CFO advisory services are the key to building a firm that not only generates higher revenue but also sets you up for a profitable exit. In this episode, Michelle Weinstein sits down with former accountant-turned-entrepreneur Adam Lean, the co-founder of The CFO Project, who has helped countless firm owners shift from compliance work to high-value advisory services. Michelle and Adam break down the strategies that can help accountants price their services correctly, avoid burnout, and build a scalable, sellable firm. If you’ve ever wondered how to stop trading time for money and start building a firm that works for you, this episode is a must-listen.
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Episode 156 | Maximize Your Practice Value And Retire Early Using CFO Advisory Services With Adam Lean
Welcome to the show. We have a very special guest. Our special guest is the former accountant turn two-time entrepreneur who built, scaled, and sold two businesses. While helping other business owner, he realized his passion was teaching and providing tools to business owners to make them more money and have peace of mind. He runs the CFO Project which is a training company that trains professionals on how to offer outsourced CFO and business advisory services. Both of us are going to dive into a discussion on how to use CFO advisory services to retire early and easily sell your practice for maximum value in the future. Now, let’s get in to the show.
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I’m from the CFO Project. Michelle’s from the Abundant Accountant. We have a very special show for you today. A very special Master Class called how to use CFO advisory services to retire early and easily sell your practice for maximum value. Michelle, that’s a big topic.
It is a big topic. It’s an important one because Adam, I’ve heard from so many firm owners, “I want to move away from compliance. I feel like AI is going to take over my work.” I believe that advisory services and the especially CFO advisory is one of the most important things. I thought we would talk about what you and I have helped hundreds of firm owners with.
What A CFO Advisory Service Is
Also, talk about specifically what we’ve noticed and seen with working, with hundreds of firm owners and the difference between those that will be able to retire. Those that want to charge premium fees and work less so they can enjoy their best years and sell their firms in the future for a lot of money by having a valuable service like what you do. I thought maybe you could share first, Adam, just so everyone is clear on the definition. What is CFO advisory services?
That’s a good question. This is a question we get a lot because there’s a lot of definitions for CFO or fractional CFO or advisory coaching services out there. In our view, a CFO advisory service should be thought of like a product instead of a fractional service. Let me explain, a traditional fractional CFO service is where you perform tasks on behalf of your client. You’re literally their CFO but on a fractional basis, meaning they’re just not paying you full time. They’re paying you may be for ten-hours-worth of work or what not.
If you have four fractional clients, you have four part-time jobs. You’re doing fractional job in a different job for each year’s fractional clients. There’s a couple problem with that. One is, if a client has a problem and you’re their CFO. They don’t care that you have three other clients. They need you the whole week, for example.
The second is it’s hard to scale, which means you’re in this what we call the Account is Trap, where essentially trading time for money. It is not much different than being like a bookkeeper or a tax professional or CPA where you’re still trading time for money. It’s hard to scale because you can’t make more money unless you get more clients or raise your fees. It’s hard to raise your fees if you’re providing a commoditized type service. That’s fractional CFO.
We recommend that you provide, what we called Productized CFO services, where instead of doing it CFO work on behalf of the client, we’re guiding and advising the client on how to have a growing and successful business. We recommend you offer it in a productized fashioned much like toothpaste. You’re selling Colgate. They manufacture the formula once and then they create the formula once. They manufacture it multiple times or thousands of times a day because it’s a product. It’s scaling.
That’s how we need to think of CFO Services. We have one process, one system that we recommend that you use to help a client have a growing successful business. Repeat that same system for all your clients. You’re doing the same thing for every client with one end goal. You’re helping them have a growing a successful business. That’s how we define CFO advisory.
The differences.
Signs You Are Underpricing Services
That’s a good question. That was a good way to set this up because CFO advisory services are a great way to retire early and also easily sell your practice. We’ll get into that a little bit later on. Michelle, let me ask you. How does an account or bookkeeper or CFO know that they’re charging too little for their services? If they are charging too little, what are some of the impacts of underpricing your services that they may have not thought about that will hurt their ability to sell their practice?
That’s a great question. One of the first things you have to think about is, if you’re trying to get as many clients as possible, even if they’re not fit. They’re not a good fit. That’s probably red flag number one. I would say red flag number two, if you’re under charging for your work, or doing free work, and maybe you’re even over delivering to prove your value like you’re doing work and not even charging on a client for it.
