As a business owner, it’s difficult to do the right work AND guide your company toward its next big initiative.
With Red Direction Business Base Camp, learn how to implement and handle processes to meet your business’s specific needs and better understand your market.
Starting the conversation:
Business growth is a mindset that entails mental sharpness, a pulse on your industry, and the financial health of the company. Decisions that are rooted in company values and the way you do your work are foundational to ensuring your company lasts. Guillermo Rodriguez, Virtual CFO at Anders CPA, shares the importance of an outside set of eyes that works in partnership with you to grow profitably.
Mental fog and decision fatigue are silent and dangerous to a business focused on growth. As a vision holder, there are two things paramount to success: personal vitality and strategic clarity. Without those, it is easy to become complacent and go through the motions. For growth and questioning assumptions need an intentional cadence to check in to stay focused on profitable growth.
In this program, you will learn the three categories of metrics to align to the way you do work, when to pivot from or reframe a situation, and that clarity comes from knowing how to correct your forecasting assumptions. Using non-financial drivers, your business growth levers, and financial awareness to be accountable — together these will serve to increase understanding of how intertwined each part of your business really is. Jess Dewell talks with Guillermo Rodriguez, Virtual CFO at Anders CPA, about why it is BOLD to focus on profitability while driving business growth.
Host: Jess Dewell
Guest: Guillermo Rodriguez
What You Will Hear:
Endings are important. You choose what they are and how they look.
Design what a completed project looks like.
Pivot or reframe? Did you really get to your goal and it looks different than expected?
Rest is important. The whole business includes your state of mind, energy level, and vitality.
Check-in each year. And, create a cadence to keep the pulse on wins, and lessons to create your educated, thoughtful forecasts.
Know your non-financial drivers.
There are three categories of metrics to benchmark in your business.
What is growing (and where is the opportunity for growing) in your business?
Advisors you select are in partnership and relationship with you. They know your business.
Advisors ask the hard questions from operations to finances and help you be accountable.
During check-in cadence, question: Are our assumptions in the forecast correct?
All business metrics are intertwined: production, financial, pipeline.
Mind your energy — rest matters.
Do your deep work when you have the most energy.
It is BOLD to be accountable to business profitability while growing.
Welcome. This is the Bold Business Podcast. Your business has many directions it can travel. The one true direction of your company creates the journey for you to move toward a new, exciting level. We call this the Red Direction. In today’s program, we delve into one idea. The idea will support you as you work on ever-present situations, including how to stay competitive in a changing market, how to break through the business plateau, and how to anticipate the changing expectations of your stakeholders. Jess Dewell is your guide. Jess brings you a 20-year track record of business excellence, where strategy and operations overlap. Your Path comes from consistently working from the special place. Your unique True North. Now, here’s Jess.
Jess Dewell 00:51
Welcome to the Bold Business Podcast. This is where we are having conversations about the things that make businesses go, the problems that we’re solving as business owners, the inspiration that we might be seeking to look at a challenging situation that we’re facing in a new way. That is what we’re doing here at the Bold Business Podcast. And I am so glad to be your host, I’m Jess Dewell. And we’ve been doing this a long time. And guess what, every single program still is my favorite. And I will tell you why I can tell you before we even start this one, that it is my favorite right now not only because it’s what’s right in front of me, but because the information that is here is going to be different than anything you’ve ever heard before. One of the coolest things about our podcast, and secondly, of a really cool dude here. Guillermo Rodriguez, he’s got 20 More than 20 years of experience. And not only has he been in roles, like corporate positions, not only has he been in self-employed roles, he is also a virtual CFO at Summit virtual CFO by Anders starting in his corporate job, where he did all kinds of functional department-related things for insights, business, senior, all of the pieces came together, including forecasting and significant acquisitions. And then also Fast Forward Thinking approaching financial services in a different way. And he found in ers, and Guillermo is now on the path as a virtual CFO within the cannabis industry, guiding cannabis operators down to the path of profitability. So cannabis business or not, you’re going to want to be listening to this conversation today. Guillermo, welcome to the Bold Business Podcast.
Guillermo Rodriguez 02:38
Thank you, Jess, good, good to be here with you.
Jess Dewell 02:41
Even when we were talking prior to a conversation today, one of the things that I know that we have in common is actually endings. We don’t necessarily respond to them the same way. But we have an understanding of the importance of endings in business. Tell me for you. Is it just the end of the year that you focus on? Or do you have other endings throughout the year that you look forward to? With the pinnacle being the end of the year.
