Danielle Hendon- Misconceptions of Small Business & CFO Vacancies

Hi! I’m Danielle Hendon – wife, mom, and Virtual CFO to small business owners.

I empower business owners to pay themselves what they’re worth and continue to put more profit in their pocket every year. I do this by helping business owners understand what their financial numbers are and WHY the numbers move. Armed with that understanding, you can take intentional steps to grow your profits.

I bring over a decade of experience in corporate finance and accounting to small businesses on a scale that fits their budget and their needs. My education and certification (as a CPA) gave me the technical knowledge. Using those skills on the job, taught me that accounting and finance is about so much more than numbers. It’s about the people. I LOVE numbers…but I have a genuine passion for people.

When my previous employer closed their doors and severed all the employees, I knew it was time to take my knowledge and passion to the people that needed it most. I started 4 Corners CFO to help business owners take a step back from the burnout, pay themselves what they’re worth, and focus on their joy and reason for serving their clients. I get the chance to change the world by helping business owners like you have the biggest impact they can in their community.

Connect with Danielle:
https://www.linkedin.com/in/danielle-hendon/

Get Your Free Path to Consistently Paying Yourself Here https://keap.app/contact-us/7993277615067632

Your hosts: Colton Cockerell & Trisha Stetzel
Click for more about your hosts:
Colton Cockerell
Trisha Stetzel

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Transcript

Colton Cockerell: 0:04

Hello and welcome to a another exciting episode of Bridge the Gap where we're balancing life through health, wealth, business and relationships. Alright, hello and welcome to the show. My name is Colton Cockerell. And with me, as always, I have my lovely co host, Miss Trisha Stetzel.

Trisha Stetzel: 0:26

Hey guys not have good Colton. How are you doing today?

Colton Cockerell: 0:30

Good. It's a beautiful day.

Trisha Stetzel: 0:33

It is a beautiful day. Listen, I am so excited about being here today. So that is the first show of our second month in the fifth season. And this month, we're going to be focused on financial wellness. And today we're going to discuss the importance of a chief financial officer. I know some of you are gonna blow your minds today, right? But who better to talk about all things CFO and Danielle Hendon, owner of four corners CFO. Danielle, welcome to the show.

Danielle Hendon: 1:02

Thank you for having me. I'm really excited to be here today.

Colton Cockerell: 1:05

Yes, and before we dive in, we do have to give a shout out to our sponsor for today's show. And that is Sharer McKinley Group, LLC. So we're gonna jump right on in. So Danielle, we do not mess around, we just come out just swinging. Okay, so get ready, it's gonna be great. So first question for you. And I'm sure this is a question you get asked all the time. But what are key metrics that people should look for? Or that CFO is necessarily what they look for whenever they're evaluating a company.

Danielle Hendon: 1:36

So as a business owner, I'm going to tell everyone, the first metric you need to look at is profit, otherwise known to some as net income, there's a little bit of a difference between the two. But your profit is what you're putting in your pocket. And that's the number that matters the most.

Colton Cockerell: 1:51

I think I would probably have to agree with that.

Danielle Hendon: 1:55

Other than that, with kind of my background in audit and stuff, I would tell you that the balance sheet is a really important area a lot of people don't look at a lot of business owners and accountants even are focused on your income statement and what revenue and expenses are doing. But your income statements usually only as good as your balance sheet is accurate. And making sure that those balance sheet numbers actually tie out to real data is important. So you're making decisions on reliable information?

Colton Cockerell: 2:24

No, I used to think the balance sheet was kind of like, oh, it's it's a cool form to have income statement. Yeah. But yeah, I can understand how the balance sheet is very important. Can you kind of go into more detail, what makes the balance sheet so important, and again, the accuracy of it depending or how it how it affects, there we go, your income statement.

Danielle Hendon: 2:44

So your easiest reference, most of us, I'm going to date myself here, if you've ever balanced a checkbook, you know, kind of what a bank reconciliation is going to be like, and making sure when you're looking at your bank statement that everything that came through, actually got recorded. That's where that balance sheet check comes in is, hey, I got $1,000 in cash, it went into my bank account, oh, man, I didn't make an entry, it should have gone to my income statement. And that's really the easiest way to explain to somebody what a balance sheet reconciliations going to do.