Another red flag is like, you’re doing work and you’re like, “I’ll bill at later,” and you never bill it. It’s this uncharted territory. Another red flag is if you find yourself giving discounts and negotiating your fees just to get clients to say yes to you or to get them in the door. That’s a big one. Another red flag is, you send out a proposal or a quote and you’re waiting for a response. You’re always checking your engagement letter for like, “Are they going to sign it? They said they were going to look at it. They never looked at it. What’s happening?”
Another red flag, thought, too that’s a big problem is you do all this work upfront and then you don’t get paid up front. You do work first, then bill later and hope you get paid but then you look at your accounts receivable and you’re like, “Why is it so high?” That’s a problem. Another red flag is, if you spend a lot of time working in the business and you can’t even plan for your future. If you can’t plan for future, how are you going to retire? How are you going to take on CFO advisory and create this product as you said?
I honor most of you firm owners for working so much, but here’s honestly what’s going to happen if you don’t shift this perspective. You start to get exhausted or you might feel exhausted. You start to resent your business and the clients and the work that you’re doing. Even though you’re like, “I know they’d be great CFO advisory clients, or I know you’re doing more but I just have to do this work done because I’m at capacity. I’m so overworked. I’m so burned out. I go home every day exhausted.” You get frustrated and you snap at the people love.
CFO Advisory Services: Red flags arise when we operate from scarcity. Fear of rejection, lost clients, or insufficient income leads to compromises that ultimately burn us out.
If that’s happening, then you know that you have a definite pricing problem. That’s what happens when we start losing our goals and our dreams because we’re too exhausted. On the one hand, I love that you’re an incredibly hardworking firm owner but you’re doing this for so little money. Make sure to understand that there is a price that you are paying running you firm that way. It’s not the money. You’re taking a toll on your health, your family, and your loved ones.
I don’t want you to be one of those firm owners. That’s why I love what you do and what you help for firm owners learn how to offer in their firms. I see it time and time again were firm owners are working their tails off and they lose their wife, kids, the connections, and the joy for their life, firm, and their vitality.
I agree with you. I could say just because I have experienced this before when I’ve undercharged or experience them as red flags you’re talking about. It’s almost like when we do those things and the red flags come up. It’s like we’re operating from a scarcity mindset. We’re scared of the client saying no, or losing the client or not making enough money. We compromised and do all these things that we think are going to help. In the end, they end up burning us out.
I talked to firm owners every day that are burnt out. I don’t want to be your last stop before you throw in the towel and just go get a job somewhere because I know that you’re all meant for so much more and you have the potential. No one taught you how to price and how to have a sales system and a process. No one taught you that underpricing and undervaluing yourself was going to hurt you in the long run.
Who Can Offer CFO Advisory Services?
That’s what we have to change for the long-term success of your firm. Adam, what I’m curious of, and I hear it from firm owners that we talked to that want to sell higher value service or product as you said, CFO advisory. How would someone be qualified? Do they have to be a CPA, EA, a bookkeeper or an accountant? What are the qualifications to offer CFO advisory services in one’s firm?”
That’s a great question. It’s something we get a lot. The reason why we get that question a lot is because the term CFO or Chief Financial officers is such a big title. You hear the Fortune 500 companies have CFOs. Other none CFOs, especially in the accounting profession think, “There’s no way I could call myself a CFO. I’m not qualified to be the CFO.” We have to reframe first in our minds what a CFO advisory service is and then we have to be able to reframe that in a business owners mind. First, we have to reframe in our mind what is CFO advisory service is. As I said CFO advisory service is where we’re helping, guiding, and advising a business owner to have a growing a successful business.
You’re qualified to provide CFO advisory services once you’re able to do just that, guide business owner towards owning and growing a successful business. How do we measure success? How do we measure successful business? There’s one way to measure a successful business. Everybody reading is probably aware of this, or one should be aware this one way, the only definition of a successful business is one that is producing positive cashflow on a regular basis.
