0:04

Hello and

0:04

welcome to a another exciting

0:07

episode of Bridge the Gap where

0:07

we're balancing life through

0:11

health, wealth, business and

0:11

relationships.

0:17

Alright, hello and welcome to

0:17

the show. My name is Colton

0:20

Cockerell. And with me, as

0:20

always, I have my lovely co

0:23

host, Miss Trisha Stetzel.

0:26

Hey guys not

0:26

have good Colton. How are you

0:29

doing today?

0:30

Good. It's a beautiful day.

0:33

It is a

0:33

beautiful day. Listen, I am so

0:36

excited about being here today.

0:36

So that is the first show of our

0:39

second month in the fifth

0:39

season. And this month, we're

0:44

going to be focused on financial

0:44

wellness. And today we're going

0:48

to discuss the importance of a

0:48

chief financial officer. I know

0:51

some of you are gonna blow your

0:51

minds today, right? But who

0:55

better to talk about all things

0:55

CFO and Danielle Hendon, owner

0:59

of four corners CFO. Danielle,

0:59

welcome to the show.

1:02

Thank you for

1:02

having me. I'm really excited to

1:04

be here today.

1:05

Yes, and

1:05

before we dive in, we do have to

1:09

give a shout out to our sponsor

1:09

for today's show. And that is

1:12

Sharer McKinley Group, LLC. So

1:12

we're gonna jump right on in. So

1:18

Danielle, we do not mess around,

1:18

we just come out just swinging.

1:20

Okay, so get ready, it's gonna

1:20

be great. So first question for

1:23

you. And I'm sure this is a

1:23

question you get asked all the

1:26

time. But what are key metrics

1:26

that people should look for? Or

1:31

that CFO is necessarily what

1:31

they look for whenever they're

1:34

evaluating a company.

1:36

So as a

1:36

business owner, I'm going to

1:38

tell everyone, the first metric

1:38

you need to look at is profit,

1:42

otherwise known to some as net

1:42

income, there's a little bit of

1:44

a difference between the two.

1:44

But your profit is what you're

1:48

putting in your pocket. And

1:48

that's the number that matters

1:50

the most.

1:51

I think I would probably have to agree with that.

1:55

Other than

1:55

that, with kind of my background

1:58

in audit and stuff, I would tell

1:58

you that the balance sheet is a

2:01

really important area a lot of

2:01

people don't look at a lot of

2:05

business owners and accountants

2:05

even are focused on your income

2:08

statement and what revenue and

2:08

expenses are doing. But your

2:12

income statements usually only

2:12

as good as your balance sheet is

2:15

accurate. And making sure that

2:15

those balance sheet numbers

2:18

actually tie out to real data is

2:18

important. So you're making

2:21

decisions on reliable

2:21

information?

2:24

No, I used to think the balance sheet was kind of like, oh, it's it's a cool

2:26

form to have income statement.

2:28

Yeah. But yeah, I can understand

2:28

how the balance sheet is very

2:32

important. Can you kind of go

2:32

into more detail, what makes the

2:34

balance sheet so important, and

2:34

again, the accuracy of it

2:37

depending or how it how it

2:37

affects, there we go, your

2:42

income statement.

2:44

So your easiest

2:44

reference, most of us, I'm going

2:48

to date myself here, if you've

2:48

ever balanced a checkbook, you

2:51

know, kind of what a bank

2:51

reconciliation is going to be

2:54

like, and making sure when

2:54

you're looking at your bank

2:57

statement that everything that

2:57

came through, actually got

3:00

recorded. That's where that

3:00

balance sheet check comes in is,

3:05

hey, I got $1,000 in cash, it

3:05

went into my bank account, oh,

3:09

man, I didn't make an entry, it

3:09

should have gone to my income

3:11

statement. And that's really the

3:11

easiest way to explain to

3:15

somebody what a balance sheet

3:15

reconciliations going to do.

