying something new, be it fractional CBO services or marketing and learning sales, is they often it's the belief in themselves. Right. And one of the things I want to say is if you don't go out there and if you don't give it a shot, you don't know if it's for you. Right. I suggest try it out, take that kind of dare. Like I said, take that leap. And you know, you may think it may be for you or not for you, but I took a chance and I messaged a strange lady in a strange Facebook group and it's changed my life forever. And I'm actually still really good friends with that same woman doing. And so for you, it might be taking trying CFO services, it may be tax advisory, it might be working further with Roger. Whatever that thing is, it's like sitting in the back of your head. You're like, I don't know if that's for me. Take that leap. That's, that's my, like, parting thought.

Very good. I love it. Well, here's what we're going to do. We're going to wrap this up by first of all saying if you haven't already liked and subscribed to the podcast, please do so. Subscribe and get notifications each and every week as we release new episodes, speaking with the experts and finding out what it is we can be doing to work on our business to build the premier accounting firm in the area, in your area. As it relates to the show itself, I want to actually point out that there are additional free resources that you can take advantage of by going to universalaccounting.com there in the navigation you'll find free resources. There we have a variety of ebooks, also courses, white papers, and a variety of things that you can consider to use as you're actually working on your business. I also invite you to go to the the website navigation and find the podcast section. It's there that we've actually collected a number of highlights playlists that you can go binge listen to as it relates to a variety of topics that are specific to your situation, whether it be marketing, selling, pricing, offering qual services, client retention, and so on. It's there that you'll find the experts all gathered together as a playlist for you to binge listen and I encourage you to do so. Also, I want to invite you to Grow Congrocon is an annual conference for owners of bookkeeping, accounting and tax businesses. It's here that we actually, as peers, get together and collaborate. We find out what it is that one another's doing and oftentimes find ways that we can help each other's clients. It's here that we're able to actually find those people that are doing what we're doing and be inspired by them. You're also able to hear from the experts off from the stage where you're hearing timely things that we can be doing in our business, implementing today to actually grow our businesses and help us become the premier accounting firms in our area. And then likewise, you can actually meet the staff here at Universal Accounting center, those individuals that are committed to your success, allowing you to be in business for yourself, but not by yourself with universal accounting. Now, with all that being said, obviously I want to encourage you to join us for Grow Con Register now. See you there. And with that, enjoy yourselves, have a wonderful day. And if you need any help, give us a phone call. 801-265-3777. And always remember, if it's about accounting, it is universal. Take care and have a great day.