That’s a successful business. Once you’re able to guide a business owner to do just that to produce positive cashflow, which is a measurable metric. Once you’re to do that, then you’ll be qualified to offer CFO advisory services. I told somebody, I could be the basketball coach for a five year old basketball team and I’ll call myself a basketball coach. It doesn’t mean I’m qualified to be the Atlanta Hawks basketball coach. We’re at different levels, but the title is still the same.
The title CFO doesn’t mean anything. It means what you say it mean. Our target audience is small business owners which represent 99% of all businesses, by the way. If we go to them and say, “I will help you have a growing successful business.” They’re going to pay attention to what you have to say. Are you qualified to be Microsoft CFO? Probably not. Can you be qualified to be to CFO for Paul’s heating and air businesses going $950,000 a year? Yes, because they are fully different things. The CFO is just a name. That’s a good question. We get that a lot. I’m sure we’ll talk about imposter syndrome later on but it goes hand in hand with thinking, “I can’t do this.”
The Technical Side Of CFO Advisory
That’s what holds most people back. They’re like, “I’ll just do this basic bookkeeping. I’m not qualified. I started. I just got out of a job. I started my firm. Who’s going to hire me?” It has nothing to do with that, as you said it. I’m just curious. If you can talk just a little bit, Adam, on what you teach from the technical side of being and offering CFO advisory when people come to work with you?
It’s very simple. Our North Star is helping our client have a growing and successful business. It’s defined as positive cashflow. Cashflow is a lagging indicator. It tells you what happened in the past. We need to be able to influence that number in the future. What are all the things that drive cashflow in a business? Most things like leads, converting those leads, making the sale, and cost of sale, and all the expenses are running your business, inventory levels, accounts receivable, and payable levels.
All those things influence cashflow like loans, debt, and how much you withdraw from your business. All of that impacts cashflow, so we have to be able to understand where all the cash is moving in a business. Our job is to help guide or suggest things that our clients can do every month to improve the needle, to move the needle on the most important things that a business can do to improve their cashflow.
For example, I had a client one time that owned a restoration company. If a house floods, they come in and mitigate and explore the house. They thought they had a sales problem, which they did. They thought the answer to their sales problem was getting more leads, so they did a ton of advertising. No lie. They had a billboard at the local a baseball stadium. They had a ton of leads coming in. The problem isn’t leads.
Their problem was they weren’t converting the leads to clients, to paying clients. When they got a lead, it came in for somebody’s house that caught on fire in the middle of the night. The insurance company called or whatever. They would send a project manager out. Not a salesperson. A project manager who is not a sales focus person.
It’s like sitting in the worst possible person to go talk to somebody who’s in the middle of this breast full of event who’s trying to decide, “Should I go with this company to do $20,000 worth the restoration or this company?” I said, “Let’s focus on improving the conversion rate.” They ended up hiring sales people to go out and do this. Their conversion rates skyrocketed which means, they were able to reduce lead flow, which means they saved on marketing costs and advertising costs.
They ended up stopping that billboard all because it dramatically offset the cost of the salespeople and their revenue went up, which is one of the driver’s cashflows revenue. The route driver of revenue was conversion rate. That’s just one example of how we have to approach thinking about improving a business’s positive cashflow.
A CFO advisory service should be thought of as a product instead of a fractional service. Share on XIt goes the same for firm owners because so many firm owners don’t have a sales system. They think they need more leads and why they don’t want to get more leads is the wrong thing to do. It’s this exact story you just shared. Especially if you’re paying for advertising and you’re not knowing how to sell. In this case, the project managers were taking on that role. They were just burning through cash. Their cashflow is going to be in the negative. What’s so interesting, I had a client and I’ll share this testimonial with you.
Her name is Jessica. She did our eight-weeks sales mastery program. When I met her, she was feeling exhausted and defeated. She had taken organic basic marketing course. She was generating leads. She had a lot of sales calls and was doing bookkeeping. To go along with what you said with this restoration company, she was improvising and winging her whole process with her leads and missed out on $30,000. Her cashflow was in the toilet.
Worse than that, she wasted four months of her time on generating leads and having no revenue. What you’re sharing is so crucial. She now says she’s so happy she worked with me. She posted in her Facebook group and I have to read it to you. These prices of what she’s doing for cleanup are very similar to the fees that you recommend for advisory. Weeks ago, she had two paid diagnostic reviews at $500 each, where previously she was doing it for free before.
