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The Deep Dive: Financial Lies Leaders Tell Themselves (w/ Carla Titus) · Integrity at Scale™

• Hey, Dr. Tara Vossenkemper here. You're listening to the Culture Focus Practice Podcast. Thank you of course for being here with me. I have, I would say like a colleague friend, honestly. We met a few years ago, and we have a collegial, friendly relationship. So I have Carla Titus with me here today, and she does all things, just think all things financial. She works in the financial realm and helps people shore up all their money stuff that none of us like to look at. So thanks Carla. Hi, welcome. Thank you for being here with me. Thanks for having me. This is always how it goes when it comes to money. Yeah, seriously, okay. So one of the things that I've learned about business owners is that we are very good at lying to ourselves about money, not intentionally necessarily, but I would say pretty consistently. We might tell ourselves that next month is gonna be different. We might tell ourselves that growth means health. We might say that, "Well, if revenue hits this number, like we'll finally feel secure, we'll feel good." You know? We tell ourselves we're making decisions, this is a big one, based on data, but we're actually making decisions based off of anxiety, hope, fear, uncertainty, stress, feeling like you have a vice grip around your chest. That's the feeling that I give it. What I think is the most, like interesting and fascinating thing in all of this is that financial decisions that are damaging aren't necessarily caused by bad numbers. They can be caused by, I would say straight up ignorance, but also just bad interpretations of good information. Maybe that information isn't organized in a coherent sense at this point in your life, but still, the information might be good, and it might be there for you already. One of the reasons I feel excited to have Carla on the podcast is financial conversations, and you could attest to this or not, Carla, but they often end up in one of two places, where they're either very highly technical or they're very highly emotional. But I would say that leadership especially happens in between those two spaces. It has to be this combo of both. So I'm super excited today to explore the financial terrain with Carla, and we'll treat this like any other Deep Dive. I'm gonna ask her a series of prompts, and we're just gonna go from there. So Carla, are you ready? So ready. Okay, let's do it. First question. I love this one. What are some of the most common financial lies leaders tell themselves without realizing they're doing it? Oh, where do we start? We have so many of this happening, and I think they're very unconscious, to be honest, Tara. Yeah. I think a lot of leaders don't mean to lie to themselves. They just think things are better than they thought, or they get attached to metrics that are not real. And when we actually show them what's real, it's very shocking. Yeah. They're like, "Oh, what do you mean I'm not at 20% profitability?" Which is what I told myself was where I was at. And then when I report numbers back to them and it's 10%, they're like, "Well, what changed?" "Why is that wrong?" And then I wanna ask them, you know, what got you thinking that you had this 20% profit when you really was 10? Are you adding your salary back? Like, what are the facts or nuances that you were thinking made this a truth versus a lie, right? Mm-hmm. And I think, again, it's unintentional. It's like, "I thought," "I had a feeling," "I felt." You need purpose-driven businesses. The problem is that we need to fuel those purpose business-driven businesses with profit, because otherwise you run out of profit and you can't have purpose. So- Yeah ... let's start with what's important, right? We are in business to make money. We need to be profitable. So I think the next lie I hear a lot of leaders tell themselves is, "Next month will be better," but they doing nothing different. Mm-hmm. And they think it's just going to fix itself with no change. And this is a hard one because they're like, "Well, what do I change? I don't even know where to start." And this is where data comes in to help you navigate that. Yeah. Are your costs too high? Is there not enough revenue? Are your cash cycles getting longer from insurance paying you? Are you collecting enough? These are the tactical things we need to start asking to dive deeper and get insights so we can make better decisions. Mm-hmm. Maybe you just hired too many people and inflated your payroll beyond what your revenue can sustain. Well, now comes the hard conversations nobody wants to have, which is do we need to lay off some people, because that is really hard. It's people we're dealing with, right? And people's livelihoods. And we have to decide that we wanna do something different going forward in order for things to change, and change is hard. And who wants to do the hard things? Yeah, man. It's not straightforward, right? Yeah. So these are the hard conversations we're having with owners on like, well, if you want something to get better or change, you're gonna have to do something different. And then we pinpoint what that new thing or different or change we need to make is. Before we make that decision, we also go through pros and cons of that decision, consequences. What does this mean? How is this gonna hit with the team? And prepare for that so that we know, okay, we wanna have better financials, but at what cost, right? Yeah. Does it mean we have to impact the team? Or do we do the opposite? Do we just grow revenue? Can we grow revenue instead of laying people off? That is my favorite question to ask owners. Sometimes it's not, like, cut back to zero. It's at, right? How do we get the team to achieve bigger, better goals so we can afford to keep them and