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#76: Tapping into Testimonials

#76: Tapping into Testimonials

Did you know that 72% of consumers say positive testimonials and reviews increase their trust in a business? Today we are talking about how to tap into and use testimonials to your benefit. Plus, we are giving you several tips to help you get persuasive testimonials and use them to convert prospects into buyers. We want to show the true impact on your business of getting, and tapping into, testimonials and reviews. We are speaking today with Jami Johnson, Partner at PJS & Co. CPAs, and Megan Spicer, our Marketing and Business Development Manager to discuss the importance of this topic.

What we cover in this episode: 

  • 01:30 – The importance of testimonials
  • 05:56 – Tip #1: Go after testimonials
  • 11:50 – Tip #2: Don’t stop at one
  • 14:34 – Tip #3: Use testimonials with the right characteristics 
  • 20:06 – Tip #4: Do not “fake it ‘til you make it” 
  • 22:24 – Tip #5: Show them off

The importance of testimonials

Let’s start by sharing some of the statistics and research we’ve found that shows the impact for a company by getting testimonials and reviews. Did you know 92% of customers read online reviews before buying? If you think about this first one, it seems pretty standard for consumers to do these days. Most people research a product or company before making a purchase and go straight to the reviews to get a good read.

Additionally, 72% of consumers say positive testimonials and reviews increase their trust in a business. Think about your own behavior when considering a product or service. When searching on Amazon or Google, and you find what you’re looking for but it doesn’t have any reviews, you’ll keep looking until you find one that does. If researching a service business on Yelp or Google, you’ll look for positive reviews before calling them. It’s that non-biased opinion that is powerful and can spur people to action. 

Lastly, 70% of people trust reviews and recommendations from strangers. Not everyone writes reviews for products or services, so when you read a review and know that someone took the time to write it, you feel like you are hearing from someone who feels very strongly, either good or bad. Having that honest review or testimonial of their experiences with a product or service can be very helpful for future customers when making their decision to purchase. 

Tip #1: Go after testimonials

The first tip is simple – just ask. Think of the old saying “Ask, and you shall receive.” Many business owners don’t have testimonials because they simply don’t ask for them. Business owners may think asking can be kind of awkward, or they feel it’s bragging, but when the request comes from a place of no pressure and authenticity, many customers are happy to help. When a client gives you good feedback over the phone or via email, don’t hesitate to ask them for a review or testimonial. It can be a simple and a no-pressure request such as “it would be really appreciated if you could hop on Goggle when you have a free moment (or wherever you are trying to get a review), and add a review for our product or service.” The timing of the request matters as well because you should be asking for that feedback while it’s fresh in the mind of the buyer. Think of requesting a review within a few days of a single transaction, rather than a few months from the time of service, when they may not remember exact details. There is a reason why Amazon sends those review emails in the next 24 hours after you’ve received your package; they want to have real-time feedback. 

There are other ways you can encourage testimonials or reviews as well. Some companies perform surveys on a regular basis (monthly or quarterly) and you can use the comments section of those surveys to encourage testimonials. You can also incorporate a link for feedback into your company’s email signature lines. The more ways you can open up for customers to provide you with feedback, the more likely they will be willing to do so, but you have to ask. When a company makes it a priority to request feedback and gain insight on how the experience was for their customer, the customer will know that you are taking the initiative and are making them a priority. 

Tip #2: Don’t stop at one

Do not stop once you have one testimonial. Use that as leverage to spur you on to get more, especially if you have multiple lines of service. You will want to go after testimonials for each line and level of service because client experiences are going to differ across each of those service lines. Most businesses have multiple products or services they provide, and customers have different reasons for selecting various offerings. Potential clients will want to see if there is a common thread or something that will resonate with them when they read about your current clients’ experiences. That’s why it’s so beneficial for a company to have multiple testimonials, and get as many as they can to appeal to all different scenarios of your services. If you work with multiple industries, be sure to try and get testimonials from each niche in which you operate. 

Tip #3: Use testimonials with the right characteristics

Focus on benefits over features

Our third tip is to use only testimonials with the right characteristics. And by that we mean the testimonials you receive that focus on the benefits rather than the features of your service or product. For example, a feature is “you handle my bookkeeping every month”, but the benefit is what you would want to use and focus on, such as “I don’t have to worry or stress over doing the bookkeeping every month. I have peace of mind that everything is done correctly and timely.” The benefits you want to highlight in your testimonials should also mirror the things you are promising to deliver for your clients and customers when selling to them. 

Include hard facts, numbers, and percentages to highlight results 

Including actual numbers, facts, and figures in your testimonials can be a very powerful tool to highlight the results you have achieved with your current clients. Some clients may not be comfortable sharing specific details about revenue, but perhaps they can share that using your services has saved them x amount of money, or helped increase profits by x percentage. Using some hard numbers or statistics can really beef up your testimonials.

Make it easy

Your client may not know what to say when you ask them for a testimonial. If you don’t want to overwhelm your customer, you can always provide them with a few writing prompts for a testimonial. If you give them prompts and questions such as “what have we been able to help you achieve in your business?” or “what stress did we relieve by providing our services?”, you can get them to talk a little more about the benefits rather than the features of your services or product. 

Get permission

You will also want to be sure and get your client’s permission before sharing that testimonial with their full name, title, and business name. An anonymous testimonial doesn’t build much trust and won’t be of use, so ask your client if they mind if you share their testimonial (with a name at the very least) on your website or marketing materials. You can even give a finalized version to them beforehand so they can see what it will look like when published. 

Using headshots and names is always advised if possible because it puts a real person behind the words. Taking it even a step further would be to get a video testimonial or an audio testimonial, so take advantage of these mediums if your client is comfortable. Not all clients feel comfortable providing a video testimonial though, so be sure not to make it a high-pressure situation for your client. It is best to be very clear about when and where and how you would use their testimonial so your clients understand the context and where they may see it in the future. The request has to come from a place of respect, and they need to trust you to use their words appropriately in a way to compliment your business with their testimonial.

Tip #4: Do not “fake it ‘til you make it”

The fourth tip is to remember that this is not a “fake it ‘til you make it” area of your business. Your testimonials have to be genuine and unfiltered. You can get something very eloquent and polished if you send it through multiple edits, but then it’s not a true testimonial anymore. You want it to sound real, so don’t ever edit or rewrite your testimonials. Now, if there is a grammatical or spelling error that needs to be corrected, you can send it back to the client and get approval on making those kinds of changes. Bottom line is that if you can’t use the testimonial as the client wrote it, don’t use it. Fake testimonials are easy to spot, and no one wants that. Everyone wants to know the truth, and know that your testimonials are authentic.

Tip #5: Show them off

Our fifth and final tip for you today is to show them off! Use them whenever possible! Use them in all your marketing materials, use them on your website, any ads that you may run, use them on your newsletters, brochures, packaging, etc… If you have a physical location with a waiting area, frame them and put them up there. You can even put them on the back of your business cards. Basically, you should be using them anywhere that you have clients who can visibly see them. If the testimonial is too long for a certain placement, for instance, a social media post, you can use a portion of the testimonial and link to the full version on your website. There are many creative ways you can use testimonials, so take advantage of them! After all the hard work of asking and getting testimonials, don’t be timid about showing them off. 