3:18

And I can see how that plays into the income statement. Trisha, I just have

3:20

to what that made me think of

3:22

when I got married, it was kind

3:22

of a a adjustment with my wife

3:26

because every time my

3:26

notification, my credit card,

3:29

get swiped comes in, I have to

3:29

log it into my phone. And so

3:32

whenever she got the credit card

3:32

to and I got all of her charges,

3:35

I said, Hey, just wanted to you

3:35

know, I saw that there was a

3:37

purchase, say like, you know,

3:37

just just so I can track. I

3:40

mean, I don't care, but just so

3:40

I can track it. And she got

3:43

she's she's used to it now, but

3:43

she was like caught off guard,

3:46

like why do I have to report

3:46

everything to you? It was it was

3:49

pretty funny, but sorry. I'll

3:49

push it. Next question.

3:53

My gosh, Colton.

3:53

Come on. What a way to start the

3:58

marriage. What away? Oh,

4:02

I know. So I've got two geeky

4:02

number lovers on the phone or on

4:08

the podcast today. I love you

4:08

both very much. But as you both

4:12

know, we have a lot of business

4:12

owners that listen to our show,

4:15

right? So yes, balance sheets

4:15

and numbers and p&l statements

4:21

and all of those things.

4:21

Danielle, how do you I know you

4:24

come from a corporate

4:24

background, but you now own a

4:27

small business as a CFO, how do

4:27

we tie all of this together?

4:31

So I like to

4:31

give people homework, which

4:35

Trisha I'm sure you're really

4:35

familiar with giving people

4:37

homework. Um, the easiest thing

4:37

that I would tell business

4:41

owners to do that kind of ties

4:41

this together is to set up a

4:45

bank account that is for your

4:45

business profits, and put 1%

4:51

just 1% of whatever revenue

4:51

you're bringing in over into

4:54

that account. And I promise

4:54

you'll figure out how to pay the

4:57

rest of the bills.

5:00

That's a that's a good word.

5:02

Yeah, like that.

5:04

You can toy just

5:05

so simple. Yes.

5:05

Well, and the one thing, the one

5:09

thing, not the one thing, but

5:09

one of the things that I love

5:11

about what Danielle does is

5:11

she's bringing big corporate

5:14

experience to small businesses.

5:14

And I think that is super

5:17

important because most of us

5:17

business owners, minus you,

5:20

Colton and Danielle, don't love

5:20

numbers, right? It is just one

5:24

of those things. We're not good

5:24

at it, we get into something

5:27

else. Because we don't

5:27

necessarily know how, right and

5:31

having access to somebody like

5:31

you, Danielle, I think is really

5:34

important. So as I look at i

5:34

Yes, I love profit, I want to

5:37

put that 1% into my bank

5:37

account. I think that's amazing.

5:40

But as I'm looking across my

5:40

business, are there particular

5:43

areas, Danielle, that you would

5:43

suggest we cut costs.

5:50

Cost cutting is

5:50

tricky. You want to look at the

5:54

costs that are valuable to you.

5:54

And that's going to be different

5:58

for everybody. It's a good

5:58

expense, if it's adding value to

6:01

your business. Being a woman in

6:01

business, sometimes our expenses

6:06

can be a little frivolous and

6:06

fun. And you really have to take

6:10

a step back and look at is that

6:10

really helping me make more

6:14

money? With the caveat that I'm

6:14

never going to be the person

6:17

that says, hey, you need to go

6:17

fire this person to cut costs,

6:20

there is a balance, right? And

6:20

you don't want to be so

6:24

stringent on your cost that

6:24

you're impacting the ability for

6:27

your business to grow and your livelihood.

6:30

That's yeah,

6:30

that's I'm glad you clarified

6:32

that. That's probably probably.

6:32

So let me ask you this, because

6:37

I think this is a very important

6:37

question. And some people

6:39

probably don't even understand that the you know the difference, or really, you know,

6:41

how scale works. But what is the

6:45

difference between growth and

6:45

scale?

6:49

I would come back to a word I said a lot today profits, your growth is

6:51

going to be incorporated with

6:56

share price. But for small

6:56

business owners, that's the

6:59

profit. That's your net income.

