CFO Chronicles: The Secrets Behind Success

Your Firm Is Growing, But Not Scaling. Here’s Why - With Michael Straza

• James Donovan • Season 3 • Episode 42

Share episode

Growth ≠ scale, and too many founders learn that the hard way.

In this episode, I sit down with Michael Straza of Straza Consulting to unpack what actually holds back firms from reaching the next level and why more sales won’t fix a broken structure.

They dive into:

  • The difference between running a business and truly being in control
  • Why poor delegation crushes growth (and team morale)
  • How Straza helped firms jump from $5M to $15M, then rebuilt profit
  • Real stories of operational friction, founder bottlenecks, and burnouts
  • How to tell if your company’s outgrown its team (and what to do next)

If your firm is scaling in size but not in profit or if you’re starting to feel like the bottleneck, this episode will help you reset your foundation and scale the right way.

👉 Tap play and learn how to grow past $10M without breaking your business.

Send us a text

This episode is brought to you by Bill.com

  • Get Started with BILL. BILL Spend & Expense isn't your typical expense software - it's a powerful, free platform that works with the BILL Divvy Card to put you in control. We're talking credit lines from $50,000 all the way up to $5 million. That's fuel for expansion, strategic investment, and seizing those critical opportunities. See how BILL Spend & Expense can transform your business now at bill.com/promo500. Terms and conditions apply.

Ready to turn your firm into a lead-generating, profit-driving machine?
We help Bookkeepers, Accountants & Fractional CFOs generate consistent local leads, book perfect-fit appointments, and close premium clients, without cold outreach or ad guesswork.

Let’s map out your growth plan together → Book your free strategy call


Speaker 1:

Welcome back to another episode of CFO Chronicles. We have an amazing guest today, michael Straza from Straza Consulting. We get into what it means to be in control of a company versus being busy running it. We get into the biggest mistakes that small and large companies make the most common mistakes. And we also get into the number one bottleneck that holds back founders from growing to that next level. Cannot wait for you to check out the episode. As always, let us know your thoughts and enjoy. I'm so excited to hear a little bit more about your story, how you got into the space and what you're doing to positively impact the industry. Thanks for joining us.

Speaker 2:

No, thanks for inviting me. I'm excited to share some more of insights and learn from others.

Speaker 1:

Perfect. So, michael, first question for you, coming out of the gate a little hot, yeah what's?

Speaker 2:

the difference between being in control of a company and just being busy running it. In control versus busy running it Control. I guess you look at it as you are making decisions, daily decisions, depending on what that is. So if you're a CFO CFO, c-suite what area do you try to stay in? And sometimes a lot of C-suite people try to be in control of everything, which is sometimes dangerous. You need to rely on the people that you have that are helping you with that Running a business. You're running it, depending on what that level is. Are you that person that goes out and you're part of sales? You're part of just the image. So you're running it. You're making sure everyone is staying on the mission and the vision that you have is a, let's say, an owner or CEO trying to say here's where you want to go and you let everyone else just run your business. It depends how involved and how you could call it micromanaging or however you want to call it. It just depends on what you value the most and what you feel is success.

Speaker 1:

Interesting. Is that something that you've ever kind of teetered on that line as you've built your firm of? Maybe like? Has micromanaging ever been a thing for you in the past? Are you really good at delegating and letting go of that control and here's my team, they can run with it or is that something that you've had to develop and learn that skill over time?

Speaker 2:

Well, definitely it's a development skill over time. I've been doing this for many, many years, so hopefully, I've been always learning and growing myself, and that's something I always encourage anybody I work with or works for me is we continue growth, continue education, learning. How do we be better, not just at the specific thing that you're working on If it's finances, it's production, it's whatever that is Learning how you can be a better manager, better owner, better C-suite person, but also to a better person and what you're trying to do is accomplish how do you communicate to your clients and how do you communicate to the people you work with or work for in your organization to really bring that up a level and there's so many things involved in that, and you just have to really continue learning a level, and there's so many things involved in that. You just have to really continue learning.