Guillermo Rodriguez 03:09
Whether it comes to client work or the work we’re doing on our own? It’s important to see what does the end look like? What is done look like? Right? Because as accountants as CPAs, as advisors, we do project work. It’s like never-ending, right? It’s not like selling a product that you’re done. And so it’s really important as we’re working with clients, or in our work to just look at what is the end look like? What does done look like? And how do we paint done? As we’re working towards the end of the year, I have big goals for the year like we all do. And it’s important to just think what is a successful year gonna look like for me, but also, not just stick into what those goals like one of the things that has helped me so much in my career is hitting, redefining success. And so if my goal for this year was 10 new clients, and we’re at five clients, let’s look at all the other things of like how we got there. And so I’ve just learned through this whole journey of having the end goal, and for me, it’s always been helping small business owners get to profitability. One of the things that you mentioned was that I was going through the journey of working corporate, being self-employed and now working with Anders, a CPA firm when large CPA firms and through that journey as said, It’s not about being self-employed or starting a business. For me. It’s always been about helping small business owners and that’s one of the things I look at. When I think about what is the end look like or being done. It’s what was my original intention about all this? What was my original, a goal for working as an advisor working as a virtual CFO and so that’s something that I’ve been keeping in mind as we get to the end of the year because inevitably, we don’t the end of the year doesn’t look like exactly like what we envisioned at the beginning of the year, right?
Jess Dewell 05:03
I remember standing in a room once and asking a roomful of business owners, how many of you set goals? And everybody, of course, everybody’s hand went up? How many of you achieve those goals? About half of those hands went down, which I was surprised that. So I had to come up with another question, because I’m like, that’s not enough. I knew I asked the wrong question here. So I said, How many of you got to a goal that was really close, or just look different than your goal, when you started? Now we’re at about 90%. And there’s that so that there’s that gap of, to your point of what actually is happening and what else came along, that maybe impacted the goal, but still move that needle enough for us to see something different than we had before. And realize we achieved more than we did otherwise, even if the number of clients didn’t match up, or that the the amount of expenses we reduced, wasn’t quite to what we had planned. Those types of things, or higher, same thing, we didn’t hire enough people feel a little this or whatever it is. So what else is there? And that’s a great question to ask Guillermo. And I’m guessing that’s what you’re doing, you know, in your advisory services to is okay, so well. So what did happen for yourself in the role you’re in, and as part of the your adaptive, dynamic company that is growing and changing how finance actually fits into businesses, instead of this extra thing? It’s truly integrated, especially at the small business level and the medium business level, what do you do personally, either at the end of the quarter, or the year, whatever your cadence is, to reflect back and look at the goals, or a period of time before to punctuate that ending?
Guillermo Rodriguez 06:48
Yeah, I think one of the important things is to get to where we want to get, and this has been part of my journey is, is health well-being, you know, and feeling well. And so that’s really one of the important parts of my end of year as I’m starting to feel a bit burned out on and off throughout the year is to get to a place where I feel really well. And I put an article on LinkedIn is based on science I was researching, it talked about the number of hours of rest that we need every day, right? And I think we’re, we’re in business, we think we just have to work constantly, or the only way to achieve is to continue to work, right? And it opened up my eyes that even science proves that we need rest. And so that is one of the, one of the areas that’s really important for me as the end of the year to be able to reflect and open my mind a little bit more is that I may need some extra rest. And that looks different for all of us. But it’s easier said than done, right? That we need a break, we’re trying to get things done. And so I’ve been looking at what are some of the small ways that I can do that I can’t necessarily lead up right now we have a lot of things going on with clients. Sometimes that’s not always practical. But some of the ways that I’m doing that is just simply by, by taking deeper breaths during the day, and break up my day and going for a walk. And these things sound simple. But they’re really things that are easy to forget. And we forget about our health and the practices that we need to keep daily, just breathing throughout the day, right being mindful. And that’s really from place of vitality is I think where we can refresh and set our goals for the next year. And so that’s one of the things that I really try to focus on. At the end of the year, whether I can do it to where I want to or not was to try to focus on some breast there toward year.
Jess Dewell 08:45
Do you only remember at the end? That’s my first question. Based upon what you said, I’m like, let me just ask that question. Because there are things in my world that are that way too. Oh, my ending checking is coming. I better do this, too. So I’m curious, is that what it is for you?
Guillermo Rodriguez 09:03
My last chance throughout the year is that I go through periods of burnout and trying to help my health. But definitely at the end of the year is just we live off a calendar year right? And just being an accountant is that is when I certainly say this is my last chance. Right? And I focus at the end of the year.