She closed at $9,000 cleanup project and another $10,000 with $750 a month for the ongoing services after that. That is because she focused on conversions versus just trying to get leads. The same as your client, the leads isn’t the problem. Getting more leads is like going to Vegas and putting money in a slot machine and helping that you’re going to get a return. Where when you put the salespeople in place like the restoration company did, or you learn it for your own firm. You start to play more of a game of poker where you have a better sales system in place. You can know the other people’s cards.
You can read the game and have strategy, versus just a free-for-all, which are like slot machines. You know what cards you have in your hand. You can read the situation. You can get a feel for what’s going on, then you can use a proven structure to follow with a simple sales process. That’s what you’re saying. The restoration company had a full 180 turnaround because it doesn’t have to be a gamble anymore.
That was just with that particularly company. There could be another client that has a lead problem, but not a sales problem. It depends. The point is, we as CFO advisors have to be able to look at the whole big picture and understand what’s driving cashflow and then make a plan to go from there.
That’s what you focus on in the program. I love that.
Understanding Optimal Capacity In Firms
Michelle, you have this phrase called optimal capacity. What is that? How can firm owners, accounting and bookkeeping firm owners use it to essentially work less?
It goes back to optimal capacity. Think about it for value over volume. The more value you deliver, the less volume you need to have, where most people when I first meet them. Adam, I say to every single firm owner, “What’s the biggest challenge with your sales in your firm?” “I need more leads.” When in reality, that’s not the case because you’re never going to achieve financial freedom by grinding away working with low value clients and doing a ton of work.
It is the recipe for disaster. That’s when you start even discounting your services and doing free work typically. The maximum capacity is never the optimal capacity. Remember that. If you feel you’re at maximum capacity, you are already too late on doing the whole thing wrong. What we want to do is have optimal capacity, which I’ve done an episode just on this topic. When you go on an airplane, Adam, on an international flight, there’s first class, business class, the premium economy, and economy.
You want to think about your firm from a point of view that your optimal capacity would be being at maybe premium economy. There’s all the other space for room for high-value clients because I want to fill up my business with business class and first-class type clients. If you get to maximum capacity where you’re filled up and you’re on like a spirit airline plane where the whole thing is cheap seats, small leg room, and terrible service, then you are a maximum capacity. You’re running like spirit airlines. Where I want to be running like Emirates, where my maximum capacity is all first-class and business class. There’s no one in economy.
Your analogy makes sense, because both have to fly the plane. If you’re going to fly the plane, you might as well fly it and make more money.
They’re all configured differently with the same size plane. Look at any triple seven or whatever it is. It doesn’t matter the airlines or look at JetBlue, even just in the US. JetBlue has 6 or 8 mid-seats that’s laid down beds. Every time I go, there’s maybe only one or two seats to buy because they’re going to maximize that because they’re making probably 10X per seat, versus all the other seats. Think about your firm and how you want to fly.
I want to have JetBlue’s picture. Instead of my mid seats being 8 or 10, I want that to be like 20 and 30 and have just a little bit in the back. I don’t even want to fill those seats. I always want to be an optimal capacity to have room for VIPs. That’s how you have to think about it like Jessica. She’s turned down so much business.
When she was in our eight weeks sales mastery course, she was meeting with people just to get practice because I said “Do it for practice because the right ones will come. We need to keep space available for those right ones.” She wanted big time cleanup projects. She made $19,000 within a two-week period, plus the firm commitment on the $750 a month for the year, because she was that below optimal capacity. When we are coming from a place of scarcity and fear we go, “I need to take on everyone. I don’t know where my next paycheck or my next client is going to come from.” I call that chasing money. If you want to continue to chase money or you want to create value over volume? Always be at optimal.
The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It
That’s where you get into trouble by taking any client that comes regardless of the price.
All day long it gets you tons of trouble and your bank account is suffering. You’re stress is suffering. Your family and kids are suffering. You’re miserable, angry, snapping up people, and grumpy all the time. You can either be at maximum capacity and do it that way or you can start reconfiguring your firm like an airplane and draw it out and start writing seats in there. Start filling the seats as if you were feeling like the NBA team.