Speaker 2:

So when I did this, when I started off owning and operating companies, was probably over 25 years ago, and so you're trying to learn and you're trying to do as much as you can on your own and realizing you can't do everything. There's just too much to do in order for it to be successful long term. So a lot of it is trying to learn what can you delegate and learning that delegation thing and being okay with saying here's some deadlines, here's things I want, and trusting the people that you've hired or people that work with you to say, yeah, they can do it and that's always. It's a balancing act, because sometimes I did great and other times I really blew it. Balancing act because sometimes I did great and other times I really blew it and I'm like, wow, I have to go back and probably apologize. Well, not probably. I did apologize to people saying, hey, I didn't handle that well or I communicated in not the best way. So over the years I've grown and continue to, you know, always learn how I can do better that's so good.

Speaker 1:

What's one of the things that maybe stands out to you as far as if you were to speak to yourself five years ago, Michael, hey, this is what you need to be doing. This will really help you out in the future when it comes to delegation. Is there anything?

Speaker 2:

you can say to the listeners.

Speaker 2:

Yeah, well, yeah, a lot of it is five years ago. It's just again. You're always evolving as a business owner, as a fractional CFO, your other people that you work with, trying to trust what they're doing and also making sure you have the right people with you. Sometimes you work with what you have and that is fine, but also, too, learning that it's sometimes certain groups, people, organizations are going to get you so far and then you have to find someone, and that's in revenue, growth, hr, where you're growing as a company and there's like someone can help you build something up to a certain level, but then after that it's a stress and that's not the best fit for them. So you have to find the person that's the best fit and sometimes it's you're hesitant.

Speaker 2:

I was hesitant at times to say, hey, I need to find someone else for this space, because it's just not, we can't get any further in this area and they've reached the max of what that person can do. And that's not a wrong thing, it's just like, well then, how, where can they go next? How can I help them find a position in the company or to another company to make sure they are the best who they can be, because that's something I want to do is making sure how can I make you better? And is it here or is it somewhere else? And I was making sure I follow through that and make sure I'm really, you know, taking care of whoever is working for me or for another?

Speaker 2:

organization.

Speaker 1:

I love that always having their best interests at heart, and it's not a failure. If it's not the best spot for them in your current company, where can you go and succeed elsewhere?

Speaker 1:

I think that's a really good frame. Staying on the topic of delegation and growing firms, you've had a chance to work with a lot of big firms and, I'm sure, a couple of smaller teams from time to time. What are some of the common mistakes that you see either small or bigger firms consistently? What are some of the common mistakes that you see either small or bigger firms consistently running into, regardless of the size?

Speaker 2:

I mean, the biggest thing that I've talked about and something I've learned since I was young, is communication.

Speaker 2:

It was like it's such a simple thing. It's like, well, obvious, yeah, you just communicate and it should be fine, but it's like we all come from different backgrounds, life experiences, everything, and we communicate differently in how we communicate, how we project our voices and how we look and carry ourselves. Sometimes it's this that is where people get misunderstand what you're trying to say, and other times it's just bad communication when you think why I said this. Well, that wasn't much detail. So that is one of the core things I think is something that we all need to continue to work on is how do I communicate better to my clients, to people who I work with, and making sure that everyone is really understanding and actually giving time for people to ask questions. So that's one of the other one of the big things Just understanding your area, your expertise, if you're trying to, whatever it is, if it's in finances or something like that.

Speaker 2:

I've been working with organizations recently, some pretty big ones and some smaller ones and they have the same thing. It's like people have been put in these positions and you assume they know everything and it's nothing wrong. They, you assume they know everything. And it's nothing wrong if they don't know everything, because everything there's little nuances in every company in trying to make sure they truly know what they're doing when they're talking about financial stuff, operational, because maybe they haven't. They've been in a small company, they've grown with the company, but they've never learned anything outside of that company.

Speaker 2:

And sometimes it's better to have experienced other businesses, other philosophies, other you know ways of doing things, because then you learn from that and you can take those to the next place you go. And sometimes you've never have. You just don't know what's out there, you're just unaware. So then trying to bring people along and saying, hey, have you done this, have you done this education? Let's look at trying to get you, you know, some additional support and that's not something I'm a big believer in and I've done that year after year is getting people into places where it's like, hey, let's get you in this class, let's get you in this study, let you really understand this so you can be better at this. And if I, if you, and that fear is, oh my gosh, now I got you, you know, you learned it. Now you're going to leave. Well, that's a risk I'm willing to take. But I'm willing to take that risk because I want to see them elevate themselves, elevate the company to where there's, you know, everyone wins at the end of this yeah, that's so good, that's.