Colton Cockerell: 3:18

And I can see how that plays into the income statement. Trisha, I just have to what that made me think of when I got married, it was kind of a a adjustment with my wife because every time my notification, my credit card, get swiped comes in, I have to log it into my phone. And so whenever she got the credit card to and I got all of her charges, I said, Hey, just wanted to you know, I saw that there was a purchase, say like, you know, just just so I can track. I mean, I don't care, but just so I can track it. And she got she's she's used to it now, but she was like caught off guard, like why do I have to report everything to you? It was it was pretty funny, but sorry. I'll push it. Next question.

Trisha Stetzel: 3:53

My gosh, Colton. Come on. What a way to start the marriage. What away? Oh, I know. So I've got two geeky number lovers on the phone or on the podcast today. I love you both very much. But as you both know, we have a lot of business owners that listen to our show, right? So yes, balance sheets and numbers and p&l statements and all of those things. Danielle, how do you I know you come from a corporate background, but you now own a small business as a CFO, how do we tie all of this together?

Danielle Hendon: 4:31

So I like to give people homework, which Trisha I'm sure you're really familiar with giving people homework. Um, the easiest thing that I would tell business owners to do that kind of ties this together is to set up a bank account that is for your business profits, and put 1% just 1% of whatever revenue you're bringing in over into that account. And I promise you'll figure out how to pay the rest of the bills.

Colton Cockerell: 5:00

That's a that's a good word.

Trisha Stetzel: 5:02

Yeah, like that.

Colton Cockerell: 5:04

You can toy just

Trisha Stetzel: 5:05

so simple. Yes. Well, and the one thing, the one thing, not the one thing, but one of the things that I love about what Danielle does is she's bringing big corporate experience to small businesses. And I think that is super important because most of us business owners, minus you, Colton and Danielle, don't love numbers, right? It is just one of those things. We're not good at it, we get into something else. Because we don't necessarily know how, right and having access to somebody like you, Danielle, I think is really important. So as I look at i Yes, I love profit, I want to put that 1% into my bank account. I think that's amazing. But as I'm looking across my business, are there particular areas, Danielle, that you would suggest we cut costs.

Danielle Hendon: 5:50

Cost cutting is tricky. You want to look at the costs that are valuable to you. And that's going to be different for everybody. It's a good expense, if it's adding value to your business. Being a woman in business, sometimes our expenses can be a little frivolous and fun. And you really have to take a step back and look at is that really helping me make more money? With the caveat that I'm never going to be the person that says, hey, you need to go fire this person to cut costs, there is a balance, right? And you don't want to be so stringent on your cost that you're impacting the ability for your business to grow and your livelihood.

Colton Cockerell: 6:30

That's yeah, that's I'm glad you clarified that. That's probably probably. So let me ask you this, because I think this is a very important question. And some people probably don't even understand that the you know the difference, or really, you know, how scale works. But what is the difference between growth and scale?

Danielle Hendon: 6:49

I would come back to a word I said a lot today profits, your growth is going to be incorporated with share price. But for small business owners, that's the profit. That's your net income. Scaling can happen in a variety of ways. But if you're scaling a business to, I don't know, 100,000 in revenue, but you're also spending 95,000 In expense to do it. You're not really growing your business in a way that's helping you.

Colton Cockerell: 7:17

That's yeah, and that's I think that's really important. You hear all the time scalability, scalability, but again, cost conscious while you're scaling. Absolutely.

Trisha Stetzel: 7:27

So Danielle, if I decide that I want to bring CFO into my business as a small business owner? What qualities should I be looking for? What questions should I ask?