You’re listening to the Bold Business Podcast. This program was created to develop your capacity on demand by sharing insights, tips, as well as lessons learned by business leaders, unedited and uncut. Now, back to Jess.
Jess Dewell 09:37
And this is something that is something that I asked all of my clients to do, and it looks different for each one of them is called a present retreat, Guillermo. And what that is it’s a weekly period of time, that we’re looking at things that are important now that we’re looking at things that are important in the near future. And we might be looking at things that are far in the future as well to tie into that strategic plan. Are we in the general vicinity is, are we still anywhere close to the path that we are following, or that we’re forging? And at the end of the year, I actually, in addition to whatever’s going on at the rest of the cadence, for the end of the year, I actually am going back to each of the quarters for read direction. And I asked my clients to do the same thing and facilitate this with them. And then we’re looking at how far they’ve come. And of course, what the wins are, we always forget to overlook the rent, or to call out the wins, we overlook them and just keep going. And as part of when you were talking about rest and health, I think that’s a big piece to have, what did we accomplish? And what does that look like? And then being able to say, how did that change? Or how did that inadvertently help us get farther along on our path, even if it might look different? And then I know, I recommend that every CEO, every executive that, that is in a management team, that they take two days, and they just unplug, and they’re doing some work on their own, their own personal review their department, their responsibilities, the year the company, and then together when they come back as an executive retreat, what does that look like? And then what does that look like when you bring it forward to all of the associates? So there is an element of communication in that there’s an element of synergy in that there’s a, are we still on the same page as a management team, so that what we’re doing day to day, quarter to quarter or month to month, is still in alignment? And we’re saying the same things, and we can catch trends much quicker? By being able to do that and talk to that, is that something that you also have experienced and do something similar or even just very different?
Guillermo Rodriguez 11:44
Sure, we do that with our clients, I would say but more from a financial perspective, right? And I get the question a lot, what is the difference between a CPA, an accountant and a virtual CFO, and an advisory service? And the big difference is that we’re focused on the future for our clients, we’re helping them get to where they want to get financially meet their financial goals. And one of the main ways we do this is through what we call financial dynamic forecasting, right, we’re going to help our clients meet their financial goals, by breaking down their revenue streams into what we call nonfinancial drivers. Now, this might sound familiar, you’re doing a forecast. And if you’ve met with your accountant, and he tells you, he or she tells you, but you did 30% profit last month, we need to get to 40%. And that’s not really helpful, right? That’s something in the past, right. And so what we do as virtual CFOs is we’re looking at that revenue and breaking it down into nonfinancial drivers. So for let’s say, a retailer, you’d want to start to look at what are the behaviors that will help increase revenue that you can actually control, you can control whether you train your sales staff to upsell or cross-sell, and you can track the conversion rate on each of those asks, and then you can calculate how much that’s going to increase revenue. So that as we’re looking at each month, we’re focused on those drivers, and how we need to improve them and make incremental changes every month to be able to improve profitability. And so that’s just really one example. But we do this what we call dynamic forecasting. And then we review this with our clients month to month, we set a plan at the beginning of the year. But more to your point of going back to where you started, right? Our approach with our clients is also just very current. And that’s what we call dynamic. Because we’re constantly changing the plan, we’re constantly changing the forecast based on what’s going on right now, or how goals may be changing. And one of the ways we do that is by establishing metrics, and we want really clear metrics for our clients. And we break those out into three, three categories. Okay. And, and we meet with our clients to be able to drive that forecast and get to their goals.
Jess Dewell 14:07
It’s easy to overlook the importance of financials. And you’re right, there’s a point of what we’ve actually done. And that’s all it is. It’s what we’ve done. And so how do we go forward? You know, and this is something we’re super savvy people will tune in. That’s you, you’re listening, you know this, and that is, you’re calling them drivers, I call them lovers. They are business drivers, period, then those and I call those levers because when you can’t focus on all at once, could they might not be in your best interests. So which levers or which drivers align with your goals. Where do you want to see improvement? What is the opportunity for growth in each of those areas? And how much of that is profit? How much of that is value added to your customer and to your bottom line or top line at the same time?
