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Business coach or fractional CFO? Why coaching fixes the founder but not the finances, and what a 13-week cash flow and scenario modeling replace.
How the Synergy Operating System builds profitable sellable businesses that run without you.
(00:00 - 00:40)
A coach asks how you feel about the number. A CFO tells you what the number is, and more importantly what to do about it before it's too late. Somewhere between Trailblazer and Peak, the thing holding you back stops being your mindset and starts being your math. And no amount of accountability calls will fix a business that can't see its own cash. Welcome to From Burnt Out to Bought Out, the podcast for business owners who are tired of being the hardest working, lowest paid employee in their own company.
(00:40 - 01:03)
I'm Jon, joined as always by Ryan, and together we've spent years inside owner-led businesses helping founders go from running on fumes to running a business that actually runs without them. Every episode we break down the real problems nobody talks about: the burnout, the bottlenecks, the blind spots, and show you what it looks like to build a business that's profitable, sellable, and doesn't need you in the building every day to survive.
(01:03 - 01:35)
Whether you're grinding through a plateau, thinking about an exit, or just trying to take a vacation without your phone blowing up, you're in the right place. Let's get into it. We're at it again. We are, Jon. Fun stuff. I know we release these every week, but it seems like only yesterday since our last one. Right? It's a... I mean, when you love what you do and you dream about it all the time, I guess, you know, one day blurs into another. Also a mess going.
(01:35 - 02:04)
Yeah, I was gonna say, is it a dream or is it a nightmare? Yeah, that's the whole thing. If you're dreaming about me at night, Ryan, I should be slightly concerned. Yeah, no, don't worry about that. No. Okay, good, good, good. Awesome. Okay, so I know, Ryan, you're not anti-coach. I know that, but what is the actual problem we're pointing at this episode? Yeah, so I love good coaching.
(02:04 - 02:38)
There is no substitute for coaching. Everyone has their lane, but coaches can do things, bookkeepers can do things, CFOs can do things, operations people do things. They all have their lanes. So using a coach to avoid the financial seat is not the answer. So let's tell everybody the stages that we talk about, because I'm going to allude to them a little bit. A treadmill operator is somebody with under $500,000 in annual sales, and generally speaking, they're in survival mode.
(02:38 - 03:08)
A pathfinder is the next one, between $5 and $2 million in sales, and they're starting to establish some real β their first real systems. A trailblazer is $2 million to $10 million. They're starting to develop a real structure and they're starting to try to scale with discipline. And that last word is a big thing. And then we have a peak performer, that's from $10 to $25 million. They're starting to get optimized.
(03:08 - 03:41)
They're starting to be self-managed with a team and they're approaching the fact that they wanna start maybe getting exit ready. And then we have our legacy builder, who's done all that stuff before and is really thinking about exit and everything after, what's going on, right? So a composite story. This is all made up. I've watched this exact thing. We have a $6 million specialty contractor, great operator, but has been stuck at the same revenue number for three years.
(03:41 - 04:19)
And the fix was, let's get a coach, right? First year, mindset coach, then a sales coach, then a quote unquote scaling coach, right? Paid $4,000 a year in coaching. Each one helped. Good at meditation though. Really good, yoga, the whole thing. Each one helped for a quarter, then the ceiling came, right? Because the ceiling was never in his head, it was in his books. He couldn't forecast cash, didn't see margin by job type, and really made big bets by gut.
(04:19 - 04:50)
So you can't affirmation your way out of a cash flow problem. I wish there was more money. I wish it was better. It doesn't happen that way. But every coach will tell you, you need to look at your numbers. But they're not the ones that can help you. Coaching fixes the founder. It doesn't fix the finances. Again, different seats, different tools, different lanes. Gotcha. And I hear what you're saying.
(04:50 - 05:26)
You know I'm more skeptical than you. But half of our listeners have a coach that they love. Are we saying that that's a waste of money? Absolutely not, Jon. Coaches are huge. And they're doing the things that you need them to do that they're good at, right? And that's the big thing. EOS doesn't fix finance, right? CFOs fix finance. Coaches fix mindset. They help build the mental barriers that are there, but they can't help you fix the fundamental issues in your business.
