Unknown: Well, hi again.

Welcome back to the marketing perspective.

Today should be a very eye opening show, as our topic is talking about fractional CFOs.

I'm sorry, fractional what a fractional CFO?

We're going to learn what that means.

Like I actually, in our company, we actually have a fractional HR person, Kathleen Hancock, who's a rock star, by the way, and who holds me accountable on numerous occasions.

James just stopped talking.

How is this relative to marketing?

You may you may be asking, right?

James, how's this relative to marketing?

Well, I'm going to tell you a quick story.

This one has to do with internal culture.

There was this company not not too long ago, all spare names to protect the not so innocent, and they were not.

They kind of fell asleep at the wheel of their finances.

I'm imagining this is what happened behind closed doors, and they literally just stopped paying.

Stopped paying their employees.

W twos.

You for the record, you can't do that legally.

You also employees don't really like that when that happens, and not just one, like all of them.

So I started getting phone calls.

I'm just the marketing guy you know from outside, and literally, people call me.

What do I do about this?

I don't know.

Out of my purview.

It's I can help you market you do you need a job well?

And I'm laughing now, but it wasn't funny at the time, because people lawsuits were starting.

This guy got pounded on PR issues.

He lost his team.

It's kind of hard.

I don't want to save the industry.

I'm being very careful.

It's hard to do the job when you don't have staff that services the job that you're doing.

It's almost impossible, and it pretty much was impossible.

So you can imagine the hit he took.

Well, had he had somebody paying attention to his finances that probably could have been spared.

That is a much more common problem in a small business than you think.

So it's definitely something to think about.

One more quick story.

Again, I have to navigate carefully and not say it incorrectly.

I've seen financial disasters occur behind closed doors two different companies in the not so distant past.

One of them was a great company, thriving, doing unbelievably well.

We more than not to brag about my company, but we quadruple them small mom pop to pretty big company in a two year window.

So they went from a couple of employees to like 40 employees working out of the basement to three physical locations, you know, equipment.

So you can imagine, they became a formidable company in less than two years, but they still acted like a mom pop, and they didn't have somebody looking at their finances from a high level.

They had a really good bookkeeper, and somebody, pretty much an accountant, not a CPA, you know, did their accounting, but she was the one that was monitoring that.

And that was way over her head, and it blew up pretty badly.

And the company, in spite of all of our efforts and the PR triaging that we did, because when money, money got stolen out of the company, you can imagine the pitfall that happens bar and computer pay Paul is magnified by 1000 and it was horrible.

It was it was a great company with good owners and a good business model watching it blow up, you know, totally out of my control, because I'm just the marketing guy, right?

And another company to not go into less detail.

They said they were debt free.

They had signed up to do the marketing, and we had a budget.

Everything we do is budgeted, and they signed off on the budget.

Oh yeah, we're going to do this.

And they didn't have the money.

Not only did they not have the money for that, it was a big contract.

They didn't have the money to do the job that they do.

So it was bar is again, borrowed from Peter to pay Paul.

And they had a good business structure.

The from outside in, they were a good company, but they were a financial disaster.

And I found out really quickly.

I mean, we parted ways within three or four months, you know, literally very first month money wasn't coming in.

And I was like, What is going on here?

But I've seen it before.

You know, it's kind of like you have that big appetite, or what do they call it?

Champagne, taste, beer, bottle, pocket kind of thing.

CFOs can help with that they can, and a lot of people now go back, Well, James, that's awesome.

I'm a small company, or even mid sized companies, sometimes don't have the cash flow.

They just can't build it in to their numbers to hire a CFO and staff.

That's what fractional CFOs can do.

It's a lot less expensive, and you get the same expertise sometimes.

Even better, monitoring what you need monitored to not have these disasters happen.

So I don't know if that makes sense, and I would love it if you're listening today, I would love it if you have a different type of disaster that you've seen and or witnessed or gone through yourself, please reach out to us.

We would happily put you in touch with the right people or person to be able to help you either navigate or have another conversation or never have that happen in your life again.

And the person I'm bringing out today is becoming a friend and a colleague.

His name is Craig Cook, and he is the founder of equities strategic partners.

It's a fairly new experience for him.

He came from another company that he had the wherewithal to realize I could do this better, and he is, and he's making a lot of headway, and I'm excited to have mom today, he will be much more adept at explaining the importance of the CFO role in a company than I am, because when we wrap up at the end of our I'm going to talk a little bit about marketing, is because I wouldn't be me if I didn't.

And usually CFOs and CPAs can be the kiss of death of any great marketing strategy or campaign.

So before we I go on and on and start talking about politics, sex or whatever, let's bring out Craig.

Cook.

Craig, welcome to the show.

Appreciate it, James, I appreciate being on and hello everyone.

Look forward to the discussion today.

Yeah, I was kind of excited about this one because it's something that's totally out of my wheelhouse, like 100% you know.

So I'm going to ask a question probably, and just stop talking.

Do I have?

Am I the poster child?

Probably, and we'll talk offline after the meeting.

So before we dive into like the meat of being a CFO and what all that entails, just let's tell us a little bit about you, how you even wound up getting where you are today?

Sure.

So I have been in the accounting industry, if you will, for my entire career.

Graduated from college immediately, kind of fell into starting my own business.

My first time around as an entrepreneur.

