Episode 44: Peter Geise Explains Why Revenue Is Up but Profit Is Missing

Have you ever looked at your revenue and thought, you know, we should be making more money than this? We're going to talk about that. Stay tuned. Today's guest brings something I think a lot of business owners need more of right now, and that is context and clarity. I'm joined by Peter Geiss, Akron area president of Focus CFO. He's a fractional CFO leader. He's also a Lean Six Sigma a Six Sigma black belt and someone who spent decades helping businesses identify the underlying causes behind the challenges that they're facing. Peter has experience ranging from Fortune 100 companies all the way down to helping those Main Street businesses grow smarter and healthier financially. And what I really appreciate about Peter's perspective is that he doesn't just look at numbers. He looks at the systems, the leadership decisions, and the operational habits driving those numbers. So Peter, thank you for being on the show today.

My pleasure. Thank you for having me.

So I'd love to start at the beginning. Can you tell us a little bit about your journey from, you know, Fortune 100 leadership into the world of helping small and midsize businesses with Focus CFO?

Okay. Yeah, well, I was born at a very young age and then let's start the whole thing.

The whole full history, yes.

No, I started right out of school with a big Fortune 500 company here in the Akron area. Quite honestly, with things that I knew nothing about.

Wow.

Products I knew nothing about. And then made my wave on the, I don't know, a trajectory that ended up sending me to Brazil.

Wow.

I was wondering, what did I do wrong with that? But it turned out to be a great experience. And I learned a lot about doing business in a different country, particularly one with a challenging financial situation, for sure. Yeah, made my way from that. Then we ended up selling our division. To even a bigger company, a German company called Bayer, or Bayer, the big aspirin company. I had nothing to do with that as well. And it was also in a business, in a product area that I knew nothing about. So that's particularly leaders in companies like this, being a product expert was not what they were hiring me for. So I was there to lead the businesses. I had run that gamut and decided to leave the big corporate world when an opportunity came up up to run a family-owned business up in Wisconsin. And that opened my eyes to a whole different perspective. I'm not dissing anything, big corporations like that, but it's different, as you know. Yeah. No, I'm not a founder of a business. Well, I guess you're kind of second gen. Mm-hmm. But it's different and it's line of sight and really impactful of what your decisions are, both good and bad. And that can be, That can be daunting for some, particularly if you're kind of shooting from the hip a lot of the times, which I wouldn't recommend. So this is what I've been doing, and then decided to stop that work several years ago and had an opportunity to join an organization that reached out to me to say, how would you like to help small and medium-sized businesses? I said, I've been doing that.

Yeah.

I said, yeah, but this is with a bigger group and with other colleagues. Moved here back from Wisconsin to Akron, and it's best, rest is history. It's been very meaningful. It's a very, a very for-purpose business.

Yeah, so I know that we've done a lot of networking, talking together, different types of business things together. You talk a lot about identifying those underlying causes for small businesses, what those business challenges are. So when an owner comes to you, I know sometimes they come to me and they say, we have an HR problem. I'm like, no, you really have something else. When they come to you and they say, we have a finance problem.

Yeah.

How often is the real issue something completely different? Talk to us about that.

Well, and it's almost never only a sales issue.

Yeah.

It manifests itself because as you in the intro, you talked about your revenue's down.

Yeah.

Or your profits are down. Well, there's a why behind that. But there's usually something else going on and usually multiple things going on. Some of it, many times there are personnel issues and we'll just call it— and even personnel issues aren't necessarily an HR thing, but they can be. So almost always that's why our process, the Focus CFO process, which I think is very good, it doesn't mean it's the only one, is we start with a discovery to find out, so what is going on? And I may be able to help them or we may be able to help them directly as a client. But many times we're not the person you need to be talking to, at least not at this point.

Okay.