Many business owners also use them for motivation. To see those testimonials can confirm for them the how, why and what they are doing well in their businesses, and it can give them affirmation they need to keep moving forward and continue excelling. It can be very rewarding to receive positive feedback and testimonials, especially as an owner who may not always feel that their efforts are appreciated. Testimonials can encourage a business owner to build up, tweak, or re-evaluate things in their business. Perhaps they were planning on changing something but now learn from testimonials that what they are currently doing is really helpful. Using the testimonials that you receive to reflect on your business and refine it, can only make your business better. 


Business owners can tap into testimonials and use them to grow their businesses and convert prospects into buyers. Reviews and testimonials are prevalent in today’s business world, and the statistics show the proof of how important they are for a consumer to make a buying decision. Business owners should ask for reviews and testimonials, get as many as they can, a variety that covers all aspects of the services they offer, and use the ones that show the benefits of your business to their prospective clients. The testimonials should be genuine and unfiltered to show honesty and build trust in your business, as well as show them off and use them everywhere they can.

If you enjoyed this topic today and found it helpful, please subscribe, rate, and review our Cultivating Business Growth podcast and check out the additional free resources and learning opportunities at your fingertips available on our site! 


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#75: The Selling Your Business Series: Avoiding Common Pitfalls

#75: The Selling Your Business Series: Avoiding Common Pitfalls

Our goal in this three-part “Selling Your Business” series of the Cultivating Business Growth Podcast is to help business owners understand all the variables involved and show up better prepared when it comes to selling their businesses. In this third episode, we are going to talk about how to avoid common pitfalls that may come up during the process, as well as discuss some insights and real-world examples. We are speaking today with Jami Johnson, vCFO, Partner and Co-Founder at PJS & Co. CPAs, tapping into her expertise in the subject, and reviewing scenarios and case studies from the real world. 

What we cover in this episode: 

  • 02:30 – Emotional fitness
  • 06:20 – Don’t try to sell your business alone! 
  • 12:41 – Real-world examples & implications
    • 14:00 – Company structure implications
    • 18:58 – Taxation implications
    • 24:28 – The changing times implications
    • 28:46 – Misconceptions in equity implications
  • 37:38 – Multiple bumps in the road

Emotional fitness

Per Jami “The number one underlying theme when you get into this process, whether you are a buyer or seller, is that the process is a marathon, not a sprint.” You should have the emotional fitness you need to go through this process because it can be very draining, and it is important to prepare yourself for any unexpected pitfalls or surprise circumstances that may arise. What can seem like a smooth process from the outside, can actually get messy in the real world. It was discussed in our first episode in the series that you have to prepare and ramp yourself up to go through this process.

You don’t want to walk into a process like selling your business unprepared. You hold much more power when you have the information you need about what your business is worth, its value, and a fair price. From an emotional fitness perspective, you need to be ready to hear from people who may have just taken a guess at the value of your company, not done their due diligence, and be ready for the highs and lows of that situation. There may be instances of highs where you’re thrilled and can’t believe someone is going to give you X amount for your business, and the lows of thinking “is this ever going to close?”, or “why aren’t they communicating?” Emotions tend to run high on both the buyer and seller’s sides. You should know your position in the market, and fully understand the implications of the sale before signing anything. The selling process can be draining, and there may be a large amount of back and forth, and quite a bit of waiting, so you should build your stamina to go the distance in order to have a strong position in negotiations. 

As a seller, you need to understand why buyers may walk away, and if you have multiple buyers walking away, that could be a problematic sign. As a business owner, you’ve invested time, money, blood, sweat and tears, and you don’t want to settle, which is why getting a business valuation and setting clear and realistic expectations is crucial. You can put yourself in the best position possible with your emotional fitness if you have a strong foundation and know what your business is worth when navigating these types of negotiations and situations. 

Don’t try to sell your business alone! 

Having an excellent advisory team and good resources available during this process is very important because it will allow you to know where you stand at all times vs. trying to feel things out by yourself. A strategic advisor will be able to identify problems and give advice, offer corrections, and will help guide you as the owner in the right direction. It’s always better to know about errors or opportunities before you start the selling process than to find out later. We spoke at length about knowing what your business is worth in our second episode of this series and advise owners to have a trusted advisory team to get the correct and proper valuation of their company well before they begin the selling process. 

An advisory team will be able to look at everything in your business from an unbiased perspective. They will look for improvements for the future operations of the business, improvements in processes, and changes that can increase the value of your company. An owner may need time to process and understand the proposed changes, and they may be hard to hear. If there are multiple owners in a business, an advisor can help the leadership team communicate and get on the same page to avoid any misunderstandings. Having cohesiveness amongst your leadership team and your owners is extremely important before entering into this process. You need to know where you stand, what you are willing to do, and it will save time on the backend. When you enter negotiations, it’s uncharted territory so any work you can do beforehand will serve you well.

Real-world examples and implications

Because the real world isn’t perfect, real-world situations can get messy. There is no cookie-cutter template for the sale of a business, and what you may encounter during this process and during negotiations can be completely different than what you would expect. We want to give real-world scenarios where errors were made, how to potentially avoid those errors and minimize risks. 

Company Structure Implications

In one instance where PJS & Co CPAs was hired to consult, the selling process took two and a half years. Due to errors made prior to our firm’s involvement, there was a large amount of time and money spent by the seller, as well as the buyer, that could have been avoided. The PJS & Co CPAs team spent time doing due diligence and discovery and getting familiar with the business itself. The owner was considering a stock sale vs. an asset sale, and it was discovered that the previous professional financial team had actually made an error from a tax perspective that had to be disclosed to the buyer in order to be fully transparent. All the calculations made by the PJS & Co CPAs advisory team were given to the buyer so they could review, but the buyer decided they wanted to have their own discovery done and brought in an external CPA firm to validate the calculations and represent them in the sale. 

The expense of the negotiations quickly escalated in this case, with multiple lawyers and CPAs involved representing both sides of the transaction, all working to get the side they represented in the best possible position. It was an unexpected expense and a really expensive one that could have been avoided if the original mistake had been avoided. The original financial team could have been more proactive in their tax approach and discussed company structure solutions that would have avoided these issues. It is best to work with professionals who are experienced, take a proactive approach, and establish checks and balances that can help catch errors like this before they become larger problems.

Taxation Implications

When we were brought in to evaluate another firm for a client, we first looked at the structuring of the business to determine if changes could be made prior to the sale to reduce the taxation implications. Since we were brought in later in the game in this instance, there was not enough time before the sale to make any changes. In this instance, if our team had been involved to provide proper advisory, we could have elected to split the company’s assets up, and then sold them as two different companies, saving the owner quite a bit of money from a taxation perspective throughout the years, (potentially hundreds of thousands of dollars) as well as increased the profits for the client at the time of the sale. 