Had a bookkeeping service within nine months of starting I was full time, had had an office that one of my clients provided me, phone line, copier, back in the day, fax machine, if anybody knows what those are.

And did that like I said, for 12 years, full time, 18 total.

And around 911 things kind of went haywire, as everybody may remember, or some may remember, and so I went into industry and worked for some major public companies here in town, in Nashville, and learned a lot, really, you know, was a kick in the pants that I needed to get out and enhance my skills.

And climbed up the ladder through there and eventually landed in a consulting gig that was very attractive to me.

Was really what I was looking for.

That change of pace, the different scenery all of that, not to mention some exposure to some additional industries that I didn't have experience in and did that.

And then January of this year started equities, and had been going full guns blazing ever since, specializing in pretty much anything on the finance or accounting side for a business, except taxes.

I will let you tax CPAs.

Take care of that, and I will get all the financials ready for you so you can ip right through them.

So if a person doesn't have let's say they have a bookkeeper.

They don't have a CPA.

I would imagine you're advising them to, hey, I know somebody, or go find someone, right?

But yeah, yeah, highly, highly recommend the tax CPAs, especially with today's tax code and all of that.

It takes an expert in that area.

You know, can make any connections that anybody's looking for on that side, but, but that is not my wheelhouse, and I know that, and I want to stay in my lane, right?

That's how I feel about my world.

You know, when I expanded to Nashville from New York, so I had a CPA, I had an attorney, and I had a bookkeeper, and I said, Tell me the tax ramifications, because I think I'll save money if I change corporate to Tennessee, and should I change eins?

Oh, definitely not, you know.

And, but then the CPA said, Yeah, but I'll defer to the attorney.

Me about I said, my the attorney.

I said, Okay, so I went to talk to him, and he's like, I don't know why you're talking to me.

He goes, it's really the CPA and and I was ping pong back and forth for months, and I never really got a straight answer as to what structure I should do.

So now here I am in Nashville, and tornado came through.

COVID started like it was a slow ramp up anyway, but when I finally got around to oh my gosh, what's my tax structure?

My I used a, what do they call them an enrolled agent who was a bookkeeper, but on steroids, right?

And she guided us towards changing the EIN.

But you can only imagine what happened in New York, which was still up and running and payroll and all that kind of so it was almost, almost four years of a nightmare of paperwork and changes.

No, I'm not there, I'm here and still being taxed New York taxes when you know there was no more W twos in New York, only 1099, there's most of the revenue was services, not billable goods, and it was a disaster, and it finally is resolved.

It took a lot of work and a lot of phone calls, and I learned something.

And I don't know if you navigate this, this is where I'm going.

IRS, if you're listening, let me know if it's but the government works like this person in this chair does this specific job.

The person literally right next to them does this specific job.

Well, good lords.

Those two jobs interface with one another, and if they just turned to each other and had a conversation.

They would solve the problem, but no, let's have another form and another XYZ dash to do this, and it goes back and forth and back and forth.

Well, I learned that, and I started saying, well, listen, can I just talk to so and so?

Well, sure, then all of a sudden I'm getting the promise.

So do you navigate that as well?

Or no?

Yeah, absolutely.

A lot of times that has come up quite often.

And what I always recommend the client usually doesn't like it, but it's the most efficient and quickest way, usually, to accomplish it, and that's to get the business owner, the CFO controller, whoever you want to, whatever you want to call them, your tax person and your your business attorney, all around the table and discuss it all, hash everything out there and get it all settled within a two or three hour period, versus, in your case, You know, getting ping pong back and forth between your your tax CPA and your attorney, and then you calling the IRS or them calling the I mean, you know, if all of this could be hashed out and laid out in person, it's usually more efficient.

You do have, you know, two or three hours of hourly billing people all sitting around the table, billing you hourly, but it's usually a quicker process, and everybody knows where everybody stands at the end of the day, versus Oh, well, let's shoot 15 emails back and forth and six months later, oh, oh, yeah, I forgot.

We dropped the ball.

Let's, let's get that going again.

So thank you.

So let's, let's define a fractional CFO.

What does that really mean?

And what is your role with anybody that brings you in Sure, essentially, a fractional CFO is, is?

It's not as as sexy of a term.

It really is just a part time CFO.

It's just a little sexier term than saying I'm part time because a business that is 10 million in revenue even doesn't have the budget nor the bandwidth to bring on a highly qualified CFO.

Nor do they have the bandwidth to give them 40 hours of work to keep them busy and do things you know they're going to overlap into some of the areas.

Sometimes that may be good and fine.

Sometimes it's just a waste of their time, or they're putting them in situations that they're not equipped for, more on the operation side, or the HR side, or whatever so.

But you know, it the person the role fills the same gaps that AT and T CFO does, just on a much smaller scale.

You know, they're still handling the overall accounting and finance issues within a company.

They are, you know, assisting the CPA with any tax questions that may arise.

They are working with banks.

They are working with lenders.

They're working with investors.

They're working with, you know, a.

Buddy that is involved and has a stake within the financial statements of that company, obviously the business owner as well, and making sure that those financial statements are accurate timely.

And then what I like to mainly describe the CFO role, especially in a smaller company, is on that strategic side, what, what do I need to do to be more profitable?

What do I need to do?

What is, what is the right timing for me to open a new store, or to expand into a new market, or to hire three new salespeople?

