CFO Chronicles: The Secrets Behind Success

Pivoting from Patients to Profits: Aleksey Kaplan’s Path to CFO Success

• James Donovan • Season 1 • Episode 20

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Have you ever considered how similar financial planning is to a medical diagnosis? We unravel this intriguing comparison with Aleksey Kaplan from Kaplan CPA, who shares his unconventional journey from aspiring doctor to entrepreneurial CPA. Abandoning his medical dreams due to an unexpected aversion to needles, Aleksey found himself navigating through the tumultuous waters of real estate during the 2008 market crash. Thanks to some sage advice from his wife and his natural knack for numbers, Aleksey pivoted to accounting, turning his diverse business experience into a guiding light for fellow entrepreneurs.

Tune in as we redefine the role of a fractional CFO as a "financial doctor," where Aleksey draws insightful parallels between financial and medical diagnoses. With engaging analogies like likening tax planning to medical prescriptions, he simplifies complex financial concepts, making them approachable for every client. Discover how a color-coded scoreboard becomes a vital tool in assessing financial health, guiding clients toward informed decisions and ultimately, sustainable success. Whether you're a business owner seeking financial clarity or simply curious about the journey of this unique "financial healer," this episode promises a wealth of engaging insights.

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Speaker 1:

Welcome to CFO Chronicles the secrets behind success the go-to podcast for fractional CFOs and accounting firm owners who want to attract more high-paying clients and increase their revenue. Hosted by James Donovan from Nine Two Media, this podcast dives into marketing strategies specifically designed for lead generation and client acquisition. In each episode, you'll hear from industry leaders sharing their success stories and Thank you to your bottom line.

Speaker 2:

I'm super excited to be joined today by a great client of ours, a great individual, alexi Kaplan from Kaplan CPA. Alexi, thank you so much for joining us today. Thanks for having me. James, it's a pleasure to be here. Awesome, I'm really looking forward to diving in, hearing a little bit more about your story and all the wonderful insights you have to share with everyone. So take me back to maybe how you even got into this industry to begin with.

Speaker 3:

It's a great question how much time do I have right? It's one of those situations.

Speaker 2:

So if it goes on too long, we'll cue up the Oscars music. We'll put that in the edit.

Speaker 3:

Yeah Well it's been a journey, to say the least. I've never wanted to do what I do, never had any aspirations to be in this field to begin with. I mean, I always wanted to be a doctor. When I was a kid I was in Biomed Institute. In my high school I took all the pre-med type of classes. I was doing great. And then the last semester of high school something changed in my body, I guess. Last semester of high school something changed in my body, I guess, and I started painting at the sight of a needle entering a body. So I'm glad that it happened before I graduated and I would not waste hundreds of thousands of dollars in, you know, pursuing my career in medicine. But I guess everything happens for a reason.

Speaker 3:

So I had to kind of switch gears because, being Jewish, every single mom's dream is for the son to be a doctor, a lawyer or an accountant, right. But the second option was being an attorney. I was always great with words and I was always comfortable speaking, engaging, defending certain positions. I was always very argumentative. So I said it's kind of natural for me to be a lawyer if I can't be a doctor. So I went to college. I had to get a degree in something to sit for the LSATs and then eventually go to law school. I had to get a degree in something to sit for the LSATs and then eventually go to law school, and I graduated with a degree in business management and finance. To kind of give me a background students do, I decided to major in something that could potentially give me something that I could fall back on in case law school does not work out. I took the LSATs. I got a wonderful score.

Speaker 3:

I could have gone to any law school in the nation, but at that moment I was already married and my wife and I found out that we were expecting our first kid and she was in nursing school at that moment and I could not afford not to work, because the first year of law school is usually the most difficult one. They tell you you can't work, et cetera, and I ended up not going. So instead, what I decided to do instead when we found out we were expecting our first kid is I quit my job that I had with a law firm at that time and I decided to venture out on my own and open up my first business. And that's exactly what I did. I opened up my first business it was not an easy journey and then the second business and the third business and fast forward to 2008,.

Speaker 3:

I had a lot of my business ventures tied in with real estate market. I had a title insurance agency settlement company, real estate holding company, real estate development company. I had a day insurance agency settlement company, real estate holding company, real estate development company. I had a daycare center with 75 little kids, imports, exports. I had a lot of different things going on, but real estate was the main bread and butter for me. And when market tanked I had to make some serious decisions.