Guillermo Rodriguez 15:00
Yeah, and that’s the point is that you don’t want too many driver, you don’t want too many metrics over and right, since I’m right, and maybe the difference into it in the way we look at it is that I think of it in terms of dollars. My mind, we’re in dollars, as I mentioned earlier, I mean, we have cannabis clients. And that’s one of the verticals that I came on to the firm to build. And I was listening to a talk by a retailer recently at a conference and he was talking about how profitability is very tough in, in cannabis, because the regulatory environment, and because there’s very heavy competition, especially in saturated markets, like California, and he was talking about how he grew his business, from two to 32 to 30 million over so many years. One of the things he said is, he talked about how many transactions he was doing per month or something like that, in my mind, I automatically calculated what the average order of each transaction was. And then I looked at, I have the kind of benchmark data in my mind, for California. And I calculated that he was doing about $65 per transaction, and I said, You’re doing pretty good. That’s one of the things we do with our clients as well is that we benchmark against as an owner of a business, it’s important to understand the your surrounding market, and how you’re doing against the industry. And that also helps in setting those goals. They like a service-based business like, like yourself, and to know a lot of the guests that you’ve had on our agency’s owner owners that are really based on people. And so like a metric for a service-based business would be an effective rate, right, based on how many how much revenue you brought in, you’re paying each employee 2080 hours per year, regardless of how much they work. There’s a per rate $1 per rate that you can calculate on that, right, basically your revenue by the hours that you’ve paid. And so we look across our clients and industry to see what is the average, we set those targets for our clients. And benchmarking is a key part of that to just be able to understand like, where do you fall within your industry?
Jess Dewell 17:08
It’s true, because if we don’t know what is going on in our industry and our local marketplace, also, it’s hard to understand what margin, right, what profit margin is actually good, better or best or phenomenally over the moon. And we could think it’s amazing. And it could be really low. And so there’s an opportunity for growth that we would totally avoid, just because we don’t even know the question to ask. And it does come back to how much do we actually want to know about our business. And I do know, in the small business realm, there is up to a certain size of businesses, they’re like, I don’t even care what my competition is doing, who by the way bigger than you might think. So if you’re thinking, I’m not doing that, think about your business, because you you could be and you might be like I already am paying attention are you really, because to gear most point, we don’t necessarily know if we’re not real. If we’re not paying attention to all the metrics and consciously choosing the drivers, we want to focus on the ones that help us align and do our business the best we can deliver the expectation and serve in a mission serve our mission and our goals to our customers. We’re not doing a good job. And I like that you can just sit there do that in your head, Guillermo Emerson, this unit, the average transaction, that is key for transactional means business is key to because the amount that you have to do for each thing is there’s going to be an upper limit to that. So everything above that, you have a better opportunity to increase margin just because at some point, the cost of actually taking the transaction from beginning, middle and end hits the top.
Guillermo Rodriguez 19:01
That’s right, and that you mentioned something in there that I wanted to touch on is that you mentioned something about mindset. And so that that’s the other piece of it too, is when we’re working with business owners is that that growth mindset is really important to into working with clients that are growth-oriented. And that may look different growth may mean something different for everyone. But what we found is that business owners that are ready for an advisory relationship, they are expecting things overnight or really like more of a transaction like I’m paying you this and you’re giving me that that’s not really a truly a relationship. And that’s really what this is all about is working with the client who wants to enter into a relationship where it’s very collaborative, and may have one month where I dig through the numbers, but I still can’t tell what really quite went on that month and so the client has to be in touch with his business his or her business as well and work with me to try to dig into what may be going on that we can work on and improve on for the Fallen months. So mindset is hugely important. When working with a service professional, whether it be your I know you’ve worked with outsource the CEOs and CEOs and the that nature’s it’s very much the same thing with a virtual CFO. Truth.
Jess Dewell 20:22
Would you use the word partnership there? Even though it’s an advisory service, isn’t it in partnership? Absolutely.
Guillermo Rodriguez 20:28
I wanted to say partnership, not to say like an official legal partnership, but a partnership. And one. That’s right, we’ve gotten together, communicating being collaborative. Yeah. And understanding each other. That is something that I’ve learned as an advisor, is that when I first started this journey, I worked in corporate for many years, I worked for large corporate business, and it’s a big change working as an advisor, because when working with multiple clients, and I feel much more what is going on with their business, because for a client, that is their business is a big part of their world, right? Whereas when I’m in corporate, you’d fitting into a fairly big piece. And so what I really quickly learned is that, yes, I knew a lot what you mentioned there in the intro, I worked in corporate I was in finance, I worked in a county, I worked in internal audit, and big corporations have all these roles within a business. But what we bring as a virtual CFO is all those things combined, for owners, their business, it’s about the relationship, right? So my point was that it’s not just about knowing all these things, it’s really important to build a relationship with the client, to your point about it being a partnership. Early on, I put a lot of pressure on myself, like, oh, in a meeting with a client, I have to have all the answers. And really, that’s not what it’s all about. In fact, that’s not how we build the relationship, it’s first about getting to really understand the client, maybe even going a little deeper and developing some compassion, what they’re going through some level of understanding. And then we get to finding solutions, asking the right questions and delivering the service. Of course, it is a business relationship. But it really starts with getting to know the client and understanding their role.