Danielle Hendon: 7:39

You would you want to find somebody that is detail oriented? And in my personal opinion, you want someone that's passionate about those numbers, like you said, most business owners don't want to get into the details of numbers. And you want someone that really loves it. And I'll tell you being one myself, it's it's a puzzle, it's putting together that puzzle and you get that final piece in place. That's the person you want that feels that way about your numbers, and is going to help you not just understand the puzzle, but put it all together.

Colton Cockerell: 8:09

Oh, no, that that makes plenty of sense. And when does it make sense? Because we have a lot of small businesses who are probably listening in they're like, You know what I you know, I want to see what you're saying. And I need to do that. I just can't really afford that. So when does it make sense to bring on a CFO?

Danielle Hendon: 8:24

There's actually a variety of options, I will tell you there are CFOs out there that work in group membership program, ways that you can kind of DIY yourself through some of this CFO work if you're interested in getting in the numbers. Otherwise, I would say start with a really great bookkeeper, every business can benefit from a really great bookkeeper. And then when you start getting close to those six figures in revenue, that's where I would start looking into a CFO.

Colton Cockerell: 8:49

That's actually very, I mean that that's a great roadmap there um, I've never thought about doing the bookkeeper and because again, balance sheet right. So the talent talent tight, tying that back interest. I can't talk today. I've been talking too much, I can't think straight. Now. That's great. So then bookkeeper. When you get to six figures, that's whenever you start to actually look at a CFO and come in, and probably you can immediately help you with scale and growth just based on key indicators and metrics. I love that.

Trisha Stetzel: 9:15

So Danielle, can you define thought, Oh, I'm sorry. Can you define the difference between what you do what my CPA does and what my bookkeeper does?

Danielle Hendon: 9:25

Short and sweet version, a bookkeeper is going to take the information you give them and organize it in a way that you can look at in financial statements. The information they give back to you is only as good as what you give to them. Your CPA is usually tax oriented. They do a lot of strategizing. A virtual CFO or a fractional CFO is going to step in and there's a little overlap. We do a little organizing, we do some balance sheet wrecks that are similar to bookkeepers. And we can give you a little bit of tax strategy normally based on our background, but we don't get into the details. The CFO is about gonna come in and help you really understand what the numbers from the bookkeeper and the compliance from the tax side? How do you understand what those numbers mean? And where they're going and what they do? The why is what drives your business forward.

Colton Cockerell: 10:14

And so what what, I guess really, I'm trying to think how I word this, so forgive me, but how does the CFO help with the overall growth? Again, I know we've discussed already, but like, bringing somebody on, you know, whether it's, you know, a virtual or, you know, you actually have a physical person, you're paying them a salary. I guess, how did how does that help with my growth?

Danielle Hendon: 10:36

So, you know, as a business owner, where you want your business to go, I bet I could ask anybody, and they can tell me what their goals are. A CFO is going to help you quantify those goals in a budget format. And then the magic happens, once you have that budget, and you have all of your numbers in place. You look at the budget, and you say, where did we want to be this month? Where did we actually come in at this month? What's the difference? And why is it different? A CFO, a good CFO is going to help you understand how to repeat the good events, and how to pivot from the shortfalls.

Colton Cockerell: 11:12

Trisha like how I mean, everything seems like kind of overlaps. Like if you're a business owner, you have a business coach, CFO kind of overlaps and your CPA CFO kind of overlaps. bookkeeper, CFO kind of overlaps, like CFOs running everything. It sounds like they have a little piece of all that. That's really interesting.

Trisha Stetzel: 11:31

You didn't include the financial advisor?

Colton Cockerell: 11:33

That is true. Well, I mean, CFO, Chief Financial Officer, I

Trisha Stetzel: 11:39

just assume that you need a fiduciary on board, right? Like pull them all in. Danielle, one of the things that I've heard you talk about is these business owners out there that aren't paying themselves enough or don't pay themselves at all. I know, that's an area that you specifically focus on. And I think CFOs in general, right are helping business owners in that space, can you give your take on all those business owners out there that are yet to pay themselves or aren't paying themselves fairly?

