The 7-Figure Fractional CFO Firm Owner Masterclass

I recently spent eight hours interviewing seven figure fractional CFOs that have been in the industry for decades. I spent that time asking them the mistakes that they've made, the tricks that they've uncovered and the lessons that they've learned in the pursuit of scaling their firms. But here's the thing. I know you don't have decades to figure all this out, so I've brought their combined experience together in this video and I've distilled it down into the 58 most important minutes that you can spend today in the pursuit of scaling your own seven figure firm. What did they have to say? Let's find out.

For Prosper cfo your firm, why do you think it's so hard in your experience to get consistent quality leads compared to other industries that are out there?

Sure, I think a number of things. So for any sort of fractional CFO business, let's say for us for example, is the target audience. We're industry agnostic and so we haven't picked a niche yet. A lot of people would say some stuff about that, but.

For sure.

But yeah, I think because of that you're working through what is qualified and what is not qualified and then you get somebody might send you a lead and you're like, well this person's certainly not qualified at this time. Maybe one day they hope to become one, but they're not. And it just depends on what rooms you're getting in and what kind of people who are able to send you leads that are going to be, you know, the right fit for your company or the right timing. And so I would say that making sure that the good qualified leads are coming in is, is certainly the biggest challenge that we've had.

But compared to other industries though, what do you think is unique about fractional CFOs because in a kind of a unscientific survey that, that we did recently, it, it was like 70 something percent high. 70% that was their number one challenge was getting qualified leads as an industry.

Why do you think it's so hard as an industry? I don't know. I really don't. I wish that for us, I think so much of if you're a fractional cfo, you're really good in industry, you're really good with your personal experience, you might be struggling on the marketing side so you might be self sabotaging and say well maybe I'm not fit for that one. Or maybe pushing certain people away that could be certainly one another I think is just a challenging in the Low millions.

Challenging.

For example, I think it's a challenging space to be selling these high ticket items at times because you're dealing with some people who have really solid growth mindsets. I'm talking about owners and prospects having really solid growth mindsets and being willing to invest that or seeing the value in it and desiring it. While other times you might be dealing with leads that are really looking to, you know, that $4,000, $5,000 ticket a month, it feels so big to them still. And so, and I understand that when you are, you know, just a 2, 3, 4 million, how that can seem that way. But it's always about encouraging them to, hey, this is the investment. And we know on the other side of this, like for us, for example, we target a 4 to 4 to 10 ROI on our investment through a number of different, you know, cash flow and tax savings. So it's always trying to remind them. But as far as industry, you know, as an industry, CFOs, as a whole, yeah, I wish I could speak to more of it, but I really don't know. I could only speak to so much of what we've experienced.

What have you done? I mean, you, you, you have a little bit of a unique background, and we'll get into that in a minute. But you, you have a academic background in marketing.

I do, yeah.

What are you doing as a partner in a firm to level up your, your marketing and prospecting skills? What, what have you done that's given you a positive ROI so far?

Yeah. It was funny at the conference when I saw the tagline begin or be the beginner again, right? Like, I kind of chuckled. I was like, oh, that's an interesting tagline. By day, you know, once I see Jeb come up on the stage and he struggles with the same type of thing, and, and then he had to force himself out, even though he was a, you know, I can't recall whether it's Fortune 200 or 100 or whatever, but a big deal in terms of his sales success and what he's accomplished in his career. But to then put yourself back into, okay, I need to be okay with being the absolute beginner. I'm not looking for the hack. I'm not looking for the.

Thing that's gonna cut the corners or do this and that. I just need to get back to being the beginner, and I need to just go back to being at the chamber events, go to the rotary, call up people who, you know, are really massive connectors and just ask them, you know, one how can I help you? And two, who do you need to be connected with? And so I try to put that back into the, you know, to where I am. I am trying to be a connector myself and putting that, you know, law of reciprocity out there in the world. Not with any agenda, but just also knowing that, that people typically want to give back to those who have given so much to them. So yeah, just calling on those contacts and being willing to show up to the next event because you just never know. Firm believer of, you know, you're one conversation away from the life you want to live or you're one podcast away from that, or you're one, you know, stage appearance away from that. And, and so you never know. So just show up and just see what happens.

Tactically speaking, what have you found in your firm that works as far as getting qualified leads in the door? So if there's somebody that's like, gosh, I'd love to be at that seven figure run rate, what advice would you give to them about what works? Yeah, lead generation perspective.

Yeah. I think some of our biggest ROIs have come from networking groups, specifically ones that you pay for where you're going to. It's going to naturally weed out some of the lower end, less qualified where you might have some of that at Chamber events. However, it's a different game when you are in Vistage or EO or some of these other networking groups where you're going to pay a good bit because you're getting people who are really serious about their business and wanting to grow and so, you know, making connections there has been. Has really been instrumental to the growth of our company.

What do you say though? You're at the. The Chamber event or the BNI or whatever. What do you say? Because I know there's a lot of people that the thoughts daunting to them because they can't get past that first question. What do I even say? How do you approach initiating a conversation?

I am often thinking of the quote that says I don't know who did it, but I think I've heard you say it as well. But be interested instead of interesting. And always just going in with how can I learn more about this person? And that's a tenet of I believe it's highly. The 7 Habits of Highly effective people or no how to win friends and influence people I think is what that is. And so always making sure that, you know, people love to talk about themselves. So it's like I think psychology. Their brain is going haywire. It's going wild whenever they're talking about themselves. And so just be interested in what you know, who they are and don't go with your sales pitch. Don't go with, you know, how you, you're going in with like a self motivation of how, what can I gain from them? But really go in just being really interested in who they are, what's their background, how do they serve their clients. And people will ask in return. They desire. It is natural for them to, after they've talked about themselves for a time, to ask, hey, what do you do? And I found that the, you know, the longer you wait, the bigger the ask later on. So don't try to go in for the kill, you know, but if you found that they are, you know, somebody that you know could benefit in a mutual relationship, you know, of whether sharing clients or referrals or what have you, you could then ask them at the end, well, let me get your phone number. I don't, I'm not, I'm not into business cards. I think you're not either. But let's go ahead and let me get your phone number so that I retain control of the relationship here and let me reach out so that we can set a time, get it on the calendar to go get coffee or go grab a bite to eat or whatever and just see how we can, how we might be able to work together. I find that that's been really, really helpful.

