Blue Collar Business Podcast
Welcome to the Blue Collar Business Podcast with Sy Kirby. Dive deep into the world of hands-on entrepreneurship and the gritty side of making things happen. Join us for actionable tips on scaling your blue-collar business, managing teams, and staying ahead in an ever-evolving market. We'll also discuss the latest industry trends and innovations that could impact your bottom line. If you're passionate about the blue-collar world and eager to learn from those who've thrived in it, this podcast is a must-listen. Stay tuned for engaging conversations and real-world advice that can take your blue-collar business to new heights.
Blue Collar Business Podcast
Ep. 24 - Mastering Cash Flow in Blue Collar Business
Uncover financial strategies that can transform your blue-collar business with insights from Lauren Furtado, the Unconventional CFO. Lauren joins us to break down barriers and challenge traditional CPA norms, making financial concepts like cash flow management and forecasting more accessible to entrepreneurs who might feel overwhelmed. Learn how a fractional CFO can be a game-changer in your business, offering tailored support without the full-time cost, and why cultivating a dedicated sales team is crucial for sustainable growth.
We tackle the necessity of financial transparency, the pitfalls of neglecting financial oversight, and the importance of setting transparent business goals. Through personal anecdotes and shared experiences, we reveal the transformative power of regular bookkeeping and strategic tax planning. Discover why understanding your specific business needs is crucial, and how to navigate the diverse specialties within the CPA profession to find the right fit for your business.
Feelings of shame and embarrassment in financial management are common, but they don't have to hold you back. Embrace vulnerability and the willingness to seek out expert help in areas where you may not have expertise. This episode is packed with real, raw advice to empower you to build a strong team and connect with financial experts who can guide your journey to success. Learn how overcoming mindset hurdles and acknowledging financial vulnerability can be key steps toward achieving your business goals.
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Hey guys, welcome to the Blue Collar Business Podcast, where we discuss the realest, rawest, most relevant stories and strategies behind building every corner of a blue collar business. I'm your host, cy Kirby, and I want to help you in what it took me trial and error and a whole lot of money to learn the information that no one in this industry is willing to share, whether you're under that shade tree or have your hard hat on, let's expand your toolbox. Welcome back, guys, to another episode of the Blue Collar Business Podcast. We have talked about many various topics on this channel so far, from continued education to having different influencers here, to engineers, to aviation engineers and handyman, but today is a pretty exciting little opportunity for a lot of you guys. We have Ms Lauren Furtado, the unconventional CFO, correct? I did say that, correct, right?
Speaker 1:That is correct, okay, we are going to be discussing some things that all of you guys and myself need help with. There is no doubt about it, and it's one of the main reasons I started this whole podcast was to connect ladies like herself with the expertise and experience that she has, but is willing to actually explain and come down to our level of. Hey, this guy is an electrician, doesn't even know what P&L acronym stands for yet, and so we're going to go through some of these number one mindset hurdles that we need to get over as entrepreneurs so we can also speak the same language. But something that Ms Lauren has already expressed her passion about, and that's cash flow and cash flow being king and cash flow management, but also how she's going to help us in the world of forecasting.
Speaker 1:Like that world for me is still such a struggle to understand, because we're just trying to make it to the end of the month a lot of times, you know, in the blue collar sense, especially in the first five to seven years, or three years, if you make it past that point. So, and then, last but not least, we're going to talk about accountants in general, because I'm going to tell you guys a little bit of my experience of several accountants that I have been through to get to where I'm at and why I'm looking into the fractional CFO kind of route to help my accountant and how they can supplement behind the scenes not waste one of your payroll team members that maybe don't have all the knowledge. Bring somebody in like Ms Lauren Furtado, the unconventional CFO. Thank you so much for joining.
Speaker 2:I appreciate you.
Speaker 1:Cy, you are the financial guru and actually guys and it's so funny as we think, especially in the South New York, you know, there's even a little bit of a gap there for us to you know, reach that upper echelon level of language sometimes. Know reach that upper echelon level of language sometimes. So our brief intro call we had, we were discussing, literally talking about where kind of the history of the struggle that I have been through as a business owner and you know, sarah, being the ultimate CFO but not really knowing what a CFO is, encompassed with all the burden that comes with the CFO position. But tell us a little bit about yourself. Tell us a little bit about unconventional CFO and what you do for these blue collar men and women.
Speaker 2:Yeah. So I want to maybe just start with the background on why it's unconventional, cfo, and I really say that in two respects. First is when you think of what a CPA is and looks like, typically it's not me. I am covered in tattoos, I've got my nose pierced right, I've got my long dark hair, and you're not thinking of a guy with white hair behind his big wooden desk with a sweater vest, right. So I think I just like to break the perception of what accountants look like. Number one, but also two, in the way that we deliver our service.
Speaker 2:We were chatting earlier just about really making the information and the concepts digestible. So I think that is very much not the norm in the accounting world. I think often business owners, especially in the blue collar space, feel intimidated by some of the financial concepts and it's unfortunate that that is not backed in nothing right. So I think that perception is accurate of what some accounting and finance focus do. Right, they talk over you. They say I've got it handled Like they don't actually take the time from a client service perspective, to explain the concepts and the impacts of your decisions on your financials. That's another word driver on why we named it unconventional.
Speaker 1:CFO sector. I mean, anytime you're thinking finance, immediately, why call her? There is this ginormous divide between our language level and what we understand. Hell, we're just trying to get enough work to keep our guys busy and all the other little things that it takes to keep this thing going. But once you start actually compounding some work together and then all of a sudden you're out past your skis real quick with all the money flooding in whether it's flooding in or it's not enough in a lot of cases and knowing where to start, and somebody like yourself that is willing to come on a show like this, completely designated to the blue collar sector of the world, and go hey guys, I'm your person, I deal with um. I.
