The Leaky Boat: Why Mid-Market Manufacturers Leave Millions on the Table

Most manufacturers are great at building things. Far fewer are great at understanding whether those things are actually making them money — and that gap is costing them more than they realize.

In this episode, Justin sits down with Allen Engstrom, Managing Director of CFO Network, to break down the financial realities that every mid-market manufacturer needs to understand. With over two decades of experience — including a stint at Intel, where he helped oversee a 60-person team managing a $60 billion data storage market strategy — Allen has seen firsthand what separates manufacturers who thrive from those quietly taking on water.

They get into the cash flow mismatch that makes manufacturing uniquely brutal, the single metric Allen looks at first when he walks into a business, and why "we'll make it back next quarter" is a mindset that can sink a company. If you've ever wondered whether your financials are telling you the full story, this one's for you.

What you'll learn in this episode:

• Why manufacturing cash flow is so uniquely challenging — and what Allen saw firsthand at Intel committing a billion dollars to build a factory for products that didn't exist yet
• The difference between gross margin and Return on Invested Capital (ROIC) — and why ROIC is the number Allen looks at first
• How to benchmark your business against industry peers to spot whether your margins are competitive or dangerously thin
• The "leaky boat" framework: how to identify where money is quietly escaping your operation through poor labor utilization, equipment underperformance, and pricing gaps
• Why a 1% improvement in the right place can literally double your cash flow
• What private equity firms are really looking for when they evaluate a manufacturing business — and how to prepare for that culture shift
• The fractional CFO value proposition: why bringing in financial expertise may be the highest-ROI investment you can make in your business
• Why sunk costs are water under the bridge — and how forward-looking financial discipline separates growing companies from struggling ones

About Allen Engstrom: Allen Engstrom is the Managing Director of CFO Network, where he leverages over two decades of experience to provide world-class outsourced finance and accounting solutions for businesses of all sizes. Holding an MBA from the University of Texas at Austin with a specialization in IT entrepreneurship and finance, Allen blends deep technical knowledge with sharp business acumen. His career includes a significant tenure at Intel Corp, where he served as a program manager overseeing a 60-person team for a $60 billion data storage market strategy and managed M&A transactions totaling over $4 billion. Today, based in North Little Rock, Arkansas, he is known for transforming complex financial data into actionable growth strategies.

Connect with Allen: 🔗 https://www.linkedin.com/in/allen-engstrom-4a436/

Enjoyed this episode? If this conversation added value, please take a moment to like, subscribe, and share the show. The more mid-market manufacturers we can reach, the more we can help move the needle on the bottom line — which is what The Allied Advisors Podcast is all about.

Transcript

SPEAKER_00 0:03

Welcome back, everybody, to another episode of the Allied Advisors Podcast, the podcast for mid-market manufacturers looking to scale operations and improve that ever-important bottom line. Today's episode, I'm joined by Mr. Alan Engstrom. Alan is the managing director of the CFO network, where he leverages over two decades of high-level expertise to provide world-class outsourced finance and accounting solutions for businesses of all sizes. With an MBA from the University of Texas at Austin, specializing in IT, entrepreneurship, and finance, Alan blends deep technical knowledge with sharp business acumen. His impressive career includes a significant tenure at Intel Corp, where he served as a program manager overseeing a 60-person team for a $60 billion data storage market strategy and managed mergers and acquisitions totaling over $4 billion. Today, based in North Little Rock, Arkansas, he is widely recognized for his ability to transform complex financial data into actionable growth strategies, helping entrepreneurs navigate everything from day-to-day bookkeeping to high stakes valuation and finance analysis. Alan, thank you so much for carving out the time to come on the show. Really appreciate it.

SPEAKER_01 1:21

Thank you, Justin. Happy to be here.

SPEAKER_00 1:23

Yeah, you know, we we want to provide valuable information to mid-market manufacturers, and I am ashamed to say I have not had anybody with a financial background on the show. So maybe the most valuable information if you're a mid-market manufacturer, and I've totally skipped it. So thank you for helping me remedy that today.