I think to do that at scale, or at least the scale that we're at right now, it takes a lot of activity week in and week out, and I think maybe more activity than somebody newer might give it credit for.

Yes.

In a given week, how many relationship conversations would you say you target to have between following up on text messages or phone calls or zooms or coffees or lunches, do you have a target roughly that you look at to say, like, I know I need to do this much in order to get this many leads over time?

I wish it's, I don't know that we've had enough. We have small, smaller sample size than I would pre to really understand my metrics at that level. I'll say we're trying. We're on eos and our EOS scorecard right now is a hot mess. I find that that has been.

One of the harder things is because it is constantly changing. And each week we are talking about, well, what's the right thing? Is it business development, conversations? Is it LinkedIn? Is it LinkedIn connection request? Is it, you know, I You know, called these. This amount of people each week, you know, so it's something that's constantly changing for us, but I think we're getting more and more dialed in. I would say, like, this past week was a good example of a week that I was. I was proud of. And I think that it. That yielded about. It was like 10 or 12, like actual solid conversations that some were, you know, prospects like, or actual leads. Others were, you know, people that I'm just trying to connect with and just trying to meet a whole lot of people. And so I've got targets where I'd like to do at least one, if not two. If I could get to two, I'd be really happy with that. But at least one networking event a week and then doing probably about 10 really solid conversations with people.

How did you get started in this world? How did you even have the idea to start a CFO firm? And how did you get here?

Yeah, myself an accidental cfo.

I don't know if anyone really branches out to be a fractional cfo, but ever since I was very young, I always just was attracted to understanding money, how money works. I was the kid in middle school that my parents drove me to Barnes and Noble and books a million, and I was in the personal finance section reading, like Suze Orman and Dave Ramsey and not the teen love storybook. So I always knew I wanted to do something in the financial services world. I wanted to advise people, talk to people about making money. And so I went down this path of desiring to be a financial planner. That was always the dream was to be a financial planner. And I built my career. I went to school for it. I worked in banking and wholesaling and financial planning and was studying to get my cfp. And then I was at a big insurance company when the pandemic hit. And I had a choice at that point in time, do I want to take my severance because we got laid off? So do I want to take the severance and then go work for another insurance company or go into planning full time, or do I want to try to branch out on my own and see what happens with helping support business owners? Because I was doing that as a side hustle while I was working in insurance. And as things continued to progress, I decided to go the route of continue to help my business owners and do planning on the side. I did that for probably the first maybe six to nine months. I was a planner for a fintech company and I was running this business on the side, and I Realized I really loved working with my business owners and talking to them about their cash flow and helping them get from point A to point B. And how can we think about the growth of your business? A lot more than I enjoyed talking about the nitty gritty details of, you know, investments and insurance and all of those things in the planning world. So kind of came to this crossroads of putting down this dream that I had for 20 plus years of being a financial planner and recognizing that that skill set transferred very well over to what we call a fractional CFO role, being strategic about how we grow businesses. And so that's how I kind of landed in this world was that transfer from I love helping people think about managing money and how to grow their money and not doing it for on the personal side, but helping business owners to be able to do it.

It's hard to let go the direction that we feel like we've had since, you know, a certain age and we go to school for it. When you were thinking about switching into the fractional CFO world in, what was it, 20, 19, 2020, around the time of the pandemic, did you have anybody around you either on the good side or the bad side, like, yes, go for it, do the fractional CFO thing. Did you have people telling you it was a horrible idea and to stay the course and to stay in insurance or CFP world?

That's a great question. So at the fintech company, I was at my, like the head of financial planning. She and I built a really great relationship and she knew all about, you know, me running the business as well. And she told me, she's like, I think you, you can really do well in that world. Like your personality suits, said how you think about money and growing money really suits you in that world. And I was very conflicted because like you said, this has been the dream for a very long time to be a planner. I spent thousands of dollars on CFP prep. I was halfway through a couple more classes to take and then I was going to be sitting for my exam. I was in a study group, right. So there was a lot of preparation to continue to plow down the stage CFP route. But I think her encouragement, because she could see my work and she could see where my passion was, was very helpful. And then, you know, I have amazing parents who told me like, we know this is what you wanted to do, but if you want to try out being, you know, a fractional cfo. And I didn't know that was the name of it at the time at an accountant friend who I was telling them what I was doing, he said, you know, that's like CFO work. Oh, okay. His input and my parents kind of support and just my, what I call my personal board of directors, their support was just like, try it. If you fail at it, you've got your licenses, you can go back and finish your classes for the cfp. I'm licensed as a planner. I'm just not a practicing planner. So I can go get a planning job. So it's like, what do you have to lose?

You know, one of the things that you said, Ashley, that really stuck out to me is you learned that you have to reframe how you take, tell the story. What does that mean?

