36. How To Build a Strategy for Your CFO Firm (Part 1 of 3)

Hey there, My name is Michael King. Welcome back to the Connected Accountant where I talk about starting, scaling, and optimizing fractional CFO services. Now, if you are anything like me, you want to be a strategic CEO. You want to make sure that you're working on the things that are going to maximize your chances of hitting those big goals that you had when you started your firm in the first place. The problem is, setting strategy is hard. I mean, nobody really talks about the process that you go through to set a strategy for your firm. They're just like, you need to be strategic, go do strategic things. And what that results in is you set a bad strategy, or like me, you don't have any strategy at all. And I can tell you that when you have a bad strategy or no strategy, the consequences can be catastrophic. For me, that meant resentment, it meant burnout, it meant deteriorated health, and it meant that a lot of really important relationships to me took a big hit. Over the last several years, I've been able to figure out the specific steps that I need to take to set a strategy for my firm. That's why I'm so excited to kick off this three part series where I'm going to talk about all things CFO firm strategies. In this three part series, I'm going to talk about everything from determining the services that I offer, to setting prices, to figuring out how many clients I can handle, how many clients I want to handle. I'm going to talk about how I set specific strategic goals for my firm and also how I walk through the process of determining which tasks I should be focused on right now so that I can make sure I'm working on the right things at the right time. I want to encourage you to take out a pen and paper while you listen to this and take notes, because I'm going to drop a ton of useful information on you that's going to serve you for years to come. As the other two episodes in this series drop, I'll be sure to include a link to them in the description below. Now let's go ahead and dive into all things CFO strategies foreign.

The first step that I take when thinking about strategic objectives for my business actually has nothing to do with business whatsoever. The first thing that I consider my personal goals and my personal priorities. Now that might seem a little bit counterintuitive and a lot of people ask me why I do that, but what I found is that if I start by setting a lot of goals and priorities and tasks for my business, putting all these things in place Building my calendar around it. What ends up happening is those things that are important to me personally, personally end up taking second seat to those business goals. And that's where a lot of those problems that I mentioned earlier with the resentment and the burnout, the health problems and the relationship problems start to fall in. I didn't prioritize those things. And so what ends up happening is I end up feeling like I'm working for my business rather than my business working for me. The good news is, is that I found that when I put my personal goals and priorities in place first, I have those defined on paper, and then I sit down and start to go through the things that I'm going to cover in steps two and three. When I do those things, the business thinks I end up having a business that I feel like works for me. And it's been a complete game changer. So when I think about personal goals and personal priorities, I actually think about those in four separate buckets. The first bucket that I think about is income. Now, income sounds pretty intuitive at first. It sounds like common sense. But as we all know, common sense isn't always common practice. But I actually think there's a little bit more to consider than just how much money do you want to bring home? How much net profit do you want to have out of the business? Here's where it comes into play. For years in my business, I was actually generating a pretty healthy amount of profit. But because I was so bought into the idea of growing my business, I would constantly spend more and more money growing the business and taking less and less money home. And what that can result in is a lot of resentment from your partner. They see you working all these hours. They see you putting so much effort into the business. They see you putting so much risk by being an entrepreneur instead of working at the corporate 9 to 5. But they don't see money coming home. And so over time, they can start to resent the fact that they're not seeing you, that there's all of this risk. You know, there's. It's like, what's the payout? What's the reward here? Why are we doing all this? You're not actually bringing any money home. So I think it's really important to think about how much money do I need to bring home? Because that starts to inform how much money you can afford to reinvest into the business. How much can you pour into marketing or hiring team? I think it's really important to have that conversation whether you have a partner or a Spouse, or maybe it's just you, but really think, how much money do I need to bring home? Because I can tell you firsthand, even if you're kind of by yourself, you're not married, or you don't have a partner, if you go long enough without bringing any money home, or you're just scraping by, maybe you've heard the term entrepreneurial poverty. You will start to burn out and resent the business and you'll eventually end up just giving up. So I want to encourage you set those income goals. How much money do you need to pay the rent, but to also feel like it's worth your while. The second type of personal priority that you might want to consider are your lifestyle goals and your lifestyle priorities. And when I think about lifestyle goals and lifestyle priorities, the things that I think you should consider are, what kind of hours do you want to