Speaker 1:I want to touch on one point, and where you were, the CPA is a lot of the white haired wooden desk gavel thrower. They want to tell us we're here, throw. Or they want to tell us we're here, yep, but you need to be here, sigh. And that needs to be done by april. Have a good day and I'm like well, just just build me a stair stab, just give me a path, a plan of action, anything, please. And because it's our finances, it's our financial, like those financial statements to you guys in the blue collar world are everything, and let me tell you about it from experience. When you're providing crappy financials, you're going to get the word no more than you'll ever experience, and you're going to turn people off by just looking proper people that understand a P&L, like Ms Lauren, but bringing you in to maybe shape that a little bit.
Speaker 2:Yeah, often right, you're going to get no's from banks when you're looking for financing. You're not going to be able to purchase equipment. You're not going to be able to grow your team. You're going to get no on bonding right.
Speaker 2:That's another one where they're looking for your financials and, if one, your bookkeeping is messy or it's not up to date and you can't clearly communicate kind of why certain things happen in the finances of your business.
Speaker 2:It becomes really difficult and I think, being support from a continuing perspective for the clients that we serve, I'm able to do that with them right. Them feeling just the comfort of me being on a call with a bunch of bankers that are asking questions about even just mid-year financials like hey, what's this from? What is this? Why this right? So just having someone in your corner right to support you in conversations that can feel very intimidating when, like we talked about before, I might not even understand the difference between my profit and my cash. So often I hear like my P&L isn't profitable but where's my cash? I'm having a hard time making people right. So like just to be able to bridge the gap on some of the knowledge going into those conversations and then being there to support I think is just such an intangible thing that people don't realize just to build your confidence.
Speaker 1:It just makes a world of difference the confidence is everything too, and it's like, do you? I wish I would have slowed down and listened to sarah a little bit I have no problem in saying that because if I knew the importance of what the question she was, asking the right questions, although she was being guided the wrong direction several different times and I got to say that's a little bit of the leading into kind of my first point of the day is that mindset hurdle that entrepreneurs face, business owners and their financials, because they're're like I don't want to bring anybody in, we feel this embarrassment, this shame, because we're, we're expected to know. In a lot of conversations you hit two on the head bankers and bonding and utility guys, excavation guys uh, we are utilities, especially to live and die by your bonding cap aggregate of what the entire top line revenue, which equals, obviously, if you're doing things right job costing and expense tracking, uh, profit at the end of the year. And the most important thing is documenting and knowing your cost per job, per item. And there was a lot of years that I didn't know my cost.
Speaker 1:I was just out there but I can't tell you the amount of guys that are in my shoes sitting here going hey, that's me and there's probably some guys going what an idiot, but at least I'm vulnerable enough to go. Hey guys, this was me. I need you to understand. It's a lot of us out there because the mindset switch that you, that you need to have from my experience is, hey, you're not in the business all the time and by this point in my world where I started feeling like this is like I had to be out there in the field and I had to be up there and estimating and I had to be everywhere. I had to be out there in the field and I had to be up there and estimating and I had to be everywhere. But I was still just trying to stay in this, in the business role, where you're comfortable.
Speaker 1:Exactly, it's comfortable, right, but then nothing is growing. Everything is dying because you're not out here working on the business and understanding and learning and engaging, while your entire team is looking at you going hey, dude, will you just get it together please? We're waiting up here.
Speaker 2:It's becoming the CEO, right, and it's not being a doer. It's not fulfilling the jobs, it's being able to manage team, understand your finances, it's all those things and that, I think, is a big hurdle for guys that have worked blue collar businesses traditionally right that like when you're used to spinning the tools.
Speaker 2:That's where your comfort level is. It's hard to make that jump into that ceo level mentality of like managing it in a very different way. Um, and it's interesting because you said vulnerability and I always say it's like the financial nakedness, like I'm asking you to expose it right, because your finances are a reflection of all the decisions you've made right, even on a personal basis. If I said, sigh, show me your credit card statement right now, you probably would cringe, you'd say lauren absolutely not.
Speaker 2:You're gonna see that, like we ordered pizza three times last week and like I'm wasting money on 10 different subscriptions that I probably don't even use, and like.
Speaker 2:so it's just. It's a matter of being able to let go of any judgment, so finding a professional you feel like really comfortable and that you can trust with your numbers and that there's not going to be judgment. Right, it is what it is and for me, when you talked about the steps you need in order to get to a certain point, the only way that I can bridge the gap on where we are today and where you want to be is by really understanding and have a good understanding of the financials and the habits that led up to that, because I can't say Cy go cancel these five subscriptions or only order pizza once a week and then we can meet your goal.
Speaker 2:If I don't understand some of that right, so it's being able to be vulnerable with the good and bad and anything in between and just exposing it. Like I have seen so many transactions I've seen bankruptcies of multi-billion dollar companies in my experience, like I've seen things go really badly but I've also seen things go really well. And on the less, you're willing to look at your numbers. You have a glorified hobby I'm sorry to tell you that, but like if you are not in business, to just spend your time and not do anything with it, if you have no goals of growth, of selling it one day or passing it down to your son or actually trying to provide for your family and meet additional goals, then you don't even need to bother looking at the numbers.
Speaker 1:The difference between entrepreneurs and skilled business owners. Business owners just do the thing. They just they're going through the flow. Yeah, I've got the business Entrepreneurs always trying to build value within the business itself and so that way that one day they can either exit from it, give it to your son. But you're right, I think I'll tell them myself.