Which is why one of the things I enjoy having people like you is what we're calling referral partners, because I like to give, I like to refer out. That's equally— it doesn't pay me anything and we refuse to take referral. Yeah, but It's if you're making an impact on that small business, that's my coin. That's what I really wanna do. And I know you're one of them. So this is the thing with experience, I've made enough mistakes in businesses that I can recognize, and I'm pretty good as a diagnostician that says, okay, I see that sales are down. Yeah, there's some other things going on here. So getting to the root causes, I don't know that I always go through the 5 whys, which is, you know, that's how you're supposed to get to the, the real root cause, but finding out what's really going on, and it's usually more complicated than the one thing they say is coming up. That's how it manifests itself, but what's going on?

Why do you think it's so hard sometimes for owners to see some of those issues themselves?

I'm speculating here and it could be a number of things, but you've heard this term working in your business versus on your business.

Yeah, absolutely.

They've got their head so far down into the business that they're, more worried about, it could be family dynamics, but it could be, we gotta get this shipment out here. We go like this, how are we gonna get more? Okay, take a step and what are you gonna do?

All customer work, what are we gonna do?

Exactly right. And so instead of just trying to and jump into it, I mean, I know I have a funny story about the company I was the president of out in Wisconsin. One of the owners were not actively involved, but they were around, which is great. And I don't know, somebody I had, one of the engineers looking in trying to fix such and such. I literally, he comes out and says, "Why are we fixing that? We've fixed that several times before." Well, I said, "Well, say that again because you apparently didn't fix it if you keep having to fix it again and again. So let's find the root cause." I don't know if this is unique to business owners, but people tend to look at the, output or the symptom instead of— so what, what's causing that and address it. I mean, I'm sure you've seen it in business too.

So, oh, absolutely. I think it's important because I think business leaders oftentimes we're trying to solve for the significant symptoms when we should be instead of solving for the system or the true problem.

Or, or we'll be facing this again instead of really—

yeah, you continue to repeat.

Yeah. And, and that, that's all part of my, my, the Lean training, which, which I don't know if I'm a I'm not a full practicer right now, but that's, you gotta get to the 5 Whys and find out what's really at the problem.

Yeah. So I know a lot of business owners think they can't afford financial leadership, high-value financial leadership until they're much larger. So why has the fractional CFO model become so valuable for growing businesses?

Well, fractional, the CXO, I mean, even HR, stuff like that.

Yeah.

I think it's catching on because when you're growing a small business and you need some horsepower, Yeah. But in finance, you make stuff, you sell stuff, and you manage the money. The entrepreneur is typically an inventor, tinker, or they think, or they are, a really good sales market, growing the revenue. Yeah. Managing the money, not usually their strength.

Not usually the strength of a small business owner.

But honestly, it takes away, you're still saddled with this 24-hour thing, and you say, but how much time am I gonna use fiddling around trying to resolve my financials or talking to the bank or looking how, whatever it is financial, that's where that gets, held up. So what if you could have somebody— and I mean, everyone has different capabilities and strengths— but if I could just have this off of my plate with somebody that's really good, okay. And too many times people co-mingle accounting, which is important, but accounting is in the rearview mirror. That reports what happened, which, which— that's where the data comes from. So you got to get it right. But a CFO is sort of the partner or the co-pilot with, with the business owner that says, so where am I going with this stuff? Yeah, how do I take this? So obviously you have to have data that's accurate and you believe in it, and then to help you make sense of going forward. That, that's what a true CFO does. Fractionally, you get that in most of these businesses. You know, we're, we're probably 2 million clients. There's some that are 100 million, but they may, it depends, but let's say $30 or $50 million, which is not chump change. That's a pretty good-sized business. You're gonna need some of those horsepower, but you don't need them full-time. You really don't. So you're gonna hire a, and I wouldn't say we're just gonna get the best CFO we can get for the money. So now you're going to the lowest bidder. That's usually not a great, great, you may luck out, but usually you can get, So for a fractional, you can get somebody who's got a lot of experience, a lot of war wounds, and hopefully they've learned from that. And two things for us, I think it's other fractionals as well, we're not there because we're wanting to get a promotion. We're not there because we have to make more money to support a thing. We're done with that. We're there solely for that, and we're not gonna be there, we're not gonna be jerks about it. But you're not doing it because we need the money. We're doing it because we're gonna help you. And we're not gonna tell you what you think you wanna hear. We're gonna tell it to you straight. And we're not gonna be jerks, but we're gonna be telling it to you straight and saying, this is how you can grow money. And many times, so if I'm referring, let's say I'm to you guys, to Clarity, or A1, either one, but I've already vetted you 'cause I am not going to, introduce somebody who's a jerk.