work? Do you want to work? You know, 8 to 5, do you want to work? 9 to 6, do you want to work, work, 1pm to 3pm it's really important to know what those hours are. Another thing to consider is like days of the week, what days do you want to work? I know a lot of people in the summers, they want to work maybe like Monday through Thursday. Some people want to work weekends because of their spouse's schedule. Other people want to work, you know, five days a week, Monday to Friday, nine to five, whatever that is for you. I want you to consider that, like, what are those hours you want to work? What days of the week do you want to work? Do you want to have the ability to come and go? For me, I love to be able to work out in the mornings. I like to be able to go do self care. I like to be able to run to the store, you know, anytime Apple drops a new product, I like to be able to go and pick those things up. So having that ability to kind of come and go is really important to me. Another lifestyle consideration might be travel. If you're the type of person that's kind of like me and my wife, we love to be able to travel all over the United States, if not all over the world. And so it's really important that I build my business around the fact that I might be in multiple different time zones at any given time. So I think it's really important to consider what are those lifestyle goals, those lifestyle priorities that you have, and build your firm around it. The third bucket that I consider are what are those family goals and those family priorities that are important to me? You know, When I grew up, we always had dinner as a family every evening. I think it was at like 5:30. For me. It's really important. Like as many of you know, I'm getting ready to adopt. I want to be able to go to soccer games and soccer practices. I want to do PTA stuff. You might have aging parents that you want to be able to care for. So I think it's really important to like, be intentional and think about from a focus family perspective, what are your goals and what are your priorities? Because again, if you're not intentional about structuring your business so that you can do those things, then you're going to end up in a spot where your business isn't allowing you to do those things. And again, that resentment, that burnout, the relationship consequences, those will come to bear. So be really intentional about thinking about those family goals. The fourth type of personal goal I think is completely underrated. And honestly, I don't hear enough people talking about this as a personal goal. So I'm really excited to bring it up to you today in case you haven't thought about it. But that fourth type of personal, those are like community goals. What is important to you to be able to do in your community? You might know that I absolutely love donating, not just money, but more importantly my time to my community. I love to get out in the community and I love to teach about business and entrepreneurship and those kinds of things. I also love to volunteer. My wife and I volunteer together all the time. We absolutely love that. We also like to go to church once a week. We like to be part of our community group. So doing those things in the community is really important. A few years ago, I had a CFO client that really modeled the way for me when it comes to community goals. Every single month. He was absolutely dedicated to donating $10,000 in cash from his business to his church. His church was building a new wing, and his goal was to donate $120,000 a year for two years towards his church. Every single decision that came up in his business, the first question he asked himself is, does this impact my ability to donate $10,000 in cash to my church this month? And if the answer was yes, then he said no to whatever that thing was, because that was his top priority for his business was being able to donate that $10,000. So I think it's really important that if community is important to you, make sure you write down those goals and those priorities that you have around your community so that you can make sure that you build your business intentionally and build your business in a way that's going to allow you to realize those community goals that you have now. One final note that I'm going to leave you with. When it comes to goal setting those personal goals that you have in your business, if you have a partner or if you have a spouse, I want encourage you to sit down and talk about each of these four buckets or each of these four types of goals or priorities. Because a lot of times we tend to as entrepreneurs do these things in a silo. Like we'll sit at our desk, you know, get out our journal and write down what are my income goals, what are my lifestyle goals or family goals or community goals. And we lay out these great plans, but we don't include our spouse or our partner in those conversations. And that can result in them feeling kind of left out or isolated or not part of the process. And again, that's where a lot of that resentment comes in. I can tell you that when you have the support of your partner or your spouse, it can be a complete game changer in the success of your business. So you definitely want to make sure that you're including your spouse or your partner in those conversations. If you don't have a spouse or a partner, then I would encourage you to find a friend or somebody that can be an accountability partner for you to help you think through these goals and maybe identify some blind spots in your reasoning or in your thought process. Alright, that's it for step one of setting CFO strategies. Next week we're going to get out our calculators and we're going to get into some hard number crunching. It's going to be absolutely amazing. So you're definitely going to want to check out step two in the process right here next week. Can't wait to see you then.