(05:26 - 05:47)
Exactly. That's a different skill set. Yeah, I 100% agree. As I say, I'm a little more skeptical in the sense that, look, you don't need a mindset coach to fix your business, right? I'm all about personal development, but some of those things are clearly on the personal side and not on the business side. And people who have done it before can coach you through the next phase of your growth.
(05:47 - 06:47)
And I mean that from a business perspective, not a personal perspective, of course they can. But we shouldn't confuse those two things, right? Like we need to be told how to take the business to the next level. And yeah, I think that's an important distinction. But I mean, there are lots of roles in the organization: coach, bookkeepers, controllers, CFOs, etc., etc., other roles within the C-suite. There are lots of seats within the business. So let's lay them out a little bit, and everybody confuses, I think, a number of the different financial roles. Owners think of them as really covering one job. Can you break it down a little bit and kind of distinguish between coaching and the different financial roles as well? Sure, absolutely. So a coach works on you, right? Helps you find your zen, helps you break your mental barriers, those kind of things. It's about mindset, accountability, motivation, right? Backward and inward. A bookkeeper records what already happened,
(06:48 - 07:41)
categorizes transactions, reconciles accounts, pure rear view. A controller makes the rear view accurate and fast. Clean books, fast monthly closes, reliable statements, but it's still historical, right? It's just trustworthy history. And then we have a CFO, who is the only one who looks forward, right? 13-week cash flows, margin strategy, scenario modeling, capital allocation, steers the money, always planning, looking forward, could care less about the rear view, right? Three of the four look backward, only the CFO looks forward. And that's a general distinction, right? So there's always a good, and when I talk to folks around there, is that I like to call it the bookkeeper track, right?
(07:42 - 08:17)
If you have a great bookkeeper, they're worth their weight in gold, keep them, right? Because they're not a dime a dozen here. And that's the problem, right? Is that they can be great, but it doesn't mean they're great at doing forecasts or margin strategies or decision modeling. That's not their role. Accuracy, history, making sure things go, the beans go in the right piles, that's their role. And that's what the owners wrongly think is covered in the CFO seat, is that they're going to point to their coach or their bookkeeper, but that's not their skill sets.
(08:17 - 08:49)
They're not driving that bus. So I think the gut check is, for every owner out there, is that when you make a big decision, $50,000, $150,000 decision, does anybody model it before you make that decision? If the answer is yes, then you have somebody that's strategically looking ahead. If the answer is no or I go to my gut, then that seat is empty. Gotcha. Right. And none of those things that you just described, a coach can fulfill.
(08:49 - 09:26)
So that's not a question, that's a statement. It's clear, right? Coaches do something entirely different. Absolutely, Jon. All right, let's run with your fun fact. Yeah, so fun fact, the title CFO is barely older than the color television. It didn't actually become a standard corporate role until about the late 1960s, early 1970s. Before that, the top finance person was also called the treasurer or comptroller. The job was mostly guarding cash, not steering strategy.
(09:26 - 09:57)
The modern CFO does forecasting, capital allocation, sits next to the CEO and strategy. That's generally a recent invention from the 60s and 70s. So if you're a small business owner who's never had one, you're really in good company because it's only existed for about 60 years. That's crazy. So the seat's basically younger than our folks. The seat is younger than your dad, right? And your business needs it about 40 years sooner than the Fortune 500 figured out that they did.
(09:58 - 10:26)
Awesome. Cool. Fun fact. That is great. Let us know, listeners, listener, if you like that, if you like the new segment, Ryan's Fun Fact. We're going to roll with a quick break from our sponsor. Today's episode is brought to you by Word Rock Drills out of Elon, North Carolina. And this one lands perfectly. When you hit solid rock on a job, you don't hire a motivational speaker for your excavator.
(10:26 - 10:54)
You get the right drill attachment. That is the whole episode. Word makes rock drilling attachments that turn equipment you already own, excavator, skid steers, into the right tool for hard ground, plus their Mighty Mite Wagon Drill. The right tool for the hard part of the job, that's the CFO seat and that's their whole catalog. The best turnaround in the industry, standard units in four weeks or less and they keep thousands of parts in stock.