Speaker 1:

It's such a scarcity mindset, I think to feel like, all right, I've built you up, I've built up your skill set, now you're going to leave. But or they have built you up and now you're now that roi for what you're going to be able to do inside my business or in that, whatever business it is. It's, it's so big. So I I love that you're saying that, transitioning a little bit.

Speaker 1:

I think that's a good segue into growing firms are you give us a real world example of how improving structure so not just sales has unlocked major growth for either your firm or other clients that you've had a chance to work with yeah.

Speaker 2:

So some real, real life you know examples is, in the last couple years I've worked with some, you know some smaller organizations where they were, uh, revenue-wise let say, you know five million dollars in revenue and they've grown to 10, 15, 20 million. They've stepped up. And what I've done is when I've gone in there is kind of overall again, looking at their structure, their operational side of things or find it the financial side of things, and it is making sure all those align with what the mission and the vision of the CEO has and trying to see do these all align? Do you have the right people in the right places? Is everyone going the same direction? Are you all rowing in the same direction? Are everyone going opposite ways? And by doing that is when I've gone in there and kind of like, look at things, how are going, why things maybe take longer than they should, what the cash flow is, and trying to make sure all that is going the right direction. I have put implemented things, some operational things in there and some financial goals and strategies, not just sales. I mean.

Speaker 2:

Sales, of course, is important, especially in your business. If you don't have sales, it's hard to bring in money, because there's a lot of us that are in organizations that we're not revenue generators. We improve the revenue we make operational, so you can reduce your costs, your expenses. But for sales, they have to be in a certain mindset and you have to make sure they're doing what is best for the company and making sure that they're aligned to make growth happen.

Speaker 2:

And then basically, with that, all the other groups, you're saying, okay, how do we make your department better? How do we and it falls in line from HR to financial you know the finance department to you know, if you're on a assembly line or something like that, you have to find the things that need to be tweaked a little bit to make it more efficient. And I always look at it and I say this to myself, so it's not just to people out there who are working in a certain area of field. It's like we can all improve and that's something I always believe in. It's like you're not saying that you're doing it wrong. It's like how do we make it? Each day we make ourselves better. How do we make ourselves a better person? How do we do that? And there's so many levels and layers of that that defines what makes someone better 1% better every day right.

Speaker 2:

Yes, especially if you're operating at a low percentage.

Speaker 1:

So, yes, how do you make sure that ops and finance are working together? Because I think for the longest time and the more I get ingrained in the industry I always run. It's really an interesting role because it's not just or at least a good CFO is not just staying inside the books, staying inside of finance. You're really getting a whole 30,000 foot view on the business. You can get super into the weeds and others and then you back out. So how do you tie those different departments to one another?

Speaker 2:

coming in, Well, one of the things an advantage I had personally is, like I said, over about 25 years ago, ran and operated a couple of different companies, owned a couple of them, and I was on the operations side and the finance. So, because we were a small company at that time, I had to do both. So I had to learn both and it was trying to understand how operations work and how finance. So, yes, I agree, as a CFO or financial person, you can get into the numbers. You can be like you know just all about numbers and spreadsheets and all these metrics and stuff like that, and you can get lost in it. And if you don't step out of that to look at what is operations doing, what is this department doing, and you have to really understand how all the groups work together. And that's where I think is where sometimes it's lost with companies is that they don't do that. It's just we're all siloed off and we just stay in our area and we don't want to ask questions. We don't want to you know, look like we're trying to, you know, get involved in something we shouldn't, but it's like we should be involved. Operations should know what finance is doing. Finance should know what operations is doing and that's something I felt like has always been important and has been very successful for me and for the companies I work with is really looking at that.