Jess Dewell 22:24
And just like every relationship, think about whether it’s up in business, it might be an employee, it might be a vendor, it might be a mentor might be an it might be a consultant in life, be a lawyer, those relationships ebb and flow based off of the needs of the business and based off of the needs of the people that are driving that business, or creating that thriving business, depending on which resonates better with you, or our listeners. And it’s so important, because the more we are in relationship, in relation to each other, the more we understand. WhatsApp actually aligned in what’s out of alignment when it comes to those goals and the way that work is done for our clients. And I think that’s a key piece to consultancy. And advisory roles are definitely not coaching. Yes, there might be a little bit of that involves, but in the grand scheme of things, it’s, this is what it is, this is what you’re telling me want. And what do you think you need to do? Here’s what I think you need to do. And here’s what we see in there about the based off of the lovers, what keeps you closest to where you want to go and in alignment with that value set that expectation? And what is it what’s too far out of the comfort zone that has to have all of our attention, because that’s one thing I don’t know, if you experienced this, Guillermo, I know growth is important. And sometimes fast growth is necessary. And there’s all kinds of reasons for that over the time, both of us having been in mergers and acquisition, there’s that gotta get attractive to a buyer but all but also got to be able to get that earnout got to be able to prove that business is sustainable, regardless of who is owning it, right? All of those things become part of this and where I’m going with that is We may need to, we have to know what our nonnegotiables are as a business. And as advisors, you and I and our companies, when we better understand that we can help call that so we don’t so are in partnership, our clients, the people we are being of service to don’t accidentally find themselves in the situation that they don’t, we do have that obligation just as being in relationship. We would do that for somebody that we care about. Our whole lives are part of our lives, family member, and neighbor if we like them, right? And there’s some of that to how much and that’s actually a really great thing sometimes not getting long, sometimes having different points of view actually helps us to better.
Guillermo Rodriguez 25:00
As an advisor, we’re working on the financial side of things. But it really all starts with understanding the client’s operational goals like understanding the business operational, and then staying accountable to those goals. There’s all the questions about how the business is functioning operationally. But then it’s also the questions about where you’re trying to go as a business owner, but we did some training at one of, one of our retreats to be able to understand what we’re what level our clients are at, are they the type of business owner that wants to stay really involved in the business and wants to be needed every day? Are they trying to get to a level for where they may be, are in the business, but can really not be as involved. And so really understanding where they are. And as a business owners and where you are in reflecting our job as a virtual CFO is to work towards that. And so if you want to be less involved, what might that look like from a staffing perspective, right? And so hiring people, and including that in our forecast, because after all we’re talking financially here is what does it look like for you to hire the right people to replace the work that you’re doing? And so I’m telling you,
Jess Dewell 26:18
That is the one of the biggest surprises for founder creators founder sellers, is when they step away, and now they hire to replace themselves, and they keep that salary. What that does to margins, what that does to the way business is done. It’s a little bit of an eye-opener, and we know we have to replace the work. So you’re gonna have this, and it’s going to have an impact. But until they actually see it, that’s one of those things. It’s like, that’s a forecast. I’m not sure we’re gonna believe it until it shows up.
Guillermo Rodriguez 26:52
And yeah, that’s that I get that question. Right You can I get the question. If because we do a financial statement forecast, we also do weekly cash forecasting for clients. Yep, we get the question. Well, how accurate is it? And the question is not how accurate it is. But it’s are the assumptions correct? Because what we want to be able to tell the client, what you may want to know, as a business owner is, if I do these things, what does it look like? Financially, yeah, and that is spot on. Because we know that if I hire this person, we know what their salary is going to be, we know what we’re going to pay in payroll taxes, and their insurance, and all these kinds of things. So just from a very practical standpoint, I know, even in my personal finance life, if I lay out a cash forecast, or how much I’m going to spend, it automatically puts you at ease, because you can see it. And I can tell that there’s our clients are doing things very fast, right? They’re growing the business very quickly at times, or maybe making an acquisition after another one ends, paying off debt, all these things. So putting all these things together, in a forecast really can help you step back and see what things may look like. And now you can say, Ooh, if I don’t achieve this level of margin, I’m going to have to raise additional capital or whatever that may look like or maybe as much cash do I need to really buy a mountain five years and what I achieved to get there.
