107. 8 Business Lessons That Could Change Everything

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I just completed my 8th year in business and honestly, my 8th year was a completely wild ride over the last 12 months. I adopted a 10 year old boy, I bought a home. I hosted the world's first ever conference for fractional CFOs. I saw my second company hit seven figures. I lost $500,000 in recurring revenue one night. And then my team and I, we made it all back up again over the next 60 days. As you might imagine, I learned a ton about myself and about business through the course of all of that. In today's episode of the CFO Report, I'm going to share the eight biggest lessons that I learned in my eighth year in business. Now you're going to want to stick around until the end because number eight was hands down the biggest lesson that I learned this year. And it was the one that's made me the most money. Let's dive in. The first lesson that I learned this year is that business development, prospecting and sales, they just have to be baked into your daily operating system. Not your once in a while operating system, but your daily operating system. If you're somebody that's like me and you're not passionate about doing business development all the time, it's really easy to kind of just put it on the back burner, especially if you're not looking for clients right now. But as I've learned time and time again, getting the machine that is business development and prospecting up and running is a whole lot like the Titanic. It's a massive ship and so it takes a lot of time and effort and energy just to get it started back up and running again. The problem with that is if you lose one or two or maybe three clients for some reason, or you bring somebody onto your team now all of a sudden you're like, oh my go, where am I going to get that next one or two or three clients from? And so you've got to start the machine up again. And like I said, it just, it just takes too long. And what I've learned is, is when you're prospecting today, you're going to likely see the results of those prospecting efforts for 60 or 90 days in the future. And so it's one of those things like you've got to be kind of just doing the work every single day to make sure that you've got a full pipeline when the time comes that you need to get new clients. Now one of the things that I've said to myself and other people say that it's like Kind of pushback around that is, well, what do I. If I don't really need clients right now, what's the point of doing the business development? And what I've learned is, is like, yeah, you don't need the clients right now, so it's okay to refer them to somebody else. It's okay to say that, hey, I can't take you on right now, but let's go ahead and get started and we can start onboarding you in 15 days or 30 days, or it's also a great opportunity to just up your prices. So if you're not hungry for new clients right now, get on those sales calls and just up your prices. That's a great way to start increasing your average client revenue per month. But don't wait until you need CL to start prospecting, because again, it's going to take 30, 60, or 90 days before you see the results of that effort. Do something for prospecting and business development every single day. The second lesson that I learned this year was to not avoid difficult conversations. Don't put off the hard conversations, particularly those that center around expectations in scope of work. This is one of those things where it's awkward, it's uncomfortable, you don't really want to get into it, you're worried about how the other person might respond. And then what ends up happening is you start building up all of this resilience, resentment, in this animosity around the other person or the vendor. And for me, anyway, inevitably that starts to come to a head one day, and it kind of all just tends to boil over. And now you're upset, the other person's upset. And a lot of times, most of the time, even they're shocked. They're like, I had no idea that you were frustrated by this or that I wasn't delivering everything that I was supposed to do. I had no idea that I had pushed the boundaries of our scope of work too far. And so they're taken off guard. You're overly upset. Gosh, just for months, you've been in this relationship that's not going the way that you need it to go. And if you just said something earlier on, it wouldn't have been nearly the big deal, and it would just save so much time and frustration and heartache for everybody involved. So if you're sitting there right now and you know that there's an employee that. That isn't meeting expectations, if you know that there's a vendor that's kind of sending you their work a little bit too late, or if You've got the client that continues to push the boundaries on the scope of work, then I would encourage you to just have an open and honest but respectful conversation with them and just let them know where your head's at so that you don't get two, three, four, five, six months down the road and then end up blowing the whole thing out of the water. In a lot of ways, Quarter three of last year was maybe the most difficult time that I've had as an entrepreneur over the last eight years. A key member of our team left during quarter three, and along with them went about $500,000 in annual recurring revenue. This was a really, really scary time for me. And this is what leads into the third biggest lesson that I learned this year. When times get tough in business, simplify your focus. So, as you can imagine, having half a million dollars in recurring revenue walk out the door overnight is a very big deal, even for a company my size. And when I got to work the next day, I found that my mind was in a million different places, all these different things that need to be done. And I'm trying to get the team kind of rallied and going in the right direction so that we can, at the end of the day, like, we've got to make up some of that revenue pretty quick. We're kind of in this existential crisis. And as I'm sitting here thinking, like, what each person needs to do, what I realized is I didn't have clarity of focus on what needed to happen. And