The the CFO is more really surrounding that, that forward looking structure, the modeling, the forecasting, cash flow, forecasting, things like that, are the main roles of a CFO, again, working with banks, getting financing, looking for new investors, you know, between them and The and the business owner, and it can be, as you know, many of those things, or as few of those things as the business dictates, as the business owner dictates, but it's, it's strictly on a on a basis that that is comfortable, cash flow wise for the company, but also to fill those needs.

And those are, those are needs that every company, it doesn't matter what size you are, whether you're 100,000 or 100 billion in revenue, everyone needs the that person in there doing those roles, filling those tasks.

You know, obviously an AT and T and Amazon, they've got, you know, CFOs and assistant CFOs and every every level in between that's not needed for your usual small business entrepreneur.

In the beginning of this show, I I kind of brought up a couple of horror stories that I've seen and witnessed, and if you caught those, can you speak into either one of them and talk of how a CFO could have helped navigate that better and probably spared them the pain and suffering that they went through.

Sure, you know specifically the the example you gave of the company that just stopped paying their employees.

Most CFOs that have been a CFO, they usually have some HR background or some HR responsibilities in previous positions, oversight.

You know not all, but some do.

But regardless, they know that, you know you can't just stop paying your employees.

You can't just stop paying your payroll tax.

All of these things have to keep going, and to have someone in that seat that's worth their salt that can go to the business owner and say, Look, you just can't do this.

You know, these are, these are serious issues, and just because your cash flow isn't there, you can't just all of a sudden up and decide to stop paying people and expect them to still do their job, one of the most important things that a CFO does, and I learned this in my career, being brought in in a situation, and then the CFO not really keeping an eye on cash flow with a with a substantial size company, and they were let go.

And because I was brought in kind of on their coattails, I was let go as well.

So, but the biggest thing that they they missed was keeping an eye on cash flow and having a daily, weekly cash flow forecast of this is where we stand.

These are the expenses that we know are going to go out.

Your costs are pretty, pretty locked in on a regular basis.

You know what your payroll is each each week, every other week, every month.

You know what your rent is.

You know what your utilities basically are.

You know what your cost of goods are, and depending on the type of business you run.

So you know you really, you really have your costs locked up.

You just got to make sure that your inflows are going to be able to match that, and if they then you got to start looking at cutting and things like that.

But that's a CFO worth their salt.

That's really where they're going to step in and and help the most, especially for a smaller size business, because they're running on such potentially small margins.

But they're also not dealing with hundreds of billions of dollars of revenue.

They're dealing with a few 1000 here, a few 1000 there, and that's, you know, catching up your AR, making sure your AR is being paid timely.

Could be the you know, the difference between keeping the doors open and keeping the doors closed, or having to tap on credit that you know, hope.

You have the the ability to tap so good collection agencies help.

Yeah.

I mean, I'm looking at looking at mine, and we have more outstanding than we've had, like in previous, past few years, like you could just tell the state of the economy, what's going on when you know it's common?

So I have another scenario I didn't talk about yet, and this is probably I see it most often in my world, because you're talking about cash flow.

Well, marketing attests to cash flow, like a lot of people.

Well, you may look at advertising market.

It's an expense, and you put it in that column.

But my world, I look at it as an investment, because if it's not creating cash flow, if it's not create because it's the lifeblood of, you know, filling the sales funnel and bringing money through the door of any company.

So whatever effort you're doing, and this is this goes for every every single person listening.

It doesn't matter if you're B to B or B to C.

It doesn't make a difference.

There's some effort that has to bring business to you.

So whatever money you spend, or whatever effort, it's got to be tracked, and you have to see that your numbers are going up.

Marketing is a pivotal part of success, of cash flow.

It just belongs there.

So I from my chair, I see, I look at our effort as so critical to the success of a business, or growth of a business on a regular basis, because that's one of the things that we specialize in, is growth.

But if the money isn't there, something is wrong.

And then, and I would openly say, if you're doing something today and you're not seeing your numbers go up, why are you continuing to do exactly the same thing?

I would say the same thing to my own clients.

I was like, Look, here's the data.

This isn't working.

We need to change gears and do something different.

And they're astounded as how blunt and transparent I'll be, because it's about a result, right?

And you probably see that even closer than I do, because you're behind the veil, yeah, the the cash flow of a company is its lifeblood.

You know, you ask any business owner what keeps you up at night, cash or lack thereof is going to be your number one answer 99% of the time.

And if it's not today, then it will be tomorrow, if there's another issue keeping them up.

But yeah, the ability to I've got a prospect that I'm looking at right now, and he keeps, I keep saying, hey, when you when you ready to take the next steps, we're ready to get started.

And his comment back to me is, you know, right now, we're in such growth mode that that any new expense I've got has to eventually be a positive cash flow for me.

In other words, even, and not just a one to one, but like a five to one.

He wants a five to one return on revenue for any expense that he's bringing in, which mainly is his, you know, a new salesperson or whatever.

So, because they're in such growth mode now, eventually that's going to slow down, and he's going to have to be in some sustained mode and get financial statements, you know, in there, accurate, so on and so forth, but, but that, you know, and that's, and I totally respect that and understand that.

And you know I'm standing by at his timing and everything, but, you know, he's, but, like I said, that's, that's what he's looking at.

And and tons of business owners are out there doing the exact same thing, just really, they're being so successful that they don't have time.