now the overhead makes sense? Mm-hmm. So these are the kind of things that we want to be exploring with owners before we make any drastic decisions. But change with data is important because the data's gonna give you the storytelling you need to make that change possible- Mm-hmm ... and then get to see the results of that positive change show up in your numbers. Yeah. You can't hide from it. Yeah. Do you find that there's any particular, Like, somebody who comes in and they are saying, like, "I'm at 20% profitability," and you or your team look and you're like, "Yeah, bitch, no, you're at 10%." Like, "This is 10% profitability. Sorry," you know? And asking, how did you get there? Like, walk me through how you got to 20%. Do you see any, like, trends or themes that most people report when they're, like, presented with that discrepancy? What are the things that people most commonly say that they're thinking 20% and they're not where they thought they were? I don't think they've looked at their numbers in detail- Oh, interesting ... to be able to know- Uh-huh ... that it's actually 10 and not 20%, to be honest. 'Cause when I walk them through numbers and I show them, like, it's 10%, they're like, "Oh, I thought it was higher." So there's that thought notion versus what the data's telling you. Mm-hmm. And there's a disconnect between the two, and I think it's because, having a 20% profit gives you bragging rights, and it probably- Mm-hmm ... makes you feel better about your business. So I'm like, "I'm doing all of this. I have all these sleepless nights. I have these difficult conversations and situations, so it's gotta be worth it to me." And maybe sometimes they are in adding their own compensation to it, which does get them to 20% profit, but we gotta be really honest on what we are accounting in that, what we call profit. Mm-hmm. Whether you're, you know, a W-2 already of your company as an S corp, then that makes sense. Like, I can get behind the math. I'm like, "Oh, you say you're 20% profit including your pay? Great." Yeah. That is true, because then I can validate, add the pay back. That gets us to 20% profit. Fantastic. Mm-hmm. So if you're thinking about the world that way, and it's just a disconnect on how we're speaking about it, we can get alignment by looking at the numbers and saying, "Okay, once we add that back, yes, we do get to 20% profit. Is that how you're thinking about your profit?" Yeah. " Fantastic. We're on the same page." No argument there, but your P&L says you're at 10% profit after you pay yourself, and they agree with me. Great. Mm-hmm. We are fine. Yeah, yeah. But it's walking through those nuances, right? Mm-hmm. It's really getting technical and, like, what are you including? What are you not including? What is in your mind, you know, counting, quote-unquote, "on your profit"? Because that's a very technical accounting definition- Mm-hmm ... on your profit and loss. Maybe they're accounting for owner's draws, and adding those back and making them feel like they have 20% profit. That's fine. We just have to walk through that math in detail and make sure that we're on the same page and align. I think- Yeah ... no owner ever intends to, like, lie to themselves. Mm-hmm. They just have this feeling about how things are going, rather than utilizing the data to validate those feelings and- Yeah ... get real with maybe it's not as good as you think it is. And now the reality hits, now you have to deal with it, and they really don't want to. Mm-hmm. Right? Yeah. Well, no, I think, too, it becomes hard to justify, Gosh, I think back to, like, initial stages versus where I'm at now, versus where I was at, two years ago, three years ago, or something. My perception and my belief about what is the biggest leverage move, or what's the, The biggest need for me in the business has changed so much within, this full scope all these years. And I think initially, the idea of having somebody review finances or do bookkeeping or any of that was like, "Hell no." Like, "No, I'm just gonna, like, keep track of this over here." Like little Tara had no idea, sure. But I think the more you go what is most important, and when you add in complexity, like you're not just adding complexity into your service offerings, for example, when you hire somebody. You're adding complexity into, of course, your systems, but that system includes into your financial systems. You're adding a layer of something, and that might have multiple, like, ripple effects depending on the weight of the layer at what point. And so I think there's just something to be said for It can be hard to make that decision to have somebody come in to, like, review finances. And if you're not going broke each month or in the red each month and having to take out a line of credit or borrow money or fund it yourself, you might think, "I'm good. Like, I'm fine. I got this." And the reality might be that, you're kind of, like, flat-lining. You're not bleeding out, but, your profitability is razor thin, and do you have any revenue, like any strategy with revenue coming up? So I think that there's, like... I like that you're using the language nuance. I think there's nuance to the finances much more beyond than what I ever anticipated earlier on. I think it's like this is a whole-ass separate thing that requires real time and attention from somebody who knows what they're doing, not from a business owner who's learning how to do finances in order to run their business. I think what you're speaking to, Tara, is the complexity of decision-making. Yeah. Because there's so many interdependencies in the decisions you're making. Yes. And as your business gets bigger, it's not as simple as when you first started. Now, you know, you have, "Oh, if I make this change, then that means there's three other things get affected by it." And now you gotta