So I'm gonna give you an example because I just got a slack message yesterday from a client who is running a successful business, but also has a full time job. And I got just like, you're not gonna like this, but I quit my job this morning. And I'm like, okay, all right. That was not a great idea in my mind. I have a meeting with her in two weeks. This is going to change everything, right? As you know, because she's going to have to pull more money out of the business and all of this stuff. So I had to stop myself because I know she values and she's very passionate about her business. So I'm having to think through when I had my meeting with her, okay, here are some truths, some hard truths that you have to be faced with now because you made this decision that you just woke up and decided to quit your job. But also is the CFO is her thinking partner, right? How do we brainstorm? How do we come up with ways in which we can close this gap that you're now going to have so you can still keep the lights on, right? So we gotta have some hard truths and have some conversation around that. But also we need to look at the numbers and make very data driven decisions based off of your numbers now to see what we're gonna do in the future. Because you can't go back and get your job, right? So if I come into that conversation and I am putting, putting on my values and my disappointment and saying, you shouldn't have quit your job and why did you do that and why didn't you tell me, right? She's going to shut down. It's not going to be a very productive conversation. I'm thinking through right now. What is the outcome of that meeting? What do I want to know for sure as Far as the plan, when we come out of that meeting. And so that's what I'll spend my time prepping for and figuring out how to build a financial story to help her. See, this is a consequence of your.

Decision, like, literally, I'm, like, writing notes as you're saying all this because there's so much good information in there. Can we drill in on a couple of these things? I'm really interested to hear your thoughts. The first thing that you said that really stuck out Ashley is you had to confront her with these hard truths. And I know for a lot of times, people in our industry, this was hard for me for a lot of years. It's awkward to bring the hard truths in front of our clients. And so I'm wondering, like, how did you kind of get the courage to confront her with it rather than just being like, yeah, you could job, let's all celebrate. How did you, like, kind of dig down? Was that hard for you? Or is that just something that comes natural based on your personality?

No, I'm very conflict avoidant.

I can be very straightforward and assertive, but for whatever reason, when it comes to conflict, you know, because I want people to like me. And I think it's a skill set that I'm building up. And I will say, I think working with you in particular has helped me to build that muscle of they are paying me for my perspective. They're paying me for my executive leadership. You talk about that a lot. My executive leadership. And sometimes that leadership is me putting aside my fear or anxiety or whatever and just telling them what they need to hear and not telling them what they want to hear.

To me, in my journey, that's why we get paid. That's what separates the thousand dollar or $2,000 a month CFO from the ones that can charge 8, 9, $10,000 a month is because they trust that you're going to be that person that challenges them. And I love what you said, like, conflict avoidant.

Right.

It feels icky. It feels awkward. Like, it stresses me. I don't want to get on the call, but recognizing, like, I'm here for service and service calls for me to just have that hard conversation. I love that approach. Another thing that you said that I think is really important is you said that you kind of leaned in as a thinking partner. Right. So she's this client is in this situation where cash flows are changing from the business because she's got to keep the lights on in her life. And so that introduces challenges.

Yes.

And what I heard you say is you became a thinking partner with, with her and you took like this data driven approach to figuring it out. Where I see a lot of people kind of going sideways there is they take the burden on themselves as the CFO to figure out, I have to figure out how she's going to keep the lights on. But you said, no, I became a thinking partner with her. What is that about?

I think because I have taken on that burden before, that I recognize that I'm making it more about me in that instance and less about, about the client. So being intentional about setting the meeting up and sending the agenda. A lot of things that I've learned from being in the mastermind is, you know, sending the agenda, setting the expectation. We're going to have a brainstorming session to talk through, you know, what things need to look like in the next six, 12, 18 months. Right. Because you've had some major shifts in the business. And so setting that expectation ahead of time, setting it again in the meeting and then setting, setting the time aside for us to have the conversation. I'm asking questions, giving her space to answer, giving her some homework afterwards, like we need, okay, these are your next steps. You need to think through X, Y, Z. And then we're going to circle back in and follow up on that in our next strategy meeting.

I think that it's not just a big four thing. I think that just the traditional business model, even still today, you see a lot of that. Before I got into this industry, I worked in manufacturing and it was the same thing. You finish your job up, but the, your boss is still there and it's a bad look when it comes time for performance reviews. I haven't seen you around. When I get to work, I expect everyone to be here before me. And when I leave, I expect everybody to still be here. And I just think that business model is dying and the companies that don't embrace that change, I think we're gonna, they're gonna see that they have an exodus of talent and it's gonna ultimately end up killing them. But when, when you, you, when you and I started working together. So I, I guess I should have prefaced with this. So you, you went through CFO masterminds. You're the first one in. First graduate after 12 months. And let me say, you awesome job, by the way. Like your, yeah, your growth over that year was tremendous. But when we first started working together, you weren't full time in financial. You still had one foot in the do, one foot in the door. It financial why did you start that way?

So, because, because of a mortgage, as I told you in the, in your questions before. So I like, you can't. So I'm very, I'm not risk averse, but I'm, I measured risk. So I'm like, okay, I know I want to do this thing. I need to prove it works. I need to prove that it works. I need to prove that it's worthwhile for me to make this jump out of a secure, steady cash flow. Because by the time I was talk about having my own practice, I was making a good amount of money as an associate director in a Fortune 50 company. And I had a team of nine people. So I was like, you know that as you elevate in your career, it becomes harder to let that go because you're used to a lifestyle, you're used to income, you're used to having that cash flow. And then when that gets cut off, it hurts because you're like, oh my God. I used to get this instant feedback, this instant reward for the job I was doing, and now it's not guaranteed. And my husband was also a business owner, so he was supposed to be like the risky income. I was supposed to be the steady income. And because he was having health issues and other things going on, I felt like I can't jump off a cliff basically.

And wait, it wasn't going to work that way. We needed that steady income in order to build our lives together so I could leave. And what that looked like for me was staying in that job. And I called it the 7 to 10. I would do 7am to 10am and then 7pm to 10pm financial. And then during the day, whenever I had pockets of time when I wasn't in meetings, but I found myself sitting here at my desk and I was toggling between two laptops. Every half an hour was like I was in a different business. My brain was completely fried. And I. It wasn't a lack of time management, it was just a. This is. The demands that I have right now is I have to do this first and then I can build financial on the side. And I've been building it for, you know, before we worked together, I was building it for two years and it had just gotten to the point where I knew I hit a breaking point where we're going to hit tax season. And I said, I cannot do both. I am burning out. I am completely toasted. I need to make a call here. I either shut down financial or I have to leave my job. Like I hit that ultimatum and I had to talk to my husband about that.

