00;00;05;21 - 00;00;26;01

Unknown

You're listening to the Profit First for Real Estate Investors podcast. This show is all about helping real estate investors and entrepreneurs bring clarity and structure to the financial side of their business. In these sole episodes, we focus on practical financial strategies that real estate investors and business owners can actually implement, whether it's profit, cash flow, forecasting or mindset.

00;00;26;02 - 00;00;48;23

Unknown

The goal is simple to help you run your business with more confidence and less financial stress. Enjoy the episode. Hiring the wrong fractional CFO will cost you way more than not hiring one at all. This is where a lot of people, when they start to make more money and they're starting to roll in their business and they're like, I'm starting to scale up, but where's all the money going?

00;00;48;23 - 00;01;03;20

Unknown

I don't have the clarity. And I asked my bookkeeper, but they looked at me funny and said, here's your PNL. Like when I was asking them, like, where's all my money going? And then I asked my CPA, and then the CPA says, well, I'm just taking care of your taxes. Here's your tax plan or here's the taxes that I filed.

00;01;03;27 - 00;01;23;27

Unknown

A CFO is really there to help you as a business owner get over the hurdle of, what do I do with this money? Or where should I put my money? Or where did my money go? Or why am I making more money? But I feel broke. A CFO is there to help you as a business owner, understand that flow and to be able to make sure that you're getting what you want from your business.

00;01;23;28 - 00;01;41;14

Unknown

This is where how do you pick the right CFO, though? There's lots of options out there. This has become a bigger field, a fractional CFO. And I just want to give you some tips and pointers of what to look for, what not of what they shouldn't do. So that way you're just armed with when should I look for a fractional CFO?

00;01;41;14 - 00;02;02;16

Unknown

Just some of the things that you might have questions on, where you're like, I turn on this video because I was interested, but I don't even know if it's the right timing. So let's start there. How do you even know if you're ready to look for a fractional CFO? I would say if you have started to make sales at any level, I would say if you're making it, well, let's just say at least 100,000 in top line revenue.

00;02;02;17 - 00;02;21;14

Unknown

So the very top line, your income, if you're making at least 100,000 and you're starting to feel like, wow, this feels like a real business. I'm making six figures, but I don't know where my money's going. And that could be from 100,000, honestly, up to like 5 to 10 million. We've we've worked with lots of people in that range.

00;02;21;14 - 00;02;36;29

Unknown

And it's astounding to me that some of the same people that are at the six figure mark are having the same issues that are the people at the seven figure mark, because no one's taught them. And that's where if you're starting to feel like I'm making money, but I feel broke or I'm making money, but where's it all going?

00;02;37;00 - 00;03;06;10

Unknown

Or I'm making money, but I don't have good systems for my finances, and I don't feel like I'm getting financial freedom from the business. I don't feel like that. Maybe it's really worth it. Maybe you've done more sales than you've ever done, but you're losing more money than you've ever lost, and you're like, what is going on? If you're starting to feel financial pinches or cash flow issues, or you're starting to feel like, okay, this is just getting out of hand, maybe you're in real estate and you're like, hey, I was doing one deal and now it's totally fine, but now I'm in the middle of like 3 or 4 deals at a time.

00;03;06;10 - 00;03;24;09

Unknown

I don't know what's going on. Or maybe you're just any type of business and you've started to scale up and you're like, this used to be manageable. And I could track everything on a spreadsheet, but now I'm too busy or I don't have time to look at the numbers and I'm still feeling the cash crunch, or I'm still feeling like, where's all the profitability going?

00;03;24;10 - 00;03;46;26

Unknown

This is when you would start looking for a fractional CFO and you say, well, if I'm under a million, I could look for a actual CFO. You'd be surprised. There's lots of fractional CFOs out there that work with people under a million because they have programs for them. Like for us, we do like a 60 day program to make sure you have a financial foundation where we make sure you have a good bookkeeper and good bookkeeping system process in person.