I used to be in like the food business and we worked with pro sports. They all have private planes. The same plane as all the other airlines. Delta has a fleet of 30 planes for different pro teams. They reconfigure the plane, so every single seat on the plane is first class seat. The same plane, it just has different amount of seat. They’re running at optimal capacity because they’re bringing tall people and different size people. The company and the basketball team are paying a premium versus Delta putting in economy seats or spirit airlines seats where your knee’s touch the seat in front of you and the tray tables half the size.
You get to choose. It’s your firm. What I’m saying is that, if you create these seats and stick to it, things will change. That’s how you can retire earlier. That’s how you can create yourself pension. That’s how you can create an exit strategy to sell your firm for a high multiple in the future. Those are all possible, but we have to do it right from the beginning. If you’ve done it wrong, you can make these changes. It is possible to change.
That makes sense.
How To Price CFO Advisory Services
Talking about Jessica and the prices that she’s charged for cleanup and the latest wins celebration that got posted in our Facebook group. You recommend a few thousand a month for CFO advisory. Can you talk a little bit about that? How do you recommend the prices that people charge for this service? I’m sure a lot of firm owners are like, “Michelle, how did Jessica sell $90,00c cleanup and $10,000?” By the way, she got paid up front. It is possible. You just have to have a different way on how to enroll clients and how to communicate to them. Maybe you can talk a little bit about that and how the clients agreed to those kinds of fees.
We have to look at this from the client standpoint, from the business owner standpoint in order to think about pricing. We can’t start with what we want. We have to start with what the client, how to present this to the client, and get what they want because they’re the ones paying. The business owner is running their business because they want something that their business can provide for them, which is why they got into business in the first place. All of us that own businesses are similar. We all got business for certain a reason.
The reason usually has something to do with control. Either we want control of our time and/or control of money. These business owners, when they start their business, things look great but then eventually, inevitably business owners run into problems. The sweet spot of a business that we recommend that you work with is a business tool between a half a million and $5 million in a revenue. These are businesses that are already up and running.
What usually happens when a business gets to between $500,000 and a million in revenue, the business owner is still half operating with the mindset that they are running the show. They’re running everything, but the stage is that much bigger. They flying blind. They’re running their business like a chicken with the hair cut off. They can’t take a vacation where their business falling apart because you’re still trying to run everything. They don’t know what’s going on. To make matters worse, they feel something is wrong in their business but they don’t know what it is because they’re not financial people.
Meanwhile, all these accountants and bookkeepers who are supposed to be the people that business owners can turn to, all they care about is recording the past correctly. Most business owners would rather, the financial person in their life, help them have a better future more than making sure that the past is recorded correctly.
They must know the need for having proper taxes and bookkeeping. That’s a need, but they had to choose. They’ve rather, you, the financial professional in their life who already understands their business and their numbers to say, “Here’s the five things I think you need to do in the next couple of months in order to make more money.” They would love that conversation. Why don’t we get paid for it?
If we go to a client and say, “I offer CFO advisory services where my job is to help you have a growing successful business.” I don’t recommend you do it this way. There’s an entire sales process and you have one as well. The series of meetings, your communication to the prospect is, “I’m going to offer a service where my job is to help you not only not fail but to make way more money so you can have less stress and gain back the control that you wanted in your business.”
It’s only $2,000 a month or $3,000 a month or $5,000 a month. We recommend you charge a flat fee per month. Give to the client the fee, but when you present it to the client, it has to be presented in a way that it’s a no-brainer to say yes to. If your leg is broken and you go to the doctor. The doctor says, “I can fix it now.” You’re not going to say, “How much is it going to cost?” No, you’re going to want them to fix it. That’s how we need to approach this.
As business owners, we have to remember their business is not a hobby for them. It’s their livelihood. It has to work. If you come to them and say, “$2,000 a month.” It has to be presented in such a way that’s peanuts. Think about, a business doing a million dollars annual revenue that’s paying a part-time low skilled laborer $24,000 or more a year. You’re not even charging that, sometimes, in many cases, but $40,000 a lot.