So time management and energy management or energy awareness are really important. Uh, did you, did you have any.

Other, any other kind of mindset related.

Things that you've learned since you've gone full time?

Yeah, it was, it was definitely, I mean like if you think about mindset and breakthroughs, it was confidence around what I offered and the fact that I could show up and command the price that I wanted. And I think that it was funny because I felt a limitation because I was only working those, you know, X hours a day because I had the full time job. Once I went all in, I realized I have all this energy to pour into my clients and that is worth more. So I was, I talked about this with you that I feel like I can't charge that price because I'm only working X hours a day and I don't want to disappoint these people if I can't get it all done if I'm going to add pressure to myself by charging a price and setting expectations too high. So once I went all in, that excuse was gone. So whether it was an excuse, a story, whatever, it was gone at that point and I no longer could, could use it as a crutch. So now it was a matter of, oh, now I really have to unpack what my service is worth in the eyes of my client and not based on my effort, which was a huge paradigm shift I had to go through.

Any tips for people that are struggling with that? Because honestly, I would say that's in one of the top two or three issues that I see holding back growth for. I mean, there's over 100 people in the connected account now and I would say the vast majority struggle with that. I actually just had a conversation in the DMs this morning with somebody who was telling you, we were talking about pricing and he said, as I think about moving my pricing up, I, I've.

Got to figure out what more I.

Can add because I've got to make sure that it's worth it for them.

Yes, I did everything to the T. The way that you, to the extent possible, I would do everything the way that you prescribed it. But then I would go like, that feels weird. That doesn't feel like. That didn't feel like me. You know, like you start picking out the points where you're like, this is uncomfortable. I don't like this. And it doesn't mean that your framework doesn't work. It just means that, oh, this is Something where I need to do it my way. And I figured that out, but I had to start with. Excuse me. I had to start with something. And that's what. That's what the mastermind does, though, is it gives you. Here's your starting point. That worked for us. Do what you will with this. And I. But I think you have. But you have to be willing to take that and go try it before you. Before you knock it and say, that won't work for me.

And that's where a lot of people.

I've done this before in programs I was in, you know, like, oh, this doesn't work for me. And then I scrap it and I'm on looking for the next magic pill. And it's really not about that. It's like, okay, what. What can I.

Let me.

Let me do it. Let me critically think about it. What worked, what didn't, and then how do I change it? So we've never talked about this before. This is, like, super exciting to hear that that's kind of how you work through it.

If you could leave one piece of advice for that. That person that's listening to this episode, they want to be where fit Nancy is today. Maybe they're just. They're not.

They're just getting started, right?

They're maybe not even to their first hundred or two hundred thousand dollars yet. What would your advice be or your biggest lesson learned in your journey be? That's very actionable for them.

I would go back to the point you made before. This was the biggest breakthrough for me was, you don't have to do more to charge more. That was like my biggest thing. And I think that that is the. That is what holds so many people back that were coming into our program because we were all kind of on the same page going, how do I. You wrote the number. You were like, $3,000 a month. What would it take for you to charge that? And I was frozen. And I said, I don't know what else I could possibly do. And I also realized, and it's going to sound funny, but I also realized I was doing more than you were doing by. By. In terms of a list of features, right. I had more features than kfc and I was less than half the price. So I was like, doing more isn't the answer. And that was kind of. That, like, shook me up because I was like, okay, if I'm not going to do more for the client, like, what else can I do? We misdirect the do more as value. And I just Actually posted this the other night because I was thinking about this, that more value is not more features, more value is more results. So when you turn to your client and figure out, believe it or not, all it was was this was the biggest breakthrough I went through with my clients and said, name three goals you have for your business. And then every month when I go through their financials, I look at their goals first and I reframe and say, okay, like, this client wants to spend more time with their daughters. Are we getting closer toward that goal or away from it?

What's the name of your firm and how long have you been in business?

Sure.

My company is called Pivot Business Group, and we've been in business for over seven years now, so we're rocking.

Oh, seven years. That's. We just hit seven years back in March, so we're been a journey, I'm sure. So before you started Pivot, how did, like, what was your background? Like, what was. What was, like your origin story?

So the short version is, thought I was going into the nonprofit world, and then I was a budget cut. So I learned, oh, geez, money's important. So I went out into the commercial world and actually worked in the construction industry for a long time. But unfortunately, the company that I worked for had to file bankruptcy because they stopped filing watching their numbers. The owner was not fully engaged in the company, and the people that was running it just basically ran into the ground. So we had to file bankruptcy. And so I ran, you know, ran through that whole process with the lawyers and the banks, and it was a nightmare. And I decided I was never going to let another business owner have to file bankruptcy because they didn't pay attention to their numbers. So I started Pivot Business Group to help entrepreneurs understand their numbers so no one would ever have to be in that courtroom.

Very similar mission. Just. I love that idea of just helping people understand their numbers. It's. It's simple, but there's a lot of power in that and a lot of empowerment with it as well. I'm interested in the analysis portion. What is the deliverable to the client at the end of the analysis?

Is it.

I'm imagining like a report, but what does it look like?