Jess Dewell 28:26
That’s interesting. And I love that you even said just for yourself. I think most of us treat our business like we treat our personal finances until we’re too big and have to have that external oversight. And I know you’re working with a very regulated industry in general. But even outside of that, is there. So let’s take that aside. What size of business do you usually see? Okay, now we actually really care about our financials, we understand this importance of budgeting. Is there a size that you see that happen at? Like, a light goes on? Oh, yeah, this is important.
Guillermo Rodriguez 29:01
I’ll tell you like I worked in corporate and when I say large corporate, I mean, I worked for a lot of good portion of my career with for business two to $4 billion revenue. Yeah, 20,000 people and even for a very large business. It can be where they don’t have a really detailed Cash Forecasting process in place. The things that happen to small business owners in terms of oversight over cash allocation, know using capital wisely, not monitoring margins. This happens from very large corporate businesses to very small business owners.
Jess Dewell 29:38
We’re not alone.
Guillermo Rodriguez 29:41
Yeah, I’m not alone. And it happens everywhere. Yeah. But what I will say is that when I started working as an advisor, I really care about small business. I especially care about the health and wellness industry, and any business that is, you know, promoting in health and well-being. And what I was gonna say is that I wanted to help any business. But I found out that it’s very hard to price and be profitable if the business isn’t large enough to pay for a virtual CFO. And so clients pay anywhere from 1000 to $2,000 per week for the service. So it’s almost like hiring someone. But it’s much more cost-efficient than hiring the two or three people that they would need. So that’s why we see either one to $2 million businesses that are growing rapidly, we’ll hire a virtual CFO, and out of the way up to businesses that are 20 million. That’s really the sweet spot. Yeah, not to say we don’t have clients that are larger than that. But that’s really around the time that businesses start to hire, introvert CFO, and all that comes with it. Yeah. And yes, internally. Yeah, exactly. So after they grow large enough, it’s probably time to hire someone in-house. Yeah, absolutely. That’s something that we can help with as well.
Jess Dewell 30:58
It’s not cool. This is Guillermo Rodriguez. He works as a virtual CFO with Anders CPA. And you know what, this is the Bold Business Podcast, I’m your host just duel. We have been talking about things like reframing and pivoting to find to just be in touch with where we’re at with an end and ending so we can start again, and checking in with our assumptions. So that we know are we using the right metrics. Are we focused on the right things? Have we lost sight of what growth looks like for us? Without much else, I got to just jump back in here, because this is just way too good. And it’s a different conversation than I was expecting Guillermo. And here’s why. Usually, we get way in the weeds, or it’s too far out because it’s hard to apply things to every company. And what we’ve been talking about is actually around the edges. So everything we have here, all of you listeners out there, this is what you can check in for the shape of what you have. How does finance fit into the role of your business? Is it where it shouldn’t be? Is it’s missing? How can you change your thinking a little bit to have ask yourself better questions? So you know when to reach out to a virtual CFO. So you know, oh, this actually is impacting our growth goal, or this is actually eroding something I didn’t even realize until we got there. And I know big ones are compensation plans, based off of revenue, regardless of what the role is. And then that inadvertently, what does that do? It changes it focuses things on revenue, and we forget about our values. And so do you help with things like that gear? Well, are those some of the metrics that you can put into place for people to see the forecasting? And then to be able to go, you’re meeting these goals? How’s the rest? Are? Because you’re hitting this goal? There’s actually some attrition over here. Could there be something else going on.