SPEAKER_01 1:42

I'm happy to be here and I'm passionate about this. So I'm looking forward to diving into it.

SPEAKER_00 1:47

I love it. I love it. So, you know, you and I had a little pre-meeting where we kind of went over what we were going to discuss today. And one of the topics that came up was, you know, I was recently out on the West Coast working for a rocket manufacturer where we discussed, you know, during those conversations that even Elon Musk had to learn the hard way that building things is one thing and manufacturing is totally different.

SPEAKER_01 2:10

Totally different.

SPEAKER_00 2:11

You know, I'm not saying that building a rocket's easy, obviously it's certainly not, but manufacturing it adds another level of complexity that I think most people overlook or most people oversimplify. You know, with you coming from the financial background, you know, what's why is it why is manufacturing so hard to capture all of the ins and outs on your traditional PL?

SPEAKER_01 2:34

Well, most people know the comp the Intel as a company. Uh, they're at the time that I worked for them, they were considered the world's most respected company. Not sure if they still hold that title today, but uh they were undoubtedly at the time, at least, the world's most complex manufacturer. And so I got up close and personal in exactly how hard it is. And you're absolutely right. Designing the tech is one thing, actually making the widget is a whole nother thing. And I would say there's even another realm at the end of the day. After you add up the sum of all the things that you've done, you've got to make a nickel, right? You've got to have some kind of profit, if anything, to sustain the organization going forward. But hopefully, you know, you're making enough of a return on all that uh to justify the pain and suffering and sacrifice and upfront investment uh that you and all the other uh the owners and even all the other stakeholders, employees, everybody at the end of the day, you've got to make it sustainable. And it's just manufacturing is incredibly difficult. The number one reason why it's incredibly difficult is is from my perspective, just a mismatch in cash flows. And what I mean by that is like at Intel, we had to commit at the time to build a factory was over a billion dollars. I wouldn't be surprised if today it's $10 billion. But the point is we had to commit uh, say two years in advance, a billion dollars in capital to build out a factory with tooling that wasn't even invented yet to build products that were not even invented yet. Now that's an extreme example, but the point remains is with manufacturing, you've got to typically you've got to commit upfront capital investments, right? In your factory and your equipment and and a lot of other things. And then you know you run your material through the factory and you've got labor, you you're doing all the things, and at the end of that period, you're adding up all the dollars and cents, and again, you're hoping up, you're hoping that the accountants show that there's a profit. The hard part is like if you commit say a million dollars up front to, I don't know, build out a new a new tool line or something, uh, you've got to have some assumptions about uh the volume of that product that's gonna run um ahead of time, um, you know, the the cost of goods sold, the labor mix, the yield on the on the line, and ultimately what you sell the product for uh in the future. And you've got to sort of match all that up and put it together in some kind of a coherent financial summary, right? That says, hey, on the front end, this is what we're assuming, and then on the back end, after it's all said and done, like are we better off by having done this or worse off, right?

SPEAKER_00 5:33

Yeah, and it's no guarantees, right? I mean guarantees. I can kind of look to the automotive market, right? Ten years ago, EVs were gonna be the that was the that was the dream child, right? EVs were the way of the future, we were all gonna make tons of money selling electric vehicles, and I mean the market share for EVs, I'm sure has grown, but I don't think it's been the the darling that a lot of the big automotive companies maybe thought or hoped it would be. Um so but that didn't stop them from sinking tons of real capital out of that. So it it it really is, to your point. That's a um it it there's a lot of risk in it, and and you never know how it's gonna work out. Or you know, you don't really know how it's gonna work out.

SPEAKER_01 6:18

The good news is uh with the right accounting and finance staff, like when I was at Intel, I was a finance analyst, and when we would make these kinds of decisions, we would put together like a project spreadsheet and a button in it that factored in all the minuses on the front end when you were making the investments, and then um you know we would plug in all the different assumptions for product mix and volume and margins and all the other cost of goods sold materials, all that stuff. We would bake it all into a kind of a project uh model, so to speak, and we would all we would do some financial financial calculations that you could do to kind of boil it all down to you know, is it a positive overall project? Is it a positive profitability with a good return on investment, or is it something that you know you should you should pass on? And so there's that's the good news is there's well-established financial techniques, financial accounting techniques that can be employed to help these business owners uh make good decisions and and know that they've made a good decision. And if you know they get halfway across the river with it, they know what they need to do to adjust in order to make it a good decision.