Speaker 1:I lost focus in last year with just everything we went through. Economically wise, there was nobody's. There was still companies around me doing just fine, don't get me wrong. There were larger companies but, um, it was extremely tough. So for me to focus on the bad during the bad was even worse for myself. And the embarrassment because, like when my guys are broke, so what? Nobody knows that they can't tune it until Friday and they get a paycheck. When the company's broke and the owners are broke, everybody knows it, everybody knows every single day, and it seems like it just all hits at once. And if you maybe had a cash flow management system to maybe tell you when those spikes are coming, you can prepare for that, and that's things I've just learned in the last year.
Speaker 2:Yeah, absolutely, and forecasting it's obviously not a crystal ball right. But, it can, directionally, kind of give you the indicators on when you have inflows and outflows happening. Right, without cash flow forecasting, it is very hard to make decisions alluded to before. We hopped on about, like just businesses going out. Um, the one of the biggest reasons that businesses go out of business is because of bad cash flow decisions.
Speaker 2:Right, like I'm gonna buy this piece of equipment or I'm gonna hire this person like all of a sudden, after a couple of months, literally your cash is liquidated, that you have nothing to show for, potentially, years of hard work. So it's really unfortunate if you don't take the opportunity to have someone help you build that cash flow, and it doesn't have to be a fractional cfo, right if you're on the smaller side. To be honest, if you have the discipline and accountability to be able to do it yourself, you have to have some ability to see where you're going because, again, like we spend a ton of time with our clients actually digging deep into your business goals and your personal goals, when we do onboarding Cause it's let's pull back the layers right Of like.
Speaker 2:why do we want to have 10 X revenue by next year? Right Like. Help me understand the wise behind it. Right Like in it we can only break it into like the steps and the timing and like the things to do If we have the understanding of like what those things are, to be able to put it in the picture and we can scenario build. Oh so you need to buy uh, you know you're gonna need to do like extra maintenance on the equipment next year and it's gonna double that cost all right, plug it in. All right, you want to hire, um, a new product manager? All right, plug that right. So it's again just understanding the impact of the things before it's already happened.
Speaker 1:That's what we all want as business owners and entrepreneurs. We want to, especially when things are going bad. Man, it rains, it feels like every little thing is all going to come down on you all at once. And then you look at the bank account. You can't fix no problems and I can't tell you how many times, especially in the last five years, I doubled my gross revenue up until 24. It was going great.
Speaker 1:Again, I lost focus on the things that I needed to be focusing on Sales, being number one and building a great sales team. I thought utility and estimation guys, we don't need a sales team, we just need an estimator. He can handle it all right. No, no, I was asking a lot out of one individual. And now I've built a team and the sales is just completely, completely game changer in 12 months. And production that was the next thing to meet up to the production level. But you know what they both need. They need those numbers of what they're actually producing. If we don't get that back to the right people, the right system, we're not billing for it, we miss a billing. That's a huge, altogether big deal right per project.
Speaker 1:But the accounting side of things is always from my experience and hopefully I'm speaking for a lot of business owners we immediately hand that off to oh, my spouse can handle it. And I'm going to tell on Sarah a little bit here. She has done incredible with a high school education. She's not an accountant. I'm not an accountant. We are not financial people. I am a dirt and pipe guy. That is what I am. And then so then you take on this CEO title and you're like oh well, I'm going to make all these decisions now with absolutely zero experience other than being a dirt and pipe guy and then being too prideful to reach out to somebody like yourself and go, hey, I need a little help. But to what you're doing as well with Unconventional CFO is be willing and open and go, hey, I just really want to work with these contractor guys. Speak a little bit on that. Why you just number one? Because of our open mindset.
Speaker 2:I can understand, but there's a lot of walls we put yeah, but I also what I love about most of you guys are your action takers right. So, like, if we have a call and I say, sigh, this month, these are the action items that need to get done. Like, once you understand it and once you can wrap your head around it, it's go time right, like you're hard working and like you're willing to do the things.
Speaker 2:I um, candidly, personality wise, being from the Northeast, like I'm a no BS person, like I don't need to be on the other end of like some woman that owns a coaching business, that like is indecisive and like uh like excuses, I don't deal well with that.
Speaker 2:So for me, I love the fact that it's like all right now that I know what to do, I'm gonna go get it. Um, so for me, like that's such a big thing. Um, the other thing too I know we started talking about cash flow, but it's, there's such a need with the cash flow issues to like get a good system in place and like also process. The other thing I bring from a perspective is like hey, what technology can we use to fix this? Like I've seen guys still doing stuff on paper. I've seen inefficiencies with like even a spouse doing some level of bookkeeping where it's like, well, let's, I'm going to teach you how to set the rules so you don't even have to touch the transaction anymore, right? So, like just being able to see opportunities and inefficiencies of what goes on. I think there's such a big opportunity to save people time so they can focus on chasing revenue, not on categorizing expenses and low level stuff.
Speaker 1:Everything you're speaking on, like we're sitting here, I'm sitting here going like, well, yeah, duh, you know because it sounds so, I don't even know what the word is for it, but I, I encourage you guys that are in that three to seven year mark, as you're building whatever business that you may be in. Guys, you're not a cfo, you are not a ceo. Yet there is people out, you are, you are. You put yourself in that position, big dog, and it's up to you, man or woman, to go out, research, find people that build comfortable relationships that unteach you. And I will tell you straight up from my experience with the financial side I have trusted the wrong folks. We didn't even get to cash flow management or any proactive system. It was all reactionary to everything, every question that I had, and I'm like, why are you not telling me this information? I thought I trust you to just pay the tax, man, I guess. And there's no strategy, there's no process. You know.