Yeah, for sure, it's a full report. And it, like I said, it. We look at it from a bookkeeping perspective. So we created our internal scoring system. We call it a validity score. And so we score their books, they actually get a rating. And it's not subjective. It's like, do we, like, it's not like, do we like the chart of accounts? It's like, no. Are there sub accounts? Do they have a cost of goods sold? Do they split revenue by revenue sources? So we score their books. And then for the CFO perspective, we have a scorecard in those four areas that I mentioned. And then for the tax assessment, they also get a full report of. We look at five areas that most CPAs overlook for tax savings. So they get a full report of where their books are, where they are from a CFO perspective and where they are from a tax perspective. What opportunities do they have? It's a full PDF and it's a deliverable that they can then take to their tax preparer and say, hey, look, they identified these savings. Can you help me? And then they can also, if they have an internal bookkeeper, hey, they found the, these errors or these recommendations. Can you make this happen? But then of course, we always offer proposals. So if they want us to do it, we'd love to, but it is a tangible, actionable thing that they can take and run with. Or it's the playbook for us as Pivot Business Group.

That's so smart. So they're going to get this report, but it also gives you the roadmap of what you need to focus on in the first several months of working together. Exactly how long does it take you from the time a client signs to get the analysis report delivered to them?

Seven days. Once we get access to their books and their prior year tax returns, my team goes in and I have my bookkeeping team look, I have my CFO look and I my tax strategist look. So within seven days, we have a full report to present to them and a plan of how to move forward.

Does the deliverable include a call where you're going over it and taking Q and A, or is it just the report?

100%. It's a call. So it's an interactive based on your goals that you said, here's where you are, here's how you rate in these areas. Here's suggestions for we have, here's how we can help you moving forward. Here's the package pricing. Do you have any questions? Those sorts of things.

So are you selling those, those reports as a standalone and then you deliver the reports and then sell them on accounting, advisory, et cetera. Is that kind of the. Okay, so it becomes a marketing tool that they're paying for, in other words?

Yes.

And how do you, how do you price for those?

Right now our, our initial Profit analysis is $2,500 awesome. Now, such a tangible. And we also guarantee, if you're making money, 3x return on tax savings.

That's a bold promise.

If you're making money. I can find $7,500 in tax savings in my sleep. We use strategies that most CPAs don't take advantage of. The Augusta rule is my freaking favorite. Like, I can save clients anywhere from 12 to $35,000 with the Augusta rule alone.

So I'm wondering. The turnaround time's awesome, right? And I think one of the important things to remember is, like, the faster that you can deliver what I call that aha moment for the client where they're like, oh, my gosh, this is why I hired Pam. This was so amazing. I call that the aha moment. When that light bulb comes on to the extent that you can, like, shorten the window until you deliver, that aha moment will set you up for long term success with a client.

Right.

Where they're. They're not asking, like, what are we getting for this money again? So I think it's brilliant that you figured out a way to do that in just seven days and then probably as quick as you can schedule the delivery call after that. But one of the things that. The questions that. That brings up, Pam, is how important is having a niche for you guys to be able to do that report with that kind of value in such a short amount of time?

We don't have a niche, and I have done that intentionally.

So.

Most of our clients are online service providers of some sort. However, we do have brick and mortar and manufacturing, but we have a lot of coaches and gurus and marketing firms, those types of people. But we don't have a specific niche that we've targeted.

Interesting.

Have you ever thought about it? Or do you just like keeping things interesting and saucy and spicy by working with all the. Yeah.

So I'm kind of the personality that if people are like, the riches are in the niches, you should have a niche. I'm kind of like, mm, no. Like, just because you say I should is the reason that I'm gonna prove you wrong.

It's awesome. Because I'm. I'm the guy. I'm the niche guy. Right.

And we have friends. And, you know, I've had mentors that are like, you need a niche down. I'm like, hard pass.

Fair enough, fair enough.

Just for spite.

No, it's. I don't think there's anything wrong with it. I think it's just like you said, it's a personal flavor.

Kind of thing.

And it really just depends on what you want to do. So we can still dine together peacefully. You know, I'm not going to throw you shade for, for not having the niche. So I would also imagine that benefit one of no niche is a lot easier to find clients. Right. Because you're not limiting yourself at the top of the funnel. But I would also imagine, does that also make it easier to find people to join your team? Because it's not industry specific?

Yes, because I'm just looking for good bookkeepers and good CFOs. Whether you have experience in like the trades, like service, you know, roofers and H vac or marketing, it doesn't matter. Numbers are numbers. And as CFOs, there's only so many problems that we see.

Right.

Everything boils down to basically just a few things, a few problems that our clients have. So it's just a matter of identifying what the true root of the problem is and then solving for that problem. All the clients think like their issue is so unique and that's cute, but it's not.

So back to the idea of team. Let's start like how big is your team today?

Awesome. 10 of us.

Oh my gosh, that's awesome. Can you talk a little bit about like what model you've used to build your team? Like 1099, W2 and how do you think about comp? Because I know a lot of people that listen to this are like at a point where they've been doing the solo thing for a while and they're like, okay, I'm ready to bring on the next bookkeeper, accountant, fractional cfo. They don't really know where to start or what to pay or where to find them. Could you just kind of share high level how you think about team in the model that you use?

Sure. So for me, the model I use is the outsource model. So client fulfillment is the outsource model. So I have 1099 contractors that have their own businesses that have their own clients that also do bookkeeping for me, that also do CFO fulfillment for me. However, my operational team are W2, so I do have W2. So I have a full time operations manager. I have an executive assistant that does marketing, she's a W2. But all clients client fulfillment is done by contractors and I pay them. There's one that's hourly because she does project work, but everyone else gets paid a commission based on what I build a client. So it's 10, 20 or 30% depending on what their Role is. So if I build a client two grand a month, fulfillment for the CFO is 40%. If I bill the client 750amonth for bookkeeping, bookkeeper gets 20%. And the reason being because bookkeepers have my operations manager who's over them, who then has to manage the client expectations and communication. But the person who's, you know, head down coding, that's a contractor because she has her own bookkeeping business. But what I found is with my model, there are a ton of amazing women out there who are powerful at what they do and hate sales and marketing and don't want to go out and kill it and drag it home. They just want to fulfill on it. And that's fantastic because I, I don't want to fulfill on it in my stage of my career. I want to go out and kill it and drag it home and then pass it to my team to fulfill on.