SPEAKER_00 7:34

Or or when to cut bait, right? So stop throwing good money after bad. I'd imagine that's gotta come into play at some point.

SPEAKER_01 7:41

For sure.

SPEAKER_00 7:42

So, you know, a lot of the folks that I work with, or a lot of folks in the mid-market space, you know, these are founder-led companies, right? These guys are technical experts, they know how to build a thing that people love and and they want, and so they buy it, and then they they grow and they have to bring on other people to help in the process of building. But but these folks aren't necessarily financial experts or sometimes even manufacturing experts, right? Right. Uh so you know, you only know what you know, and it's it, you know, that's no nobody's fault. Right. But what that tends to lead to is leaks, right? You there's money that kind of gets leaked out of the organization that really goes unnoticed because, you know, for whatever reason, the the purpose of the person at the top maybe just doesn't know. You know, what are the most common leaks that you see and and how can somebody know if they're in a ship that might be taking on a little bit more water than what they expected?

SPEAKER_01 8:42

Yeah, that's a great question. So the highest, I would say the there's there's different metrics. Uh at the end of the day, um, you look at you go look you look at profitability. Uh we look at benchmarking a lot. So your type of business and your industry, uh what are what are the sort of what should expect in terms of gross margins, what should expect in terms of bottom line profitability percentages. And then another big thing that I really harp on with manufacturing companies is return on invested capital. So what is that? So that is at the end of the day, you're you've got the capital base. So you've you've invested, right, in in your say your factory and all of your equipment and everything like that. That's capital. Uh if you're if you've got some good accounting, you'll be able to look at your balance sheet and see how much invested capital you have in the business. At the end of the day, you've got to make a decent return on that capital, or every finance guy worth his salt would say you need to go do something else, right? So if you've got say five million dollars tied up in your in your factory, uh, and you're only making say a 3% return on that capital, well, I could say you could you could sell that factory and go put that five million dollars in U.S. Treasuries and sit on the beach sipping my ties all day and do better than that, right? So that that's that's that's an example, but at the end of the day, uh you can look at other companies again, benchmark yourself on like what do other manufacturer, you know, manufacturing companies at Intel is 15%, right? So Intel had to get a 15% return on invested capital, or people like me would say it's not worth doing it, right?

SPEAKER_00 10:30

Let me ask you this. So and I don't mean to show my ignorance, but I'm I'm about to put it on full display. When we talk about return on invested capital, are is that how does it relate to gross margin? I mean, is that essentially what you're talking about there?

SPEAKER_01 10:44

Yeah, all re the return piece is basically the profits that you're generating, right? So that's the when you're talking about return on invested capital. Invested capital is what you put into the into the business in terms of cash. In terms of the return piece, labor capital is profits, cash flow. Ultimately, it's all about cash flow. Right.

SPEAKER_00 11:06

Yeah, I uh since starting you know the Allied group, I I've definitely learned a lot about managing cash flow. It's uh it's the grease that keeps all the gears turning. And uh I didn't appreciate that when I was just an industrial engineer. I didn't appreciate it like I appreciate it now.

SPEAKER_01 11:22

But in terms of the leaky boat, that's sort of if you're looking at those things, and that should give you sort of a indicator, right? It should be indicator light, you know, green, yellow, red, think in that term. So if there's say yellow or red lights in terms of profitability, gross margins, benchmarks against similar companies, if your return on vested capital is low, then that would be my warning indicator light that you've got a problem, right? So it could have been, you know, with that from then we'd start sort of breaking it down, looking at your financials in more detail. Um, you know, are your gross margins too low? If if they're too low, then do you have a labor utilization problem? Do you have uh an equipment utilization problem? Uh, do you have a pricing issue? Um, you know, you sort of break it down into all the different components at that point.