It is very important to be proactive regarding taxation implications and have a solid tax foundation when considering and planning to sell your business in the future. This is why we at PJS & Co CPAs always preach to begin planning early and advise to start at least five years ahead of time. Changes in legislation and tax codes can happen at any time, and they can really affect your business. Owners need to ask themselves if their current CPA or financial team are keeping up with those changes, and what the standards are for their industry. If you are not having those conversations with your accountant or financial team, it can affect your business health and should be a red flag for owners that needs to be addressed.

The changing times implications

When you are looking at the companies that are currently selling, the majority were most likely formed over the last 20 to 30 years, say in the early nineties, and at that time there were only three options when it came to company structure; sole proprietorship, partnership, or a C-Corp. Many owners felt comfortable with those choices, especially the legal liability a C-corp provided. But as the two thousands rolled around, the limited liability company and partnership options came about and changed the game. Without the help of an experienced advisor, the options to make changes in their business and structure, changes which could minimize risks, were not implemented.  

We had a client in the past where their CPA did not set up their structure properly, did not know that they qualified for a new option that would have given them the same veil of protection that they were currently structured under, and would have allowed for a better taxation liability position. Perhaps the CPA they were working with was not well-versed in the various options available and the changes that could have been made, and the owner did not want to change CPAs since they had built a trusted relationship over time. In this instance, as well as most, it’s critical for an owner to educate themselves and not be afraid to ask questions, because it could cost you thousands, or hundreds of thousands, of dollars.

Misconceptions in equity implications

It is very important to have a good, strong equity position when selling your business, but there is a common misconception that we have seen when owners try to build equity in their company. Jami shares that some business owners think that in order to sell it at a higher price, they should not take a distribution or pay themselves, and keep all the money in the business. This can turn out badly for an owner because it can impact the valuation of your company, cash flow, and lending abilities, etc. 

Once again, it’s important to have a strong advisory team in place to help navigate any of those negative implications. As we mentioned in our first podcast episode of the series, you have to be able to look at the sale from a buyer’s point of view, and if the buyer sees that the owner has not paid themselves very much over the past 20 years or so, it could be a red flag for the buyer. 

The buyer won’t be very interested in any emotional attachment the seller has to a business they are interested in buying, and will not pay for sweat equity in building the business. The sacrifices you, as an owner, may have made in missing your child’s games every Saturday for the past 20 years, is not what will increase the value in your business. A buyer is not going to pay an owner for their hard work, but pay what the business is worth and the opportunity and the potential that they see in their future position as the owner. 

Multiple bumps in the road

The situations we discussed today are about what can happen when you have a bump in the road when selling your business, but what if you encounter multiple bumps in the road along the way? The answer actually comes down to having the solid foundation in your business that we’ve talked about throughout this three-part episode series. Putting yourself in the best possible position for a sale and being able to get over multiple bumps that you may encounter includes knowing all the factors that will help minimize any risks. You should know your financial position is solid, have a good advisory team and know where you stand, know your market and the value of your business, be all on the same page if partners are involved, know your limitations, and be able to walk away from a deal if necessary. You will need this strong foundation to overcome bumps in the road. In order to put yourself in the best position for a positive outcome in the sale of your business, you have to know that the preparation process is part of the selling process.


The return on investment that an owner can get in preparing for the unexpected that may come up in the sale of their business can be invaluable. Being prepared will put you in an offensive position during a sale, allow you to stand tall, minimize stress, and navigate any unanticipated situations that may arise. Remember that this process is a marathon, not a sprint, and think of the old Boy Scout motto of “Be Prepared.” If you are planning to go through this process in the future, know that we here at PJS & Co CPAs are available for a free discovery call, and you can speak to our virtual CFOs and get some real-world advice.


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#74: The Selling Your Business Series: What is My Business Worth?

#74: The Selling Your Business Series: What is My Business Worth?

What is my business worth? In this episode we are answering that question, as we want to help business owners understand more about the process of business valuations, understand that there are many variables involved, and what you can do to be proactive about your business value. This is a deep dive into business valuations, including the types of reports available, methods used, and factors that impact the value of your business.


What we cover in this episode: 

      • 05:03 – When would someone need a business valuation?
      • 12:50 – Types of valuation reports
      • 20:04 – Methods used for valuations
      • 29:25 – Factors that impact the value of a business
      • 36:49 – The levels of value
      • 39:40 – When do you need to start thinking about this if the exit plan is to sell?

Introduction to Zach Sharkey

This is the second episode in a series of three, featuring Katina Peters, Partner in our firm PJS & Co. CPAs, and Zach Sharkey, the founder of Gateway Valuation Consulting, LLC, a valuation and exit planning firm. Zach is an expert on this topic and has 20 years of experience in valuation, corporate finance, and M&A, as well as being only one of three CPAs in the State of Missouri to hold the globally coveted CFA charter and the ABV (accredited in business valuation) designation.

When would someone need a business valuation?

There are many reasons why you would need a business valuation, but for the purposes of this episode, we will consider the most common scenarios, and look at them from the perspective of a closely held business rather than a large publicly traded firm. For context, we will be discussing valuations that may be necessary for anything from a “mom & pop” small business, to anything closely held under one hundred million in revenue.

Buy / Sell Agreement

One of the most common reasons why you would need a business valuation in place would be prior to executing a buy/sell agreement in the event that some sort of trigger event occurs, such as buying a company, a change in partnerships, or adding onto an existing platform. A buy/sell agreement is something that you enter into with the partners or shareholders of your small business, and having a valuation in place establishes the value of a business in case one of the partners were to pass away or become disabled, for example. There could be multiple partners involved, spouses, insurance implications, and knowing what the value is that would be paid out to an estate in these cases minimizes the stress and gives understanding upfront what to expect. You can see how critical it is to know what the value or worth is of the interest in the business when executing any buy/sell agreements.

Less Common Uses

A few less common reasons for a valuation would be to put an agreement in place in order to retain a key employee, such as a stock options agreement or a value performance-based compensation agreement. Another occasion that would require a need for a valuation would be for gifting purposes for gift taxes. If someone is wishing to lower their taxable estate, they can give a portion of their interests over time as gifts, and utilize valuation discounts and exemptions in the tax laws. The tax laws can change in the near future, and given the current tax climate with the new federal administration, there may be a reduction in the overall estate limits and state tax laws.  

The bottom line is that having a business valuation in place helps a business owner look at the long-term plan for their business, helps plan for any exit strategies, and gives an important baseline in case of an unexpected event.  

Types of valuation reports

Many people do not know that there are several different types of business valuation reports, and they vary depending on the valuation organization. There are two non-profit valuation organizations within the United States, the ASA ( American Society of Appraisers) and the AICPA (American Institute of Certified Public Accountants) that regulate the standards of the reports. There are three different types of reports, which we will detail below. 

Full Narrative Report

The most detailed level of report is called the full narrative report and is the most costly. This type is needed to support a tax return going to the IRS, or for the Department of Labor. They read similar to a thesis, and they are very in-depth and lengthy (up to 100 pages long) and they explain and support every material input or assumption used in the valuation.

Evaluation, or Summary, Report

The other two are more common and depending on the situation, and used by most firms. The second is the evaluation report, or a summary report. It’s a less expensive alternative to the full narrative report, and can provide a better cost benefit to business owners. Instead of 100 pages long, this report may be more like 50 pages, and while they may not have all the assumptions and everything detailed out, you still essentially get the same result.