Speaker 3:

And from 2008 to 2010, I tried to salvage what I could. I sold off everything I had and I had a stack of checks. I came home, I sat down across the table with my wife and I told her honey, I kind of don't have to work for the next 10, 15 years, we'll be fine financially, but what the hell am I supposed to do for the rest of my life? And at that time we had already two kids. My middle child was born and we were okay financially, but I was still young and I kind of had to reinvent myself. So she told me, my smart wife, smart and beautiful wife.

Speaker 3:

She says well, look, you were always great with numbers. All the business you ever had, you essentially ran them yourself internally. And then our accountant would always tell you that, alexi, you don't need me, you can just file your own tax returns. You're doing great. And keep in mind, nobody ever taught me any of that stuff. It was kind of a hit or miss. I had to teach myself a lot of different things how to understand financial data, how to interpret it, how to use it to make the business decisions more effective and efficient within every single venture that I had. But it was kind of natural for me. So I looked at it from a standpoint of what makes sense and kind of backtracked into it and made decisions based on using and analyzing financial data.

Speaker 3:

So she goes to me why don't you just become a CPA and have it as a business? And I'm like look, it's recession proof. Everybody needs this. You need advisors like that. You need somebody that understands this stuff and guides people along the way. I mean, I'm in a very unique position because I've been down in trenches as a business owner, entrepreneur so many times. But now, if I was to actually pursue a career and become a CPA, I could actually help so many other people on so many different levels that at least my own CPA could not do.

Speaker 3:

So I said you know what? It's not a bad idea. Let me find out what I need to do, because the other alternative was to actually go to law school. Right, because now I actually have the means to do it. But law school is three years of my life and you know I would have to compete with 20-year-olds. You know that have no well, that don't have anything else to do with their lives except go to law school. They don't have kids to support, mortgages to pay, et cetera. So you know it would be tough. So I went back to my college and I found out what I actually need to qualify to sit for the CPA exam, and I was told I only needed a year to get my second bachelor's degree and that basically a year would allow me to take 10 missing accounting classes and then I will be eligible to sit for the exam and then, once I passed the section, I could essentially become a CPA. So that's exactly what I did. I went back to school. So instead of three years it's a year, right? So I saved myself two years of my life. I graduated with a second degree, a bachelor's degree, in accounting, with a perfect GPA, and it took me another year to pass the four sections of the CPA exam and I opened up my firm. I got my license. I opened up my firm.

Speaker 3:

Now, when I opened up my firm, I wanted to be completely different from anyone that I knew that was involved in this industry, and that's why I decided to specialize in taxpayer representation representing taxpayers before the IRS and different state agencies whenever they get in trouble. Why? Because it's as close as it gets to being a lawyer without practicing law Right. So I kind of combined the best of both worlds and started specializing in that area and I was really good at it. I loved it. I love challenges. I love challenging IRS and I was really good at it. I loved it. I love challenges, I love challenging IRS. I love winning cases. It was really really cool time.

Speaker 3:

But the problem with those clients, the ones that actually owe money to IRS and different state agencies they don't walk around advertising on their foreheads. Here I am, I owe money to IRS, help me, right. So you can't really market directly to those clients, and that was the biggest challenge of obtaining new leads for those type of clients. So, but meanwhile, I was still offering the traditional services the tax preparation, bookkeeping, all that fun stuff that I actually did not enjoy, but it kind of came with the territory Right, because people expect you to do taxes when you tell them you're a CPA.

Speaker 3:

So a few years down the line, I stumbled upon American Institute of Certified Tax Planners and coaches and I decided to become a tax coach and a tax planner and a tax strategist. Why coach and a tax planner and a tax strategist? Why, because I wanted to specialize in tax planning and specifically proactive tax reduction planning for successful business owners. And that's exactly what I did. And what intrigued me about that side of the practice and that specialty is the fact that nobody ever taught me when I went to school to become a CPA, while I was studying for the exams, while I was working for a CPA firm, of how to actually proactively save money on taxes legally right, because that was not the intent. The only thing that was ever taught to me and my colleagues is how to record money, historical financial data, putting numbers in boxes, call it a day. As a result, I wanted to learn a different angle, which I did. I still am a part of American Certified Tax Planners and coaches until now for the past eight years or so and coaches until now for the past what eight years or so?