Danielle Hendon: 12:11

There are so many business owners that I've talked to, you know, three to five years away from their corporate job and still can't reach that corporate salary, salary. And that that just really breaks my heart, honestly, because you put your you pour your passion into your business, everyone I've talked to you, whatever you're doing, you're doing it because you love it. And it's so easy to give it all of your time, your energy, and your money, and you forget to give yourself what you're worth. So that's where the 1% in a bank account for your profit is, it's such an easy step to take. And you put that bank account out of sight out of mind, that's your money, it doesn't get mixed in with all the business money. I also am a firm believer of setting up the appropriate formations and s corpse and things like that when you reach a certain income level, and put yourself on payroll. You deserve to take a payroll. If you're in business for yourself, if you're running a business and you started a business, you're a creative thinker, you know how to get outside the box, you know how to solve problems. And if you prioritize yourself in your business, you will solve the problem of keeping the business going. If you don't, it kind of becomes burnout.

Colton Cockerell: 13:24

Yeah, no. And that's that's a lot of a lot of good stuff. And again, we're gonna have we have, we have attorneys already booked up to talk specifically about, you know, formation and things like that. So again, she's hitting like all these just little nuances like different professions. I love it. Because I mean, it just goes to show how a CFO has been, I mean, a good as you say to a good CFO understands how all these different components work, at least on a surface level to make it all work together, which is very interesting. Now, let me ask you this. And again, you could probably read restate an answer, but I'm just curious what is for all the small businesses out there? What is the if you can give them any advice, what would be the golden nugget that you could give a small business owner,

Danielle Hendon: 14:06

I'd go back to the 1% set up a bank account that is separate from your operating account. I would even challenge you to put it in a completely different bank and move 1% of your revenue over there and just leave, let it be there and be your profit and your reward to yourself for running a great business.

Colton Cockerell: 14:25

That That 1% is that's interesting. I've never heard that before. But that is Trisha, you guys would have to wrap up here in a second. You got any more questions?

Trisha Stetzel: 14:34

What if I'm afraid to even go there? Like why in the world would I need a chief financial officer? You're gonna come in and look at all my stuff and be judgey Right? Like, what how, how do you go about allowing that getting in the right mindset to allow that person to come in and actually help you as a small business owner?

Danielle Hendon: 14:54

So my first thing to small business owners that are worried about airing the dirty laundry is That, consider me your your laundry mat. I love the dirty laundry, the messier the better, the more the problem solving the puzzle piecing and, and a good CFO is going to be the same way we want to get into those numbers and dig in and clean them up and figure out how to bring value back to your business in a way that you can see.

Colton Cockerell: 15:22

The Dirty Laundry Well, I'm not a big fan of laundry, but I try to fold it every once in a while.

Danielle Hendon: 15:29

Not to be confused with monitoring, money laundering. We're not getting into

Trisha Stetzel: 15:32

that. Okay, not to me.

Colton Cockerell: 15:35

But yeah, it's great. Compliance isn't gonna improve this now. Thanks a lot. He word money now. Well, hey, thank you so much for coming out today. We appreciate having you and just really teaching our audience and really me and Tricia more about the importance of the CFO I think that's probably overlooked a lot. So everyone, I just want to remind you that go to our Facebook page go to we're hosting the podcast, all of her information is gonna be in the show notes. You want to contact her reach out, have questions, she doesn't bite it, I promise. But that will do it for this week's podcast. Tune in next week for another exciting episode of Bridge the Gap will be focusing on financial independence for the month of March and we'll be talking to Mr. Hoard who we're going to get all into cryptocurrency, so it's going to be a blast. So thanks so much for tuning in. We'll see you next week. Thanks again for tuning into this week's podcast. Don't forget to subscribe and share this podcast with the most important people in your life. Colton Cockerell with Sharer McKinley Group, LLC is located at 820 South Friendswood Drive Suite 207 Friendswood, Texas 77546 phone number to 281-992-5698. Securities and investment advisory services offered through NEXT Financial Group, Inc. member FINRA/SIPC Sharer McKinley Group is not an affiliate of NEXT Financial Group, Inc.