SPEAKER_00 12:16

How do you go about making those distinguishing, you know, making those decisions, right? I mean, because to your point, it could be a cost problem or it could be a sales problem, it could be a pricing problem. You know, what's the strategy for figuring out where to focus?

SPEAKER_01 12:29

Yeah, so um there's lots of techniques. Uh utilization is a big issue. Uh, so it could be like poor labor utilization, you know, do you have too many people that are idle too much that you're paying for? Same thing on your tooling and machinery capacity. You know, what is your theoretical capacity? You know, this goes back to engineering stuff. What is your theoretical capacity and what's your actual capacity? That's a big indicator for me. Um, the way that you look at just the economics of a factory, one of the number one rules is get your keep your utilization high, right? So, you know, eight say 80% utilization on your labor and your your uh equipment capacity, uh, usually that means that you're you're you should be doing pretty well at that point. Um otherwise you need to cut down on on your costs, right, to to get to match that capacity utilization.

SPEAKER_00 13:24

Have you seen so a lot of the struggles that I see, um, especially in the the smaller to mid market space, is reporting is a function of labor adherence to standards, right? And good processes to get this data in so that you can look at it. A lot of times, you know, when I talk to folks, I talk to folks in on the financial team or supply chain or or in the office, let's say, and I ask them about, well, you know, what's your what's your scrap, what's your talk cost of scrap? You know, I get the deer in the headlights look. They're like, ah, you know, that's kind of hard to pin down. I don't really know. Um, and you know, to me, I'm like, well man, I how do you sleep at night if you don't know some of these things, right? I would be, I would, you know, I would be beside myself worried about it if it if if I was the one signing the front of the paycheck. Is that what is that what you experience? Have you seen that? And then kind of what's your advice to these folks to start getting better data? Um, and maybe what's your speech to encourage them that, hey, this is important, you really need this.

SPEAKER_01 14:33

Yeah, that's great, great question. So the the thing that I've been doing this for more than 20 years working with small businesses, and the thing that a lot of people don't understand about business owners is they're stretched so thin every single day. And I'm a small business owner myself. I understand there's a thousand different things that I could be doing that are good, you know, good for the company, right? I just don't have enough time in the day to hit all those things right now. And you usually I'm stretched so thin that sometimes I'm in danger of not being good at any one of those things. And so a lot of times it's really about focus. And uh one of the best techniques we have is with the numbers, the command of the numbers that we have, we for it's typical for each of our clients, we've got basically a I call it a business simulator, a custom model that we've developed in Excel for that particular business. And we can look at, hey, if you if you uh did get your gross margins up to industry average, if you did get your bottom line margins up, uh, if you did get your utilization, capacity utilizations up, if you did minimize your your scrap, here's the potential cash flow, right? And usually it's a it's a big number, right? It's it's compelling, right? And so you could say, look, if you got all these KPIs, all these indicators in the green zone, like scrap, for example, if you spent some time on the front end to measure these things, um, look at the cash flow you could have, and sometimes it's like you know, a quarter million dollars more in cash in your pocket, not only this year, but every year thereafter. That's motivating for a business owner. That really gets their attention.

SPEAKER_00 16:23

And that's kind of you kind of sparked another maybe lot of thought in my brain is I'm assuming that's probably one of the things that, you know, so a lot of my clients are family-owned transitioning to private equity. If I'm a private equity guy, that's probably one of the big things I'm looking for is where are they at in terms of industries for growth and net margins? Um, where are they at for utilization, and you know, how much, and if I improve that, what can I turn this business into? And as well as are we in a growth industry? Is there an opportunity to expand? That sort of thing.

SPEAKER_01 16:58

For sure. Yeah, private equity doesn't just buy businesses to just kind of continue on as before. Right. But equity has very specific demands on them to produce returns on invest on their capital. Right principle for them. And so you you would assume in every case when you're working with private equity, that they are very interested in doing some doing something different in a way that that increases, tweaks up the return on investment, right? So they this is right in their zone. They are very interested in what can we do differently in the business to increase cash flow.