(10:54 - 11:33)
Their tagline says it: hitting rock should be the least of your worries. Same as cash flow, hitting the hard part shouldn't be the thing that stops you if you get the right tool in the seat. Word Rock Drills, WordRockDrills.com, 336-584-6700. I get the damn number again. Elon, North Carolina. Keep drilling, keep working, get the right tool. Hey Jon, as my co-host, do I have the right tool in the seat? Oh, you definitely have the right tool in the seat. I'm right here. I'm hitting rock bottom all the time. You are. Alrighty, excellent.
(11:33 - 11:58)
So let's talk about what a CFO actually does at the level that we're talking about. So let's get concrete. What does this person actually do on a Tuesday that my bookkeeper, my coach, my controller don't? So the first one is we want predictive measures and forecasting. So one of my favorites is the 13-week cash flow, right? So you've got projected ending cash week by week. It's not your bank balance.
(11:58 - 12:23)
It's your real position, including what hasn't cleared. This is probably the single most important document in the business and this is how you should be running your business day in and day out. And then we've talked about this before in previous episodes, but when we lump everything together in a P&L with revenue minus cost and all that kind of stuff, getting that ink when that's great, but we've got to do it by margin by line, right?
(12:23 - 12:45)
There's some that do better than others. So we've got to make sure that we are feeding the pig, right, and we're talking about the dogs out there that's dragging us down, right? And then scenario modeling, right? Mike Tyson said it best, right? Everyone's got to plan until they get punched in the mouth, right? And then all heck breaks loose. So we've got to make sure that we have scenario modeling.
(12:45 - 13:16)
So if we're going to make a $50,000, $150,000 decision, what does that mean, right? If we buy the truck, hire the crew, take the big job, what happens to cash, what happens to margin, what's our return on investment? We gotta do scenario modeling. And then, of course, we need financial KPIs on that scorecard, right? What's our cash? What's our weekly collections versus forecast, AR overdue margin? Something that's significant, ooh, wow, can't even say that.
(13:16 - 13:42)
Signifies, there we go, signifies. Where is our business going? How healthy is it? And what can we do about that? And more importantly. And then also, capital allocation. What are we gonna do with that dollar? What's gonna give us the best return, right? Are we gonna pay down debt? We're gonna buy new equipment? We're gonna hit marketing, Jon? Do we need a new hire, right? But we've gotta actually quantify those.
(13:42 - 14:12)
We don't wanna talk about vibes and how our gut feels. We actually wanna see it on paper and say, all right, this is our next best step to get the best return on investment. And what's not on that list, right, is the other roles, right? So filing taxes is for your CPA. Categorizing receipts, that's your bookkeeper, right? Getting you into that warrior mindset, that's your coach, right?
(14:12 - 14:37)
We all have those different roles, right? And more importantly, and we did these stages for a reason, is that this isn't big company stuff, right? We're talking about a $6 million company or a $15 million company, a $2 million company, right? What matters most about that is that when we're making these big decisions, right, we have less margin to deal with. It's not a rounding error to us, right?
(14:37 - 15:03)
This could be a hire, this could be a new location, this could be us shutting down for three weeks because we made a bad mistake. And that's really what's on there. So demand, some type of forecasting, especially the 13-week cash flow, right? That's really gonna tell you if you got somebody in that seat or not. Okay, awesome. And yeah, clearly that's the one you should ask for first.
(15:03 - 15:46)
But in what order should some of those others come together? Like, you know, when you're trying to understand how to steer your business, cash flow forecast gives you the cash, you know, that's telling you whether you're gonna survive the next 13 weeks or not. What order do some of the other documents come in, where one of the most critical there? I think that the most critical one is always fix your cash first and then you fix your operating system, how the company's running. So in that scenario, in that place, is that I would start looking at margin by line. We've got to look at that and say, which ones do we need to work on, which ones are really holding up the entire company?