6:59

Scaling can happen in a variety

7:02

of ways. But if you're scaling a

7:02

business to, I don't know,

7:07

100,000 in revenue, but you're

7:07

also spending 95,000 In expense

7:12

to do it. You're not really

7:12

growing your business in a way

7:15

that's helping you.

7:17

That's yeah, and that's I think that's really important. You hear all the time

7:19

scalability, scalability, but

7:22

again, cost conscious while

7:22

you're scaling. Absolutely.

7:27

So Danielle, if

7:27

I decide that I want to bring

7:31

CFO into my business as a small

7:31

business owner? What qualities

7:36

should I be looking for? What

7:36

questions should I ask?

7:39

You would you

7:39

want to find somebody that is

7:42

detail oriented? And in my

7:42

personal opinion, you want

7:45

someone that's passionate about

7:45

those numbers, like you said,

7:48

most business owners don't want

7:48

to get into the details of

7:51

numbers. And you want someone

7:51

that really loves it. And I'll

7:53

tell you being one myself, it's

7:53

it's a puzzle, it's putting

7:57

together that puzzle and you get

7:57

that final piece in place.

8:00

That's the person you want that

8:00

feels that way about your

8:03

numbers, and is going to help

8:03

you not just understand the

8:06

puzzle, but put it all together.

8:09

Oh, no, that

8:09

that makes plenty of sense. And

8:11

when does it make sense? Because

8:11

we have a lot of small

8:13

businesses who are probably listening in they're like, You know what I you know, I want to

8:15

see what you're saying. And I

8:17

need to do that. I just can't

8:17

really afford that. So when does

8:20

it make sense to bring on a CFO?

8:24

There's actually a variety of options, I will tell you there are CFOs out

8:25

there that work in group

8:28

membership program, ways that

8:28

you can kind of DIY yourself

8:32

through some of this CFO work if

8:32

you're interested in getting in

8:36

the numbers. Otherwise, I would

8:36

say start with a really great

8:39

bookkeeper, every business can

8:39

benefit from a really great

8:42

bookkeeper. And then when you

8:42

start getting close to those six

8:45

figures in revenue, that's where

8:45

I would start looking into a

8:47

CFO.

8:49

That's actually very, I mean that that's a great roadmap there um,

8:50

I've never thought about doing

8:53

the bookkeeper and because

8:53

again, balance sheet right. So

8:55

the talent talent tight, tying

8:55

that back interest. I can't talk

9:00

today. I've been talking too much, I can't think straight. Now. That's great. So then

9:02

bookkeeper. When you get to six

9:04

figures, that's whenever you

9:04

start to actually look at a CFO

9:06

and come in, and probably you

9:06

can immediately help you with

9:09

scale and growth just based on

9:09

key indicators and metrics. I

9:13

love that.

9:15

So Danielle, can

9:15

you define thought, Oh, I'm

9:17

sorry. Can you define the

9:17

difference between what you do

9:21

what my CPA does and what my

9:21

bookkeeper does?

9:25

Short and sweet

9:25

version, a bookkeeper is going

9:28

to take the information you give

9:28

them and organize it in a way

9:31

that you can look at in

9:31

financial statements. The

9:35

information they give back to

9:35

you is only as good as what you

9:37

give to them. Your CPA is

9:37

usually tax oriented. They do a

9:42

lot of strategizing. A virtual

9:42

CFO or a fractional CFO is going

9:47

to step in and there's a little

9:47

overlap. We do a little

9:49

organizing, we do some balance

9:49

sheet wrecks that are similar to

9:52

bookkeepers. And we can give you

9:52

a little bit of tax strategy

9:55

normally based on our

9:55

background, but we don't get

9:58

into the details. The CFO is

9:58

about gonna come in and help you

10:00

really understand what the

10:00

numbers from the bookkeeper and

10:03

the compliance from the tax

10:03

side? How do you understand what

10:07

those numbers mean? And where

10:07

they're going and what they do?

10:10

The why is what drives your

10:10

business forward.