Speaker 2:Yeah. So let's dive into the different accountants. I know we probably had that translated in the conversation, but let's dive into that because it was such a good lead of. Like I always say, first let's talk about CPAs. I am one, but I like to describe CPAs just like a medical degree. We all have passed something like the boards, but then we all have specialties. So as a CPA, I actually do not tax work. It's interesting because people often say I need a CPA. Usually that means I need someone to do my taxes. But I will say CPAs have different specialties. Understanding your need versus a title is what I always encourage people.
Speaker 2:So, there are some basic needs in your organization, no matter your size, that you are going to need. And let's talk about tax first, right Tax compliance. You have to have your return done. You need to make sure payroll taxes are getting remitted, anything sales tax and then, beyond, just tax compliance. That is just like my stuff is filed, things are getting paid.
Speaker 2:Tax planning and strategy are always what I encourage. Planning for sure, that is, having conversations before the end of the year to understand, like, well, what's my liability going to be, so I can either plan to spend more money this year or I want to show some profit because I'm going to go to the banks looking for lending right, and that's hard to do if I'm showing a loss year after year. Yeah, so just having a conversation from tax planning before you get your tax bill before the end of the year, where it's too late. And then strategy is really right, the stuff that gets hype on social media. But, like, once you get to a certain size, making sure that you elected to be like an s corp, you can hire your kids right. There's the Augusta rule. There's a number of different things from a strategy when, like, you're in a position where you really want to minimize tax and you're willing to put in some work, invest in someone helping you to do that that's the tax piece.
Speaker 2:Now let's talk accounting and kind of the management of your finances. On a regular basis at a minimum, you need a bookkeeper. I'm not saying you have to hire one. It could be your wife, it could be your cousin, it could be someone that lives overseas and does it at a very low rate, it could be someone you have in your office. It can be whatever you envision it to be right.
Speaker 2:So, but having someone who understands enough about your business in your industry and whether they're willing to learn it, because there's someone who's going to be in-house with you full-time or going to be someone you're looking for externally. Again, I I always recommend someone who has done your type of business construction. Businesses are very different than working on I don't know a SaaS company, a retail client. It's just nuanced and you want somebody who understands how you need to analyze your financials so they can prepare your financials on a regular basis for you to be able to review.
Speaker 2:The other thing maybe, just as we're talking bookkeeping, I just want to encourage frequency, right? I don't want a bookkeeper to come in once a year and like clean it up and just look at them annually.
Speaker 2:I want them to close my books every single month so I have the ability to look in my business and actually make decisions. Because if I'm waiting even a quarter, that's three months of information. That, like I can't react two months ago. It's really hard to continually make decisions if I don't understand where I have been on a regular basis. So I just want to encourage regular bookkeeping. If it's not being done weekly, at least monthly. Close the book so we have some information.
Speaker 2:So the bookkeeper is one. Two is an accountant. Right, some people need these, some people don't, but those are people who, potentially, are doing your AP, processing payroll, doing some of the like transaction-type stuff that's not just lurking like within your GL, whether it's QuickBooks Online or whatever system you're using to do your bookkeeping. And the accountant can be engaged too to help with AR things like that account reconciliations. So that's number two. You can also have layers in between. Right, can I have a controller, when I get to a certain size, that manages your accounting team? Sure, but we're going to skip that for purposes of this discussion.
Speaker 2:But where we talk about CFO, I always want people to understand that's executive level, that is, someone who is focused, like you said, of the thing you were missing was forecasting, strategy advice and, candidly, when you are a a smaller business, you don't need this person full-time, right? I love the fractional model and I love that, like, people are just becoming more aware of it because it gives you the advantage of having advice from someone who has such experience in the market serving, in my experience, multi-billion dollar corporations for two decades. Right, if I were to go get a full-time job, it's going to cost multiple six figures for someone to hire me full-time. But you get my expertise for your business at your level for a fee, a fraction of the cost, right, like. So it's just a great model because you get expertise you wouldn't normally, until you get to like 50 million dollars in revenue when I actually need someone full time.
Speaker 2:So I just want to encourage people to think about the level of expertise, and there's all different CFOs out there. People may have worked in FP&A, they may have worked in corporate. There's a number of different experience levels that you're going to find with CFOs, but that's where the trust thing comes into. I encourage anybody looking for CFOs to really find someone who still has experience in their industry, but someone you really have a relationship with, because we're going to have some hard conversations. Right, I'm going to say aside.
Speaker 2:We didn't talk about this transaction and you did it and there's nothing we can do about it. So now we got to figure out the path forward Right. So like having hard conversations but also celebrating the wins, and like it's such an intimate relationship because I am looking at your decisions, I am looking at your numbers, I'm asking you about how your personal goals fit into your business goals. I'm going to ask about your family dynamics.
Speaker 1:I'm going to ask about all sorts of things that might feel uncomfortable but also like, just are so helpful for a blue collar guy. We're just thinking, oh, I need somebody to handle my books. I need what is it? What does that even mean? Like, and you just broke down the bookkeeping level. That's what you need. You need a book keeper, you need somebody to close that month out. You need somebody to enter expenses, enter deposits. Hopefully it reconciles at the end of the month, but past that everything else could be fractional from there. So I would highly suggest you get somebody, just like Ms Lauren just said, with some experienced expertise. That's word to word negative negative there, but anyways, experience in your field, because instruction is so different and it's looking for the need, right.