At what point did you make that transition from where you were doing fulfillment to where you were going out and killing it and dragging it back and kind of being more of the visionary for the company? When was that in your seven year history?

Real early, really early. So much so that I was part of an association of CFOs and I got kicked out because my model of bringing in other CFOs to fulfill on the work was intimidating to them. They just wanted me to go out and help a client and come back and I'm like, I don't want to do that. I want to go out and educate people and add value to small businesses and sell it and lead a team. So they were like, thanks, peace.

So I was like, okay.

So within a year and a half of starting, I was like, okay, I want this to be bigger than me and to do that I need other people to fulfill on it and I need to stay in the area that I enjoy and that I'm good at. So yeah, within the first two years I was like, okay, who else? I need to bring in more people because I don't want to be the only one like doing this stuff.

Last question. If you could offer one word of advice for fractional CFOs that are coming after you, that are, that are behind you, they're just getting started. One word of advice, one, one takeaway from your seven years, what would it be?

Be clear on your value. Be clear on the value you bring to the client and the impact that that can have. I think too many CFOs don't believe in themselves and they don't give Themselves enough credit. And so it's the imposter syndrome. It's the, I haven't done this long enough. I don't have enough initials behind my name. You add value. Be clear on the value you bring and go out there and do it.

If somebody's not clear though, how do they get clear?

I mean, I have a number of great mindset coaches if you want to talk to.

Do you have a book?

Is there a book you recommend about mindset? Million Dollar Consulting was a really good one for me.

Oh, I don't know that one. I got to write that. Million Dollar Consulting. Check that.

Yeah, that one. That one was helpful. It's a mindset, dude. Like these CFOs need to understand. And I know you coach people on this one on one. Like, your experience has value. For me, I worked with Multi seven figure construction company that went bankrupt. That has value. Since then, I've worked with hundreds of small businesses. That has value. Even if you worked for a big four in auditing, that has value to a business owner because your experience and the lessons you learned are valuable to the entrepreneur standing in front of you. And that experience needs to be paid for. That client needs to be, you know, be paying for your time, but you have something of value to share with them because of what you've been through. Everyone's story is different and people downgrade their story and downgrade their experience. I talked to one CFO recently and she was. She needed one more certification. She I'm going to go get this one more thing and then I'm ready. And then I'm going to go get this one more thing and I'm ready. But then she'd had 15 years of amazing world experience. Those extra three sets of letters behind your name don't mean crap to your client. The 15 years of amazing things that you've done brings value to your client. And so it's a understand your experience has value. What you've learned has value. The mistakes you've made have value. The wins have value. The things you've seen in your world have value. Because your life experience isn't what your client's life experience has been. Your value. They need. They need to know how to not crash and burn a company. They need to know how to manage their money. They need to understand why financial reports have value in the world. And as a CFO or an accountant with experience, that's what you bring to them. And so many CFOs don't see their own value and then don't Bring it to the client.

I think the really interesting thing that our listeners and viewers are going to appreciate, David, is we run very different model firms. It's not like we. We have a cut and paste version of each other's firms. Our firm models are from our teams to how we pay people to the clients, and the methodologies are all very different, but there's a lot of similarities. It just kind of how we're built. So I'm excited to dive in today to talk and learn a little bit more about your firm and how you got started and the way that you've built your firm and the whole model behind it. So if you would just kind of start off like, what was your story? Like, how did you get into the fractional CFO business?

David My background is actually real estate investing. And in that world, because I read Rich Dad, Poor dad in college, and my thinking was never the same after that. And, you know, bought a few houses, started working with a real estate investing company that was doing some deals up in near outside of Chicago and northwest Indiana. And then from there it was scaling that business with them buying rental properties, like just getting into that world. But then from there, I eventually sat in a lot of the different seats. So it was very cool. It was cool seeing a small business, you know, grow into a bigger business, because at one point we got to like 30 deals a month, over 300 deals a year, you know, almost a deal a day in the real estate world of actually buying, selling, or renting or like doing a bunch of different exit strategies in the real estate world. But what was cool was I got to see all those different, you know, seats. But then one of them was finance. I like the numbers. I like that side of the business too, you know, and I had a penchant for it. And that's where I sat in that seat with no prior experience. Like, I look like I should have gone to college for accounting, but I did not. I went for, you know, to be a teacher. But then I sat in that seat seat, and I just asked the cpa, our CPA at that time, just a million questions. So learning how to read the business books and like reading the story of the business. And once I figured it out, like we were doing like 25 deals a month or whatever, but spending 26 worth, and it's like, oh man, this sucks. Like, that's where I figured out, you know, that a lot of people are probably in this predicament. So I was going to mastermind events and like meetups for the Real estate world. And I would go to places and people would be like, yeah, we're doing seven figures. But then they're crying at the bar later on like, yeah, but we don't know where the money is. So I'm like, okay, this is a big epidemic. This is not just us in this situation, which through a series of circumstances, I moved across the country, I started helping another investor. Like, it was the same thing, same thing all over. Like, doesn't know where the money is, doesn't know what's going on. Books are a mess. I'm like, okay, this is just confirming, you know, like, yeah, this is an issue. So that's where I started my company. Just because I wanted to give clarity. I wanted to give clarity to these owners, like, where their money's going. Just simple things like make, spend, keep. Like, where is it coming from? Where's it going? And are you keeping any of it? And I helped that first guy, and he was like, hey, this has been crazy, like, life changing. I didn't pay myself before. Now I'm paying myself all this stuff. So then I started Simple CFO to literally, before it became what it is today, just to give my friends clarity in the real estate business. Because I knew, I knew that industry, but then I also knew, like, I could be dangerous enough to say, okay, here's where the money's going and, like, what's going to really take turn the needle for you. That's also when I got introduced to the book Profit first by one of my mentors, which had a big impact on me as a good cash flow system, you know, for entrepreneurs, because it spoke to me as the entrepreneur, and I'm like, this would speak to other people, and I could explain this, I believe, pretty simply to others. So that was kind of how it got started, was it just came out of, like, seeing it over and over that so many people that I had worked with and the businesses I was a part of and the friends that I had were making money, but they felt broke. And I'm like, why? We can help. I can help with this and get them out of this situation.