00;03;46;26 - 00;04;04;16

Unknown

We make sure that you have profit first or a cash flow system making sure profit first is all about you keeping more cash and paying yourself. And it's a system to make sure you repeatedly do that. And number three, we implement a dashboard. So it's like you have to make sure that you have the numbers in front of you so you can make the decisions in the best decisions.

00;04;04;16 - 00;04;20;28

Unknown

So there's stuff like that out there where even if you're under a certain dollar amount, you could still benefit from that, especially if you're feeling like, where is that money going? And my bookkeepers not helping me. CPA is not helping me. Or maybe you have your spouse doing your books or something, or a family member and like, they don't know.

00;04;20;28 - 00;04;39;04

Unknown

They're just trying to figure this out along with me. So this is where I would start to look for one no matter that size. Because and then of course, if you're making 500,000, a million, then that's where a fractional CFO and an ongoing component and they're more of like a part time leader on your team would make more sense on more of an ongoing basis.

00;04;39;04 - 00;04;55;00

Unknown

So that's where I would start. If you're under 500,000, I'd probably look for more of a short term engagement, try to get the financial foundation late. If you're like, I don't really have great systems or I don't know if they're if my bookkeepers doing things right or I don't have a good cash system. I'm not keeping what I want to.

00;04;55;01 - 00;05;16;19

Unknown

Honestly, the younger you are in business and like, the less that you're making, the less bad habits that you have before you get bigger. So if we can help you, or if a fractional CFO can help you before you become that seven figure business, you can have good habits with your money. The smaller you are as you grow, those habits just grow with you.

00;05;16;19 - 00;05;32;01

Unknown

And now you'll have good habits with a million versus where if you're at the seven figure mark already and you're like, I have no idea what's going on, I don't know where my money's going. This is where I want you to be able to walk in someone's door, to have a conversation, to say, okay, you're a fractional CFO.

00;05;32;02 - 00;05;53;01

Unknown

How do I undo some of these habits? Or how do I make sure that I can actually build true wealth in my business? So like I said, as long as you're doing some deal flow or if you have sales, I would start at least at least 100,000. In revenue on up you could look for a fractional CFO. It just do they have a short term engagement or they just long term.

00;05;53;01 - 00;06;10;23

Unknown

Because if it's just long term, you'd probably be looking at $500,000 in revenue or above. If they have a short term engagement, then that could be any size. You know that, especially 500,000 or below. But for a fractional CFO, how do we even know? Like what are the steps to hiring one? How do you know? What questions should you ask them?

00;06;10;23 - 00;06;33;13

Unknown

If you're in front of a fractional CFL, that would be number one is, you know, like, do you take clients that are at the level that you are revenue wise, like, do you have programs for us? Are you able to help us? Number two, are they in your industry or do they understand your industry, whether it's real, if you're in real estate, that's a really specific one and not just a very it's not consulting.

00;06;33;13 - 00;06;53;25

Unknown

It's not just moving a widget. It's there's lots of moving parts in real estate, but there's also other avenues out there that are very niche and very, you know, just where you have to dig in. I would just ask that CFO, do you have any experience? Have you worked with anyone in this field or, you know, can you give me an example of who you've worked with, that type of thing, or if they have referrals or references?

00;06;53;28 - 00;07;15;03

Unknown

Another thing to be able to ask a fractional CFO is how many clients do you work with? How long have you been in the business? Because I want to know, do they have a proven track record? Have they been able to work with clients and be able to help them? Do they have any personal stories that they have from clients that they've worked with, of helping them achieve their financial business goals that they've wanted to?

00;07;15;04 - 00;07;33;02

Unknown

Because at the end of the day, the CFO should help you keep more money, whether that's paying yourself more, having more money in the business, the reserves or building the business that you really want like vacations or trips or whatever you want your business to provide you or helping you prepare for an exit in the future, in the near future.

00;07;33;04 - 00;07;51;05

Unknown

This is where a fractional CFO can really help you. And these are some of the questions that you can ask them. I would also this is kind of a secret question. This isn't just for CFOs, but for anyone that you work with as a service provider, but especially, I would say, for your financial service providers or someone that might be like a factual CFO.