SPEAKER_00 17:42

So if you're a family-owned manufacturing company, you know, maybe thinking about selling, maybe, you know, maybe maybe you've kind of taken the company as far as you think you can, and you need some additional capital to to scale operations, and you're thinking about partnering with a private equity firm, you know, how can you prepare yourself for that? You know, what's the what's the shift going to be like um going from family-owned operations, or maybe in your experience, going from family-owned operation to private equity?

SPEAKER_01 18:10

Yeah, so that's a that's a really uh we could probably have a whole episode on on this topic, but of course, every private equity, everybody you work with is different, right? But I would say generically these guys are purebred capitalists. Uh they're they're not as likely to be experts in that particular business like you are, but they are purely driven by by that profit motive. And it's all good, you know, if you're an owner, part owner, if you're a participant in their fund, that's who you want to run your fund. Because again, they're gonna be they're gonna be the business guys that are gonna be driving the re that return on invested capital. Uh, but they're good, I would expect them to be looking at you in terms of again, like what is the potential of this business? How can we grow? How can we increase our margins? Uh, those sorts of things.

SPEAKER_00 19:04

And you think that the conversations are probably gonna shift, I'd imagine, more in the financial vein, right? So we're not gonna sit down and talk about how many widgets did you get off the line today. It's gonna be more about what was the net margin on each widget you got off the line today, what was your labor utilization rate for each widget you got off the line today? So it's definitely gonna get more to the you know, to the dollars and cents of the matter, which I mean that's what keeps us all in business anyway, right? I mean, if we're not making money, nobody, there's no reason to show up. So so but but I can see where that's a that's a culture shift, right? That's a culture shock.

SPEAKER_01 19:43

Absolutely. Yeah, if you Google like uh what are the average returns to private equity, and by the way, I've I have been reading a lot private equity, the industry is suffering right now because their their returns have been actually below the overall stock market returns. And it's the same principle. The invest people that invest in private equity are sitting there saying, Why should I put my money in this private equity fund when I could just put my money in a you know SP 500 ETF and make more money, and it's totally liquid. You know, I could buy and sell it all day long. Whereas private equity, you put your money in and it's locked up. You hope to get your money back out, say three years down the road. So private equity has got to over the long term, private equity has to beat the overall market, which has got to be north of 10%. It's gotta be in the 15% range in order.

SPEAKER_00 20:37

I mean, really, is that gonna get it? I mean, would I get would I give up the liquidity of just buying stocks?

SPEAKER_01 20:42

That's why they have to deliver those above returns.

SPEAKER_00 20:46

Right. I mean, you gotta deliver them significantly above returns, right? I mean, multiples on your money, not 15 to 20 percent, I would think. Otherwise, I'll just stick it in, like you said, an SP mutual fund, and I could sell it and take my cash out whenever I want to. That's right.

SPEAKER_01 21:01

Yeah, that's uh if you do business, if if private equity comes into your business, you you should expect that they're going to want to get those kinds of returns in your business, or else it's not gonna be sustainable for anybody.

SPEAKER_00 21:14

And I mean, you know, and some people could hear that and maybe take it negatively, like, oh, you know, they're gonna make this, you know, I'm selling out, I'm gonna be corporate or whatever. But but I guess when I hear it, I you know, I think it's exciting. Like, hey, you know, they're they're interested in this business because they see potential in scaling it and making it bigger than it is, uh, you know, in multiples of it, right? Not 20%, not 25%, 200%. Yeah. Um, and that's an exciting thing to be a part of, is how do you scale those operations? How do you grow that that that output and and and grow revenue along with it?

SPEAKER_01 21:52

Absolutely. Yeah, and every business owner has a right to uh you know ultimately sell their company, of course, and you know, you ultimately you want to cash in on. All of the accumulated hard work you've put into that business. And so there's nothing wrong with that at all.

SPEAKER_00 22:06

Yeah, absolutely. Um, and you know, one of the things that I've kind of had to had to learn in my own business is, you know, once once money's gone, once you miss that target, there's no getting it back. I think if you're not a financial person, you think, well, I I missed it in January, but I'm gonna make it back in April, right? You know, Q1 was really bad, but I'm gonna get it back in in Q4. But from a financial perspective, that's not how you see things.