(15:46 - 16:17)
Right. And then what I would do is capital allocation, right? If dollars are thin and we only have so much of it, we've got to get the biggest return on investment. And then you can talk about scenario modeling and financial KPIs. Gotcha. Makes sense. So basically make sure your cat β get your cash situation sorted, make things a little bit more efficient, right? So you're not wasting dollars, and then understand how you make more dollars in a dollar per dollar way.
(16:17 - 16:44)
You got it. Excellent. See? I do listen to you. You do, sometimes. I'm not just sitting here playing Candy Crush, you know? All the time. All the time. New high score. Okay. Oh yeah. Ding! Alrighty. Halfway point. Time for another new segment. Marketing tip of the week, or as I like to call it, M-TOW. Catchy, eh? Okay, maybe not. That's why he gets paid the big bucks.
(16:44 - 17:19)
Maybe not. I've got to find a name for it. There will be a name at some point. Mom and Dad. Ryan, this one's the highest ROI as far as I'm concerned. Marketing change that most businesses can make operationally, right away. And it is this: the business that responds first to a lead usually wins the job. Often regardless of price. Conversion falls off a cliff after the first, I don't know, 5, 10, 15 minutes of people looking for services, and most owners let inbound leads sit for days, if not hours, right?
(17:19 - 17:43)
So I think you've got to get on those leads as quickly as possible. Wow, that's wild because that's free money leaking. That's the same energy as the cash forecast. It's the leak you don't see on the meter. Yeah, thousand percent. That's exactly right. Like, you paid a ton of money to get that lead coming in, letting it go cold, and you have to work out exactly what is cold.
(17:43 - 18:15)
You know, if it's a fast moving area, people will call you, leave a message, and they're moving directly onto somebody else to see if they can get somebody on the phone. So respond to it right away. It's like drilling a hole and then walking away before you pour the footing in. So it makes no sense. So the one step this week: set up an auto responder on every inbound channel, every inbound marketing channel, and a rule that every new lead gets a human reply within 15 to 30 minutes during business hours, ideally quicker.
(18:15 - 18:48)
And that's it. It costs almost nothing, right? That auto responder, we've all got that capability in our email right now. And you can work out your own internal systems so that you get those responders, and it will beat out your competitors and it will reduce the amount of money you need to spend on your advertising budget as well. Okay, let's keep rolling. Fractional versus full-time. Nobody at $6 million revenue is hiring a full-time CFO with the salaries that they command.
(18:48 - 19:16)
So what do the trailblazers looking to be peak owners actually do? So nobody should at $6 million. I'll tell you that right now. And I'm not endorsing, everyone should need a fractional CFO or CFO or anything like that, right? It depends on your stage and where you're at in that game, right? Everyone should have a bookkeeper. If you need a coach, get a coach. But you know, fractional CFOs or full-time CFOs, it depends on where you're at.
(19:16 - 19:45)
And so hopefully this will help you a little bit. So the ranges is typical full-time CFOs will go for 180 plus benefits all the way up to millions of dollars, depending if you're a publicly traded company and that kind of stuff. And the range that we're talking about, 25, $50 million of annual sales, you can find somebody that's probably going to be about 250 to 500 and change plus benefits plus bonuses, doing those kind of things, right?
(19:45 - 20:19)
So why not get somebody that gets that skill set, but you don't need to rent them, you don't need them full-time. You just need their horsepower, right, sometimes during the month to help you out, right? And they give you that knowledge, they give you the tools, they help you lead the company forward, but you don't need them all the time doing that, right? So fractional CFO, roughly $3,000 to $8,000 monthly, monthly, right? It depends on the company, their scope, how much time you need them.
(20:19 - 20:44)
Depends on the pricing model because it's a wild, wild west out there, right? But you're gonna get a strategic financial mind in a slice of the pie, right? So the whole thing is that, you know, they have 40 hours a week and somebody's buying a slice of that pie, right? And so there might be five people, ten people, companies, however that works out. And so they still make their 250, 500, but you're only paying a tenth of that.
(20:44 - 21:15)
And that's the aim of the game. And so who needs them? Companies with $1 million annual revenue all the way up to 50. I've heard of fractional CFOs for $80 million companies. They're just giving them more of their time, but not all of it. So you can do it that way. Also depends on the complexity of what you're going through, your stages of your business as well. So if I want to add three locations in three years, probably want somebody to help me design that out and what that looks like.