It’s all about how you present it. $2,000 may seem like a lot to you, but it’s not to a business owner making $5 million in annual revenue. It’s not a lot to them. Especially, when we remember that their business has to work. You are coming with the solution to their business working, which is generating positive cashflow. It’s the only solution to it. Why present it in a way that makes it seem like this is an expense? That’s how we get a client to agree to a $2,000, or $3,000, or $5,000 a month, for CFO advisory service. It’s all about perspective presence.
I call that the art of enrollment, so we go much deeper into how to have that conversation.
I just touched the surface. I wouldn’t even recommend talking about pricing on the first time you meet a prospect. That’s the last thing you want to talk about, but you’re right, there’s a whole process. The spirit of all of that is just to get the client to understand that your job, whether you call yourself a CFO, an accountant or profit guru, it doesn’t matter. As long as you can connect the dots that your service will help them get what they want and pay you whatever you command.
The only definition of a successful business is one that is producing positive cash flow on a regular basis. Share on XI’m sure there’s firm owners who are skeptical, which I would know that’s the case, especially the CPAs. You’re taught to be a skeptic, but trust me when I tell you can get the right systems in place. You can have the right strategies to charge more and happily have people pay you to solve their problems like Adam said, if you got a broken knee. You got to get it fixed.
There’s just a couple of shifts that you have to understand in order to command those premium prices of $2,000, or $3,000 a month. Once you understand the right way on how to do this and you have the right system in place, that makes a lot easier. Some people tell you, “Raise your prices,” and then you can’t get a client. They don’t know how to set it up properly and that’s the problem. Intuitively, you know there’s more to than just doubling your fees, their prices. Otherwise, you wouldn’t be here reading anyway because you probably are undercharging.
It’s like telling a depressed person, “Don’t be depressed.” When do you with that?
That’s what we do here at the show, too. We help firm owners learn how to command premium prices and how people will pay you without any hesitation. Be it if you’re doing CFO advisory or bookkeeping. The vehicle on how you’re going to fix the problem, which is that’s the vehicle like the doctor’s vehicles in the surgery. They don’t go and tell you all the details in how they’re going to do the surgery. They tell you that after they fix it knee. The details in these conversations doesn’t matter.
I 100% agree with you. In my opinion, the number one problem with accountants is that they want to talk like accountants to non-accounting people, which represents 99.9% of people on Earth. They want to talk like accountants and then there are shocked that these people, the 99% of people on earth, don’t respond in a way that they wanted to.
That’s true.
Nobody wants to talk accounting so we can’t talk accountants to non-accountants. You have to talk like a human. Every car commercial that I’ve ever seen, not one of them has mentioned the type of material that the engine paid up. No. The car commercials are like these very good-looking people driving with their dog up to this very nice house in the snow. They’re creating this emotion and feel because that’s what gets you to buy a car. Not a bunch of car engineers talking about the different specs of a car.
People buy, Adam, based on emotions and feelings. They don’t buy based on price.
Why Firm Owners Need A Sales System
Michelle, you recommended that firm owners need a sales system before they start getting leads. Is that true? Why?
It’s like what we touched on earlier because many firm owners that felt that focusing on getting leads was the first thing they should do, ended up at Jessica’s position. Pretty much every person I meet. What I found is that most firm owners think they need to spend money on marketing first when they have a sales conversion issue at the course. If you’re starting out, you’re in a job, or have a firm on the side. You have to fix and create a sales system and a sales process in your firm because out of a proper way to convert the leads, when you get them. You’re going to be putting money in a slot machine in Vegas. End of story.
You can hope to win big one day. It’s just not probably going to happen. Maybe you can choose to play a game like Poker where you have more control. That is having a better sales system in place or if you’re new and don’t have one. It’s creating a step-by-step sales system in place in your business. You know what cards you have in your hand. You’re able to read the situation. You’re understanding our people visual auditory kinesthetic. I teach you all these kinds of things and you use the proven step by step structure to follow with the sales process in place that you create. It doesn’t have to be a gamble anymore. You don’t have to stick money in a slot machine and hope for the best.
That’s very stressful.
Literally, it will be like Jessica. Instead of losing $30,000 a month and wasting four months on marketing. She gained two new clients totaling, $19,000 and a two-week period or maybe it was one week and a $750 month fee client on a twelve months engagement. Once you have the right strategy for the sales psychology, you will have a high ROI once you got to marketing. It is important that you understand that, too.