Speaker 3:

During this journey, I actually was nominated to be a certified tax planner of the year on three separate occasions. It was a national award and national recognition. I did not win. On two of those occasions I came in second and one of them I actually won and I became a certified tax planner of the year, which was really fun and that was the highest possible award you could get from that organization. But then, once again, as with anything else, the more you do things, the better you become. Sure, you become an expert in that space space. But I tried to figure out a way or how to help business owners in more efficient ways from a totally different angle, and that's when I decided to become a certified CFO, whereas I'll be.

Speaker 3:

It's an advisory service, but you essentially work with successful business owners that are struggling to understand successful business owners that are struggling to understand financials, that are struggling to understand where the money are going, and you were their guide.

Speaker 3:

Essentially, I became their guide to success.

Speaker 3:

I call myself a non-equity partner right.

Speaker 3:

So I'm always there by their side, guiding them along the way, dealing with all the challenges, finding all the solutions for their challenges, from internal standpoint to managerial, to business, et cetera and, of course, incorporating the fact that I know how to save money on taxes, you know in a proactive fashion and I know how to defend every single position if there's an issue with the IRS or any state agencies.

Speaker 3:

So it kind of goes hand in hand and I become their go-to guide and expert on all things matters to their success. So it's three unique, separate specialties that I have accumulated and I've ascertained over the years and they definitely helped not just me but my clients get ahead and those people that actually work with me. They actually get ahead much faster. They accomplish and reach their goals very quickly. They accomplish and reach their goals very quickly and they're all successful. You know in every single way of how they define success. Every single person has a different definition of it, but I'm there to make sure that the business prospers, has a positive cash flow on consistent basis, pays as little taxes as possible legally and, of course, the business owners accomplish all their goals personal and business throughout our relationship and I help them. So that's pretty much where we are today.

Speaker 2:

All right, that's an introduction, that's a story Appreciate you sharing that you asked?

Speaker 3:

me a question.

Speaker 2:

Yeah, very true, very true. An introduction, that's a story. Appreciate you asking me a question. Yeah, very true, very true. Um, yeah, I mean right back to the start of that. I'm not good with needles either, so my the chances of me going into the medical profession were were very short-lived. I think back from grade school when I had my first needle and fainted in the gym, probably getting like a flu shot. So I was like, all right, we can write off going into that industry. It's interesting, though you talk about, you know, wanting to be a doctor because I would. I would hesitate to say, or I wouldn't hesitate to say, that you know, being a fractional CFO is, you know, the financial doctor for a lot of businesses. You're looking at something that someone can't quite figure out. They know there's some pain there. You identify where the pain is and you give them the solution on how to fix it.

Speaker 3:

Yeah, it's a good point, James. So usually I like to use a lot of analogies within my business to explain complicated concepts in very layman terms, and the analogy that I love to use a lot and I actually work with a lot of doctors as my clients. I love dealing with medical practitioners. I mean, they're great at what they do, but they suck at everything else, especially when it comes to finances, it's true. I mean, most of them are just clueless until they start working with me and then they become a lot more educated and well-versed in all things finances related. So the analogy that I love to use is very simple is just like when you go to a doctor, before the doctor actually tells you what's wrong and how to fix it, what do they do? They diagnose you right, so they take in certain tests, they review some of the results, or maybe scans or whatever you bring in. They run their own tests. Then they come up with a diagnosis and then, after the diagnosis, what do they do? They write a prescription on how to fix the issue that you're having your stomach, your tummy, aches. Oh my God, what do we do? So we know that the tummy aches that's the diagnosis. Well, how do you fix that? You prescribe a medication, so that prescription is essentially the tax plan that I do for, let's say, tax planning clients, and prescription by itself will not alleviate your tummy ache. So what do you need to do with that prescription? You got to go to a pharmacy and fill it, right. That's where the implementation comes in. And when you fill the prescription, just because you got the medication and until you start taking it, you're still going to have a tummy ache for the most part. So what? It's the same concept. You, I diagnose what the problem is, I come up with a solution that's a prescription, and then that solution has to be implemented in order for the results to become, in order for everything to work. So I I'm there along the way, I'm implementing everything.