Speaker 2:So instead of saying I need a CFO, maybe it's saying like, hey, I own, I'm a GC and I'm looking for strategic partnership with financials right? Or I own a landscaping business. I really need someone that can help with my bookkeeping, right? So like seeking it in the market in a way that clearly communicates your need, versus like the person, because then I think it just becomes harder to like really find the person you're looking for. So I always say, like express the need and then you can find, ultimately, who fits. That.
Speaker 1:It might be a CPA, it might not, and a lot of times, guys I'll just again being pretty vulnerable here I've had a extremely rough relationship with the last two or three CPAs gone through. I feel comfortable with the one that we've landed on now. That now actually has experience funny, you might say that with my specific industry. And so it actually was worse that I was trending with these people because we were trending in the exact opposite direction. Like I just said, it was reactionary, there was no proactiveness. But just like you guys you know excavation guys some of you guys may go out and dig cable. Some of you guys may go out and do waterline Like I'm a utility guy, I do water insurance, storm drain, but I don't do anything with cable. Do I have the same equipment to be able to put cable in the ground? Absolutely, but it is a totally different sector of my industry that I don't have experience in. So, just like to your point that bookkeeping, that's pretty general knowledge and we can get somebody trained up or get them with somebody that you trust and have a comfortable relationship at that. Whether it's a executive level or whoever that may be, I would highly suggest that it's somebody with the expertise to train from day one at that year two mark, like. I know a lot of you guys are sitting there going oh, they may even just scroll right by us. I'm not ready for that.
Speaker 1:A cfo and I'm like guys, dude, I wish I could go back five or six years and concentrate and find a miss lauren that would come in and go hey, what do we really need this 85 000 pound excavator? Before you sign your name to it, like, uh, can you show me contractually where you're going to use this machine eight months out of the year and have the absolute need? I need those challenges, and you guys do too. You need somebody challenging you because if not, you're just going to have short-term goals and short-term fail. Because you have to have that mentorship. That's somebody to go to and get advice. Sometimes it's going to be worse than uh, than you know that you would expect. Sometimes it's going to be a flat no Um. But I think what I was hearing from you just a minute ago, that a lot of these clients just go ahead and do those decisions and then go hey, how are we going to fix this?
Speaker 2:Yeah, and I think it's having the ability to give them a tool to see what the impact is before they do it and getting them to use it Right. So, like we're going to invest all this time building a cashflow forecast, well, I'm going to teach you how to use it, even when you're not on the phone with me. So before you do that, like go in and plug in the number in that cell and understand what happens exactly with your cash balance over time when you do that. So it's being able to equip people with implementing the review of the impact prior to the decision being made. And I think it's just getting them accustomed to using that tool. And it's so powerful.
Speaker 2:And I just recently onboarded a client where it was like he said I can't believe you weren't doing this before. And I said you can't beat yourself up, you don't know what you don't know. Right, but bring it all together. And I think the hard part sometimes to depending on your structure is like, well, I'm investing all this money in this system like Procore or foundations, or whatever I'm using to do.
Speaker 1:Don't say that word. That's a no, no word in my world. Oh my God, go on about them.
Speaker 2:But, right, like, I still don't feel like I have the capabilities to see the reporting that I truly need, so it's just being able to come in and like bring it all together for you guys. That I think is so impactful, to like listen, sure you guys can transact, do estimating and do job costing and wherever, but like being able to bring that all together so you can understand the big picture isn't always done and, again, if you don't understand or bring somebody in who's going to explain that to you, it's really unfortunate.
Speaker 1:I think that's where you're obviously striving to be different. It's not a hey, let me handle all of this. And you probably have clients that are like that and do one quarter, one meeting, a quarter, et cetera. But then you probably also have clients that you talk to almost every day probably and that are needing that guidance and are needing I still need taught on a lot of the things at the executive level that I still don't quite understand. Don't get me wrong, that I still don't quite understand. Don't get me wrong. Education is expensive and experience is priceless. And me going through and learning those mistakes without having some type of forecast and still to this day, I've got a small budget, but do I have this forecasted plan? Guys, I'm not sitting in front of you acting like I got everything that's coming out of her mouth. I'm learning with you, guys, like I'm nine years into this and as a company, we are completely overhauling our financial and our awareness, tax, consult, all of it, bookkeeping, everything. But it takes a few of those education lessons. If you're not going to jump out there in year two or year three and start this system and avoid those, I would highly suggest you do that. But if not, you are going to learn with your own money and pay for a very hard knocked education. That could be avoided, but I think that's the big difference.
Speaker 1:That I'm hearing is like I've never had anybody in the financial world go hey Cy. Anybody in the financial world go hey Cy. Well, other than my CPA that we've been working with not too long sat there with my P&L. He's a fairly highly regarded man and doesn't have much time. It's very boom, boom, boom. He sat there for two hours, went through my P&L and balance sheet and asked questions and circled this.
Speaker 1:Wanted to know the. Just like you're saying, hey, where's this coming from? Why is this here? Do you even know what this is? No, I don't, and I can honestly say yes, I know how to write a P&L and a balance sheet. It may not be the results that I want, but do I know how to fix the information on that balance sheet? You know, to get me where I want to go is the biggest question of all, and most of the time, guys don't feel bad. You're not going to know how. Neither do I. That's why I'm sitting here having this conversation. I've gone to a fourth CPA in nine years that actually has expertise in what I do. So that's that I encourage you to. Um, I mean client level. Ms Lauren, where are you? Obviously you've been up here at the upper echelon, but your main contractor that you're working with is that 100K a year? Is that a million a year? Where's that range for these guys that are listening?