Speaker 2:

And that's something I like doing is observing, observing how people work and interact with each other and trying to figure out how to close that gap of why aren't they communicating. And I had this recently in a group that I work with that is, you know, pretty large organization and every department. They just didn't work together. They were just everyone was siloed. It's like don't talk to finance, and finance is like I'm not talking to anybody else because they'll send me emails, I'm just going to ignore them.

Speaker 2:

And it's like we can't do that. We have to bridge that gap because you don't want someone from operations or someone else in the organization to be afraid to ask a question because they're thinking they're going to get this awful response or no response. So that's where you have to build those relationships that are so important for the success of an organization, a company or just the people in general. It's like how do we, how do you succeed if you basically just shut yourself off from everybody? You can't just say, well, the metric shows that we're doing well. Well, what metric is that?

Speaker 1:

Yeah, I often. I'm a massive hockey fan, being from canada, um, but I a lot of times just like watching sports in general. It could be hockey or football, whatever it is. I often think about a team in business and a sports team. You need every, every position, every offense, defense, the coach, the goaltending, whatever it is. Everyone needs to be going in the same direction. It sounds like that's exactly what you're saying, like it would. You would never think of a hockey team or any any sports team in general. Well, forwards, don't speak to the d and if they speak to you, don't, you know, speak back because that will ruin things. And expect to have a championship team like that sounds ridiculous ridiculous.

Speaker 2:

No, I agree, I mean, you can I always. I'm a big sports person and I always look at, as you look at, some of the great groups out there, some of the you know hockey, football, whatever. You can see how the organization is set and it's like you know, if the owner is not great, the GM, you go down to the players, the coach, I mean it falls all the way through there and it's like, oh, we have a great ex-players, you know, on this team, or we have this great coach, but then everything else is dysfunctional. It doesn't work. It never you we talk about, we get excited about every year. I'm sure you have a favorite hockey team that hopefully they're doing well this year or they're still in the playoffs, I assume.

Speaker 1:

They made the playoffs. They were out in the first round, but it was exciting. It was their first time making it in eight seven years, so yeah, okay, it was good they finally made it this year.

Speaker 2:

Not to interrupt your point no, no, no, but that's the thing is you always, every year, you talk about your team and you're like, oh, this is going to be the year, that's going to be the year. And it's like, ah, it's the coach, oh, it's that one player, oh, it's the gm, it's the owner. I mean, I see that in all these different things, it's like constantly this dysfunction. Then you look at other teams like how are they successful? Year after year, they're either in the playoffs or in the finals, or something. It's like how is this possible? And it's like they look like a good group, but it's like, but they continue to show up and your team is like what is happening here? It's like can't we you know?

Speaker 2:

And it's just and that's again, it's a failure somewhere in the organization, that there's a failure. And that's where, for me, that's where I thrive in trying to figure out where is that failure point and figure out how do we improve on that. It's like, okay, you learn from your failures. Okay, we, sooner or later, you have to learn from them, or you're just going to be where you're at, and is that okay? Maybe the owner's like I'm fine with that, I'm making plenty of money, people come to the games, plenty of people or my business is making plenty of money, but I'm okay with it being just okay and I think that's where it is. What is that vision you have truly for your organization?

Speaker 1:

The Toronto Maple Leafs might need to hire you, Michael, because they have all the talent in the world. They keep running through the regular season, they get to the playoffs and it's just a disaster. So if there's Leafs fans listening probably enjoy that comment.

Speaker 2:

Yes, what should a founder be doing today to prepare for scaling tomorrow? A founder is trying to say what is your goal as a founder is trying to scale? You're really looking to say do I want to grow revenue? Am I trying to scale? What does that scale mean? Does it mean I want to be in a certain area, so I'm a certain city. Do I want to go beyond that city, country?

Speaker 2:

You know, it's kind of like that when, when I had owned a company years ago, that was something we first started was like we want to be more than this, so what does that look like? So we grew and we grew like 20, 30% a year and it was like, ok, we're going so fast. It's like, but is this what we need to do? Is that's? That's not scaling, that's just growing and you're just doing work after work after work and money's going through the place. So scaling is trying to say, okay, where do we wanna go? How does that vision look like? And then what does that growth look like? Is it organization, employees, locations and what is our ultimate goal?