Calculation of Value Report

The third is called a calculation of value report, and is the least expensive type of valuation. They are similar to an audit report or compiled financial statement report that a CPA would provide. However, this type of report does give the appraiser more leeway to use management’s assumptions because they are an agreed upon procedures type of project. It is a very popular alternative because there is a way to take the modeling of a full narrative report and put it into the calculation of value report, and strip out what is not needed by most owners, and come back with a pretty reliable valuation number, for a lot less money. If a business owner is doing general planning, we recommend this type of report. If there are situations where you would need to highly defend the valuation number and all the assumptions underlying it, then we would recommend the full narrative report. 

Knowing the differences in reports available allows the owner to ask questions and make the right decision on what they might need depending on their individual circumstances. Also, having a baseline report early on, and then updating that report regularly every few years as a company grows, will help an owner start working towards the number they are looking for in their business value.

Methods used for valuations

There are three types of approaches that are used, and under each approach are different methods. But what impacts the method used for the calculations? And is there one method that is better than the other? 

Income Approach

The first approach is an income approach, where you are taking a numerator or some type of income. Many use the simple method of free cash flow divided by a denominator, which gives you the cost of capital. It’s used in most industries, and when valuing a company, it’s really the basic building blocks of valuing a company, which is what it’s earning now and what’s the risk of earning what you expect to earn going forward. There is also the discounting it back method, and the first part where you project your P&L, and then calculate your free cash flow. It’s not our recommended method, since free cash flow is the cash after accounting for your depreciation, and it’s a non-cash charge. But you actually deduct your cash charges, which are requiring networking capital, which everyone has, and capital expenditures. The next method that is used frequently is the capitalization of earnings method. We do not use this method, nor recommend it. What this method does is only take a single numerator and a single denominator. This method assumes that free cash flow is a solid number in terms of what can be expected with growth in the future, and as you know, that type of method had to be thrown out this past year due to Covid. There are just too many variables and flaws with the thinking that the same denominator would remain the same throughout the projection period.

Asset Approach

The second approach is the asset approach, and this one is pretty simple. This approach is where you take the current market value of the assets, then subtract out any debt that the company has on their books. This is also called the net asset value method.  

Market Approach

The third approach is the market approach, and there are two commonly used methods that fall under this approach. The first is the guideline public company method, where you are looking at publicly traded companies, and taking their pricing multiples. The other one is the guideline company transaction method, and in this method, you are using databases that provide transaction information from privately held firms. This method has been a very good one to use, up until Covid hit in March of 2020, because you can’t use pre-covid data for post-covid assumptions. 

Because you are depending on the unique situation and variables of a company, there really isn’t a best method to use across the board. Using similar situations and comparables, just as you would when selling a home in a certain location, puts you in the best position to best calculate the different values of a company.  

Factors that impact the value of a business

Free Cash Flow 

When you begin talking about a company’s value or what its assets are worth, you have to look at what it earns on a risk-adjusted basis. The simplest factor that impacts its value is free cash flow and obviously the bottom line. Most CPAs and advisors can speak to the income side and advise if you are performing well. We won’t focus too much time on this but focus on the other factors that impact the value of a business.

Firm-Specific Risk

Zach shared  “A big factor that doesn’t seem to get enough focus from owners is the cost of capital, or what we call the unsystematic risk or a firm-specific risk.” For example, if you are looking to sell your business in the next ten years, it’s best to have the next line of successors in place as soon as possible. We’ve worked with many firms in the past where the lack of management depth has burned them badly when an unexpected event occurs. You have to consider the risk of losing a key person and the knowledge and relationships they bring to the business. It can obviously be devastating for a firm.

Customer Concentration

Customer concentration is another risk factor for closely held businesses. If 70% to 80% of your revenues come from just two or three customers, the risk of losing just one can be devastating. Owners should look to diversify to lower the risk, and in turn, will improve the company’s value.

Changes in Your Industry or Economy

Changes in your industry is a risk factor to be considered as well. Changes in the economic climate of your industry can affect companies adversely if owners are not prepared. We’ve seen changes that decimated the taxi cab industry due to the rise of rideshare companies, and what will happen to the companies that work with combustion engines as electric vehicles take over in the next ten years? As a business owner, you can’t ignore impending changes. You have to be able to look down the horizon and be a visionary in your industry in order to have a long-term strategic plan and make changes when necessary in order to succeed and grow. 

The levels of value

When we speak about the levels of value in a company, we think of it from a place of ownership control, or current owners with controlling interests versus minority interests. If you are buying into a company, you must look at the level of ownership you will be gaining. If you will own at a minority interest level, where you can’t make any operational decisions at that company, you should not be paying a premium. This is similar to the example where you purchase stock in a company, and you become a minority shareholder. If you wanted to buy that company in order to gain that controlling interest, you would have to pay a premium to do so. This is called a control premium, and on the other hand, if you’re purchasing as a minority shareholder that would be called a lack of control or minority discount.

Per Zach, “Most business owners look at everything from a pro-rata (control) perspective, and owners buying into a company at a minority interest should be paying a minority price, not a pro-rata price, and often pay too much. There should be what we call a valuation discount or a lack of control discount to compensate a new owner buying into a company from an economic standpoint. Buyers who have the knowledge of what a fair price to pay is in order to get interest in a company are much better off when walking into a purchase situation – and they are not walking in blindly.”

When do you need to start thinking about this if the exit plan is to sell?

The answer, in this case, goes back to the standard “it depends” response. If you are just starting out with your business, the full narrative valuation probably isn’t your best bet. You will want something that gives you the benchmark you need to measure against in the future. Zach suggests a calculation of value report is a great place to start. Since many owners only have a vague idea of what their business is worth, the cost of having that real number in hand going forward is good as gold for planning purposes, and knowing what to expect. It’s good practice to think about your business as if you are going to be selling tomorrow and operate within that mindset.

It is a good, sobering practice to have a valuation done for your business periodically, and having that information gives you the knowledge you need to make improvements, minimize risks, and build value. You also never know when a buy-sell agreement might be triggered with an unexpected event. 

Zach stated “We do see some intermediators or business brokers come in to assist a client or owner with selling their business and sign contracts with owners to do so for a percentage or flat fee, and they usually offer a free business valuation when you sign that contract. We advise that you should always be aware that you get what you pay for, and many of these brokers use the wrong valuation method for these free valuations, and do not take the company’s specific attributes and situations into account.” 

Zach also shared “It can take a long time to sell a business, and mostly because the business is overpriced. The Exit Planning Institute stated recently that 86% of companies never sell in these situations, and from our experience, that is right in line with what we’ve seen. When an owner signs a business broker contract, there is almost always a provision called a tail provision where if you fire your broker, and you then sell the company yourself from within a year or two down the road, you still then owe the broker that full brokerage fee.” 


We’ve learned today that answering the question of “What’s my Business Worth?” is a bit more complex than it seems. A business valuation should be looked at as an invaluable tool for owners as they plan for exiting or selling, and a way of proving the value of their business to whomever may need to know. Thinking about all of the variables that go into the valuation of a business, being proactive in planning and making improvements where and when needed will eliminate the guesswork and unexpected surprises when changes happen or you are selling your business.