Speaker 2:Yeah, so we always preach that everyone can benefit from a CFO. I will say it's not like like you said. People might scroll past this, will say it's not like you said. People might scroll past this and say I'm not ready for that. Right, that's wrong, that's actually wrong 100%, so everyone can benefit.
Speaker 2:Now, the frequency may be different depending on your size and complexity. So I'll say, for smaller businesses in the six-figure range, I'll do a one-time service and it'll be okay. Hey, lauren, like I've got my books cleaned up, like I really need to build a forecast, can you help me? Sure, I'm gonna meet with you one-on-one. We build the forecast, I'm gonna teach you how to use it, but you gotta go do it because you can't afford, right, so candidly. Yeah, and it's to be honest, when you're that size, you don't have as much complexity with meeting me as frequent as you do, right? So it's getting that in place and like, as you start to grow, just there's more growing pains. You've got more team, you've got more systems, you've got more um issues that just come up right.
Speaker 2:So it's just um, when you're on the smaller side, even just once a year, and that one-time service I do with people, it really depends on what their need is. A lot on looking at pricing right, can we look? At us can we look at bidding like are we profitable? Like does this make sense? And when you're only looking at gross margin, you're not looking at your overhead costs, like really looking at them, not just like guessing? Oh well, I think 20% makes sense.
Speaker 1:Like guess what you're wrong, you're wrong, I am the guy sometimes you need someone to show you that right.
Speaker 2:So, like I've had those conversations as well. So just making sure foundationally some things are set, because if you have goals to grow your revenue guess what that margin issue doesn't go away, just becomes a lot bigger and your cash runs out very quick with, like, bigger jobs that you're accepting oh so that I would say for the smaller right again, like maybe once a year and specifically focused, but you have to make sure that you're going to use whatever tool we spend time on.
Speaker 2:Um. I do have quarterly clients, um, that fall kind of in the million to three million dollar range from an annual revenue standpoint, um, and that is where, again, they're not huge but like still need some advice. They're not making decisions as frequently typically when we go that route or they're like you know we're having the bookkeeping done, we know how to look at the reports and like the reports that we provide are real time so they can go on at any point in time and look at it themselves, right, but like okay, our meetings just aren't as frequent. It's you know more information to review on a quarterly basis in terms of what's happened.
Speaker 2:But, um, you know again, like just that that revenue mark not as complex, but if you're growth minded and you're growth driven and you're going to get up to kind of where the sweet spot is, that I say it's between three and $50 million of annual revenue, that I think you need someone who is engaged each month and we talk, as you said before, more than monthly, that's for sure. We have a monthly dashboard review of the financials. That's pretty formal, but, like every other week, we're having conversations and, to be honest, we're on Slack, they're emailing me, calling me and they're not treating me as a full-time employee. But at the same time, when there's urgent things that need to be handled uh, really to finance I'm not going to ignore it, right. Just because I'm your fractional cfo doesn't mean that, like, I'm going to leave you on your own to deal with something that I really do need to be involved with um and then, beyond that, it's like you really need somebody full time, right?
Speaker 2:So when you get to that like 50 and beyond million dollar mark, like you probably need to go out and hire an actual CFO that works for you full time and sits in the office. And that's always the goal for me is like, either get them to like exit or whatever goal they have long term, or get them where they need a full time CFO and help them hire that person Right. Like what are you looking for? What are the attributes? Is there anyone I can recommend? So like, for me, it's always get them to the point where they don't need me anymore.
Speaker 1:That's what I hear a lot of from the good ones. I want to work myself out of a job. And how do you do that? And that's just teaching. That's, hey, entrepreneurs. That's opening these big things on the side of your heads and listening to what they're saying. They're not, I promise you they're not wrong. I have sat across many tables many times and go, oh, that's not, there's no way. And then make up some realization justification that's completely fabricated, to make myself feel okay about the insecurity of you seeing this. And I have done it. I can't tell you how many times, but you're not going to get any better not holding yourself accountable. How, as a business owner, the only way you know you're making money is overviewing the P&L, the balance sheet, monthly per project. I know I may be going a little further in depth, but when you get past that five-year mark, you really got to start job costing per job per project.
Speaker 2:I would encourage you to do it before then Even before that, yes, of course, from day one.
Speaker 1:I, I'm sorry that would be coming from your side of the screen but over here in real world.
Speaker 2:If you don't have a whip report and you're actually monitoring it like that's another thing.
Speaker 2:We're going to spend a lot of time on a what a whip report a whip report tell us about it oh my god, so I'm gonna send it to you. Here's the template tell the accountant that you have to go do it, okay. Yeah, it literally is looking at your job progress again, like depending on the functionality of your system. A lot of it happens in whatever system you're using to do costing and to actually like manage that. But a document that shows every single job, it's a job cash flow, basically it's going to show what you've invoiced, what percentage complete you are, if there's overbidding, like just really mapping out.
Speaker 1:Okay, when you're invoicing.
Speaker 2:When are we collecting that money? Like if we have overbid. We can clearly see it. Like how are we invoicing? Is it based on actual costs or is it based on percentage? Complete, like just being able to see the whole picture from a job perspective and monitor that very closely yeah, that is called a, what we would call an under billing, over billing that's part of it, right so?
Speaker 2:like under and over billing reports out of the system to feed into this whip report, because it's got just all the different components put in. Because I'm with you, right, like over under billing is showing obviously snapshot in time of where you are in voice versus total job contract. Um, but again, like just bringing in the cost component and really being able to analyze again the cash flows and how those come in as well. Um, so you can analyze it and the biggest benefit, because you probably go in job by job, that is important. But understanding how all the jobs fit together is such a big piece too. Because guess what, when I start one big commercial job and I have to outlay six weeks of payroll costs before I see a dime, that's a problem. If I have another big job that's starting in the same month as well, right, so like just being able to say yes and saying no to jobs too, right like you don't have that picture, you don't have the ability to really make the decisions.