SPEAKER_01 22:33

It's water under the bridge, it's gone. Yeah, that yes, it's it's hard uh mental discipline, but it it's the water under the bridge thing. You you know, when it comes to financial decisions, uh, you know, I don't know what the right analogy is. Like it's when you're at the casino and you've lost you know some money and you go back to the ATM to get more cash because you need to feel like you need to make it back. And it's it's always from this point to the future that you have to look, right? So whatever's happened has happened, and now all you can do is optimize your decisions right now and in the future.

SPEAKER_00 23:08

To figure out how we're gonna how we're gonna start winning again, right? Yeah, that's right. You know, Alan, I I try not to make this a a sales pitch, but I do think uh there's this might be an exception I'm gonna make. You know, if you're a mid-market manufacturer, maybe you don't have, or maybe small cap uh guy, and and you don't have a CFO, right? Maybe your financial team is you and a you know, your QuickBooks, what would be the argument that you would make to those folks to say, hey, look, I I understand this is an additional expense on the PL, but here's the value that it delivers. Yeah, here's why you should call somebody like me.

SPEAKER_01 23:46

So that's I it I believe in this with like every drop of fiber in me. Um it's it's probably the best investment that you have ever made in your investment or in your company. Uh getting somebody, and it's not, you know, just not even me, like just call it a fractional CFO, somebody that's got that financial perspective that we've been talking about, uh, goes back to what you said on the front end, they're like, these guys are heroes in my book. They're amazing at what they do, amazing. And it is a it would be an absolute miracle if they're also amazing at finance. You know, no one should expect that. And so the key, as everybody knows, is like surround yourself with people who are who compliment you. And uh if you're not a financial expert and a manufacturing expert, then it's easy to go out there and find somebody like me, a fractional CFO, uh, who could come alongside you, who can make sure that you've got a foundation of solid accounting, right? So we've got solid numbers that are timely, accurate, and relevant every month, and that we're leveraging those numbers. Uh, we're doing the analysis that we talked about, we're in the cockpit helping them make decisions on the front end about how they're allocating capital. And then we've got the analysis to say, hey, when you connect this capital to whatever project it is, we've got a project model that shows here's our assumptions, here's what we need to do to make sure going forward that we are staying faithful to that original investment decision. So that at the end of the day, you're making that solid return on investment so that you can feel comfortable knowing that you made the right decision and that ultimately at the end of the day, you are being a good steward of the capital that is tied up in this business. Um and if you need to make any mid-course corrections, you're more you're more likely to spot it quick and to know exactly what you need to do back to focus, know exactly where you need to focus. So that the end of the day, when we pull financial reports, say at the end of the year, we're able to say, hey, you know, you're hitting your target gross margins, you're hitting your bottom line margin, you're making, you're maximizing your cash flow. And at the end of the day, it's all worth it, right? So all the sacrifices you've made, um, you know, you're getting a good return on that investment. You can feel good about that.

SPEAKER_00 26:26

What have you seen in terms of, you know, I guess the percentage return that you've been able to help people achieve that maybe they weren't achieving before before they met somebody like you?

SPEAKER_01 26:37

Yeah, you know, it's common. We'll we'll walk into a business and maybe they're making some some money, maybe they're making low to mid single digit percentages, like say five percent profit margin, and that's okay, you know, but uh you know, it's not uncommon to see like, hey, you've got, I don't know, million dollars of capital tied up and and making this this five percent. That's not that's not where you need to be. You know, let's do some benchmarking. Let's look at, you know, look at here's these other companies, they you know, they're they're pulling in 15%. You know, that's that's triple. Yeah. Like, who what business owner would not be interested in tripling their cash flow? You know, that's the good news. If you've got a big capital base, you've got a big revenue base, but a small bottom line margin, even 1%, like if you find 1% inefficiency here, 1% here, 1% here, you could double, easily double your profits and cash flow.