If you are interested in getting more information on the topic we discussed today and contacting Zach Sharkey for a business valuation, you can go to to get all his contact information.

Links mentioned in this episode:


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#73: The Selling Your Business Series: Business Valuations, Structures & Taxes, Oh My

#73: The Selling Your Business Series: Business Valuations, Structures & Taxes, Oh My

How do you know what your business is worth? Most owners struggle with answering that question, but for a business owner, knowing the true measurement of your business’ value is a critical step before planning to sell that business. Today’s podcast is the first in a three-part series that will discuss the valuation of your business and the variables involved in the process of selling your business. We’ll be providing an overview today on the subject of how and when to plan ahead to sell your business in order to help owners be proactive throughout the process. Our goal is to help you learn about when to plan to sell your business and understand the process of business valuation before making that big decision to sell. 

What we cover in this episode: 

  • 02:31 – Defining growth and value
  • 06:46 – How soon to start planning the sale
  • 07:30 – The importance of sustainability
  • 09:48 – How late is too late?
  • 11:21 – Structure of the sale
  • 18:42 – Tax considerations
  • 20:24 – What is the buyer going to look for in your business?
  • 23:26 – What type of business valuation do you need?
  • 25:18 – Bringing in professionals to minimize risks

    Defining growth and value

    In order to do a deep dive into this topic in later episodes, we need to lay the groundwork and start with the definition of growth and value in the business world. So, what does growth actually mean? Is it growth in revenue, growth in personnel, or adding locations? All of those things are related, but the true measurement of business growth is the value of the business itself. Now, what is value? The value of a business ultimately is what a willing buyer will pay a willing seller. Now… What exactly does that mean? 

    If you can put yourself in the position of the buyer, the definitions may become a bit clearer to see. As a buyer, what would you be looking for in a business you want to purchase? One way to gain perspective of a buyer is to look at the stock market. Larger businesses trade on the stock market, but smaller businesses don’t have that readily available. They are similar, however, from the outward perspective in the idea of stock prices. The price of a stock shows the value of that business and takes into consideration the many different factors that affect the value.


    How soon to start planning the sale

    We do get questions from clients from time to time regarding how soon is too soon to start planning the sale of their business. The answer really does revolve around what your ultimate goals are for yourself as an owner. Whether you are just a few years into your business, or on the tail end, and if your ultimate goal is to maximize the profits from the sale of your business in the future, then the answer may seem a little cliche, but it’s really never too soon to start planning. We typically say you should be thinking about this at least five years in advance, which we will discuss in the next section, but you can really start planning as soon as you start your business. There are many factors to consider and it’s a marathon, not a sprint, to create a business that has the sustainability and value you will want in order to sell. 

    The importance of sustainability

    As you grow your business, you will want to make it sustainable. You’ll want to keep a pulse on the respective value of your business because that is what truly shows how you’re growing, if you are growing well, and if you are effectively adding value to your business. Some business owners do think they have a very valuable business if their business is lucrative, but that’s not the only thing that generates value. You will of course want to make good revenues and profits, but you also have to build a business that someone can step into and have the same continuity to give them a return on their investment. You should have good systems and structures in place so that you’re not required to be there to have sustainable growth. A business that has these things in place, and can continue growing without you as the owner, can make a buyer very interested and willing to pay top dollar.

    How late is too late?

    If you want to sell your business next month, it’s probably not the best time to start thinking about these things, right? We certainly don’t think so! You don’t want to end up in a fire sale situation. The more desperate you are to sell, the lower the price you’re going to get, and you won’t have the time to properly prepare.

    Our advice to business owners is that you want to start planning at least five years in advance before you sell, if possible. Planning this far in advance can allow you the time you need to get a business valuation done, address any weaknesses, and explore areas that could build more value. Most buyers will want to see at least five years of financial statements and tax return history when deciding on a business purchase. Having a stable financial history in place, establishing key personnel in positions for several years, and showing that stability can put a business owner in the best possible position to sell for the best price. Owners should also keep in mind that this process doesn’t happen overnight. A private business sale is not like trading in the stock market, and the sale process can take up to a year or two, and perhaps longer.

    Structure of the sale

    There are many considerations when selling your business. Looking at current trends in your industry and marketplace may help you decide how you structure the sale of your business.  There are some important points to plan for when structuring the sale, so you want to be sure you are ahead of the curve when you begin planning. You should be thinking about the basics first, such as liability issues, complexity, and tax implications. There are typically two structures when selling a business, a stock sale or an asset sale. 

    Stock Sale

    The stock sale is just as it sounds and is similar to the version of a stock market sale where you provide a piece of paper to the buyer for the set price, and they take ownership of the same business, same business name, same corporation, LLC, or other structure. It’s a straightforward and simple process. Even though it’s a simpler process, many buyers don’t like to use this type of structure because when they purchase the stock, they also buy every liability and the potential risk associated. This means that if someone in your customer base decides they want to sue for an issue that happened prior to the sale of the business, the new owner would be liable. 

    Asset Sale

    An asset sale is where you take all of the assets in the business and you sell them to the new buyer. The buyer will most likely set up a new company, or absorb into a current business to receive the assets. This option is a little more complex because every asset within a business has different tax ramifications, and you will want to work with a tax professional to understand what those ramifications are before coming to an agreement. The business price also needs to be allocated to every asset, and the buyer and seller have to agree on that allocation and treat it the same way. This typically becomes a negotiation process, because a better tax situation for you, as the seller, is usually worse for the buyer. This process can be difficult and time-consuming.

    When you reach a sales agreement with the new buyer, you may structure the sale to have the payment up front for the business, or it can be an owner carry which pays the seller over time. We advise our clients to be cautious with the owner carry situation because you’re no longer in control of the company and how it performs, and you may or may not get paid. You can set up vesting schedules so that if they default you can take ownership of the company back, or even have it structured so that the buyer stays on for a period of transition time from one owner to the next. Just remember there are options, and understand the risks that may come with all scenarios.


    Tax considerations

    The number one thing you want to take out of this is to UNDERSTAND THE IMPACT. This topic can be very stressful for many business owners, so planning ahead and being aware of what to expect is key when selling your business. You will want to know upfront when you set that sales price what the tax implications will be and what you’re ultimately going to get in your pocket.

    We strongly advise that you should work with a professional, no matter the structure of the sale, stock sale or asset sale, so that you can be as informed as possible and have no surprises when it comes to what you will be adding to your retirement savings or nest egg. We plan on getting into some specifics in our upcoming podcast, the third in this series, and dive deeper into a case study on this topic in the very near future.

    What is the buyer going to look for in your business?

    Normally, a buyer will want to look at three to five years of information before a decision to make an offer to purchase. They will be looking at your financial statements, balance sheet, profit and loss, and cash flow statements to gauge the value and stability of the company. The buyer may want to have an independent professional come in and do an analysis and business valuation. They will look at your infrastructure, client list, your team, and gauge how sustainable the business is without you. 