Guillermo Rodriguez 32:53
The KPIs that, that we track, which will be different for every client, I look at them as all working together, right? And as I mentioned earlier, not to get too far into the methodology, but we look at KPIs in terms of production. That’s your sales, we look at financial metrics, which is like your gross margin, how big is your overhead as a percentage of revenue, net income over divided by revenue? And then we look at what we call pipeline metrics. So those are your customer metrics. And so they all work together in the sense that we may have a production metrics of this is how much this is our sales, we’re meeting this gross margin. But the pipeline metrics, the customer metrics is what really informs the forecast, right, we have to retain our clients to grow revenue, and we have to, we have to get new clients. And so those are the kinds of things that we’ll look at together is like your gross margin is down. What is going on the customer side, right? And if we want to dig even deeper, but we could look into why are we not retaining customers. What are the marketing strategies that are working or aren’t working? And that’s the part where I may just ask the questions, right? I’m not a full-on marketing expert, but that’s what the CFO does is really speaks enough languages to be able to ask all the right questions and all the different areas to have some movement and some traction. To increase profitability. There’s that part. I think what you’re also referring to is values and purpose of the business and how we get involved in that. We do a lot of this also connecting the dots we step in and quarterback things for our client. If you think of large corporate, the CEO, the owner, the CFO is usually the right-hand person that handles a very variety of things. And so it’s the same way with, with a virtual CFO or clients may come to us saying I am having a hard time coming up with my overall business strategy. Who are my customers and where am I going to grow, we will dig into once we come up with that, how we get to the final numbers, the cash, the profit that we need to get to. But we also work with various folks that can we connect our clients with to be able to help them facilitate those discussions like maybe they need to work with a coach a little bit more deeply to get at are valleys and the purpose of their business and the overall strategic plan. And so basically, we cover everything and connect all the dots.
You’re listening to the Bold Business Radio. In every program, we share stories, tips and concepts that benefit short-term goals and increase confidence in long-term positioning. For additional perspectives on your growth strategy, Jess Dewell is your business advisor and consultant. Now back to Jess.
Jess Dewell 35:46
I love this article that you were talking about how many hours of it was there like a general rule of thumb and this article that, about rest and how to do that.
Guillermo Rodriguez 35:57
I remember calculating it. And basically, I looked, if you get eight hours of sleep, you need about two hours of some thing that you consider rest right every day. And if you sleep less, I guess you can allocate a little bit more. But for me, I had to sleep about eight hours, I look to have a couple of hours a day to go for a walk with my family that may look like I like to play softball, those kinds of things that, that can help you be more alive or feel more rested or bring some more vitality into your life.
Jess Dewell 36:29
I’m trying to bring naps back. I know that sounds silly. But this concept of an afternoon nap is something that I’m very curious about only because everybody’s circadian rhythms are different and mine, that three o’clock in the afternoon is the hardest time of the day for me. And so we’ll have to see this is one of those things I’m looking at going could I do this before the end of the year? Maybe? It’s a whole different kind of busy at the end of the year. So if not, how could I work that in? And even if it was just twice a week? What would a nap in the middle of my work day? Because it wouldn’t be like a two-hour and average probably like 15 minutes or 20 minutes? But would that change things? And how would it change things? We’re already naturally really good at this. And you I’m guessing you are too as we put the things in our day, where we that need the most of our energy, where we have the most of our energy, that’s actually a total side thing that will help with profitability, because we’ll get way more done and see a bigger picture, energy management, what are the things that require the most energy? And when do we have the most energy and whether we are interested in, in it or not? That’s when we do those things? Because we can move through though? I’m like, Can I get a second time? Does a 20-minute nap give me a second time?
Guillermo Rodriguez 37:49
Yeah. It’s funny that you mentioned that because I’ve been working that into my day is that there’s no point in doing the tasks that you hate doing in the afternoon. If you’re doing them better in the mornings, I find that I do in more detailed focus work, I can do more in the morning. So there’s no point in me trying to focus that get some of that work in the afternoon. Yeah, but from a business standpoint, we just I just returned from our firm retreat. And one of the talks was about purpose. And during the talk, the speaker she said I want you to just take this time to reflect, to reflect this as a time to, to just step back. And we’re working it into our retreats and how we work with people. And this is something that just helps people, it’s from a well-being standpoint. And in the end, it’s not the purpose for me, but it helps business as well. It helps her clients and it helps the firm. And just being honest about I need an app today. There’s nothing that’s good. There’s nothing wrong with that. I worked in corporate many years where it was like people were glorified for working a lot or for just never being tired for never complain, never taken time off or whatever. That wasn’t right for me with the firm that I’m with now with Summit, virtual CFO by Anders I was again I was at a retreat, we were at the bar and I was talking to one of the founding partners and he said you’ve been traveling a lot lately, right? Because I had been going to a lot of conferences and then I was there traveling and three weeks in a row. And he said it’s pretty tiring. And I said yeah, I’m actually really worn out. I wasn’t showing it at the time because I was having a great time. But just the fact that another leader in the organization, a partner can come to somebody else and say hey, I need rest to I need to refresh to like the work that we do can really wear us out and that honesty, it gives me permission to feel okay with where I’m at I think for mental health or it it is not good when we just deny like how we’re feeling and what we really need.