(21:15 - 21:45)
And so when you're looking at those kind of things, you take that into consideration as to whether you β and there are different skill sets for the fractional CFO, right? Some people are M&A, some people are startups, some people are nonprofit, turnarounds, there's a whole list of that. So it's not a one size fits all either. And so as you scale in the stages that we read off, it's probably more of the time that you're gonna need from a fractional CFO, right?
(21:45 - 22:41)
So if I'm growing from $10 to $25 million, that's my plan of five years, I'm gonna need more of that person's time, right? Or if I know that I wanna sell in three or four years, I might need a different fractional CFO that gets me towards the M&A and the exit planning, right? So I think that's what you need to think of, is that treat a fractional CFO like you did in our last couple episodes with the fractional CMO. It's essentially that you are renting or leasing a senior level person that brings a lot to the table, but you don't get them all the time, right? And you'll know when, and this is very important, you'll you'll have grown the fractional when you know the finance work is genuinely full time, right? You're doing M&A or you're raising capital or really the complexity just explodes where, you know, we got this product, we need three more
(22:41 - 23:07)
product lines, we've got to do all the research and development, all this, and, you know, we're going from $20 to $50 million plus. That's really when you have to start making that decision that we've got to either bring them this fractional full time or we get to get somebody in that seat because we really need the full horsepower of that person. Gotcha. Loud and clear. Me combining that with the direction that we discussed earlier in the podcast.
(23:07 - 23:52)
You know, it's a no-brainer. It's that first right move to be able to understand how to grow your business. Quick break. Word Rock Drills, Elon, North Carolina. And the angle this time is downtime, because a machine that's stopped is a machine that's losing money, which is a whole finance conversation in one sentence. Word keeps thousands of parts in stock and guarantees in-stock part shipment within 24 hours. When you're drilling and something breaks, you're back working fast. As a Canadian I respect anyone who takes keeping working seriously because for four months of the year the ground where I'm from is harder than anything they're drilling in North Carolina and stopping is not an option.
(23:52 - 25:00)
That's your one. That's my one. Keep the equipment you already own in a drill rock. Four-week delivery, parts in 24 hours. Keep drilling, keep working. Same as a CFO keeps the money machine running. Downtime is the enemy in both. Word Rock Drills, WordRockDrills.com, 336-584-6700, and grab their free download: Seven questions you didn't know to ask your rock drill salesman. Very on brand for this show. You got the number again. Yeah, I don't know how it happens. Like, I don't ask for it. How do I get it, 'cause I write the ads. You go in there and change this and give me all the damage I do. Oh. Oh man, you're an ass, and that's on topic as well because I noticed in this week's podcast announcement, our email that went out, there is not a picture of me but there is a picture of a donkey.
(25:00 - 25:31)
You know what? Better looking too. We've already gotten a lot of fan mail. More popular. Excellent. So yeah, I've got β Smells better. There's another episode of Shrek being shot, then I've got an opportunity. Yeah, maybe. He can play it from behind. It's not the first time I've been caught on ass today by my family. All right, okay, let's keep rolling. Take us back to the $6 million owner.
(25:31 - 26:12)
He finally fills that seat. What changes? So, brought in the fractional CFO, $5,000 a month, right? Three months in, three things surfaced that three years of coaching never touched. One, the margin by line showed a huge story there. His biggest, proudest service line ran at 11% margin. Doesn't even cover overhead. Losing. But a smaller line he ignored ran at 38%. He's been selling the wrong thing. Second, and this is a call back to episode 12, our best customer, right?
(26:12 - 26:47)
This is the best customer episode coming home, right? The margin by line is exactly how you catch the trophy client or the trophy service line in this case. That's quietly costing you money. The CFO ran the report on the cadence and showed the owner what was actually going on, right? The second one, the 13-week cash flow showed a cash crunch coming every summer. Every summer the owner had to borrow against the line, right?