Speaker 3:

It's the same ideas as when you go to a doctor's, or the other analogy I like to use is from the architectural standpoint. So before you have any building up, right, what do you need to do? You need to go find a piece of land, right. Then you have to go to an architect that designs a blueprint. Blueprint, essentially, is that tax plan and then that blueprint is fulfilled and followed by the contractors. That builds the foundation. You know, they put up the walls, they put up the beams and then you have everything up and ready. After the blueprint has been followed to the t, you have a house. So the same idea there's a lot of pieces that has to work, uh, in conjunction and together, uh to to make things work and to improve things. So, yeah, you're 100% right. I mean doctor's analogy and the architect analogy are basically what I like to use the most to explain how we get things done and why we do them.

Speaker 2:

That's great, the analogies, especially when it comes to sales and I'm guessing you would say you use that when on sales calls with prospects, because I think it really helps paint a picture in a much more simpler term on what is going to happen. And, like you mentioned, not every business owner speaks the same lingo as you. They don't. They don't know all these things, Otherwise they wouldn't be speaking to you to begin with. So being able to tell them like hey, here's, here's what's going to happen, here's the steps, this is what you need to do. But how often, Alexia, do you run into the problem where you know you can't? You can take the horse to water, but you can't force it to drink.

Speaker 3:

How many times have you put in a plan and it doesn't get all the way across the line. So every single situation is completely unique and different. So we're all different. We all have different fingerprints, right. So same idea when it comes to an approach. There's no such thing as a one trick pony type of thing. You have a one thing that will work for everybody 80-20 rules you do apply. So there's a lot of things that, especially when you specialize in particular industry, that apply to the same type of strategies may be applicable to a lot of different individuals and business owners, but still they have to be tweaked, you know, because every situation is different.

Speaker 3:

What I like to do with all of my clients is essentially educate them as much as I can. Now, when we go through that educational part of the engagement, I never use financial jargon or lingo. I speak to them like we're speaking right now, in a term, and I try to explain the most complicated concepts in very layman terms and put things in perspective, depending on what they do, so they could understand in their head how it relates to them right, Like, for instance, very complicated concepts of CFO right, the certified CFO services, the advisory service they provide, instead of going through all the ratios and KPIs and all the financial and accounting lingo, what I use in my practice is a scoreboard. It's color-coded scoreboard. It's just like a traffic light. You got the green, you got the yellow, you got the red. So the green is the areas that don't need to be touched, the yellow is something you got to pay attention to and the red are the immediate things that has to be taken care of. They have to be taken care of because they will potentially could ruin your business.

Speaker 3:

So whenever I do an analysis, the financial assessment of, especially for a prospect, I present them with a scorecard and I tell them this area is great. There's 16 different drivers in every single business. What drives the revenue, the cash flow and, obviously, the profitability of the business? Those 16 drivers I would not bore my clients with. I'm definitely not boring you with that. That's not my intent to bore you with that information because it's very detailed. It's based on a lot of ratio analysis that nobody really cares about. They want to know how you solve the problem and whenever they see the scorecard, it's easy for them to follow it. You've got to look at the red areas. Oh, my God, let's zoom in. What's going on there and how do we change that color from red to yellow and then to green? Right, and that's what we work on.

Speaker 3:

But there are times that, no matter what you tell them, it's all about accountability, right, because there's certain things that I can't do and there's certain things I cannot do without the business owner's help or their team's help. If they're terrible business owners and they don't listen to their advisors, they usually end up failing, right, so did it happen in my practice with anybody I ever worked with? It happened once, and that was their choice. They just did not listen. And when you don't listen, you can't, no matter what you do, you can't jump over yourself, right, so you could lead the horse through the water, but you cannot make or drink it.

Speaker 3:

This is the perfect situation of that and scenario is when people just choose themselves not to follow a certain advice, for whatever reason. You could blame the time, you could come up with a million different excuses, but at the end of the day, if you're not going to take action, nothing will change. No matter how many advisors, how many people are working with you, for you, et cetera, it doesn't matter. The business owner is ultimately responsible for making key business decisions for their business. I cannot make them for him or her. They have to be doing this Now. I could only provide my insight of what I believe should happen and how things should shape out if you take certain steps. But if they choose not to follow them, there's nothing else they can do.