Jess Dewell 39:51
To have a generative business. sustainable practices are necessary and it is up to us to make sure that we are thriving. We are our own garden tenders, if you will, right where we are responding, nobody else is going to do that for us. And we do have a lot of responsibilities here for our world, for our clients, for our customers, and for our families, for our friends, those that live on our roofs, and in our communities and our even those that we have obligation to across a lot of disputes. And I think that there’s something to be said for pausing and all that. And yes, some can be generative that ties back into the other rest as necessary. I actually have people that go out and they actually do this particular deep work sitting outside, they will go take a walk, and they will take everything, their computer, whatever they need, and they’ll go sit by their favorite tree or at their favorite partner, you know, just because part of it is restful, that energy shift. And that different location allows us to tap in and think a little bit differently, too. And so all that that comes in handy when you’re preparing for meetings, and even having meetings being able to be that person that is that different viewpoint. And that’s actually what I think this advice, any advisory any consultant can bring to the table is a different environment with which to look at the things that we’re working on to go Yeah, it seems silly to be talking about naps to me. But in fact, I’ve had several of my mentors, my board of directors has said, yes, just this is the right thing to do. So the more I talk about it, I’m like, normalizing this is a way that I can do it. What could you do? So I love hearing for you, too, from you. That’s yeah, I get tired, too. Yeah, I’m seeing how can I use my time differently. Also, with that being a normalized conversation only makes us better?
Guillermo Rodriguez 41:49
Absolutely. And for our business and for our clients, because at the end of the day, an advisory any kind of professional relationship, we show up with a certain level of energy, when we’re interacting, like you and I are interacting face show up here. kind of tired, not feeling well, you’re gonna feel that right. And our clients feel the energy that we’re bringing to our calls because especially if we work remotely, we have to bring that energy through that call. And as we’re communicating with the client, so it’s in everyone’s best interest to take care of yourself. And so you can show up well, for your clients.
Jess Dewell 42:22
Just in general, every single person in our organization is a reflection of the potential and actual profitability that we can bring to the table. And if we aren’t honoring, where we’re at creating a foundation, working with that, we’re actually missing we’re leaving money on the table. If we go back to the acquisition conversation, right? We’re leaving money on the table. And we don’t want to go after more money than we need at all costs. But we also don’t want to be leaving it on the table. And I think that there’s a connection between the two.
Guillermo Rodriguez 42:58
Jess Dewell 43:00
We’re talking about accountability. We’re talking about profitability. We’re talking about long-term success. And we’re talking about growth-mindset in not only ourselves, but in our organizations, what makes it bold, what makes it bold to be accountable to our profitability?
Guillermo Rodriguez 43:17
What makes it bold. I think it’s accountability, it all comes back to as you’re working with the client, really understanding where they’re at, and always bringing it back to those goals. And being honest, that’s a big part of the relationship of doing this type of client work advisory work. Right, is the honesty, I was reading this book, it’s called Secret Trade Craft of Elite Advisors. You know, I was reading this at night, and one of the things that it talked about there and and he and his journey to become an advisor. And I found this to be very true, as I was reflecting on it is that we have to care more about, about helping the client about giving the advice about being honest and upfront. More than we care about keeping the client I know that sounds hard to say that. And so I’ve kept that in mind. And that if we’re honest and candid with our clients in our conversations, that goes back to understanding their goals and where they want to get, we’re going to be much better. And so keeping that in the back of my mind, and that we always want to be candid, we want to be honest and work from those values. Were gonna do a great job. And so that’s what to me, what it looks like to be bold is to have a very difficult conversation or have say things that you don’t mean clients don’t want to hear. And there’s been plenty of that over the years. Right. One of the big ones has been in the economy right now. Right? The economy is tough and a lot of industries. It was tough during COVID layoffs are possible all these kinds of things. We want to be honest with the client about how far they can get under the current structure. are given economy and these kinds of things and those are the tough kind of candid conversations that we have to have sometimes with clients and it doesn’t do anybody any service to sugarcoat things or not say things as you see them because that’s the value of an advisors that we’re apart from the clients business and we get to see things much more clearly and that’s what they’re relying on this is to give that advice.
The Bold Business Podcast is brought to you by Red Direction. Jess Dewell dug into one idea in this program. Her goal is to ignite your creativity and spark different thinking with the presented material. How you apply this to your current priorities is up to you. Jess Dewell can bring the missing voice back into your company. With you, Jess will solidify your company’s TrueNorth. Your unique Red Direction. Provided you are ready to work with Jess, email her at [email protected]. Special thanks to The SCOTT Treatment for technical production.