try to understand, "How did that consequence of that decision going to ripple effect the rest of my business?" And that's when it gets hard for decision-making, 'cause you get paralyzed with so many variables and so many components. And so decisions become more complex, that you need- Yeah to break it down and map it out before you make the decision. And that's what we help people do, is what does that decision mean for the other three areas it's touching? And do you like those outcomes, or do you not want that to happen? Because- Mm-hmm ... whether intentional or unintentional, it's still going to happen. So it's better to deal with it ahead of time to know what could happen, and then you can make an informed decision versus you make the decision, now you deal with just the consequences of it, right? And- Yeah ... we said it's a ripple effect because it does touch other areas, and this is when finances get, complex enough that owners are like I just don't know what to do." And they're like "Well, I'm gonna try to figure it out," and then they go down the rabbit hole trying to learn finance, and they're like, "Oh, I don't know, like, if this is for me." And some owners are like, "I love this." Mm-hmm. And even the owners that say, "I love doing numbers and getting into that" run out of time. They're like, "I have better things to do with my time than run-" Yes. "... the financial modeling." Oh my God, yes. "I need someone to delegate this to. Please come help us, because even though I can do it and I can do it really well, I just don't have the bandwidth." And that's when we want to be bringing in a CFO and, like, a team that can do it for you, not because you can't. And it's great if you learn it first, because now- Mm-hmm ... you can ask better questions. You can really think about, you're the expert of your business. We're never taking that away. It's just that we're better at modeling than you are, and faster probably. Yeah, for sure. And also help you think about your blind spots in decision-making that you didn't even think about, because we have the experience of, well, we've been here before and we know what is going to potentially happen, and we need to warn you of the risk before you go make that decision, versus you're just in your silo on your own trying to map that out and not thinking beyond what you know- Yeah which is just your own experience. And so that's why we wanna bring that third-party perspective to the conversation. I love saying that. I think there's something about even if you're good at it, is it the best use of your time? God, uh, yeah, you might be great, and is it the highest leverage? Is that the most valuable use of your time? If the answer is no, then you shouldn't be doing it. But that second piece of having this other party come in, being faster at it, man, if it took me, let's say four hours to do some, like, forecasting, which I don't even do if I'm honest, I hate the financial component of things. I know what healthy looks like, but I just want it done, you know? If it took me four hours, it would probably take somebody who knows what they're doing a half hour. And they have a myriad data to pull from. It's not just me doing it on my own. It's this group doing it with however many other businesses they've worked with or another person or a group working with countless other business owners or organizations. So their sense of, like, what's healthy and what's not is so much more informed than somebody running their own business trying to either learn how to do finances or, you know, maybe they're good at it, but still it's, like, theirs and they don't have much other experience in working with a lot of other people. Man, those are great points. And also, Tara the beauty of, having this perspective is we come with a recommendation- Yeah ... and we come with an approach. We're like, "Oh, we've seen this before. This is what we recommend for you based on what we know is important to you, based on the goals you have in the business that you're trying to achieve." And when you mention that flat line in growth, this is very common. This is when a CFO can really help your business get back to growing, right? What are we doing? How are we increasing revenue? Are you growing revenue fast enough? And then I had a conversation with my client. It was, like, the best question they've ever asked me. They're like, "Is that good or bad?" Like, "Am I ahead or behind?" And I'm like, "Oh my God, yes." This is the kind of conversation- That's awesome ... we have because I could give them perspective on, like, "Oh, this is actually better. This is faster. You're growing much faster than most of the businesses that we work with, and this is great, and you have the systems and people that can support it," 'cause we established that ahead of time. And not every business can grow that fast and not fall apart, by the way. Yeah, yes. So this was a great question on context, on benchmarking, on knowing, like, am I better than or the same or this is average, or am I behind? Am I growing half the rate everyone else is growing? And being able to have that conversation and provide that perspective was so valuable 'cause now they're like, "Oh, okay. Great. And now I can plan to do X, Y, Z with that information and feel good about the rate of growth. I don't have to push harder," or, like, if I was behind, "I need to push to double the growth. Let's go." Right? Mm-hmm. "Let's make a plan for that." And so I think this context piece on being able to benchmark and bring in perspective on that's good, that's not good, and it's all relative, of course, because it depends on what are your goals for the business financially, and are you tracking to that? Maybe sometimes there's lifestyle goals we have to honor, and we can't grow- Mm-hmm ... as fast because we want to take that into account, and