00;07;51;08 - 00;08;11;21

Unknown

Do you go to any masterminds or any like member type events, and how long have you been a member? Because if you're like if they say no, well, then you can't really reach out to that network and get feedback. But if they say yes, it's like, how long have you been a member? Because if they've been a member for a year or longer, they probably have a track record of helping people in that membership.

00;08;11;21 - 00;08;38;06

Unknown

So that way they would be a really good candidate for working with you, because they're already a part of a network where if they're not doing a good job, they're not going to be able to stick around, they're going to get kicked out. So that's kind of like a secret question where you're kind of just saying, do they have a reputation in the industry and is it a positive or negative one, or are they bouncing around to different masterminds and different things because they don't really know, you know, like they don't know what they're doing or they're not really good at what they do.

00;08;38;06 - 00;09;01;20

Unknown

So they have to keep bouncing around. So that's kind of a secret question that you can ask anyone in your sphere, but especially when it comes to financials, because you want people that you trust. At the end of the day, you need someone that can you can trust, and then at the same time that can trust you. Like if a CFO, if you hire them, they're going to tell you these are the steps, like how to get out of the rat race, how to get into financial freedom.

00;09;01;20 - 00;09;17;28

Unknown

And it's going to feel counterproductive sometimes to what you're doing. And it might feel like, oh man, I'm like taking a big risk or I'm doing things differently than I've usually done. And that's where financial freedom is not about how many deals you do or how many sales you do. It's about what you do with the money once it's in the door.

00;09;17;28 - 00;09;33;16

Unknown

And if you have a CFO, they should be helping you with the money once it's in the door. And that's where a CFO is going to help you get exactly what you want from your business. So that's a little bit of the how two of hiring of what you can ask them, when's the right time to be looking for one?

00;09;33;16 - 00;10;00;14

Unknown

What are the kind of those triggers, statements or thoughts that you might be feeling or having as a CEO or an owner? No matter the business size or the level, if you're over a million, it's almost guaranteed that you need a fractional CFO at that point, unless you already have one. Like then that fractional CFO needs to be helping you get towards financial freedom or whatever that means for you, or scaling profitably, or if that means exiting whatever those financial goals are for you, they should help you get closer to them.

00;10;00;15 - 00;10;26;14

Unknown

So that's where I would say if you're above a million, it's almost a requirement. Like you need someone in your corner helping you. From the financial point of view. We've worked with so many people where just having that knowledge of what's really coming in to my business, what's really going out, what do I get to keep? That is really what separates the business owners, who really are the business owners that feel like, hey, I'm doing a really good job here.

00;10;26;14 - 00;10;44;13

Unknown

And like, I feel like I'm actually getting from my business what I wanted out of it when I first started it. That's where I would just make sure that you find someone that helps you get closer to the goals you have as a business owner. So there are some practical things that secret question of, are they a part of groups?

00;10;44;13 - 00;10;59;21

Unknown

How long have they been a part of them? What is that network maybe reaching out to that network where if they give you some of those references or the network that they're a part of. So that way you can get that feedback. But at any, at any size, if you're at least 100,000, I'd be looking or above, I'd be looking for a CFO.

00;10;59;21 - 00;11;17;27

Unknown

If you're above a million, I for sure be looking for a factual CFO. If you're above the 10 million mark, then you probably want to look potentially for a full time CFO at that point. So if you're making 10 million and above, 10 to 20 million is kind of the range of fractional CFO or full time CFO, it just really depends on your industry.

00;11;17;27 - 00;11;39;15

Unknown

But that's when I would potentially start looking for a full time one as well. But if you want to make money, not feel broke, put more in your pocket, pay yourself consistently. Start to look for a fractional CFO now. Thanks for spending time with me today. If this episode gave you clarity or a new perspective. Be sure to like, subscribe, and comment below if you're ready to apply what we talked about today with real guidance and accountability.

00;11;39;17 - 00;11;47;10

Unknown

Visit profitrei.com to schedule a free discovery. Call with us to create your path to financial clarity and freedom.