10:14

And so what

10:14

what, I guess really, I'm trying

10:17

to think how I word this, so

10:17

forgive me, but how does the CFO

10:21

help with the overall growth?

10:21

Again, I know we've discussed

10:24

already, but like, bringing

10:24

somebody on, you know, whether

10:28

it's, you know, a virtual or, you know, you actually have a physical person, you're paying

10:29

them a salary. I guess, how did

10:33

how does that help with my growth?

10:36

So, you know,

10:36

as a business owner, where you

10:38

want your business to go, I bet

10:38

I could ask anybody, and they

10:40

can tell me what their goals

10:40

are. A CFO is going to help you

10:44

quantify those goals in a budget

10:44

format. And then the magic

10:50

happens, once you have that

10:50

budget, and you have all of your

10:52

numbers in place. You look at

10:52

the budget, and you say, where

10:55

did we want to be this month?

10:55

Where did we actually come in at

10:58

this month? What's the

10:58

difference? And why is it

11:02

different? A CFO, a good CFO is

11:02

going to help you understand how

11:06

to repeat the good events, and

11:06

how to pivot from the

11:10

shortfalls.

11:12

Trisha like

11:12

how I mean, everything seems

11:14

like kind of overlaps. Like if

11:14

you're a business owner, you

11:17

have a business coach, CFO kind

11:17

of overlaps and your CPA CFO

11:21

kind of overlaps. bookkeeper,

11:21

CFO kind of overlaps, like CFOs

11:25

running everything. It sounds

11:25

like they have a little piece of

11:27

all that. That's really

11:27

interesting.

11:31

You didn't

11:31

include the financial advisor?

11:33

That is true.

11:33

Well, I mean, CFO, Chief

11:36

Financial Officer, I

11:39

just assume that

11:39

you need a fiduciary on board,

11:42

right? Like pull them all in.

11:42

Danielle, one of the things that

11:47

I've heard you talk about is

11:47

these business owners out there

11:51

that aren't paying themselves

11:51

enough or don't pay themselves

11:54

at all. I know, that's an area

11:54

that you specifically focus on.

11:59

And I think CFOs in general,

11:59

right are helping business

12:02

owners in that space, can you

12:02

give your take on all those

12:05

business owners out there that

12:05

are yet to pay themselves or

12:09

aren't paying themselves fairly?

12:11

There are so

12:11

many business owners that I've

12:14

talked to, you know, three to

12:14

five years away from their

12:17

corporate job and still can't

12:17

reach that corporate salary,

12:19

salary. And that that just

12:19

really breaks my heart,

12:23

honestly, because you put your

12:23

you pour your passion into your

12:26

business, everyone I've talked

12:26

to you, whatever you're doing,

12:29

you're doing it because you love

12:29

it. And it's so easy to give it

12:32

all of your time, your energy,

12:32

and your money, and you forget

12:36

to give yourself what you're

12:36

worth. So that's where the 1% in

12:40

a bank account for your profit

12:40

is, it's such an easy step to

12:44

take. And you put that bank

12:44

account out of sight out of

12:47

mind, that's your money, it

12:47

doesn't get mixed in with all

12:49

the business money. I also am a

12:49

firm believer of setting up the

12:54

appropriate formations and s

12:54

corpse and things like that when

12:57

you reach a certain income

12:57

level, and put yourself on

13:00

payroll. You deserve to take a

13:00

payroll. If you're in business

13:05

for yourself, if you're running

13:05

a business and you started a

13:07

business, you're a creative

13:07

thinker, you know how to get

13:11

outside the box, you know how to

13:11

solve problems. And if you

13:14

prioritize yourself in your

13:14

business, you will solve the

13:17

problem of keeping the business

13:17

going. If you don't, it kind of

13:22

becomes burnout.