that's okay. And you get to decide what success looks like for your business, and we get to enable it through the data and the financial modeling and the support because we wanna make sure you're achieving your goals, whatever they are. We start by defining goals in order to make sure we're working towards the same thing. Yeah. Yeah, I love that. Let's do another question: what financial beliefs create the most damage because they sound reasonable on the surface? I think that's a interesting question. Yeah. So I think a lot of people have this notion, and, you know, it comes from childhood or your upbringing or whatever kind of brought it on, and it's okay if you're dealing with this, and it's let's cut our way to zero to make more money. And I'm like why are we cutting back? Can we- Mm ... grow instead?" And so the focus you shift to, how can we grow? And I'm not saying overspend on your business. Like, of course, control your costs, people. Like, this is not a- ... free reign card to go crazy and, like, sign up for everything. But if you want to afford something in your business, the question you should be asking is, how much more do we need to grow in order to afford that extra person? Or how much do we need to grow in order to afford to open another office? That's my favorite question because it unlocks unlimited potential for growth- Yeah, yeah ... rather than saying, "I'm gonna cut back the subscription, and I'm gonna cut back my usage here, and I'm going to nickel-and-dime my way to growth or profit," which doesn't really happen most of the time. I mean, we were all for expense audits and only spending what makes sense for the business and evaluating what should you be spending on based on what you're trying to get to as far as a goal that the business- Mm-hmm ... is trying to achieve. Because often I see a lot of misalignment on, I'm spending on these five things that do not move the needle for where I wanna get to. So if you are trying to grow, you should be looking at your allocation of spending and saying, "Is this the things that I need to be spending money on to get to that goal? And if not, I need to change it, and I need to change it often." I look- Mm-hmm ... at mine every six months and ask that question and say, "Am I bucketing the spending in the right places for me to get to this next goal I have in mind?" Mm. "Am I investing enough in my people, in my marketing, in whatever it is that I need, in my coaches, to get to that, break through that next level of growth?" And same thing for my clients, right? I'm asking them the same question. So cutting your way back to your goals is not always the way to go, but this is- Mm-hmm the first thing we do, right? It's like, cut back. Mm-hmm. Spend less. And there's a place and time for that, but that's not necessarily gonna help you unlock the next level. Yeah. I had two thoughts as you were talking. The cutting back and spending less to me feels so much more reflective of the anxiety and fear whenever we are faced with information maybe, or we're faced with a tight month or something. It's like, oh my God, where can I cut? And if you don't have your hands in the pot so to speak of finances period, then you're not able to even answer the other question. Like, how can I grow? What can I do to actually grow to offset maybe the cost of this thing? Or is what I'm spending actually in alignment with the vision, with the goals that I have? I've known this, but I think there's something about I have not been paying attention to this, and we have a financial person that is coming into the leadership financial seat. She's there, but there's transition and all that. But the goal is that she'll be the one paying attention to this, like staying in tune with how do we make sure that we're like tuned into our financial projections or our goals for like the quarter or the year? Mm-hmm. And not just assessing are our quarterly rocks on track, are they done or not done, you know, on or off track, but also financially are we on or off track? Maybe a rock is related to something financial. Who knows what? I don't know. She's been there enough to set financial rocks. But my point is I feel like there's a lot of pieces that have to be in place in order to do that, and theoretically someone could do it internally, but I think there's also this idea of like if you don't have the bandwidth, if you don't have the time, if you don't have the energy, at some point it's worth it to spend the money to get a financial group or person in place to help not only assess where spending is currently going, but also where it needs to be going to make the most out of what you have, but then also where it's going in the future, and, like, cross-referencing that with whatever vision you have for your business. It's like that marker for past, present, and future is getting answered by having the right financial person in place. Yeah. And what you said is key, is that forward-looking, that future casting that a lot of people are very uncomfortable doing, 'cause they probably don't really spend their whole experience and their career doing this for a living like we do. Yeah, yeah. We're very comfortable in uncertainty. We're very comfortable with assumptions. We're very comfortable with that if we make a plan and we don't hit the goal, that it's okay to adjust, and adapt, and take the learnings from that and do better next time. Mm-hmm. But a lot of business owners haven't flexed that muscle, right? And then so- Mm-hmm ... you have to practice. You have to start looking forward. You have to be comfortable with it. What I see a lot of business owners do is react to what already happened, and now it's too late, 'cause you already went through a bad month, and now you're like- Yeah ... "Oh my God, next month I'm gonna do better and I'm gonna cut back half of everything." And