No.

And so it's my cred— maybe I'll do it once, but never twice. And so that's another great thing of being a partner to a business owner that says, here's one, I think you need this help. And this is why. I mean, it's the same thing that— so if you or somebody else is trying to convince them, but that's— you're selling me. Okay, forget about the selling stuff. This is a value to your business. This is gonna help your business run better. You gotta decide whether it's worth it to you. But most times you already know this is bringing value way beyond what it quote costs you.

Yes.

You should stop thinking of the cost. Business owners tend to be, if they aren't up here thinking about how am I growing my business and getting my transferable enterprise value higher, they're in, and I'm not criticizing, this is just, you're in cost containment mode. You're focused on everything as an expense. Yeah, well, things are only expensive if they're not worth it.

Yeah.

So it better be worth it. And we can help with that. In fact, we won't take them on unless I'm convinced it's worth it. Yeah, we'll say it doesn't work.

Well, and what I appreciate about some of the things that I have learned from you is you have taught me to have a better understanding around the true value of what the business is, not just looking about it as, you know, this is what your revenue is, this is what your expenses are. It's about can you have— do you have repeatable processes? Are you in your business all the time? Do you have people that are supporting you within your organization, whether it is full-time or fractionally, that are experts that can continue to help you see through the front of the windshield as opposed to the rearview mirror to be able to keep moving forward. And what I, I love too about what, what we get to do with fractional, with what you do at Focus versus what we do at Clarity is we are able to be in the business. We're able to be good experts for the organization for a minimal amount of time. But the value that they're getting is so so much stronger than what they would be doing if they were, I mean, heaven forbid they're Googling their HR questions or their finance questions. We don't ever want them to do that, but they do. And so we help them through that too. But then also it's like being able to help them move forward, help them see 2, 3, 4 steps down the road because they're still trying to look like right in front of them.

Yeah, that's right. No, that's exactly right. It's given a lot, and it may apply to other, other functions, but particularly for HR, I think people get confused with, so what is HR? It's a whole gamut of stuff. Oh, it's payroll. Okay, but it's a lot more than that. And about managing your workforce and going forward and what's the success. I mean, there's all, and it overlaps with finance.

It absolutely does. And so many times I see the finance and HR are lumped together 'cause they're like, people are payroll. And we're like, well, they are, but that's not all they are.

Yeah, no, exactly.

But we do, we have to, we work together a lot between finance and HR because you're dealing with that. It's the monies of the people, but then it's also, you know, the motivation, the scaling. If you have an organization that's scaling quickly, you've got to be able to build those projections and how do we move forward. So I think that it's, it's important that, you know, that HR and finance can work together and collaborate, but they are not enemies. I've been in organizations where it's clear that like that's been the, the rub, and it's like, oh my gosh, like how do you— yeah, we gotta, we gotta do like a hostage negotiation and transfer some of this.

Yeah, that's a dysfunction right there for sure.

It absolutely is. So let's talk a little bit about when you had your Lean Six Sigma training, because that was— I mean, moving back there, I think a lot of business owners hear the word lean and they assume it's really complicated. So actually it's not. Okay, so what's a lean principle that you think a small business owner could apply immediately to kind of reduce waste?