Now, my my statement, back to companies like that, business owners like that, is, I respect that.

I get it.

I know you're you're overly busy, but a lot of a lot of the times when I'm trying to get a sale, get a get a contract closed, I'm not even really talking about the financial savings that you're going to get.

You know, obviously I'm a cost.

I consider myself a value, but I really consider myself a time value, because it's it's the amount of time that you your wife, Aunt Margaret, whoever's doing your books that are maybe not as qualified, maybe not as as diligent, Maybe not as focused, definitely not as fast doing the day to day transactions, knowing what to look for in a monthly review, a quarterly review, a year over year, review analytics, how to do those things, you know, and again, nothing against the staff that you've got.

But you know you normally in the business.

And the size of businesses I'm working with, they got started and they scrambled to put some sort, some semblance of an accounting system together, and usually with the spouse or themselves, you know, so a business owner that's sitting at home for 234, hours each night, entering all the bills, entering the invoices, sending out things, processing payroll.

You know, be nice to get 1520, hours a week back by not having to do that.

And then, and then in the long run, obviously, the financial value is going to show because you you're getting accurate financials, you're getting timely financials.

Financial Statements are great, but they're backwards looking.

It's what has happened.

You can't look forward until those are clean.

And those can't be clean and useful unless they're done timely.

So getting those timely and very important, I would you said something, and it kind of got me stuck on it.

I parked there for a minute in my head, you said that you equate it to your value to time.

You save them time.

Well, I mean, that's only step one, in my opinion, for a CFO.

I mean, a bookkeeper saves a person, a business owner, time.

You know, because the chances are a business owner can figure out how to do their own books, you know, but you're it's an expertise that you're bringing.

It's a the value add is the education and the experience that probably surpasses that entrepreneur.

You know, most people start up a company.

They're really good at what they do because they came from corporate or something and that world, I mean, that's my background.

I came from big, you know, Madison Avenue, and hated and wanted to do my own thing after 911 and so that's my story, and that's how I became an entrepreneur.

So a lot of people have the same kind of story.

They're really good at what they do, but they are not good at all the other things, including the finances.

So it's, it's a in my opinion, it's a lot more that you're bringing to the table.

It's something that they knowledge that they don't know, and expertise that they don't know.

You're looking at something from 1000 feet and giving advice, even financial advice, on the business, on how to help it to grow, how to, how to not get into cash, punch problems, you know, it's a critical role.

And I can see the difference in companies when that person is not present, yeah, I I almost all the time.

I mean, you know, because market, we get under the hood.

We get to know everything.

I know where the bodies are buried, you know, we do the PR, the clients that we serve, so we know it all.

That's why those NDAs are so strict.

And if I, if I catch myself ever on one of the shows and I'm talking about a story, I have to be very careful.

You probably do too, I imagine, you know from the financial standpoint, yeah, so I just wanted to give that back.

And I, if you're listening today, I know how he, Craig is a humble man.

I know he is.

I just know that chair is much more important than how you described it.

I was like, Well, that sounds like a bookkeeper, yeah.

And that's, and that's true.

You're very true.

And that's, that's, I may have sold myself a little bit short on that side, but everything starts with that foundation of bookkeeping.

You know, I can review financial statements all day, but if the information is not in there, I'm only reviewing 10% of the data.

Those mean nothing, and I've wasted my time viewing so, so you've got to get that foundation in and, like I said, in and incorrectly and in timely.

And it's, it's just, it's, it's so important.

The number of times I've walked into a client and pull up in the the books and I see 1200 transactions that need to be categorized going back nine months.

You know, I'm excited because I know I've got a lot of work to do, but I just, I'm like, How in the world have you functioned at all?

And I know they look at their daily online they log in online bank and see what's in there, and they're like, Okay, I can make payroll this week and and move on and try and get more customers and more business and and, and I get it.

This is, you know, this is my second stint as an entrepreneur.

I know you get busy doing the sales, you get busy doing the meetings, the networking, and then you lose focus on on the management and strategy side of the business.

And it's, it's hard to relinquish the day to day and and take that time to look forward.

And that's where CFO can really help pull a lot of that data out and present it to you.

And you can look at it, review it, and make decisions in a two or three hour period, versus, you know, you doing it yourself, trying to figure out what's a what's a gross margin, again, what is, you know?

And.

And all of these things can be, can be done for you in a much quicker and more succinct presentation that you can then say, okay, you know, I want to do X, Y, Z, your your consultant can say, well, you can do x and y, and then we got to wait six months for , provided things continue on the way they are that that makes decision making logical and documented versus from the gut.

Some people like to do it from the gut but, but if you've got the gut feeling, let's put some numbers behind it and prove it out too well.

With that said, let's talk about budgeting a little bit and the importance of budgeting.

I could tell you from my side of the table, I more times than not if I had $1 for every company I've met and I say, what's your marketing budget?

They may have a number in their head.

They don't have an actual budget.

So what that tells me, without knowing anything else is they probably go over budget at times, and then they're overspending, and they say, marketing doesn't work.

It works, but there's a process, and there's a formula, and there's there's a lot to it when it's done right, and budgets is how you say the books, you know you have to put the numbers in.

So my world, if I don't have a budget, I literally cannot put a pen to paper.

So you see it probably much deeper than just marketing.

So talk about it.

I see it deeper, but I see it more from a from a complete package.