it's like, whoa, you just shot yourself in the foot, 'cause now you- Mm-hmm ... can't even grow because, you made the wrong decision just because you're reacting from the data rather than planning what you wanna do going forward that is different or better. And so this is where financial forecasting can really help create scenario planning and modeling that says, "What if we invested in this and that got us 20% growth? What if we actually had a 10% reduction in revenue? What would we do?" Like, plan on it before it happens so you can make- Mm-hmm ... the right decisions and know what levers you will pull, rather than just react to what happened, and now you're panicking and scared, and you're in anxiety and fear, letting it drive- Mm-hmm the conversation. But you were just two months away from your biggest month, and now you fire half your team. So you wanna get proactive in controlling the forward-looking of your business. And again, this is a muscle just a lot of business owners haven't even been aware, familiar, or let alone driven in. They're just fear, reaction, anxiety from what's already happened. Mm-hmm. Yeah, it's so much more reactive. How do you help people move out of that? Is it just even, like, being in place? Whenever somebody comes to you and they've been really reactive. Like, their way of being in the world with regard to their finances have been reactive, and that's all they've sort of done, or most of what they've done, let's say. How do you even start to help people... it feels like a whole mental shift, you know? And Yeah ... maybe it's your presence alone, like, just being there and saying, " this is what is. This is what's possible. This is normal." Or part of this, "This part is pretty standard," you know? Like, I'm curious how you help people with that transition, so to speak. Yeah. We start by looking surprisingly, at the data we already have. So, like, what did- Mm-hmm ... we do in the past? What have we been able to achieve? We start to ask questions and get curious on, why was last February such a good month? And they're like, "Oh, I don't know. Let me think about it." And they're like, "Oh, we did this three things." So I'm like, "Can you do it again?" Like- Yeah ... we tried to work so hard. The data tells you, like, when it was good, why was it good? If you can answer that and make a plan forward to do it again it seems so simple, yet nobody's asking those questions, right? Mm-hmm. Until the financial professional shows up and starts to be, like, curious about things. So you can do that on your own. And then we start with what's possible, 'cause we can show them, "Hey, this is the baseline. This is what we've been able to do. Going forward, we're trying to unlock a new level that looks like forward planning, and it's gonna be really uncomfortable. It's gonna stretch you, because you have not thought about your business being able to have the possibility to do this." And it starts with goals, right? We gotta map what are our goals for the next six months, 12 months. And that's as far as I can get most business owners to plan. We start with that, and then we say, "Okay, what are the goals?" And we break it down into achievable milestones. We're like, "Okay, if you have to hire six more people this year, what are we hiring in the next 30 days? What are we hiring in the next 60, 90 days?" So make it tangible, and then go make them do the thing, right? You say, "Go put the job posting out." Go interview the candidates. Like, it really does break down to those action steps- Mm-hmm ... to make sure we're on track to achieve the goal, because it's really easy for me to say, "Hire six," and they haven't even started. Mm-hmm. And it's been three months and they're still not moving on it. Why? Because they didn't think, "Oh, I need to go post the job, do the interview." Even that action of- Mm-hmm ... okay, hey, we're two months in into our six-month hiring six people plan, and we haven't hired a single person or put the job ad out. This is a problem. We're not on track to our goal. So now we can, bringing back that feedback and say, "Hey, if we're gonna hire six, we better get moving on this, 'cause that means in the next four months, three months left over, you're gonna have to hire three each time," and it's like, that gets us to six. Are we even doing the six anymore? It's a goal now four. Mm-hmm. You know, so we need to get really honest and clear. What is our goal and how are we tracking to it? And this is what starts to shift the mindset, because it's no longer about what you've already done or the past or what we accomplished, but it's what we're trying to get to next. And by having that plan that's clear that says six hires in the next six months, and I made, just made that up, right? Yeah, sure. And how are we tracking to that goal and is that even achievable? And like, "Hey, when was the last time you hired?" They're like, "Oh, two years ago and we only hired one person in the last year." And maybe they are committed and they are like, "Yes, we have the space, we have the availability. We wanna do this. We wanna grow. We wanna see our growth rate go up, and we have the demand for it too," 'cause again, we wanna tie it all together. Mm-hmm. "And we're ready to do this leap, this jump." Great, but all the pieces have to line up, right? So if your marketing's not working and you can't fill up caseload, you're probably not gonna get those six hires up to full capacity, and therefore you're actually gonna be losing money instead of making money. Mm-hmm. So all of this becomes real because now with every hire we know we have to fill them up in caseload. Yeah, it starts to get into all the other operational things related to, I mean, something like hiring, for example. If you're trying to grow revenue and let's say your pay scale worked out in such a way that