Well, and I think you even alluded to it before, the, the biggest— so it's waste. It's just— so I know high efficiency, but it's really driving out waste from processes. Okay, so even knowing what your process is, and I would even say map it out I mean, this is the way we used to do this with some— you have a big sheet of paper or someplace to write it down and you get with your team. It's better to be as a team and say, okay, how do we— let's say, I don't know. So I'll use one of yours, performance management.

Yeah.

It's a process. It is. That's a process. So how do we do that? And usually it's circular and it can involve your compensation plan, all that stuff. So that's a whole process. Let's map it out and how can we do it? We better. It's good for training as well. That's from a lean standpoint, knowing what your processes and driving out waste or muda, they talk. I mean, it's just really, it's as simple as that. It's just really mapping out what are your processes and you have a bunch of them, but everything can probably go into it. Some are gonna be more important and impactful. So start with those.

Yeah. One thing that we have in our—

And involve your people.

We have an organization, we ask, why are we doing this?

Well, there you go.

Yeah. And I think that there's a lot of businesses and I think you've probably seen this, they're carrying processes, they're carrying meetings, they're carrying habits that they no longer serve where they are today.

That's exactly right. That's exactly right. So when you're mapping that out, usually you put, you're supposed to put, what do we do? And then you gotta have somebody maybe like you say, do we really do that? And well, no, actually it goes here and here and here. And then everyone stops for a second and goes, hmm, why do we do that? And that's where you start getting streamlined to, Well, then let's, what if we, instead of mapping this, what if we went straight here? Why are we just waiting for the, true. So that's how you, and it doesn't have to be earth-shattering or quantum steps. This is the, put 1%, just little bits. This'll go faster. And the other thing about lean is people, they're, and maybe this is human nature, looking for the big home run, which is great. This is the thousands of singles that you're gonna be making things better and keep doing them. Well, they won't amount to anything. So movement, having something at your disposal that you use every single time. And I'm always taking, you know, 5 minutes to go find it. It's only 5 minutes. Add up how many 5 minutes happen in a day and then in a year and all of a sudden, oh, we can save a headcount. I mean, that happens that way. Or I'm going and looking for whatever it is. So is there a way we can do that? 'Cause it's the constraint of 24 hours a day or the— That's a— And oh, I wish I had more time. You don't get more time.

No.

That's what you get.

Adding the capacity in.

And if you aren't producing something that somebody's willing to pay you for and going looking for tools, find a customer of yours that's willing to pay you for that.

Oh, nice.

No one's gonna pay you for that. Or that we have to make it again. I'm gonna put it in the manufacturing thing. So we went through the process and it was gone. Okay, we have to make it again. Those costs go somewhere.

Yes.

Oh, well, our customers will pay it. Really? Okay.

Maybe once, but they're really good.

No, they're not good for a long time. So that's where, yeah, lean makes sense. It's just driving it. But knowing your process, truly knowing your process, and then updating on some periodic basis, 'cause that could be, that serves as training. That serves, but you gotta get people involved when you kind of stand around and say, so somebody at some point is gonna say, so why do we do it that way? Wouldn't it be better if we didn't? Yeah. Oh, maybe it would. Well, maybe it would. So then you try it and say, okay, well, that's gonna save us something. Let's time it and see what it saves us.

Yeah.

And now you got commitment from somebody that's thinking about that and efficiency. So it's even better for the culture.

Absolutely. So let's pivot a little bit and talk a little bit more about, you know, value long-term thinking. 'Cause I know that a lot of what you do at Focus is you're helping people think about, you know, not just surviving the next quarter, we're thinking long-term. So what do you think, are some of those hidden business leaks that reduce the value of a business over time? If you were talking to a small business owner today, well, you are, you're talking to a bunch of small business owners today.

I am, exactly.

What are you gonna tell 'em to kind of shore up those leaks?

Well, the one that almost always surfaces is cash flow. So if you aren't in command of your cash flow, and everyone says, well, let me check my balance. I don't mean your cash balance in your bank.

Yes.