    You should also be sure to have a non-disclosure agreement in place before you give out any information to a third party, in order to prevent them from sharing this sensitive information with anyone. The information that you will be sharing is extensive and protecting yourself and your business is critical. Having that signed non-disclosure agreement in place before you begin is an important step not to ignore. 

    What type of business valuation do you need?

    We are getting into the details of business valuations in our next episode, the second in this series of three, but we want to establish that there are different types of valuations. They vary in pricing depending on complexity. Planning ahead and budgeting for this expense when selling your business helps you know what to expect.

    A business valuation provided by an expert can vary widely in cost but depends on your needs, size, and complexity of your business. The cost for an informal report can cost a few thousand dollars and can be useful in planning. On the other hand, a full, formal report that can stand up in court and details everything about your business can land somewhere around $20k.

    Bringing in professionals to minimize risks

    Seeking assistance during the sales process seems like a no-brainer, but what type of expert professionals do you need to engage to minimize your risks? A CPA can obviously assist with the tax implications of the sale, but you will also need a good attorney. Your attorney will be assisting with the non-disclosure agreement, and will likely work with your team to help determine what the best outcome is for you. Ideally, you’ll want to find someone who specializes in contractual law and has experience in your industry. 

    A good attorney can look at your business holistically, review all of the agreements you will need, and work as a team with your other trusted advisors. Having expert professionals collaborate and coordinate together is ideal for you as the business owner, and will put you in the best position for a positive experience in the sale of your business. Remember that PJS & Co. CPAs has a free discovery call that you can hop on at any time if you have any questions, or you can shoot us an email at


    Planning ahead to sell your business is an important part of the selling process, and getting started sooner rather than later will put a business owner in the best possible position for the best possible outcome. You should understand the full implications of the sale before signing anything, or putting your business on the market, and it is imperative in order for an owner to walk away with what they need when selling their business. 

    In this episode, we cover the basics and some terminology you will see in the process of selling your business. This is to lay the groundwork for the next two episodes in this series, focused on business valuations and business sales.


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    #72: How to Hire a CFO

    #72: How to Hire a CFO

    If your business is growing and the crucial, timely financial information you need for strategic decisions isn’t prepared or available, it’s likely time to hire a CFO. But how do you hire a CFO and what are your options? You may not think you can afford to hire a CFO if your business isn’t bringing in multi-millions in revenue, but there are many options available to get the expertise you need.

    A virtual CFO can help you grow your company faster and smarter and doesn’t have to break the bank. In this episode, we are talking about how to make that happen today with Jaime Staley, CPA, MSA, vCFO, and co-founder of PJS & Co. CPAs. She is sharing some guidance and tips on how to hire a CFO or a virtual CFO for your business.


    What we cover in this episode: 

    • 02:53 – What can a CFO do for your business?
    • 04:09 – What level of financial services do you need for your business?
    • 11:55 – What are my options in hiring a financial expert?
    • 24.51 – Where do I find a vCFO that will fit my needs?
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    The Top 10 Questions You Should Ask Before You Hire a CFO

    This free download will help you ask the right questions to help you find a CFO that fits best for you and your business. 

    Feel free to use this guide during your interview process and pull the questions that are most relevant to your situation. Find the best fit and don’t spend more than you have to on service you don’t need! 

    What can a CFO do for your business?

    We spoke on our last episode about what a CFO is, the difference between a CFO and a virtual CFO, what a virtual CFO does, and all the initial questions a company should review when deciding if, and/or when, it’s time to bring a financial expert onto your leadership team.

    This episode goes into all the details on the differences, how a CFO works with your company, and when it is time to hire, as well as team dynamics. Listen to Episode #71 of The Cultivating Business Growth Podcast to learn more about virtual CFOs, outsourced CFO services, and more to learn about how this service works. The focus of this episode is hiring a Chief Financial Officer, CFO, after you’ve determined you are ready.

    What level of financial services do you need for your business?

    So now that you’ve decided that hiring and bringing a financial expert into your leadership team makes sense for your business, where do you start? There are a few questions you should ask yourself to gain clarity in deciding what is right for your business. Start with asking yourself these questions: 

    1. Why are we hiring? You should think about what you really need right now. Think about what will help your day-to-day needs, what will help balance your life and your business needs and what will provide you with the guidance to make the financial side of your business better.
    2. What need am I trying to fill? Do I need a full-time, 40 hour per week person, or do I need a fraction of that? 
    3. What anxiety am I trying to relieve? Understanding what your main pain point is will help guide you to the answer for your business. Do I need someone to manage people who are already doing the basic accounting work and need them to be there constantly to answer questions, or do I need some staff to get the financials in order first? 

    The short and easy answer to all of these questions is – it all depends on your size and individual circumstances with your business. Are you at the level that you need the basic services of a bookkeeper or an accountant to nail down the processes first, or do you have the correct processes in place to now move toward an overseer role who will guide your growth?

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    What are my options in hiring a financial expert?

    Full-time, in-house CFO

    Some business owners are at that level of their business where they have the budget and can afford to hire a full-time CFO. Revenues must be fairly substantial to justify the budget for an average CFO cost of $200,000/year. Many smaller businesses are not ready for that cost and investment just yet. It’s easy to get a case of sticker shock when doing the research and write off the option of hiring a CFO due to budget concerns. 

    Virtual CFO or Fractional CFO

    It’s important to know that there are flexible options for a smaller company that still have the need for a CFO, but may not yet have the budget to support a full-time hire. If you need a higher-level financial expert but have found that you may not need one full-time, a part-time CFO option, such as a virtual or fractional CFO, could be an option for you.

    Depending on your size, needs, and growth plans, the cost associated is a fraction of the cost of an in-house CFO. By outsourcing, you can still get the guidance you need without blowing your budget. On average, virtual CFO services can start at $60,000/year depending on your size and needs.


    Smaller business owners might want to explore the option of hiring a Controller first to manage staff you may already have doing your bookkeeping and accounting tasks. A Controller would act as the head of your finance department, and perform a variety of tasks, like ensuring you’re getting paid timely, paying invoices on time, and working toward improving efficiencies in your accounting department.

    Improving the finance function of your business would be the goal for a Controller, but they do not get into the higher-level strategic planning and business decisions for your business. The national average salary for an in-house Controller starts at $100,000/year. Controller services can be outsourced as well and can start at around $36,000/year

    Start with what you need and work your way up

    Starting with a CFO when you may actually need a Controller can add unnecessary cost. A CFO may also have to spend their time on clean-up work or projects to fix and update financials if they haven’t been properly managed. 

    Think of the process as stepping stones, and each additional position in your finance department builds the financial foundation for your business. Having a great bookkeeper or accountant gets the basics done for you, but how do you know if those tasks are being done correctly? A Controller will be proactive and can bring a level of service that will confirm that those tasks are performed correctly.

    Once you have your finances in order and need to have the financials reviewed from a higher, strategic level, then a part-time, fractional CFO or a virtual CFO makes sense to bring on board to then get the financial expertise that you need to either correct problems or push further growth. Adding a CFO, or vCFO, will also give you multiple checks and balances. They will look at your business from a higher level, see things that you may miss, and ask those tougher questions to make sure the finances are accurate and provide guidance to you as the owner for the future. Once your business grows to a certain level, then it’s time to bring on a full-time, in-house CFO. 