you're not bleeding money, you know- Yes with your pay, then- And you have the people coming in. There's like bits and pieces where if you wanna hire somebody, you're not just hiring somebody, you're also trying to ensure that the pay is accurate, and you could support the person coming in from an operational standpoint. And also even like the structure of bringing a person in, like, when you're a one or two or a four-person shop, it might be easier to bring somebody in for hiring. But the bigger you get, the more, let's just keep saying complex since we're on that bandwagon, you know? Mm-hmm. The more complex things are, the more things should be uniform in the experience of onboarding. And so now we've got this additional piece like, okay, onboarding, are we able to afford this onboarding process for this person and this ramp, this runway to get them full until this point? Because it takes about three to four months on average to fill somebody up, or it takes six weeks to get them credentialed. I mean, who knows? There's like more data, but I like where you're going. I just think, yeah, yet again, to me it just strikes me as like, yeah, a financial decision doesn't exist in a vacuum. It doesn't exist outside of everything else that's set up at your business. It's deeply embedded in all of the other pieces. What I often see is people are not realistic, and they're like, "Oh, of course I'll get credentialed in two weeks." I'm like, "Um, credentials- Ugh ... take me more like- Yeah. ... three to six months." So, and this is where we bring the realness- Yeah ... of goal-setting into play in the conversation. We're like, "Well, we actually seen our credentialing be 90 days, so we shouldn't plan for that to be the case if we know it takes that long. Let's be real." Yeah. "Maybe we wanna hire six in a year, because that gives us enough time to get them credentialed, paneled, and ready to go." So this is where I think planning is helpful, but if you don't have that touch of realness, you're gonna miss the goals. And then what do you do when you miss the goals? Because this is where I hear a lot of people are like, "Well, why plan? I'm just gonna miss it anyways." But the goal of planning is not to be 100% accurate. The goal of planning is to set a direction and say, "How close can I get to that destination?" Mm-hmm. Right? And if I nail that, maybe it wasn't a stretch enough. If you're far from hitting it, what's preventing you from hitting the goal? Yes. And what got you off-track that you can learn from and fix so the next time you're closer to the goal? And so the habit of planning becomes this feedback loop, and this is what we're looking for, because that's where the learnings come from and where we are able to then get a better outcome than otherwise if we didn't plan, Tara. And this is what I tell people all the time. They're so fixated on like, "Well, I didn't hit my goal." I'm like, "But if we didn't make that goal, would you just be stuck at where you were before and not- Exactly ... 20% better than you were?" Yes. Okay, well, we didn't hit 50% better, but at least we hit 20% better. Isn't that better than? Mm-hmm. Yeah, I always think, like, time is gonna continue on whether you're doing something or not, so go for the goal. Like, who fucking cares if you fail? Everybody fails. And what is failure if not, like, the assessment of, "Okay, cool. It didn't work out. I wonder why. Like, what happened that it didn't work out? Mm-hmm ... what could we do slightly differently, and how do we do..." You know, it's like that's the starting point. The failure to me is the starting point. Like, the expectation is you're going to fail, so what do you want, and, where do you fail? And then that in and of itself is the place where you gather data to then set new goals. And you're right, 20% closer to something versus exactly where you were. Over two years, what is 20% closer twice? That's much, much closer to wherever it is you're trying to go versus where you're standing right now. Do you notice there are like certain financial points that business owners hit that they start to like, they need somebody in this space right now? Yes, there's definitely certain points in the growth journey that business owners will struggle with making decisions. Then again, that bandwidth piece comes into play again on like where's my time better spent growing the business or running the financial model to make that decision? And this is where they want to consider bringing in an outsourced CFO or a fractional CFO to kind of help them make those decisions, and also bring them new perspectives that they don't have on their own. And it starts at around seven figures. We just find that a lot of seven-figure business owners are craving help with decision-making. They're like, "Should I pay myself more? Should I hire more people? Can I afford to do this?" Fill in the blank. And they're asking those questions because their current team cannot support those needs. That's why they're asking, "Who is the role and person that should help me with this decision-making? Because I call my accountant, they don't wanna talk to me. I call my bookkeeper, like, 'I'm not it. I don't have the skill set. I don't wanna support you.'" And if they don't want to, they can't, right? Mm-hmm. And so you are looking for this third role, which is the CFO role, that honestly before hasn't been available to small businesses because there wasn't a fractional model. It's like you had to hire a $400,000 a year CFO to come into- Yeah ... your business. Nobody can afford that. No, not at all. Yeah. You know, at a million you're not gonna put that for a full-time. So you get this fractional CFO with the level of experience of a full-time CFO that's gonna fully support you, but come in at a fraction of the cost to still advise you. And that's what you're