Obviously, I'm looking at every line item on the on the P, L and balance sheet.

So being, being in there, and you know, I when I always, always caveat when I say, you know, budgeting to realistic budgeting.

Everybody's got a budget in their head.

Business owners, they love their business.

They think they're great, like most of the time are.

I did.

I did a million last year.

I'm doing 10 this year.

I just know things are going to explode, right?

Okay, well, let's, let's take a step back and realistically look and see what makes you think you're going to go 10 times revenue year over year.

Normally, that does not happen.

So realistic budgeting is very important, and it goes hand in hand with the cash flow forecasting that I mentioned earlier, and being able to look at your financial statements and compare it to what you did budget and see you know, why did you if you've got a realistic, logical, strong budget and your number, your actual numbers, are either meeting it or not, that gives you a whole lot more information to dig in and say, Okay, why am I not meeting these numbers that we put together in this budget?

Could be the economy could be that your your service line, has decreased by five services, your product line, you you're over budget now because you've added all these new products that you didn't think you were going to add, and having then explanations for those variances.

You know, that's what the big companies do.

They dive in and everything is tied to the budget, and they dive in month after month, and everything is explained.

Okay, you budgeted this, the numbers this why, and the person responsible for that line has to give explanations.

So it should be no different in any $2 million revenue budget than it is for a public company.

It's just as important, if not more, so because you're dealing with someone's livelihood, you're, you know, you're not just dealing with a month and a public corporation that could release some more stock and get, you know, billions in capital influx into the business to be able to fix that issue.

Can't do that with Mom and Pop.

So being able to know that budget, know it's right, know it's accurate, or at least logical, and then comparing your actual numbers to it can open up so much information and so much guidance and direction for future months, future years, you know.

And then eventually you're getting into you start talking about, okay, you know, what am I doing this for?

I'm I'm having that question, What am I doing this for?

I'm six and a half months in almost seven Why am I doing this?

You know, so, having to figure out, you know, where you want to be in three years, in five years, in 10 years, when are you ready to exit?

What does that look like?

You know having those financial statements an educated, sophisticated investor knows when you've been doing well in your accounting and when you've not been doing well in your accounting may not affect whether they want to buy you out or not, but it sure will affect the value that you're going to get for your company.

If you've not been keeping good books, they see something like that, and they they know the business.

They know the the capabilities of it.

They're looking their chops because they know they're getting it on, you know, potentially pennies on the dollar versus having to pay maybe they're paying a two or three multiple when, if everything was good, tight, tidy, excellent financial statements, excellent history, excellent forecasting.

You know, you could then go to a 10, 1214, multiple when you're exiting, when you've got things the way they should be, versus and you're losing out, you know, on several, several degrees of multi multiplicity there, and that's just because you didn't take care of the basic daily transactions and financial statements.

I just got a little stressed.

And I know I'm talking a lot about the exact accounting side.

Obviously, that's where I came from for longest, but all of it ties together.

Like I said, You've got to have that foundation of the day to day.

You've got to have those transactions reviewed.

You've got to have a clean balance sheet.

You can't let stuff get tied up on the balance sheet, because that just means you got to clean it up later.

And that's a big number, usually that has to get cleaned up when it's found and fixed, but all of that has to be right before you can even start looking forward, and that's where the CFO comes in.

But again, all that data and information has to be right and timely.

I had a client one time that that we were trying to do some, some succession planning for him and things.

And the last time they got good financial statements was like March.

This was in October, and then November.

And, you know, I just couldn't get their their bookkeeper to get caught up and get things timely.

And we were brought in there by another party of theirs that was looking to help them with their succession planning.

Well, I can't give them the numbers that they're wanting and data and forecasting, because nothing is recent doesn't be no good to forecast from a march.

P L, when I'm in office, right?

So it's all tied together.

It's all time together.

Yeah, it's a snowball.

And so what do you do in that situation?

Is that when you start making recommendations that they may need a different bookkeeper, or, you know, the roll up your sleeves, like, how do you take care of that?

Yeah, usually, I haven't had to recommend a new bookkeeper very often, because they kind of once I bring things to light from the review of the financial statements and so on, and trying to put a cash flow forecast together, and trying to do some modeling, some forward looking P and L forecasting, I come back with questions of, Hey, I saw this, and, you know, it was this, and now this has changed, or whatever.

And they're like, yeah, that's my bookkeeper.

They're not, you know, and they they probably already have an understanding that they may not be as on top of it as they like, as they would like.

And then they start investing more money in a fractional CFO.

And they're like, Okay, I gotta cut bait at this point.

And then then they're saying, you know, they kind of, they kind of figure it out on their own with a little prompting from from whoever's doing the review, whether it's the bank, whether it's their wealth advisor, whether it's me, so but yes, that does happen occasionally, and then, you know, just again, getting someone who's, who's, and it may be the wife, and that's the hardest, hardest situation, or the business owner himself, for that matter, it, But it's just, it's just getting them to understand, look these things.

It's all tied together.

And in order to do this thing at the end of this line, we've got to get everything right at the front and not having those numbers in there.

It does nobody.

You are you were talking earlier, and you made, you made what you do very human and like again, outside looking in.

When I was, you were talking about that business owner and what happens day to day, and the the trials of being a small business owner.

And, you know, it's, it's simple, but it's so hard.