One of the things you just said, David, was that what you do today is not what you did four years ago when you got started. So what's the difference between where you're at today as far as services go and what those services were when you started?

Man, I think the biggest thing for me is that I simplified what we were doing up front. Okay. When I first started, I didn't even know what a Fractional CFO company was. I literally just wanted to give clarity to my friends of what I had done with some of the other businesses. So when I first started, it was diving into their books. It was just having conversations with them of like, here's where your money is or like, hey, your books are a mess. Here's how I'm going to help your bookkeeper or here's what I'm going to do. And then we're going to be able to meet about the numbers, you know, and actually go over them. So I didn't have a dashboard back then, like we have today. Like there was nothing, a set structure like there is today. It was more like, okay, I'm going in. What do they need? What can I do? Taking any type of client up front, you know, it was those types of things where when I was first starting the business, I didn't have all the frameworks and structures I had today. And that's where even today when I say the make, spend, keep framework, that was like year three that I came up with that, that wasn't even up front. And it's like. But that resonates with a lot of owners because they know those, those words. It's very simple for them. When I first figured that out, I ran it past my then five year old daughter. I'm like, do you know what these words mean? Make, Spend, keep. She's like, yeah, I know what those words mean. And then she told me like her definite. I'm like, boom, there we go. Like, if I can make it that simple then that's great. But up front it was more just take on a client. What's the issue? Let me get them some help. And it was just me running around like a chicken with my head cut off until there was like a lot of people coming in and I was just struggling with all the leads and stuff.

So I love the idea of make, make, spend or spend or what is it?

Make, make, spend and keep.

Make, spend and keep. I love the, the concept of it. One of the things that I get a lot of feedback on from, from people that I coach and teach. You know me, I'm a simplicity guy too. I like to joke around. I'm from la, lower Alabama, so I have to keep things as simple as possible. But a lot of the pushback that I get, hey, if, if I make it that simple, then people are going to think that the work that we do isn't going to be that impactful or I'm worried that it'll make them feel Dumb. If I use words like make, spend, and keep. Have you ever gotten pushback from. From the market on those kind of things? That it's too watered down?

No. We got to think about this too. If you're a fractional CFO, your level of competence is probably like 8 to 10 on the financial scale. Like, from 0 to 10, you're like 8 to 10. Most people that you work with are probably 0 to 4. Like, that's where their knowledge is. And honestly, if you're a fractional cfo, they've probably had a bookkeeper or CPA who has sounded smart in the past, and they have felt dumb. Like, they have felt dumb in those conversations where they don't understand what is being said. So they've had a bad taste in their mouth. That's like, where now I make things as simple as possible because, like, we have to make sure that they understand what's going on and they feel like it's more of an owner to owner conversation than, you know, like, then this person that's way out there in outer space and doesn't understand, because when you confuse someone, you lose. And that goes for a simple conversation back and forth. And it's like, that's where we don't get that pushback. We usually see the light bulb come on of like, oh, this is how. If I make this much and I spend it here, this is how much I get to keep. Like, they can follow along. So if anything, it's tied us closer to the client than push them away at this point.

And just to give the audience an idea, you're not a small firm. You know, as fractional CFO firms go, you're definitely on the larger end. How large are we talking? Like, to whatever extent you feel comfortable.

Sharing, we'll end about 3 million in revenue in 2023, a little bit above that this year. But it's because we've def. It's because of how I think, of how simple we've kept it. Like, because we attract a lot of good people who, like I said, our avatar at this point is people who make money but feel broke. So that attracts a certain type of person. Like, you actually have to be making money, but then you don't know what's going on. And those people, okay, here's my soapbox. Like, so many people are out there in the business world. You talk to them and if you hear the issues, most people talk about marketing and sales, that as their issues, like, they don't have enough leads. They don't. They can't convert, whatever it might be. But they're hitting their pillow and losing sleep because of the money, but they don't talk about that and they're embarrassed. So it's like you have to keep it simple and you have to reach those people. So I feel like that's what's really helped us grow. But then also at the same time, why we keep it so simple is that. And yeah, I mean, we continue to grow. Like, I want to do about five next year at the minimum, because we're able to go out there and I believe we've made a huge impact in this industry that we first started in. And now I want to just keep getting that message out there because so many people are like this, but they're not talking about it. That's why I love what you're doing, Michael, and I love this podcast and I love the different things because not a lot of people go down this path.

When I think about what I've learned from you, David, and what I've observed since we've known each other, I think that there's three things that you do better than almost anybody else I've talked to in the CFO world. One is the simplicity. You've got that on lock. The next thing that you do really, really well is you have a very specific niche. And third, you are world class at bringing in leads. If you think that you're gonna just post Instagram stories or stuff on Facebook and you're going to get clients in 30, 60, 90 days a year, two years, you might get a couple. But it's a long, long road. And I'm like, you can go get on stage for three, 30 minutes and get to just two even. I spoke last month to be that good to get to.