Speaker 2:

That's impactful. It's so true, though, so I don't want to take up a ton more of your time, alexi, but one question I would love to ask you. You have a very successful business. You have a very successful business. You've built a very successful business. You have a great life. What's one piece of advice you'd give to either other fractional CFOs, tax professionals listening on you know, building a successful business, building that dream life that they're after, because you've had multiple businesses now it's not your first rodeo. What's that piece of advice you'd give to other entrepreneurs Actually, it doesn't even have to be fractional CFOs and tax planners.

Speaker 3:

Well, I have a lot of different advices of the main ones that you should probably stick with. Whoever is going to be watching this is the fact that you should always be honest with yourself and honest with everyone you work with. Do not over promise and under deliver. Always try to under promise and over deliver, but if you're not sure about something, it's fine. Just be honest with the client. I don't know, I'll look into it, I'll get back to you. Don't agree or yes, or just be honest with yourself and try to get rid of your imposter syndrome.

Speaker 3:

A lot of folks, unfortunately, do not have enough faith or confidence in their abilities, in their or confidence in their abilities. We cannot possibly know everything. I certainly don't, and nobody's expecting us to know everything. What people that work with us expect us to do is to do the best job we can under the circumstances and just be honest with yourself. Never lie to anybody and only do things that will help and not hurt your clients. Because I don't know about you or anyone that's going to be listening, but I love to sleep at night and I don't want anything to come back and biting my client in the places of their body, and obviously me by default. So I know a lot of folks out there. They do a lot of shady things with their mission of helping their clients, with their mission of helping their clients. From time to time I come across situations where I actually have to represent those clients before Internal Revenue Service and different state agencies because of that help that ended up hurting them a lot more than the actual help. So please be honest with yourself and know what you're capable of, without overextending the things and abilities of what you feel you know but in reality you don't, and never be afraid to ask for help.

Speaker 3:

I align myself with a team of different experts in different areas. Like I said, I don't know everything. I don't need to know everything. I know people that do, so all I need to do is just reach out to those people, get the confirmation I'm looking for or guidance, and just pass that information along to my clients. And I encourage everyone to have a network of professionals around themselves that specialize in different areas, not just with tax or CFO or what have you, or just different experts in different areas so you could rely on and work with on a consistent basis and be there for you and, in turn, for your clients whenever you need that help. But, above all, never lie to yourself, never lie to others and just be truthful and try not to overextend yourself by overpromising and overdelivering and do the opposite. But I always tell my kids this and to myself actually just some of those daily affirmations, and one of the things that I say is that always try to be the best version of yourself Never try to be somebody you're not.

Speaker 2:

That's great. Thank you so much for sharing that, Alexei. That's very, very wise words.

Speaker 3:

No, I try.

Speaker 2:

No, that's great, that's great, I appreciate it appreciate it comes with experience, james.

Speaker 2:

Yeah, yeah, that's fair. That's fair. Thank you so much for coming on today, alexi, really appreciate it. Um, it's awesome hearing your story how you got started. Um, you know, brief wins how you approach your sales conversations make, uh, that you know that analogy much easier for individuals to understand where you're coming from and how you can help them. And then, obviously, the the advice to cap it off. So, again, thank you so much for coming on today. My pleasure Anytime.

Speaker 2:

Thanks for tuning into this episode of CFO Chronicles the secrets behind success. I hope you found value in today's conversation. As we wrap up, I'd love for you to do two things. First, make sure to subscribe to this podcast so you don't miss any future episodes. If you enjoyed today's discussion, please rate and review the show. It helps others discover the insights we share here. Second, if you're ready to take your business to the next level and attract the high-end clients you deserve, head over to accountingleadsnowcom or click the link in the show notes to book your strategy. Call it's time to position yourself as the advisor your clients need. And don't forget you can connect with me on LinkedIn to stay up to date on what's happening in the world of accounting and financial growth. We've got more exciting topics coming up, so stay tuned for the next episode of CFO Chronicles. Until then, keep pushing forward. Your growth is just one strategic move away.

Speaker 1:

Thanks for listening to CFO Chronicles the secrets behind success. We hope today's episode provided valuable strategies to help you attract more high paying clients. Be sure to subscribe, follow and share with fellow professionals, Connect with us on LinkedIn and leave a review or comment to join the conversation. Your feedback helps us bring you the best insights in finance and marketing. Until next time, keep striving for success and unlocking your business's potential.