And these people, you know, everybody loses sleep for different reasons, right?

But I was thinking like, I related to, well, when is it the right time for a business to be ready for a fractional CFO, like, how do they like a light bulb's got to go off that I'm over my head.

I really need somebody with more expertise that can look at this differently.

One is, is there, like, a, I mean, you may say all the time, everybody, like, I say that about market, everybody needs marketing.

Of course, you do well, like I said, every, every company needs the bookkeeper, someone to review and someone to do the forward looking.

The life cycle, usually is, there's they're looking at, hey, I've got substantial growth.

You know, I have four or five, six times my revenue year over year, or two or three years over time.

And I don't know, I'm kind of, I'm growing to a point where I don't know how to manage the company.

That's a perfect example of, yeah, you're, you're at that point, or a little bit past, when you need to bring someone in with a little bit more financial acumen, if you will, about it, to work with you, to give you some guidance on that expansion.

Like I said, you're looking to move into a different market.

You're looking into finance, to franchising.

You're looking into, you know, opening new stores, any any time that and could be the opposite.

You know, you're like, I'm at six stores, but these three aren't profitable.

You know, I need some numbers to tell me for sure.

Yeah, I need to close these three, or these two, or consolidate, or something.

Pricing analysis.

You just don't feel like your profitability is where it should be.

That's when you can bring someone in at that point.

And a lot of these things you don't have when you bring someone in, you're not signing a lifetime contract with this person.

A lot of times, on the fractional CFO side, sometimes it is an ongoing, you know, especially if they're in rapid growth mode and they need someone just constantly.

There.

A lot of times it's just a project.

You know, come in for two or three weeks, for eight to 10 hours a week, and knock some project out like a pricing analysis of all your services.

You know, what are my costs?

What are my true costs, and am I charging enough?

Am I paying enough?

Are my people utilized enough?

All of those things are things that CFOs Do you know, for any other major corporation or their team does so you're looking at, you're looking at things like that.

It's, you know, like I said and you joked, yes, everybody needs one at all times from the $250,000 revenue a year company.

You know, no, they don't need a CFO in there for 20 hours a week.

But could they use someone to come in for three hours a month and really give them some forward looking statements and put together a cash flow forecast and and really show them, hey, you're doing great.

You're going to have 80 grand in six months.

Look, if things continue on the way they are, what do we want to do with that?

Is that retirement?

Is that hiring two employees and just sticking that in savings and paying them from that so that you're not really affecting your cash flow, your current cash flow?

Is it, you know, I'm ready to start a new line, and I need this for inventory, whatever the case may be, you won't know that by just looking at your online balance every morning, you'll never figure that out.

So having that cash flow forecast is very important.

Again, the budgeting part is very important.

And then all the things that come before that, again, the reviews and the day to days.

But bringing that, that fractional CFO is, is usually the trigger, is some growth event or some something that the owners got a niche to expand, to exit things like that.

So, okay, that.

So basically the answer was yes, it could be, I love that you said that could be a few hours a month like that really opens my eyes to the smaller company.

They can still get the advice, they can still get the eyes looking at it from a different perspective, and it's not as expensive.

Yeah, no, and that's, and there goes back to that definition of fractional.

You're part time.

You're really there when you're needed.

And in my case, and in other companies cases, it's not a, you know, you can, you can totally ramp it up and ramp it down.

If you need them for two hours this month and you need them for 20 hours next month because you've got a special project or you've got a thing you really want them to do a deep dive analysis on, and then the next month after that, they're back to two hours.

So, you know, it really just, it's not, you're not locking into a lifelong contract.

You're not.

Walking into in some cases you are, in other cases, you aren't depending on if they're a retainer basis, but you can quickly negotiate that with them and just say, look, I only need three hours a month.

If I need more, I'll let you know.

Some may want to do that.

Some may not want to do that.

I, for one, would love those engagements.

So Right?

I get that now it makes much more sense, even knowing you, I didn't know that, so that's great.

When would you say a CFO?

So let me preface this, when you get behind the veil, you're talking about money, and you mentioned earlier.

Sometimes it's the wife or, you know, one is family run companies like your chair changes your shingle.

Is more about therapy, you know, can I go through it too?

When do you when does the CFO step in?

In what instances would you listen?

I have blind in the sand here.

Or when?

Do you know when you should just sit back and maybe, hey, here's this thing, and just see what they say about it.

How do you balance that it is once you are in family, run businesses, you're dealing with spouses, you're dealing with siblings, you're dealing with grandchildren.

You know, it, it's, it's always very touchy, and you have to be careful.

But usually the business owner already kind of has their mind made up a lot of times.

In my experience, anyway, they've, they've, you know, unless you're just bringing some new revelation to them, of, hey, I think your grandson might be stealing some money, and this is why I definitely got to have it all laid out and very backed up and very documented before you're bringing anything like that in.

But if you're, if you're going in and you're saying, you know, asking some just generalized questions.

You know, what is their background?

What?

Why did you put them in that position?

What is, you know, they probably already have an idea.

Yeah, that's not working out.

Or they have some questions already in their mind.

And you're not really bringing new revelations to them.

You're just, you're solidifying their opinion already.

Now, does that mean they're going to make the necessary change?

No.

And may tell you, you know, look, I know I probably need to cut them, cut them loose, but you know, their family, I can't at this time, or whatever this case may be.