(26:47 - 27:21)
And it was predictable but also avoidable. Third, the owner wanted to make a $200,000 equipment purchase out of a gut feeling, right? The CFO pointed out that it would be a two year drag in order to recoup the funds. So instead of buying it outright, they decided to lease it, free up cash, and have some hires instead. The ceiling was a margin problem and not a mindset issue.
(27:21 - 28:01)
The coach couldn't see it because that's not what coaches do. CFOs see it because they look at the numbers, the number tells them the story, and then dive in there and get the context. So was the owner finally ready? Yeah. But what happened was that the person started getting from blurry vision of numbers to context to clarity. And that's the big thing. And then 18 months later, revenue was up 30%, right? Margin nearly doubled, and since they predicted the line of credit issue in the summertime they completely avoided it.
(28:01 - 28:31)
That's the big news, Jon, right? I won't even get into the exit and the enterprise value increase that happened but it was significant. Awesome, okay. So clearly method to the madness and very distinctively different, going back to the title of the episode, you know, from what a coach does. Let's speak directly to the business owners in the car listening right now. What is the one thing they do this week?
(28:31 - 29:37)
I know there's a lot of our customers that listen, so they've already done it. But you know, what is the one thing that the owners that don't have any financial, senior financial solution in place, what do they do? Don't hire anyone this week at all, right? We have to diagnose it. What's the problem? So ask yourself five questions, ask them honestly and answer honestly. Mine is, do you know what your cash position could be in the next 13 weeks, right? Have you run the numbers, right? Not your bank balance but what you're projecting to be your cash balance. Do you know your gross margin by service line, product, location, last month, this month, do you have a forecast for them? Does your scorecard have at least three financial KPIs: cash, Profit First, margin, AR overdue? When you have to make a big decision that costs a lot of real money, do you have someone that you can go to and actually model it
(29:37 - 30:10)
or is it your gut? And more importantly, in your accountability chart, who's in the finance seat? If it's you or your bookkeeper, you got an issue. Every no is a gap. Two or more nos and the CFO seat is empty. And that's when you have to start thinking about is, I've got a bookkeeper, I've got a coach, what are they helping me solve my problems? Are they going to help me solve those gaps?
(30:10 - 30:38)
And if the answer is no, then I think you know what your answer is. And if you can't afford a fractional CFO yet, you need to learn how to do a 13-week cash flow forecast. It can be rudimentary, it can be whatever it looks like to you. Take your AR, projected AR, your AP, when you're going to pay those things, take all your recurring bills, throw them in there, and take a look. That's going to help you.
(30:38 - 31:06)
That's the single most thing, best thing you can do this week, is if you don't have a 13-week cash flow forecast, is do that. Take the exercise to do that. And then I think also is you found the gap, you know it's there, book a conversation with a fractional CFO. Their role should be to give you free education. So pick their brain, see what they have to hear and see if they might be a potential solution now or when you have them funds to do that.
(31:06 - 31:40)
Okay, awesome. Great. Go do it, people. Alright, the takeaway, Ryan. Hit us with it. Takeaway. A coach helps you run faster. A CFO tells you whether you're running towards a cliff. Both matter. It doesn't matter what stage you're in, right? But if you try to keep buying more speed when you're missing the map, it doesn't really matter. Coach, bookkeeper, controller, CFO, they're all four different seats and three of them look backward.
(31:40 - 32:10)
Only the CFO looks forward. The 13-week cash flow, margin by line, scenario modeling, capital, the whole thing. Most owners think that seat is covered by their bookkeeper or their coach. It never is. They're not programmed that way. They have their own skill sets. They have their own lanes. You don't need to hire somebody full time at 180, 250, $500,000. You just need the seat filled. You need to be done right.
(32:10 - 32:43)
Try a fractional CFO if it's right for you. The ceiling you're hitting isn't about mindset. It's about margin. Stop buying motivation to push yourself through a wall made of math. Hire the person who can actually see the wall and get you through it. Perfect. Great. Good episode, Ryan. Thanks as always. A few more insults from you this round. Well, Jon, I can make up for that. I'm sure you will.
(32:43 - 33:21)
Until next episode, adios amigos, peace out. Every week. Until next time, stop burning the treadmill and start building something you can actually sell.