looking at, is you're looking for this advisory role with experience and expertise. Ideally mental health too, because then that fast-tracks their way to be able to give you good advice, that they don't have to get up to speed on the industry. And they're helping you make decisions, taking that off your plate so you can focus on growing the company, and then we can help you make decisions faster with more clarity so you can move quicker through decision-making- Mm-hmm that then helps the business, you know, get better results. And so it's around that. I also see it Between 4 and $5 million, business owners are just stuck. They're not quite getting to that $10 million mark, let's say that's their goal. Yeah, sure. And that requires opening five more locations, and they're like, "I don't know if I wanna do that." And it comes with a complexity of things where, do you have to have a leadership team in place? The biller has to be able to support that growth. Mm-hmm. Your marketing needs to be able to support that growth from a demand perspective. And they're like, "I'm not sure. What do I do first?" They're like, "Which do I hire first? Do I build a leadership team first? Do I fix the billing situation? Do I fix the marketing? Like, which one is it?" And they're just, like, paralyzed by that, and so they're stuck between, like, the four and five, four and five, back and forth- Mm-hmm ... on, like, not being able to get past that into that next stage of growth. So those are- Mm ... kind of the two we see often. In the earlier, you know, they might benefit from some strategy and one-off support as needed. It's just not going to be affordable to bring even a fractional CFO below a million because it's just expensive- Yeah ... because you're paying for experience and expertise. Yes. Yeah, you for sure are. Yes. Yeah, because it's not the same thing as a... I think again, way earlier on people are thinking, like, a bookkeeper is enough. Initially, sure, it might be. Mm-hmm, for sure. But, like, as you're growing... And I'll attest to this. I mean, I absolutely feel like we've been- uh, plateauing between right around 1.5 million, and we haven't officially had a financial seat on the leadership team, although I was, like, half-ass. I was doing it without realizing I was doing it, and I was not doing it well. Yes. So I think that's just part of the problem, not having two key seats on the leadership team filled with the right people. So a marketing strategist and then also, like, a director of finance and admin. Those seats being filled, I just keep thinking like, "Oh, God." Like, that's it. That's it till the next level. Like, this is exactly what we need to bump us up. Because the stuckness is... From my perspective, it is a lack of strategy and then also a lack of maintaining decisions that are made that feel like, I don't wanna say arbitrary, but I wanna say that don't feel connected to the larger plan. Maybe financial decisions or maybe marketing related decisions that aren't grounded in all the other stuff that is happening. They're more, like, standalone, you know? So I think I was curious for myself, thinking, like, we've been plateauing at this number, and also the goal and the plan and sort of like what I'm thinking is, okay, well, these key seats are filled. I wonder what will happen next. Like, I wonder now what will actually come of this. But I'll tell you one thing though, Tara. Growing for the sake of growing is not the path either. Mm-mm. You have to make sure that your financial picture inside the business at this level is functioning well and efficient and driving profit. Because what I see often is people are scaling broken models- Yeah ... and they don't know they have problems, and they're just scaling their problems. Which is what leads you to scaling with no profit. Mm-hmm. Is their underlying is not good, and they're just adding fuel to that fire and growing those problems exponentially into the future. Yeah. So what we wanna do is take a pause, assess what we have, make sure it's running smoothly, as profitable you know, healthy profit, and that you don't have issues that will compound with growth- Mm ... before you go grow. And so a lot of the job as a CFO is coming in and assessing, okay, is everything functioning well? If not, let's go fix it first. Then we can scale a system that is not broken, that is working well, and can produce the profits we wanna see as we scale. 'Cause scaling costs money, and if you don't have the room for it, you're going to end up cash poor and one paycheck cycle away from going out of business. If leaders could walk away from this conversation understanding one thing differently about money, what would you hope it would be? It would be they need to stop bringing their personal money mindset into the business. Mm. And what I mean by that is whether you grew up with money or didn't, whether you have fear around money or anxiety around money, that is probably translating to your business. Are you bleeding your business dry every month of cash because you're trying to fund your lifestyle outside your business? Your business is not responsible for that. Your business can only afford to pay so much. Your business needs money to grow. You need to be able to invest profit back into it, and you cannot bleed it dry and not have consequences. Yeah. Are you running your business finances like your household finances, where you're, like, just one paycheck away from going broke? Do you have enough in reserves? Do you know how to save money? Or are you spending every dollar that comes in the sake of scaling and growth pursuit- Mm-hmm ... without a plan, right? Yeah. It's easy for me to say that, but it's really hard for owners to do that. Because whatever your way of handling money was, you're going to translate that into your business. And what I'm saying to you