so I used that opportunity to just completely clear the deck. We took all the rocks and the priorities and the to do list, everything that we were working on. And I just cleared the deck, and I said, listen, everybody, for the next 90 days, I want you focused on two very simple things. Number one is loving on our existing clients to make sure that we don't lose any more. And number two, we need new clients in the door. We need to fill the top of the funnel, the middle of the funnel, the bottom of the funnel. And that's literally all we talked about for the next 60, 70, 80 days, taking care of our existing clients. And then what is each person doing to get new leads in the door and working those lead through the funnel. I was so amazed at how well the team rallied behind this very simplified yet very important focus that we had. And the outcome of that was that not only did we make up the $500,000 in revenue that we lost, but we actually made up more than that in just 62 days. And I know that that's because we have a great team. But I also know it's because I got our team laser focused on that one thing that was most important right now. So when times get tough, simplify your focus. The fourth lesson I learned this year was that if you're looking for big rewards, sometimes you've got to just take big actions. There's been several times in my professional career where I kind of just felt like I was stalled out. I had hit a glass ceiling. I wasn't really getting any additional traction towards the big goals that I had in place. And earlier last year was no exception. I wasn't getting the traction in the breakthrough from the CFO accelerator that I was looking for. And so my team and I decided to take a really big action. We decided to host the world's first conference for fractional CFOs. In coming out of that conference, gosh, our business absolutely exploded. We ended up, I think, 8x ing revenue last year. And we had a similar multiple on our net profits as well. And I know that the catalyst for that was the conference. Now, I'm not implying that if you're stuck in your firm or in your career that you need to go and host a conference, but I bet if you sat down, you recognize that there's some big action for you that you need to take in order to move forward. For a lot of us, that's the fact that we're running a firm, but we're also working at a full time job. We know inside that we're not going to be able to get the traction that we need in our new firm until we take the big action and quit the job and go full time in the firm. I don't know if that big action is for you, but if you are that kind of person that feels stuck right now, if you're not getting the traction, the momentum, you're not making the progress that you're looking for, ask yourself, is there some big action that I know that I should be taking that's holding me back? If that is, maybe now is the time for you to take that big action so you can get the big reward that you're looking for. Another lesson that I learned last year was that in order to reach the next level in our journey to mastery, we have to be willing to embrace the role of the beginner. What I mean by that is there's different stages in life and there's different stages in business. So in the context of life, if you think about it, you know, you're a toddler, and then you go to elementary school and middle school and high school and then college. Then you start your career at the beginning of each of those phases, you're the beginner again. You have to learn new skills and find your way and develop your identity and learn what it means to master each of those phases. And then about the time you reach mastery at that phase, you're moving on to the next stage. And then you're a beginner again. And the same thing is true in business. You start off as a solopreneur. You're doing your own thing, and you kind of figure out how things work. And maybe you get to this point that you're doing 200 or $300,000 in revenue, but now you're ready to move past that into the next stage. And so what that requires is you hiring a team and putting processes and procedures and systems in place in order to get the clients you need. You have to learn how to do different types of prospecting. And for you to move from each of those stages to the next, you have to become the beginner again. You have to be willing to say, I don't know how to manage a team today. I don't know how to prospect effectively other ways. I don't know how to build a business that's a million dollars in revenue, or 2 million or 5 or $10 million in revenue. And so a lot of us, when we realize that we don't know all the things that we need to do and we realize that we're going to suck at the thing, we stop. And so our progress stalls, our journey stalls. We don't make any more progress. And it's all due to this fear of not wanting to become the beginner again. We decide that we don't want to do the work that it's going to take to move from beginner to master at the next stage. And so if you're somebody that's. That's dedicated to scaling your impact and you're firm and doing bigger things in life. If you're somebody that has a growth mindset and you're like, I want to grow and do more and learn more things, then you just have to be willing to embrace that role of the beginner. Be willing to know that you're going to suck at the thing that you're trying to do, and that's expected, that's okay. We know that it's coming. That's part of the journey. If you're stuck right now and you're not really sure why Just ask yourself, are you putting off embracing that role of the beginner? Are you scared of sucking at the new thing that you're getting ready to try? If so, be okay with that. You're gonna suck. It won't last long. You'll figure it out. The sixth lesson that I learned last year, again, is that, yep, things are gonna go wrong. And it's completely expected as fractional CFOs. When we sit back and we look at our clients and we're working with our clients, yeah, we see these things go wrong and we have this unemotional detachment from the situation and we're telling them, hey, everything's gonna be okay. These things happen. That's why we have cash reserves. That's