Which would be good that that's not empty, but I'm saying going forward, How do you know you have enough, particularly if they're growing?

Yeah, what's coming in?

And harder if you're a manufacturer or have high working capital. So there's a lot of cycling of money through this whole thing. If you don't have a command over how your cash flows, and usually there's a time between you sold it and spent the money, whether it was from inventory or not, on the stuff going out, and you ain't getting paid for this for a while. You hope in 30 days, maybe 45. If you're in the appliance industry, that's 180 days. So that's a tough— who's funding all of that stuff? Well, you are.

Yes.

And if you aren't careful with that, you're growing meteorically. This is how businesses go bankrupt. Or like, I was gonna say worse than that, probably worse than that. Let's say you miss a couple, you think you have workforce problems? Miss a couple payrolls.

Oh yeah. No, we don't get to do that.

You better not, because those people won't hang around.

No.

And that's a lot of stress on a business owner as well. So that's— that you got to take the longer view as well. And it's great to get the production out or keep up in manufacturing, but whatever the service, let's say it's great to be thinking about what are we doing here? You got to do like that. But you're the owner.

Yeah.

And you better be up here and say, okay, so where are we going? Whether it's with your personnel, "So such-and-such is a young-looking 69, but 69 actuarially is closer to jettisoning out than starting. So what are you doing about that? What are you thinking about that?" Or whatever. That's what I'm trying to put in the HR version. There's HR issues about this. Have a plan. And these aren't things that are just today, we'll do it by tomorrow. You better be thinking for the long term, how do you want to do this? And I could tie that into even getting transferable enterprise value, which is what the business should be focused on rather than, no, we're just focused on sales. No, sales are good, repeatable systems and processes are important. Profit's really good. But also, and are you— anyway, so be thinking about how do you grow transferable enterprise value and the things that will add to that. And you're right, one of them is your processes. Are you doing the same thing? That's also the gateway to scaling a business. You know, people say, "I'm $3 million in sales now, but boy, I wanna be $10 million." Excellent, okay, well, that's not gonna happen overnight. And if you just said, "All I need more is more sales," okay, you're probably gonna need something more than just sales.

A little bit more than just more sales.

Yeah, in fact, if you get, and we've had some of those, that they get the $10 million and they have the same processes like that.

Yeah, how do you provide service? How do you scale?

That's exactly right. So that's, It doesn't come naturally for, well, it does for some business owners, but mostly they're in it 'cause we make this and then we ship this stuff.

Absolutely.

Great. But you have an investible asset called a business. So how does that go? Anyway, is it just pulling your head out of the inn?

No, I like it. So Peter, thank you for your time today. Okay. Last question that we're gonna, we ask all of our guests that are here. It's if someone wants to get 1% better in their business today, What should they be doing? What's the one thing they can do?

Yeah, I would, I would. So we talked about this. I guess there's one thing.

One thing, 1% better.

Document your processes and find out who does it. Because here's the, your owner dependence or tribal knowledge or lacking any financial help, any of those things. But if you map out How we get things done, that'll become evident that I don't have a good handle on all these things if you process it. And that's the start of saying, so how do we do more of this and do it well?

Wonderful.

So that's what I would do. Yeah.

Peter, thank you for your time today.

You're welcome.

And I'll be back to wrap up.

All right.

Here's what I hope people take away from my conversation with Peter today, that great businesses are not built on guesswork. They're built on clear systems and they're built by leaders who are willing to look beneath the surface instead of reacting to the symptoms who are willing to invest in an expert, whether it's a full-time team member or a fractional expert to help them continue to grow. Peter's perspective is such a good reminder that healthy businesses require financial visibility, growth requires operational discipline, and long-term value is built intentionally, not accidentally. Because when leaders understand the real drivers behind their businesses, they make better decisions, create healthier companies, and build something that can truly last. Last. And if this episode has helped you think differently about financial leadership, I'd encourage you to share it. And like always, let's keep working on getting 1% better in our businesses every day.