I spoke last month, I got three right from there, you know, and it was a quick 30 minute thing. And that was like in a room full, you know, of like, you know, the core clients of what I needed there. And then we had like four follow up calls from there and like three of them move forward. So it's like, you never know. Speaking is such the gateway to bigger things for you. I want you to get out there, get out of your comfort zone. That's where coming from an introvert who never, like you told me in high school, I'd be speaking on stage, I'd probably be hiding under the rock right now, you know, like from back then. But it's like, just go out there and then always have that call to action. If you're going to speak.

Two more questions and then we'll wrap up for today. But I think this is so important for people to hear. David, one is earlier you talked about your core values and I'd like to hear what are the core values that you have@simple CFO. And I'd like to ask you just a couple questions about them after you share them.

So always do what we say. Service above self, extreme ownership and extreme openness. We have a couple other ones too, but I want you to come, I'm going to give you something at the end and then we can tell you more about those. But those are the four ones that honestly. Oh my gosh. That we, we. You cannot be a CFO on our team unless you have those. Especially my favorite ones are the extreme ones. Extreme ownership and extreme openness. Have you ever worked in a company where there was not open and honest communication and it feels like politicking all the time? If you've ever been a part of that. That's what I want the opposite of our company to be. That's why I could tell you the stories of leaders opening up and we've had good conflict in our calls and in our meetings. But that's where our core values are. Not only make up who we are, it helps us determine who we let in. Whether it's a client, whether it's a CFO on the team. It's our guiding principles for who we are as a company. Because I want to be able to be work with the like minded people. It makes for a fun work environment, a great culture and like I don't want to work with deadbeats. Whether it's a client or a CFO or people that are jerks or mean or are, you know, political and just are in it for the power. I want people that actually the service above self. I want them to serve. I want them to say, okay, how can I help this person and be authentically me and doing it and helping them get to where they want to be. We also have our core purpose too is to help create freedom for our people and our clients. So it's like I want, if you're the right person and you come onto the team, I want us to be aggressively helping you live the life you want to live. Like I don't want if you are a parent and you have young kids or you know, kids still at home, like that needs to work into your life, like can we give you the flexibility to be a parent? Like, because most people don't have that flexibility at a Typical job. So it's like, can we help you create that freedom? Because if we can, you're going to turn around service and help that person that's a client create their freedom. Because, you know, things they don't. A lot of people say, well, I don't like that want to be CFOs, I don't know the real estate industry or like your niche. And I tell them you're a 10 on like the financial scale, you have something they don't. You just giving them that clarity creates freedom in their life because they've never had the clarity to make a good thing decision in their business. And like, that's where I really want to help our people. And I want our people to help the clients create that freedom in their lives. And it is very symbiotic there. And it's wonderful because then we have the right people on the team, which is what the core values, you know, guide towards. And then we're helping them with the actual, like something that can be life changing on both sides.

And I love how crystal clear you are on the core values. You're like laser focused, you know, there's no ambiguity there. I'm wondering like, if somebody's listening to this and they're like, gosh, I recognize I need to have that kind of clarity around my core values, but I don't know where to start. What words of advice would you give them?

Okay, where to start? Let me go back to the beginning. When I read the book Traction, that really helped, you know, that gave a set of guidelines for me of how do you create a core value? What is a core value? How do you select them? For me, that was the beginning of like, okay, this makes sense, like, why do I need these? It answers all the ancillary questions of why does David have this? Because if you like the results I've gotten, you know, of like in the business and I actually have a life, I'm not this $3 million business owner who doesn't, like, yesterday, picked my daughter up from school at like 3 o', clock, took her to dance. You know, like, I can have a life too and still run this because of things like Traction. The book Traction, which outlines the EOS system, entrepreneurial operating system, which just gives. How do you set up core values? What is the purpose and how do you find that? That's where I was introduced to the 10 year goal of like, oh, I like that. And this is what really resonates with me. I want to give, I want to give back. I don't want this to just be the David Show. I want this to be we're using the resources that we're getting to give back to the things that we care about as a team together. And that's where I would say, start with a book like that and then you can go up from there. Hiring an implementer to implement an EOS type system. I will say from day one, it was me and a virtual assistant, which we. We could probably do another episode because of just how I started, because I didn't even start it by myself. I had a virtual assistant. Like, I bet on myself and I bet on this guy that I absolutely love, but he was going to be the admin to my, you know, to my chaos. And we were running level Tens. Like, that's a. In the EOS terminology, that's a weekly meeting where you just work on the business. And it was me and him, me and my virtual assistant. And we were doing that every single week. I've done that meeting every week. I'm literally late for mine right now. You know, like, we have our level 10, that's happening, but my leaders are going to take care of it. My COO runs the level 10. I let him know I might go over here. He was good with that. I'm just going to show up for probably issues time, and we're going to solve issues together if I need to be involved. But that's where it grows into that. You could have you by yourself or one other person on the team or a virtual assistant or an admin, but I would take the time to do at least one hour a week where you just work on the business, have some thinking time with your business. Read the book Traction. That's where I started. That's where I also saw it then implemented in other businesses that I was a part of. Like, and I liked it and I liked what the framework stood for. And then when I started this business, I'm like, yup, EOS day one. I don't care how small we are, we're gonna be doing some of these things and then grow into the rest. That's when I read Traction as a new business owner for here. I'm like, I'm not going to implement all this. Like, there's no way I can have department meetings and level Tens and the same page meeting. It's like, no, I'm going to start with what makes sense for me and this one other person to do or like me by myself. What should I be thinking about? So start with a book. Like traction. It'll give you a framework. But then keep it simple. Michael and I have said this so many times. Keep it simple, like for your clients, but for yourself, too. Don't overthink it like we all do in the financial space. So it's going to be very hard. So maybe we need some psychology or some coaching there on the mindset, because you do. You got to be able to just say, what pieces of this do I really need right this second? And what can I put on the shelf for a later date? You know, so that's what we did. And a later date came and we started adding more pieces in. But start with a book, start with a good framework, and then just pick the pieces that you need right now.

Sa.