    Basically, the foundation needs to be in place before CFO or virtual CFO level services will be of the most benefit to you as an owner. The clarity you will get in seriously considering what you really need when it comes to financial help for your business is well worth the time. Ask the questions you need to determine what the best option is for you and your business. 



    Where do I find a CFO that will fit my needs?

    When you’ve made your decision to hire, and you’ve gained the clarity to know what you need, now is the time to find the right fit for your company. But where do you find the financial expert you need? Hiring the right person is never easy, and it may take a bit of time to find a good CFO and the right fit for your company. 

    You should start with the typical first steps in the hiring process, such as posting your opening to job boards to elicit responses, but there are a few additional things you can do as well. Start speaking with colleagues, friends, and family to let them know what you are looking for, and network with your trusted contacts to see if they can provide you with a referral. Speak with a business owner in a similar business that is currently working with a CFO or financial expert to get recommendations and advice.

    Explore the free consultation options provided by many virtual CFO firms to see if you can make a connection. If you currently use a CPA firm for your taxes, perhaps they also offer the kind of financial services you need or may know of a firm that offers them that they can introduce you to and provide a referral. And searching online for different services once you know what your needs are can be less of a daunting task. 

    One benefit of finding a good virtual CFO firm is that they usually have a team of people that can help you. They may have bookkeepers and accountants that you may need, and they also will have controllers and CFOs, so they can support you as you push your business forward and experience growth. Working with a virtual CFO firm can provide financial solutions to a business no matter what level of expertise is needed. You can contact PJS & Co. CPAs at any time to book a free discovery call


    What are the benefits of hiring a virtual CFO?

    Bringing on a CFO is a large commitment for many business owners. It is usually something most business owners desire, but the cost factor dissuades them from making the decision. Many small businesses think “I’d love to have a one, but I can’t afford a CFO.” The level of financial management and insight you get in working with an expert at the level of a CFO is invaluable for the growth of your business. Obviously, if you can afford a full-time CFO, at the costs we discuss above, that’s an ideal situation because you have someone in-house focused solely on your business.

    The flexibility allowed in a virtual CFO or outsourced, fractional CFO situation is probably the largest benefit most small businesses see on the onset. You are able to gain access to a high-level financial expert who can provide proactive services, like financial modeling, cash flow services, budgeting, and more for a fraction of the cost.

    In addition, with a firm like ours, you gain access to an entire team rather than just one person. You can tap into a team of CFOs, CPAs, advisors, etc. who can tackle difficult situations as they arise and support you as you navigate business ownership. This level of support, with multiple meetings a month, is a value that can be seen in just a few months of working together. Feel free to read some of our case studies that highlight results.



    If your business is growing and the crucial, timely financial information you need for strategic decisions isn’t prepared or available, it’s likely time to hire a CFO. Understanding where you are with your business is paramount before you decide to bring in a financial expert.

    There are options and flexibility in deciding what kind of help you need, and working with experts who can help you scale does not have to be cost-prohibitive. The option to hire a part-time, virtual CFO may be just the answer your company needs without breaking the budget. We discuss various options available to you to bring the financial leadership to your company that will help you make the strategic decisions to help propel your business forward to the next level.


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    #71: What is a Virtual CFO?

    #71: What is a Virtual CFO?

    Growing your company’s revenue is a goal for almost every business owner, and it’s a great feeling when you hit those financial goals you’ve set out to achieve. Reaching those new goals in your business can come with growing pains so there may come a time when your continued business growth and the desire to drive your business forward requires a financial executive’s expertise. Perhaps you have considered hiring a CFO (Chief Financial Officer). Before you make that decision, you may have seen some other options available, like fractional, virtual, and outsourced CFOs. But what are outsourced CFO services? What can outsourcing the CFO function do for your business? And what is the difference between an in-house CFO vs. a virtual CFO? 

    What we cover in this episode: 

    • 01:54 – What is an outsourced (virtual, fractional) CFO?
    • 06:17 – What is the difference between a CFO and a virtual CFO?
    • 08:58 – How would a virtual CFO work with my company?
    • 13:52 – When does a business need a virtual CFO?

    What are outsourced (virtual, fractional) CFO Services?

    The term CFO (chief financial officer) refers to a senior executive who manages the financial components of a company. There are many terms used for a financial expert who performs the services of a chief financial officer, but isn’t on site or in person. These duties can be performed remotely and are referred to as virtual, remote, fractional and outsources CFO services. We will use these terms interchangeably here but know they all mean relatively the same thing. Rather than delivering those services in person, as a full-time employee, the virtual CFO (vCFO), works remotely, on a contractual, part-time schedule. The outsourced CFO would oversee your accounting processes, provide expert advice, and drive the financial strategic planning side of the business. 

    Strategic planning for a business involves more than the finance processes as well, like marketing strategy, business operations strategy, metrics and performance management, cash flow, oversight of regulatory compliance for the financial aspects of the business, and reporting on financial performance. The vCFO is responsible for working at a very high level with the leadership team, in an overseer role. The vCFO would identify any process deficiencies or financial issues, manage your key performance indicators (KPIs), and report back to the leadership team with executable solutions for what’s important in managing the business processes to optimize growth and revenue.

    What is the difference between a CFO and an outsourced CFO?

    The outsourced CFO role is similar to the traditional role of an in-house CFO, but the differences between having a full-time, corporate CFO in-house vs. hiring a vCFO are important considerations for a business owner. It can be very cost-prohibitive for small to medium size companies to hire a full-time CFO, and perhaps a company does not need someone 40 hours per week for their circumstances. In addition, there are team dynamics that will change, depending on the type of CFO you choose.

    Cost Differences

    The cost of hiring a full-time CFO with the traditional compensation needed for an executive position may not be affordable for most small to medium companies. Perhaps the biggest benefit of a vCFO is the ability to access this level of experience without paying the typical cost of an in-house CFO. A vCFO has experience tapping into a structured, proven, best practices process, and will be ready to begin working with a company with just a bit of customization. A vCFO can provide customized service with the skills and scope of work necessary to fit your company, without charging you for anything that is not needed. In addition, vCFO services can be expanded and shifted as your business grows and changes.

    Team Dynamics and Experience Differences

    Another difference to consider between a CFO and a vCFO is the expertise and experience that a vCFO has gained in working with multiple companies and across multiple industries. The expertise of a vCFO can bring a depth of knowledge to a company that is invaluable for all financial aspects of a business. You are also working with someone on a part-time, contractual basis with a vCFO, vs. bringing on a new employee with a full-time CFO. There are obvious differences in how that impacts the dynamics of your team to consider as well.

    How would a virtual CFO work with my company?

    Because a vCFO is not sitting there every day in your office, it will be a different experience for business owners. Obviously, the nature of meetings and communication is going to be virtual, so that is pretty straightforward. Beyond that, the biggest thing you will see is a true decision-maker that specializes in specific industries while working with a handful of different clients across various sectors. This enables a vCFO to demonstrate a deep, relevant understanding of your business and customize services to your needs.