SPEAKER_00 27:36

And I'd imagine starting those conversations with you also has downstream effects just on organizational structure, right? I mean, yeah. Come in and point out that, hey, you're inefficient in your equipment utilization. Well, maybe I might go out and hire some many, you know, some mechanical engineers to help me get this equipment up and running more reliably, or you know, or an industrial engineer to figure out how to do changeovers more effectively or something like that. It could have a significant impact on what the company looks like overall.

SPEAKER_01 28:05

For sure. And uh I think you mentioned earlier like just the leaky boat, and you know, there's a lot of times when we go in there and the profit's not where it needs to be. And uh, you know, we've we helped guide dozens and dozens of companies through the great financial crisis. Same goes with COVID, and we really learned a lot through the through those really, really tough times. Um one of the big lessons was not making cuts soon enough, right? So, you know, you mentioned like, I will make it up next quarter. You know, it's that's hopeful thinking, that's not a strategy. And so um we're really good at saying, hey, look, you know that you're losing money and whatever this segment of the business. Ultimately it's up to the business owner what they decide. But we could certainly quantify, like, hey, here's here's the here's the amount of the loss, and here's what the profit could be if you made these changes. And sometimes people just need a little bit of confidence, yeah, and just a little bit of you know motivation to go ahead and make those changes because sometimes they you know it can be tough. Any any change is is hard. And we recognize that.

SPEAKER_00 29:20

I've been in that boat, right? I mean, where the business is and is not where you want it to be, and you've got resources that you know aren't aren't generating the revenue that you had hoped, and you know, but you feel like you've committed to them, right? They're part of the team, you hire them and you feel responsible for them. Um, so and and I did have somebody, you know, kind of fill that role and just say, hey, I get it, but you gotta cut them. You gotta cut them, or nobody's got a job, right?

SPEAKER_01 29:46

Yeah, one way you you know, let's say I did that analysis, and let's say, hey, you could be making, I don't know, $100,000 more if you made this change and lopped off doing this money losing activity or whatever it may be, you've got maybe the wrong person in the wrong chair. We can quantify that. So then you could say, look, look, this guy in this chair is not the right fit for him. He probably knows it. If this was just a friend of yours, would you be writing that guy a check for a hundred thousand dollars to help him out? Yeah. Yeah. I don't know. You know, it's maybe, maybe not, but at least they have that data and they could they could make that decision. You know what I'm saying?

SPEAKER_00 30:26

Yeah, and you yeah, you get the support that because I I get it. A lot of times you need you need somebody there going, hey man, this doesn't make you the worst person in the world if you have to cut back, right? I mean, it's it's part of being a leader, it's part of be owning a business. Um sometimes you have to make tough decisions and you have to be willing to stand up for it. You have to be willing to stand up for the business first.

SPEAKER_01 30:48

Or at least, you know, make make that choice. Some some sometimes people are like, nah, you know I'm good, and that's fine too.

SPEAKER_00 30:54

Yep. Well, Alan, really, I really appreciate it so much. Thank you for carving out the time to coming and talking with us today. Uh, obviously, finance is a topic near and dear to all manufacturers' hearts, whether they want to admit it or not, uh it's definitely something that we all need to to to in you know increase our knowledge in, and and we do that by talking to experts like you. So if folks want to follow up with you or connect with you, how can they do that?

SPEAKER_01 31:19

My company is CFO Network, just Google us, and we uh we we love to talk to business owners, so don't hesitate. Uh, we're happy to help. Our mantra is just be helpful, and so we love to have calls with folks. A lot of times, you know, it doesn't lead to you know business for us, but we still come away just excited to be able to lend some some good old hard-earned wisdom along that we've accumulated along the way. Um, and it's good karma. So love to talk to business owners.

SPEAKER_00 31:50

That's awesome. So yeah, we'll link to the company website as well as your uh personal LinkedIn profile in the show notes. For sure. And and folks, if you enjoyed this conversation with me and Alan, please do like, subscribe, share the show. Tell all your friends, you know, we want to get the message out there and we want to help more mid market manufacturers scale operations and improve that bottom line. Until next time, guys, see you later. Thanks again, Alan.

SPEAKER_01 32:15

Thank you.

SPEAKER_00 32:15

Bye bye. Take care.