13:24

Yeah, no. And that's that's a lot of a lot of good stuff. And again, we're

13:26

gonna have we have, we have

13:29

attorneys already booked up to

13:29

talk specifically about, you

13:32

know, formation and things like

13:32

that. So again, she's hitting

13:34

like all these just little

13:34

nuances like different

13:37

professions. I love it. Because

13:37

I mean, it just goes to show how

13:39

a CFO has been, I mean, a good

13:39

as you say to a good CFO

13:43

understands how all these

13:43

different components work, at

13:45

least on a surface level to make

13:45

it all work together, which is

13:48

very interesting. Now, let me

13:48

ask you this. And again, you

13:52

could probably read restate an

13:52

answer, but I'm just curious

13:55

what is for all the small

13:55

businesses out there? What is

13:58

the if you can give them any

13:58

advice, what would be the golden

14:02

nugget that you could give a

14:02

small business owner,

14:06

I'd go back to

14:06

the 1% set up a bank account

14:09

that is separate from your

14:09

operating account. I would even

14:12

challenge you to put it in a

14:12

completely different bank and

14:15

move 1% of your revenue over

14:15

there and just leave, let it be

14:19

there and be your profit and

14:19

your reward to yourself for

14:22

running a great business.

14:25

That That 1% is that's interesting. I've never heard that before. But

14:26

that is Trisha, you guys would

14:30

have to wrap up here in a

14:30

second. You got any more

14:33

questions?

14:34

What if I'm

14:34

afraid to even go there? Like

14:36

why in the world would I need a

14:36

chief financial officer? You're

14:40

gonna come in and look at all my

14:40

stuff and be judgey Right? Like,

14:44

what how, how do you go about

14:44

allowing that getting in the

14:49

right mindset to allow that

14:49

person to come in and actually

14:52

help you as a small business owner?

14:54

So my first

14:54

thing to small business owners

14:56

that are worried about airing

14:56

the dirty laundry is That,

15:01

consider me your your laundry

15:01

mat. I love the dirty laundry,

15:05

the messier the better, the more

15:05

the problem solving the puzzle

15:09

piecing and, and a good CFO is

15:09

going to be the same way we want

15:13

to get into those numbers and

15:13

dig in and clean them up and

15:16

figure out how to bring value

15:16

back to your business in a way

15:19

that you can see.

15:22

The Dirty

15:22

Laundry Well, I'm not a big fan

15:25

of laundry, but I try to fold it

15:25

every once in a while.

15:29

Not to be confused with monitoring, money laundering. We're not getting

15:31

into

15:32

that. Okay, not

15:32

to me.

15:35

But yeah, it's

15:35

great. Compliance isn't gonna

15:38

improve this now. Thanks a lot.

15:38

He word money now. Well, hey,

15:42

thank you so much for coming out

15:42

today. We appreciate having you

15:45

and just really teaching our audience and really me and Tricia more about the importance

15:47

of the CFO I think that's

15:49

probably overlooked a lot. So

15:49

everyone, I just want to remind

15:53

you that go to our Facebook page

15:53

go to we're hosting the podcast,

15:58

all of her information is gonna

15:58

be in the show notes. You want

16:00

to contact her reach out, have

16:00

questions, she doesn't bite it,

16:03

I promise. But that will do it

16:03

for this week's podcast. Tune in

16:08

next week for another exciting

16:08

episode of Bridge the Gap will

16:10

be focusing on financial

16:10

independence for the month of

16:13

March and we'll be talking to

16:13

Mr. Hoard who we're going to get

16:17

all into cryptocurrency, so it's

16:17

going to be a blast. So thanks

16:20

so much for tuning in. We'll see you next week. Thanks again for tuning into

16:22

this week's podcast. Don't

16:25

forget to subscribe and share

16:25

this podcast with the most

16:27

important people in your life.

16:27

Colton Cockerell with Sharer

16:30

McKinley Group, LLC is located

16:30

at 820 South Friendswood Drive

16:33

Suite 207 Friendswood, Texas

16:33

77546 phone number to

16:36

281-992-5698. Securities and

16:36

investment advisory services

16:39

offered through NEXT Financial

16:39

Group, Inc. member FINRA/SIPC

16:41

Sharer McKinley Group is not an affiliate of NEXT Financial Group, Inc.