is you need to be very mindful of how you run your business finances that ideally is better than your personal finances, and then maybe that can translate back to your personal. Mm-hmm. But I see too many business owners just running their business ragged, and the business like, "I can't keep up. I'm one cycle away from going out of money." They love to live on the edge. They haven't put reserves. They're leveraging debt just to plug holes because they're not solving- Mm-hmm ... the root cause issue of problems. Because again they don't know where to look. They have no idea, "Well, what's the problem? I'm just gonna take on debt. It'll get better. It's fine. It'll improve." And they're using debt because everybody tells them, "Oh, leverage debt- Mm-hmm ... to solve your problems." Like, but do you have a plan to pay that debt back? Mm-hmm. When does things get better so you can get ahead and pay that off? Mm-hmm. Like, they are just going at it without a plan, and it's because their current personal money beliefs are playing into their business, and not in a good way most of the time. I mean, sometimes there's business owners are really good, and they- Mm-hmm ... save and they, have their reserves, and they are investing just right. They're paying themselves well. And not to say it's all bad, but where I see it doesn't work well is where people are bringing those broken mindsets into their business and impacting their business in a negative way because of whatever- Mm-hmm you know, they're bringing with them. Yeah. Man, that's so great. I got my own shit. I say this before on the podcast, but finances and shame are, like, super interwoven for me. And even bringing in somebody into the DFA seat identifying that it was a seat period, on the leadership team, and then also having somebody step into it and, like, take over is ooh. I called her and I was like, "Look, I'm just gonna let you know, this is hella vulnerable for me to do, so I trust you." I would not have anybody in there that I didn't trust. "I trust you, I know you, I respect you, and also i'm gonna have some shit come up. I'm just letting you know in advance. Like, there's gonna be some stuff- Oh, yeah that comes up as we work through this." Yeah. Man, there's a lot of things that I don't give a fuck about. Like, I don't feel... People will say, like, "You're being vulnerable," and I'm like, "Yeah, no it's not." Like, I feel this is just normal, but finances is- One of them, hardcore. Just because you have someone to do the financial- Mm-hmm doesn't mean you don't get to be plugged into what's going on. Yes. Yeah. And you don't get to advocate your decision-making either. Yeah. We're just here as advisors. We are not making the final decisions, and that is the role we play in finance is to influence decision-making with data and to help guide the direction and help get us closer to the goals, but that does not mean we get to decide for the owner. Yeah. The owner still needs to know their numbers. They still need to make decisions with their numbers, and if they don't understand, now they have someone they can ask to explain things to them and support them in that way, but that does not mean advocate your decision-making. Yeah, I love that. Yeah. Yes. I really like that. That'd be hard to do anyway. Well, for me, that'd be hard to do, where it's like, "You decide." No. No. Yeah. No, no, no. I will decide. You inform me, please. Okay. Now, Carla's gonna take a few minutes and just talk about, I don't care, whatever plug you want. You can talk about yourself. You can talk about your business. You can talk about what you offer. It's anything you wanna do. So take the floor. Yeah. It's all you. So thank you, Tara. I would love for anyone who's looking for a fractional CFO to check us out on our website and book a call, wealthworthwithin.com. If you like podcasts like Tara's podcast today, then go check out ours CEO Financial Clarity Corner. If you wanna get better at your finances, and this has been a subject you've been avoiding, that gives you anxiety, and you don't wanna look at numbers, I break it down in a way that's tangible, simple to understand, and you can get essentially a finance degree for free listening to my podcast and get better at the numbers or at least feel like you understand what's happening so you can partner with your CFO to ask better questions and look at your finances in a way that it makes sense to you. And I heard a lot of people say, "Oh, that clicks, and it makes sense now," versus before it seemed complicated and nebulous. So make sure you check it out. Let us know if you're enjoying the episodes, because we love to put out free educational content for all of you to get better at managing money in your business. That's so great. Yeah. Thank you. For anybody listening, Carla is great, super grounded. I feel like you really do simplify things from a financial perspective. Any conversations we've had have been like, "Oh," "Oh, yeah, duh, that makes sense." Like, it, it seems so obvious in retrospect, you know, but of course the application of it is very different. So anything referenced here, any of the podcasts, the website, everything will be linked down below. So make sure you get in touch with Carla if you are, like, needing support in this area in particular. Other than that, that's all I got. Thanks for hanging out with me today. If this episode got your wheels turning, I would love for you to stick around. You can, of course, subscribe wherever you're listening. If you are interested in more ramblings about leadership culture, EOS, and all the weird fucking ways humans make organizations harder than they need to be, head over to my website and join the email list. Until next time, make sure you take care of yourself and the people around you. This shit is hard, and we are better together. See ya. Bye