Speaker 2:

Because sometimes you scale and you're like I'm making less than I did when I was a $5 million company I'm making 10 to 15. It's like, oh, the revenue's up. But it's like, yeah, but it's costing me more to do this. That's not scaling. That's basically saying because what happened is you basically needed more people to run at that level and before you had multiple people doing the same job and you could get away with it. So you have to determine is your job, is your company, scalable to get to the next level, to where, okay, 15 million isn't the break even point? You got to be the 30 in order for it to make more profit than you did before. You wouldn't. That wouldn't make that any. Most people would say that doesn't make sense. It's like, well, I was a 5 million, now I'm 15. I'm making more. It's like you are making more but you're making less. So you figure that out, that break point.

Speaker 1:

That's such an interesting piece you shared there. Can. How can you simplify that again, like the difference between growing and scaling? And then I have a follow up question for you on that.

Speaker 2:

Yeah, so growing is you're just basically you're growing as an organization. So you are your revenue and expenses, if you're, you always want to make sure if you want to be profitable. You know, sometimes I just want to break even, so you find that fancy way of breaking even so you don't pay taxes, I don't know. So that's. There's a lot of people out there that'll, you know, manage that to where they basically look like they didn't make any money and that's. That's a whole different day story.

Speaker 2:

Um, and then you have the other issue is, okay, so you're growing. You go from 5 million to 10 million. 15 million, it's like well, like well, we're growing, that's growth in this, but your expenses are exceeding your revenue. So all of a sudden it's like well, at 5 million, I was making a million dollars in profit. 10 million, I'm losing a million, or however you want to say it, all the way up to 15, it's like, wow, we're working harder, we have more people working for us.

Speaker 2:

Our overhead is beyond what we should be If you're not in the usual realm. Back in the day it was like 18 to 20%, as your overhead cost should be compared to everything else. So if you're just constantly, your overhead continues to grow at a higher rate and you're just like well, we're just not making any money. We're working harder, we're spending more money and we're making less profit. So then you have to look at is what point does that switch over?

Speaker 2:

When does that cross back over to where the revenue is more than your expenses and sometimes that is an operational thing, to where you have to figure out your operations, because you didn't grow as a company, meaning you didn't. Basically you did certain process, procedures and what you did finances when you were 5 million, because this is what you could do. Now you're more sophisticated in some of the things. You have to learn how to manage your money, from depreciation to all these other things managing properties and locations and people and you have to leverage all that to really figure out how you you come up. You know you, basically your revenue is above your expenses and that's where your scale, you're able to scale to where you're not. Your overhead is not costing more than your revenue is, if that makes sense, I made it more complicated, oh that's helpful.

Speaker 1:

What would be maybe an indicator that someone, a business owner, could look at today to be like are we just growing, are we scaling, and how do we get onto the scaling side of things?

Speaker 2:

Yeah, I think you look at your. Basically, you're looking at your, the metrics of just seeing where are we at. You know, looking to always look at history. Take your history points, your certain points in your history of how long you've been around. You know you've been around a year, five years, 10 years, 20 years and seeing what does that look like? What do we notice?

Speaker 2:

What is the trend when our sales team is doing, you know, growing at this amount? What's our percentages? That we think that we're making off the work, the widget, whatever it is, that we're making off the work, the widget, whatever it is, is that truly what it is? And trying to determine how those line up and saying, okay, this is looking like we are honest with our costs and stuff like that and we're not borrowing money and leveraging things. So I think it's just a matter of you have to just kind of look at is where are we at yesterday, where are we at today, where are we going to be in the future?

Speaker 2:

And seeing, is there a trend to where you're saying this is more than just a growth phase, because you'll be able to see right away in your expenses, your finances. It just can't keep up. And that's the thing is. It's like you are borrowing more money, you are putting more into debt and you're just not seeing that relief where it's like, okay, we're starting to see a trend where we can sustain ourselves. If you stop today as we've seen some critical things over the last so many years like if your business stopped today for whatever reason, can you sustain going longer? Or is it pretty much you're done? And that's the thing is, if cash flow isn't happening 24-7, you're always like spending and then you're hoping for that check to come in or whatever transfer of money that will tell you something that there's probably something that's broken in your company that you need to look at a little bit more seriously.