So yeah, you have to be cautious.

You have to be very political about it.

And sometimes it's, it's non family.

They're just long time partners, you know, they've been in business together for 40 years, or whatever the case may be.

Those are, those are almost worse than family members sometimes, right?

Yeah, it can be, I guess, especially if it's a long time.

All right, I planted a seed early on my last big burning question.

So, like I said before, many occasions, you find the CPA or CPO or CFO is the kiss of death of the best marketing plan in the world.

And I'm, you know, it's funny, because, like, I don't know about other agencies, but we're very fiscally responsible.

Like, there's a mathematical formula we stay within.

We are conservative in in how we have them investing in their marketing, is we use two to 6% of gross anticipated as the window.

No Wrong answer.

You know, just no.

2% is going to be a little bit more conservative.

Six will be more aggressive, and I won't let them go over 6% I will literally stop it.

Oh, I really want to.

That's awesome.

My last agency let me spend 10 Uh huh.

And why am I here?

Yeah, it's I figured out the formula.

I figured out the math.

So so we are very respectful, but I have seen CFOs and CPAs step in and all of a sudden they stop their ad spend.

I'm like, What are you doing?

You know, if my sales so my burning question, and you may break my heart, I'm not really sure.

What advice do you have for business listening today on how to be fiscally responsible when it comes to marketing their business.

I think it goes back to what we talked about earlier, is budgeting and knowing the data.

You know you've the data is there.

All the information's there either, either that needs to be input, or that is input and just needs to be interpreted.

But you know, you can really determine based on where you stand on cash today, where you forecast it out to be in three to six months and and what you're trying to accomplish, and working with with the rep.

Marketing person like yourself, that gives you those buffer ones of what your spend is going to be, what your potential reach is going to be, what your potential return is going to be.

You know, ROI is one of the big calculations that CFOs are going to do on any new cost.

Is, what's this bringing back to me, I kind of mentioned it earlier with the prospect I'm working with, and he wants that four to five times ROI for whatever he's spending on whoever he's bringing in.

Kind of hard for a CFO to have that kind of ROI, but depending on what kind of strategy you can bring in.

But back to your question that that is, you know, dealing with that data.

And, you know, being a business owner myself, I understand the the importance of every aspect of a business.

Sometimes a CFO gets so focused on the financials, and that's now, you know, a 2% cost that I was not anticipating or hadn't budgeted for, that that may kind of hit them broadside and be something that they're not for.

But again, it's just analyzing the data that's there.

What's your budget?

You know, working with the business owner and is this something worthwhile?

I would say I'm not your typical accountant.

I like I like the marketing side.

I like the sales side.

I have to do that with my own business.

I'm not only the the the owner and the contractor, but I'm also the salesperson and the one out there, the business development person.

I've kind of got all the hats on so I understand and appreciate that need for a business and and I'm weighing it myself, you know, trying to figure out, what should I do, marketing, if I do What kind is it, and things like that.

So, but again, I'm talking more of a business owner than a CFO.

From the CFO standpoint, it all goes back to the data.

Well, I do know somebody that might be able to navigate that and just kind of put it out there.

Just have a conversation.

Let's I love doing that for people, you know, when you're talking about the ROI and that person that wants five times the biggest challenge in advertising, not marketing, advertising, is the brand component that gets put into every single strategy.

So there's got to be something.

If you've been a listener for any length of time, you know, I talk about this a lot, that brand component says who you are, what sets you apart from your competition, what is unique, What's your why in your and that brand statement has to be there when it's not whatever lead gen, I call it, direct response that You're trying to generate will not be as effective without the brand component to it.

I have found that even when it's a little sprinkle of branding, it could be paid social media or something very cost effective and not done in mass, but just that the name gets out there, the direct response is so much more powerful, like I've seen, I've seen, I've taken on clients where all they were doing was lead generation, and we just added, we took a little bit away, added a little bit of branding, same direct response tool, and that direct response went from like a 5% return to a 30% return, and that's An average number.

So how do you get the the business owner that I want to see five times return on every single dollar I spend?

Brand dollars?

It's not as easy to track the ROI.

It is difficult, but it has to be there.

It's It's not like I just want the company to spend more money.

I really don't.

But without that, I know that I said, let, let me do this for a period of time, and you'll see the numbers increase.

And once I get a company to that point, they allow it.

But like people in your chair are like, brand what?

What's the return on this?

Well, it's built in.

The strategy as a whole is what brings the result?

It's not a thing, you know.

It's not an item.

We're going to do this one thing, and it's going to rule the world, and we'll make billions.

No, it, there's their steps.

So how do you navigate that, and how do you equate it in a budget, you know?

And tell them the clients got to turn around and say, Oh, sure, well, the CFO said, but we're not going to return on this directly, but it works, yeah, oh gosh, that's a tough one.

Um, yeah, you know for me, I really my why.

I don't know if this is what you're exactly looking for, but my why is.

Is I love the entrepreneur spirit, and I really, truly want to help entrepreneurs make the most out of their business.

And I know that.

I don't know it for a fact.

You know the old adage, you know, most small businesses failed in the first five years.

I've got to believe that there's a pretty significant percentage.

I won't say it's the majority, but a pretty significant percentage of those fail because they they fail in the accounting.

They don't know what their costs are.

They don't know how much they should be charging.