Speaker 2:Um, and sometimes the shiny thing seems exciting, but at the end of the day, like can you actually afford to do it?
Speaker 1:I am telling you it would be so I don't even know the word. Refreshing to be able to see that and I can tell on myself and go no, we don't have a WIP report in place and it sounds like we absolutely need to.
Speaker 1:And from this conversation, I might actually benefit in a quick regard there. But, yeah, knowing, yeah, overbilling, underbilling like even most CPAs last three CPAs I just learned what an overbilling, underbilling all of that is. I'm nine years in right, and this CPA is like what do you mean? You don't know what underbilling, overbilling is. This is like this is like your old document to go to the banquets and um, so Like this is like your old document to go to the banquets and so.
Speaker 1:But what I was trying to get at is I'm finally in a regard where they know the construction basis, from estimation to production to accounting, and it all ties together Like we even speak the same language. Hey, you're a contractor, go be a contractor, let me be an accountant. And hey, I need this information from the field into the admin team so the admin team can get that into accounting as quickly as possible Footages, production rates, material, job, all of that. But that's like one first piece of the puzzle that so many don't ever even get to is the project management role of. It's not about work you can doc. It's not about work you can doc. It's not about work you can do. It's about work you can document you've done and getting that documentation in real time moving through the whole kit and caboodle to get to you, so you can give us the answer yeah, absolutely, and the only way you can react to that right is if you've got your team doing and honoring your basis.
Speaker 2:So, like implementing some process changes, if they need to happen, and them understanding. The impact of communication with team is always kind of key, like guys. This is why this is important. It might feel annoying but like I need you to go in and update this stuff so I can react. I can have conversations um about additional bills or, you know, talking to suppliers about material costs, whatever. It is right, like there's only one way that you can react and that's if they're doing it timely change orders.
Speaker 1:How can you adjust for change orders? How do you know how much gravel you've actually used? If you don't even.
Speaker 2:Yeah, I was there, it was such a thing people want is a last minute surprise.
Speaker 1:Oh my god, and it's and you're thinking in your head because I was for years, oh I'll just. The last thing people want is a last minute surprise. Oh my God, and it's. And you're thinking in your head cause I was for years, oh I'll just. Well, obviously, this, this is going to cost this, here's your bill. And they're like oh no, uh, how about not? Do you have written approval? Do you have this? Do you have that? And so there's so many lessons to be learned, and especially as you grow so quickly and you get out in front of your overextended in your skis. But you can do that on a production standpoint and you can do that from a manpower standpoint. But the one place you cannot do that is in the financial sense. I can sit here and say that, but I can also sit here and say that I have done that, living through it right now and being unbankable and doing all these crazy things of being a part of what a business owner is.
Speaker 2:But if you don't know what you don't know, just like you said and there's a lot of things in this regard that I still am learning and I'm still having to learn the hard lesson, yeah, and but I do want to take a minute to commend you on the fact that, like you're willing to one switch providers right, like people get so comfortable, I think, with like the CPA they've been using forever, even if the service isn't that great, so the fact that you're willing to get what you want to be paying for, you know what I mean Like the fact that you have someone giving you professional services and you're willing to like actually go out and chase.
Speaker 2:What you think you need at this point is number one and number two, that you're willing to do the cleanup stuff right. That, like you understand, the foundation has to be good in order to build the rest of the house. So you're in the thick of that right Of like digging out and building that foundation and getting good numbers, so then you can move into the ability to do something like forecasting. Because I'll tell you now someone that hires me that has terrible books. I've had multiple conversations where, like people have said, I haven't done my taxes, I haven't done my bookkeeping in like two years and I'm like, till you get that cleaned up, like just don't call't call me right, like I am not going to be helpful to you if I don't have good information. So the fact that you're taking the steps to get that in good shape, you're facing that right, that vulnerability, that asking for help like you, overcome those mindset things and you're in the right.
Speaker 2:You're headed in the right direction.
Speaker 1:Well, I'll tell you, because I built a house for the crappy foundation and it blew over in the first windstorm and I took on. We've done a lot of work in our little nine years and we've done uh, we've done a lot, but at the same time it will always come crumbling down. I mean technically, that's. What I do is civil construction, is foundation taking out the bad but in the good, yeah.
Speaker 1:And then it is just such a simple and it I think a lot of guys in my shoes, just to be frank with you, get almost feel completely ignorant when we're sitting across the table and a lot of these conversations like and just feel out just outright dumb because we're like, how did we not, how did we not do, why what? And it's like, but again, reach out, be vulnerable. You are going to get embarrassed, you are going to feel shame, but guess what? You don't know, what you don't know. Go find the right, comfortable relationships, um, to help you move forward, because the wrong ones are only going to hold you back and, if not, set you further back than where you're at right now.
Speaker 2:Yeah, and listen. I'm a business owner too, there are things in my business. Sure, I can analyze my financials all day, right, but I can't necessarily do a great job at marketing, right.
Speaker 2:So, like there's things in my business, I'm not great at and that's why I'm like, okay, can you, someone needs to help me. Like I hire out, I have people, I have people. Teach me, okay, I'm gonna engage you to help me with my marketing. All right, explain this to me, show the system to me, do all the things. Like I need education on it. One and number two, I also need help. Or like I just don't know how to do that stuff, and that's okay. I I'm not gonna be the jack of all trades and I can't fulfill every need. If I think I'm gonna be like a normal human being, right, like I can't do all the things, um, in 24 hours that I get for the day, right, um, so it's just acknowledging that and that's okay. Right, like the finances to me is an expected one that you're going to ask for help on, so it shouldn't be embarrassing and I understand, though, because it's especially when you've been in business for a long time there's guys that sit across you, but I should have known this.