Speaker 1:

You spoke earlier about communication being one of the most common mistakes or, I guess, issues you see in companies like, regardless of their size. What's one of the most common, like hindrances or bottlenecks you see in founders that you work with that prevents them from growing beyond where they're currently at when you come in?

Speaker 2:

A lot of times the founders are. They say they want change. And the hard thing is it's hard to make change because they're the founder, they're they're the ones that you know, probably the one that came up with this idea, this, this concept or whatever they're doing. It's like they're holding so tight with it. They're just like they don't they. They say they want help and like okay, you come in, you can tell that you, there's going to be only a small percent, there's going to be a percentage.

Speaker 2:

I always look at it as you're going to be able to make change in an organization. For them, it's like because they're only gonna allow you to do so much. They're like it's the comfort level. It's like, okay, I'm comfortable to this point, I'm willing to do these changes and continue to keep those things in place, but I'm not going to do everything. It's like they're never going to come to 100 of like you know what you're right, but that's why they're the founder. They're like I'm the idea person, I'm the visionary, they're that person and they're like you're having someone come in there and they know there's something's broken, but they're only going to allow you to fix so much. And that's where you have to realize okay, this is what I can do, the percentages going in already, knowing that this is as far as you're going to be able to take them for this moment in time. Maybe come back later and say, okay, let's do a little bit more.

Speaker 2:

But that's where you have to get the buy-in from the founder to do so much and them knowing that it's going to take some time. This is not something you're like, like you're going to come in. You're like I'm going to get it done in three months. It's like nothing changes. It's a six plus month process to get you know. Habits and things like that change and even for a founder you have to get the habits changed. And another real big thing that happens too with founders is if they ever want to sell their business, they're the ones that are going to be the hardest because they've been through all the ups and downs, the money and the sacrifices of family life or whatever, and they're going to be. The value of their company might not be on. That report that says this is what they think it is and this is what really reality it is. And that's where sometimes I've talked to founders about when they're selling is like. I understand why you think this dollar amount is worth it, but it's not really. That's not that. So that's a tough discussion.

Speaker 1:

I was going to say that must be a tough one telling someone maybe their baby's a little bit ugly, or you know? Yes.

Speaker 2:

Not as cute as you think it is.

Speaker 1:

But hey this is a pretty nice amount, and I think you should run with this while you have the offer on the table. Last question for you, michael what's the best piece of advice that you've ever received?

Speaker 2:

Best piece of advice. One of them has been don't take myself so serious. Sometimes I get a little too serious about things. I get focused and so intense about it for my own self or put so much pressure on being perfect, and I think that is something. That's something I continue to have to learn about. Is not, everything is not going to be perfect, everything's not going to be successful. You will fail, we will all fail, it's just what do we do after that? And that's the thing is. It's like like what are we? What's the next step? Okay, we failed or something wasn't what you wanted to be, but then what's next? Don't let that hinder you from being successful or to continue to push forward fail your way forward.

Speaker 1:

Yes, that's awesome, michael. Thank you so much for coming on and for an awesome conversation and sharing so much insight on how you view your role and how you help other firms and for everyone else listening, what they can implement right away. This has been a fantastic conversation. How can people get in touch with you if they want to continue the conversation with you?

Speaker 2:

with you. Yeah, so there's two ways on my website, straza consulting, or consult Straza calm. Or you go to my LinkedIn page. You can find me, michael Straza, and it's fractional CFO out there and, yeah, I post up all the time and it's just. Those are the two best ways to reach to me to say, hey, I'm would like more information about how you could help. Or you say this is what I need help with. So, yeah, those are the two best ways.

Speaker 1:

Awesome. We'll put that stuff in the show notes so people can reach out. I encourage everyone to get in touch with Michael. Again, thank you so much for coming on. I really enjoyed this conversation. Thank you.

Speaker 1:

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 exciting topics coming up, so stay tuned for the next episode of CFO Chronicles. Until then, keep pushing forward.

Speaker 3:

Your growth is just one strategic move away. 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.