They are out there thinking they're making a lot of money, when at the end of the day, that every time they leave the parking lot to do something, it's at a loss.

You know the old Dave Ramsey adage, it doesn't matter if you lose a penny or a nickel or whatever.

You multi and you sell a million items, you're still losing a nickel per item.

You're still going to have a loss at the end of the day.

It doesn't doesn't matter.

Volume doesn't matter.

So, you know, for me, it's really wanting to help them understand and make the best decisions they can, financially and and getting in on that ground floor.

That's why I don't I don't mind working with startups.

I don't mind working with pre revenue because all of that accounting has to be set up and accounted for properly to once they are in that revenue mode, they've got it.

Things have got to get categorized correctly, or you're going to be, you know, it's a lot cheaper to get it set up on the front end than to bring me in, you know, three years later and fix the issue and fix the big problem.

So it's really my desire is to help entrepreneurs, small businesses, just knock it out of the park from day one and not worry about the accounting again.

The old adage, work on your business, not in your business.

Grow it.

Do it?

Do what you do best for that business and sitting up, doing paying bills, doing payroll, creating invoices each night, is not, is not what you do best for the business, right?

So, yeah, that, no, that wasn't the answer, but I would highly recommend you enter into politics.

Oh, okay, so good for you.

I'll let you off the hook.

Craig, was there anything that I did not touch on?

Because our time is like we are beyond I just enjoy talking to you.

No, I enjoyed this.

This is great.

You know, I think the one thing I didn't really touch on, I touched on a little bit but, but having someone there to assist you with any type of financing that you're looking for that is such a time suck for a business owner.

You know, having having someone handle the communication for you, having someone take care of all the documentation for you, and just bring you to the table when it's ready.

As a business owner, and not having to deal with that on a daily basis could really substantially cut that time, you know, from a four to six month process to four to six week process, depending on if the bank is cooperating in the speed side of it.

But, but just, you know, with the way the the economy is right now and the way that banks are not lending right now, they're very selective.

Having someone in your corner that kind of knows where the banks are coming from, who's lending, who's not, is a is a huge help, and that's where a CFO can really step in and help and guide that process to completion in a lot quicker time frame.

That's good.

Yeah, I think if you're really listening today, everything, Craig just said it's in between the lines of everything we talked about.

So it's all there, Craig, we're gonna need lunch soon.

You and I, sounds good.

I think we can help one another.

Okay, so let's be a little shameless.

Please tell everybody how to reach you directly.

What's the best way to contact you if they have the desire to do so sure.

My email is Craig at equities, S, P, E, Q, U, I, T, A, S, sp.com, email address is equities, x, p, s, p.com, there's a Contact Me form there.

There's a if you're looking for a quote, there's a form there to fill out as well.

If you go to enough networking in Nashville, you will probably.

Probably run across me at some point.

I've been told I'm out there a lot, and probably more so by my wife than anybody else.

But I enjoy it.

I enjoy it.

It's it's one of the favorite parts of having this business is being able to meet people and make connections for people, clients, other networking connections, so on.

Just I love meeting people and learning what they do, and if there's anything I can do to help them so that that sounds self serving, but it's not.

I truly do like connecting the right people together, so that's probably why we get along.

We're very similar in that way.

So thank you very much for being on today, Craig.

I think it was very eye opening, and hope people benefit from it and learn from it.

And whether they're using you or making sure, if they're in another part of the country, that's it.

You didn't say that, but if somebody's in another state, can you work remotely and just as efficiently.

Absolutely, I currently have four clients that are not in the Nashville area, and everything is done remotely.

So yeah, with with the Thank You COVID, with all of the capabilities of working remotely, this job is can be done pretty much anywhere in the world.

So any, any client that's out there that's needing this type of assistance is, is can totally be done remotely.

You know, obviously they want someone there, occasionally, we can make that happen as well.

Thank you for that.

So thank you for listening today, everybody, as you know it is educational, informational.

We're topic driven.

We try to have fun it.

We're here for you, not for us.

The idea is you learn from it.

If you're a business owner, hopefully you take this topic by topic and help to benefit your business.

If you have the wherewithal to reach out to Craig, he's somebody I would highly recommend to you.

I think there is a need for his service, and he and I are going to be talking offline about a lot of things, I have a feeling.

So thank you again today, if please remember to reach out to us, if you have a question and you didn't get an answer on this topic, just email we put on our podcast.

There's multiple ways to reach out.

If you're trying to get the question to Craig, he gave you his information directly.

If you want to do it through us, we're happy to share that question with him and we'll get you the answer back, or we'll put you in touch if you'd like.

But do that and open the door to if you like the show, please share it.

Please get it out there.

We as business owners, we have to help one another.

We have to help each other grow.

And if we all have the same mindset as entrepreneurs, we'll all benefit.

We're the lifeblood of this country.

As much as people think that it's big corporate America, it's not.

Do you know that we, on the last show I just did, we talked about franchises, and franchises accounts for over $800 billion in revenue a year, like that, and that's franchises.

Some of these franchisees are entrepreneurs just like you.

So can you imagine if we all put our heads together and all thought positively and help one another, instead of trying to bite, scratch and race our way to the bottom?

Let's start doing that as a people, and we'll forget what's going on in the world out there, and the economy, and we can make our own economy and do a lot better.

So thank you for listening today.

I look forward to next time talk to y'all soon.

You.