Speaker 2:Right, there's some shame and there's some ego, and I know that's a hard conversation to have right when you are a good collar guy, which usually you guys are a little rough around the edges and like you don't want to admit when you're wrong and like all the things. But guess what like? The only way to make this better is to figure out where you are. It's just like weight loss you cannot have a goal if you're not willing to get on the scale and see where you are today.
Speaker 1:And I think, honest to God, shout out to podcast videos here because the owner and myself were talking. He's a mentor to myself and he's like, hey, man, have you ever? This is about almost two years ago. He's like, hey, have you ever heard about fractional HR? And I'm like, wait a minute, what's fractional? Like in my mind I didn't even know that there was fractional HR. And I'm like, wait a minute, what's fractional? Like in my mind I didn't even know that there was fractional HR. Ladies, fractional CFOs, fractional project management.
Speaker 1:Guys, like, there is these tools and resources that are experts, tried and true through experience of 20 years of getting to where you know miss lauren's at well, let her use that for your business where you're at right now and start today. I'm telling you guys um, uh, I don't know if I have, but if you guys have loved this content. Bluecollarbusinesspodcastcom um, don't know if I threw the sponsorship, but today is we're going to do a post roll today, sponsored by Saigon Excavation and Utilities. You'd love to be a sponsor here on the Blue Collar Business Podcast and you have a product or a service that we may be able to showcase here for you? Reach out to us on the website, become a sponsor tab and get in touch with us there.
Speaker 1:Um, I got to ask you the final, final question here. Um, that maybe not the final question, but I think we've already talked about mindset so much, but I ask everybody the same question If you've listened to a couple episodes. But what's the takeaway for the blue collar guy and let's go entrepreneur route that is sitting there feeling that shame and embarrassment? What's his first couple of steps to getting out of that stuck mindset and exactly where his position is?
Speaker 2:You have to really take a good hard look at why you're doing this whole thing. But if you're not willing to ask for help and, to be honest, I think you're going to have a really hard time in the entrepreneurial world in general if you're not building team. If you think you can do it all yourself finances are the exact same thing right. It is just a member of your team that's going to help you with a specific piece of it, and you have to let go of the personal tie that it's truly a reflection of your identity.
Speaker 2:It's not right. You may have made some crappy decisions and guess what you're going to learn from those, because we're going to figure out what to do differently to really improve profitability. Get your hands around cash flow forecast. Eliminate the stress like. The other thing that people don't understand is the intangible things that come from being comfortable with your finances. Uh, you know those of you have been wide awake at night thinking how am I going to make payroll this week? Am I going to have to lay guys off? It is not a good feeling, it's not. And to be able to eliminate that and to be able to be comfortable that you've got the right process around your financial reporting, you've got the right people engaged and you truly have people on your corner is a level of comfort that I can't even explain.
Speaker 1:Like and for that to replace the ego, it seems like a no-brainer. No-brainer, that's a. That's a really good response. And no, I would agree with you. I can't tell you how many nights I have stared at the ceiling going, well, lord, uh, what we're gonna do this month there, feller and trusting and facing in him, but going past that as being a good steward, amen. And you've got to figure out exactly what you're doing with those finances. And one thing you said that we talked in intro is that you wouldn't bore us with the financial talk, and so I've got to say Is everyone asleep?
Speaker 1:No, I doubt they are. I bet you've rung a few guys' bells, honestly, just from the way you sat there and described and came out of the box as unconventional as you are into your inward look of financials and helping us. Because the biggest struggle for these guys I know you've already seen it, but in my experience to get past that five-year mark, that three-year mark. These guys are good, honest guys. They start out that way but they get consumed by the business piece that overwhelms them. They do what they got to do to get out and then all of a sudden they're not a thing anymore. And that is the number one focus.
Speaker 1:I started this podcast was to shine light and things that I have struggled with immensely to get where I'm at and to be real and open and and raw about what needs to happen next. And hopefully you guys have found some value. I know I have. She got me kind of thinking on a couple of things, so if I'm thinking, I bet they are too. So I can't thank you enough for joining us. Where can we find you socially? Website or go ahead.
Speaker 2:Yeah, website's the best bet because, honestly, on my website you can actually book time directly on my calendar. Because if anyone's interested in hearing a little more about what fractional CFO services are, also, if you're looking for recommendations. The other thing I love doing with people that I don't even end up working with is like hey, lauren, I live in Georgia and I really hate my tax account. Do you know anybody down there Like I love making connections, even if you're not meant to work with me and you're looking for accounting support, whether it's bookkeeping, whether it's tax-related, or you really do want to hear more about fractional CFO work. I'd love to chat.
Speaker 1:That's awesome. Thank you so much for joining us. Until next time, guys, you can find the rest of our episode on bluecollarbusinesspodcastcom or any podcast platform that you're already streaming on. You can watch from the website as well. You don't have to have a subscription if you guys don't, so don't be afraid there. Ms Lauren, thank you so much for your time and I look forward to it.
Speaker 2:Yeah, it was a pleasure, Thank you.
Speaker 1:Thank you, ma'am. If you've enjoyed this episode, be sure to give it a like. Share it with the fellers. Check out our website to send us any questions and comments about your experience in the blue collar business. Who do you want to hear from? Send them our way and we'll do our best to answer any questions you may have. Till next time, guys.