why we've done this and that. We put all these things in place because we knew things would go wrong and, and it was completely expected and we guide them through that. Yet when it comes to our own firms, when it comes to our own businesses, we have a hard time making that emotional detachment. And what ends up happening is we get inside of our heads, we start telling ourselves these stories about how much we suck, how much we don't belong. We have all this self doubt and imposter syndrome. And it can really be this very unhealthy kind of spiraling out of control thing that really slows us down or stops us dead in our tracks. And so if you're in that season right now where things are just going wrong and you find yourself saying like, hey man, you are an idiot. How in the world did you miss this? Are you cut out for this? Do you belong in the seat? Maybe you should go back to work for the Big four firm or working for somebody else. I would just say, listen, you knew it was coming. It was on the forecast, it was on the projection. Bad seasons, those are seasons, like every other one. Stay in the game, keep going, you're right where you belong. 7th Big lesson this year, not a sexy one, but I can tell you it's a really important, important one, especially if you want to scale a team and that's defining your values and applying your values creates culture in your business. That culture is so important because it's going to do a couple of really important things. Number one, it's going to attract the right people to your team, to your client roster. People are going to see that, they're going to want to be part of it, and then more importantly, it's going to repel the wrong people. There are going to be people that see the values that are important to you and that you live. And they're going to say, that's not for me. That's not the game I want to play. And. And that's not just, okay, that's a great thing. You want to attract the right people and you want to repel the wrong people. For me, I wasn't really talking as much about my values before, and so it was limiting the value that I could get from having values. That was unintentional. But I think you get my point. Last year, we really leaned into talking a lot about our values internally and externally and kind of how we live them and the things that are important to us. And what we saw as a result was people just proactively reaching out to us and saying, oh, my gosh, I love what you're building over there. I want to be part of that. Oh, my gosh, that thing you were talking about the other day about extreme ownership or about gratitude. Those things are really important to me, too. And in fact, I've been completely miserable in the job that I've had for the last year. And I realized today it's because the place that I work doesn't have those values that you have and that I have. I don't even know if there's an opportunity, but could I join your team? Is there a seat on the bus for me? I was blown away and humbled by how many people reached out to us last year interested in joining our team just because of the values alignment. So if you're thinking about building a team, or if you already have a team and you want to be really deliberate about your culture, I would say make sure you've got your values defined and make sure that you're talking about those values internally and externally. It's going to do so much for building a culture and attracting amazing talent. The biggest lesson that I learned last year is that all things have necessary endings. When we think about it in the context of life, you know, a seed is planted and watered, and then a flower comes out, and then it blossoms and it looks great, and then not too long later, at the end of the season, the flower wilts and it dies. In the whole cycle of life happens. And that's true in nature, but it's also true in relationships. And honestly, business relationships are no exception. It's just part of the normal evolution of things. What I realized last year that I was doing is I was trying to force relationships that were coming to an obvious and necessary ending. I was trying to force them onward. I was trying to figure out how I could continue in those relationships, even though all the signs were there that the season was over and that it was time to move on. And I realized that I kind of caught myself thinking that I had failed somehow as a leader or as a business person. And one of my mentors kind of pushed me in the right direction and said, no, it's not that you failed. It's just part of life that's part of the cycle. What you need to do is just embrace the fact that there is a necessary ending here and let it go. Move on from that relationship with dignity and with respect and with gratitude and just recognize that it's a sign and it's just part of life. And so if you're in one of those seasons where you recognize that some sort of a relationship in your life is coming to a necessary ending, don't fight it. Maybe journal on it a little bit. Talk to a mentor, talk to your spouse and have somebody that's not as emotionally invested in that situation as you and just ask them, does this feel like a necessary ending? Is it time for me to just move on from this? And then don't let your ego get caught up in that decision like I did and continue to try to fight it and keep something alive that's clearly no longer there. It's just not healthy. If you want to know more about necessary endings, Dr. Henry Cloud has an amazing book called Necessary Endings that I would recommend that you check out. We'll include a link to that book in the description below. Like I said, my eighth year in business was an absolutely wild ride. We've been able to provide fractional CFO services for small businesses for the last eight years now, and we've had the blessing to work, work with hundreds of business owners now, and it's been amazing. All right, my friends, I hope you found this episode helpful. If you did, it would mean the world to me if you would leave a five star review on Apple Podcasts, Google Podcasts, Spotify, wherever you're listening to this episode. In the meantime, I can't wait to see you back right here next week. I'll see you then.