Marketing is doing lead regeneration, getting people interested, and listening to what you have to say. However, when you create your sales process, you are going to learn the language and understanding, feelings, and emotions that people may be hearing in or to even have their ears perk up like a dog. You have to think about it, when you are going to say like the word TREAT to your dog. Their ears are picking up.
That is like marketing. The dog eat it, then that becomes the sales process because they’re converting into now taking in that TREAT. My dog’s here, so she’ll probably go crazy. You have to have that foundation in place before you do any marketing. I had a client on my group calls, say, “Michelle, I have a question about leads.” I’m like, “You’re only three weeks in. We’re not going to discuss that here. When you’re 100% done with my class, then we can have a discussion about leads.” You want to do Facebook Ads, LinkedIn marketing, Google SEO, email marketing, leak management capture and organic Facebook marketing.
There’s a million different ways and a lot of different companies that help you based on what you need. First, you have to identify all of the sales elements in your firm, which is how to handle objections, how to understand your ideal client, what keeps them up at night, how to have the enrollment conversation with them, and how to ask really powerful questions to understand and get to the pain. That segue into what I call the three Ps, Adam, which I think most firm owners need to clearly understand in order to create their sales process, which is, 1) The problem. 2) Your pricing. 3) You’re process.
If you want to sell your business or retire early, you must turn your business into a cash flow machine because every business on Earth is sold based on how much cash it is producing. Share on XIf you do not understand your client problem, you can’t sell. If you don’t know how to price, you cannot meet with clients and start selling your services. If you don’t have a process and you’re winging it and shooting from the hip, then you’re going to waste a lot of time, money, and effort and get frustrated. You have to have the three Ps in place before you meet a client.
I agree with you 100%. Almost no client that I’ve worked with said, “My problem is I’m not generating positive cash flow in a regular basis.”
No, they never say that.
Improving Firm Value For Retirement
We know that’s what they need, but what they want is whatever problem they’re trying to solve, so I 100% agree with you. Let’s shift gears and talk about how an accounting firm, bookkeeper firm owner or CFO firm owner can improve the value of their business so that either they can retire early and/or they could sell their business and it’s worth something.
How can they do that by leveraging CFO advisory? What would you say?
Using CFO advisory services. We’ve established a CFO services are a high-ticket item that you make way more money and less time, but you have to do one thing if you want to sell your business and/or retire early. You have to do one thing. This is not exclusive to accounting businesses. This is any business on earth that wants to improve its value so they can sell.
You have to turn your business into a cashflow machine. Why? It’s because every business on earth is sold based on how much cash it’s producing. Buyers of businesses are buying cashflow streams, period. They’re not buying people. In other words, if your business is 100% or even 30% relies on you. You don’t come with the sale of the business. Therefore, your valuation is going to come down. Buyers of businesses or buying cashflow streams that are not relying on individual people.
To leverage, CFO advisory services, we first need to sell something that is scalable and that’s why we recommend a productized service versus a fractional. Fractional services are jobs. You want to sell a service that’s scalable, meaning, you can train people on your team to do this. It’s a system. It’s scalable. Somebody like Colgate, when they manufacture toothpaste, they don’t have to get highly skilled people to come in manufacturer each tube of toothpaste. No.
They plug it in and it’s scalable. That’s how we need to think of this. You can have people in your team, get clients, sell the clients, get leads, sell those leads, and provide the CFO service. All of that are systems base. You could train other people. In that way, you could you can have these systems running in your business that don’t necessarily rely on you, but they’re still making money. You go to a buyer and say, “This is the system that you’re buying. It produces this much cashflow each month and it doesn’t require me to operate these systems.” That’s how you leverage CFO services.
As you said, it’s important to have the firm run on autopilot because it can be scaled quickly then and easily and it doesn’t have to be with you working more hours than burning yourself out. That’s the beautiful thing of offering CFO advisory.
There’s a book that I highly recommend anybody read, if you haven’t already. It’s called the E-Myth. Have you read it?
I have, with the woman who was the baker.
That’s right. She’s a baker. She wanted to start a pie baking business and she did. She started a pie baking but she found herself being what the author calls the Chief Technician. You’re the one making the pies, so you can’t sell your business. Instead, she ended up writing the book. Spoiler alert. She ended hiring a team to work those systems. Instead of being the technician, she became the entrepreneur. First, she became the manager of technicians, then she can entrepreneur managers. The point is, it’s same with bookkeeping, accounting, and CFO Services. You cannot continue being the technician if you expect to sell your business and will retire early.
It’s so true because you have to figure out a way and what we’re talking about to create time and financial freedom. If you can create it now, then that’s a sellable asset in the future. You have to wait till retirement either. You can step back, work part-time, and take the cashflow out of your business and pay dividends to yourself. Enjoy your friends and family in your life. You can do all those things now and create a plan for selling the firm in the future all at the same time.
How To Set Up A Firm For Sale
That’s what my question, what do you recommend that firm owners do to set themselves up to prove their value and to sell their business?
Adam, you don’t know the answer? You have to create a sales process. You have to implement a system for the three Ps, which to reiterate is understand the client’s problem. The problem is the first P. Pricing is the second P. the third P is the process. Once you do that, you can eliminate 90% of the time-wasting strategies that you probably do on a daily basis. You can have the confidence that you’ve been lacking because your confidence like Jessica’s will go through the roof because you’re going to understand your value.
CFO Advisory Services: Business owners prefer financial or life advisors who help them build a better future, instead of just keeping accurate records.
You’ll know your pricing. You’ll be able to step into the firm owner that you were meant to be. That’s probably one of the most powerful things. It’s just not winging it and not sending out proposals and quotes because you don’t have to worry if you’re going to retire. When you’re ready, you’ll have a system that can be easily handed off to anyone who wants to buy the firm from you in the future. That’s what’s so powerful about this.
If somebody’s interested in learning more about sales training, where they go?
You can go to the AbundantCall.com. As simple as this is like in our conversation, there’s a million ways to mess it up. I always say, “Why try to figure out the answers when someone like me can hand them to you?” I have helped hundreds of firm owners quickly grow and scale their firm. Some of them have sold. They’ve eliminated all of their accounts receivable. They’re all getting paid up front and created the systems to turn their firm into positive cashflow and a sellable asset, if that’s their choice on the exit strategy.
It’s all possible. You can have the financial freedom now that you want. You can go on vacation. You don’t have to be up against tax deadlines anymore. You can implement the things that we’re talking about and put in CFO advisory as one of the products that you offer in your firm. My team and I have set aside time to speak to some of you. You do have to own a firm or you can be in a job, but you have to have a firm on the side and your goal needs to be to quit your job.
If that’s you, then head on over to the AbundantCall.com. We’d love to speak to some of you. There is an application to fill out once you book your spot. That helps us get to know you a little bit before the call. It’s for anyone who’s serious about building a scalable firm and saving for retirement and not being cash negative but being cash positive like we were talking about. We spend about an hour together on the phone and we’ll go through what’s working in your firm, what’s not, and what you’ve tried in the past. Also, what strategies you might be missing. The AbundantCall.com is where you go.
I highly recommend you check that out. If anybody is interested in learning how to be a CFO advisor, there are a ton of tools and resources at TheCFOProject.com. Check it out. Michelle, it’s has been fantastic.
This is great. I hope many firm owners can sell their firm one day soon. For those of you that want to chat with us, we look forward to connecting because what Adam has is amazing. I also hear a lot of times, Adam, “How do I get my current clients to do CFO advisory when I’ve been doing it? I just haven’t been charging them. I’ve been doing it for free.” That’s the exact thing when we’re upselling to our clients. That’s learning how to enroll our clients at premium prices and having the confidence that you don’t have. We cover that as well.
I highly recommend that you don’t give away services for free. You need a system to upload.
Thank you for this awesome conversation and we’ll do it again soon.
Sounds good. Thank you, everybody for reading.
Important Links
- Adam Lean on LinkedIn
- The CFO Project
- The Abundant Accountant
- The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It
About Adam Lean
Adam Lean is a former accountant turned 2-time entrepreneur who built, scaled, and sold two businesses. While helping other business owners, he realized his passion was teaching and providing tools to business owners to help them make more money and have a peace-of-mind. He currently runs The CFO Project – a training company that trains financial professionals on how to offer an outsourced CFO and business advisory service.