    You can expect face-to-face meetings on occasions, as well as virtual meetings with a company’s leadership team on a regular basis to make sure you’re really connecting. You will want your vCFO to be a part of your business, and assist in driving your business forward. It’s very hard to operate as a vCFO in the dark or have missing pieces to the puzzle, so they really need to be involved in order to have that accountability and that partnership, which allows them to advise you accordingly.

    When does a business need a virtual CFO?

    We have found there are often tell-tale signs that seem to trigger the need for a CFO, virtual CFO, or fractional CFO. There are also stressors that can be relieved when you find the proper advisor. But how do you truly know you’re ready for a CFO? Obviously, you will want to have many discussions before hiring, but some of these can be signs it’s time to begin looking for a virtual CFO or other option for your team.

    Profitability isn’t at a desirable level and you need clarity

    When profitability has become stagnant or you are experiencing slowing in growth, it may be time to get an expert to look at what could be causing the slowdown. There are many factors that can impact profitability, but an experienced CFO, or virtual CFO, can assist you in dissecting the areas that could be impacting growth and identify the areas you can control. If you want to get to that next level of growth with your business, but you’ve exhausted ideas within your current team, it is time to consider hiring a seasoned vCFO. 

    Complexity of the business increases

    You could be experiencing rapid growth and increasing complexity in your business. As growth occurs, so will volume and if you don’t have solid systems in place, things can easily spiral out of control. This can lead to anxiety if you know you need more control but there aren’t enough hours in the day. In addition, you may be seeing more complexity in taxes, more complications when it comes to your accounting, or you may not be able to figure out why you’re bringing in plenty of revenue, but you’re not seeing the cash. These are all examples of signs you could use a CFO or virtual CFO.

    You want to establish a Financial Model for your strategic planning

    First, it’s important to understand why a financial model is important. On its face, it may sound similar to a budget, but a financial model is actually established to determine whether the business model itself works and is sustainable. This crucial tool will help you forecast into the future and see how your team will grow, how you could expect your revenue to grow as you make changes and many other factors. A CFO should be able to put this together and should be leading the discussion and managing this important piece of your strategic planning strategy.

    You want a partner who can help execute a growth strategy

    Perhaps you have more questions with regards to how the business is doing and need expert guidance to get you to the next level. You know you need some structure in place from a financial and strategic perspective, but have a hard time getting that established. A vCFO can help you navigate unsettled times, assist with the best systems for your current phase of business, and help prepare you for the next phase.

    So if you’re struggling in your business with executing your strategic plan, that’s usually a sign that you need somebody who can champion those things with you, and they can help to push you as a business owner and, in turn, can help push the leadership team along. Having that knowledge from a vCFO is very valuable and informative from a management perspective. It also helps ease your mind. You feel like you’re on top of things, you know what’s going on, you know where you’re going with your business. Hiring a vCFO makes sense when you’re in that position where you want to make sure that you can understand what your balance sheet is telling you, you can understand what your P&L is telling you, and what your KPIs are telling you. 

    It’s time to delegate financial duties 

    As an owner, there will eventually be a point where you will not be able to have your hands on everything. It will be impossible for you to manage everything at the level necessary to run your business once you reach a certain size. Offloading this duty to someone like a CFO can help ease your mind, knowing that you have someone experienced and very capable in your corner, who is thinking proactively about the future of your business. We cover how to hire a CFO in episode #72 if you’d like to learn more and download our free guide that include the Top 10 Questions You Should Ask Before You Hire a CFO

    What can you achieve with a virtual CFO? 

    Understanding the value of a vCFO and hiring one can bring your business to the next level. Gaining valuable, real-time information with insight from an experienced financial executive can mean the difference between struggling and thriving, and in some cases, business success and failure. Gaining assistance with your business processes and having sound advice in strategies to push forward is key to growth and success. It’s exciting as a business owner to have that insight and work with someone who can really partner with you so you can make sound business decisions. If you are looking for more information, we have excellent case studies for proven results that businesses have achieved in working with PJS & Co. CPAs. Contact us today to see what a vCFO can do for you!


    In today’s episode, we answered the question, “What is an outsourced CFO?” You may have been considering hiring a CFO, but then been disappointed to find it wasn’t in your budget, but there are other options available, like fractional and virtual CFOs. We explain what a virtual CFO does, the difference between a traditional CFO and a virtual CFO, and how you could expect to work with a virtual CFO. We then discussed the signs that it is time to bring a CFO, vCFO or other option onto your team. The results you can achieve by partnering with a vCFO can be astounding! The investment and dedication from you to reach new heights in your business will pay dividends. If you are interested in learning more about our services, please feel free to reach out for a free discovery call.


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    #70: Optimizing Revenue in Your Law Firm with Lexicon

    #70: Optimizing Revenue in Your Law Firm with Lexicon

    If your law firm was leaving money behind, you would do everything in your power to fix that, right? If you could maximize the amount of revenue that you keep without adding extra work, it would be a no-brainer. Today’s episode is focused on operational efficiencies and best practices you can implement in your own practice to do just that and optimizing revenue in your law firm. We welcomed two experts with over 25 years of legal industry experience to get the best advice. Scott Brennan, CEO of Lexicon, and Tom Boster, the CFO, and COO help us gain insight so you can increase revenues, maximize efficiencies, reduce costs and spend more time practicing law. 



    What we cover in this episode: 

    • 01:30 – Introduction to CEO of Lexicon, Scott Brennan & CFO and COO, Tom Boster
    • 04:13 – Maximizing your net income through timekeeping, collections and quality  
    • 05:21 – Improved timekeeping gives you numbers you need to push your firm forward
    • 14:24 – Best practices for collections 
    • 32:23 – Why quality should remain a focus
    • 42:21 – Special Offer from Lexicon

    Introduction to CEO of Lexicon, Scott Brennan & CFO and COO Tom Boster

    Scott Brennan (left) has a diverse global business leadership background and, as the CEO of Lexicon, he is driving their strategy with a relentless focus on superior customer service. Lexicon liberates law firms to do what they do best; practice law. Lexicon provides industry-leading practice management software that can be fully integrated into a suite of services including revenue optimization, business analytics, marketing, client intake, billing, and collections.

    Tom Boster (right), a CPA and CGMA with over 25 years of experience, is a skilled operations and project manager, and the CFO and COO of Lexicon. Tom’s history of working in the legal and healthcare industries has focused on software solutions, budgeting and overall performance improvements.

    Scott Brennan, optimizing revenue in your law firm

    Scott Brennan, CEO of Lexicon

    Tom Boster, optimizing revenue in your law firm

    Tom Boster, CFO & COO of Lexicon

    Maximizing your net income through timekeeping, collections, and quality

    There are a few ways you can optimize your own bottom line as a firm. The more obvious options are to take on more cases to grow your net income, or you can make more per case without doing extra work. But, in addition to those more prominent strategies to increase revenue, there can be quite a bit of money that is spilled on the ground with your current caseload. By improving internal procedures around timekeeping, collections, and quality, your firm can dramatically improve profitability.

    Improved timekeeping gives you numbers you need to push your firm forward

    Do you track your time as you perform each task or do you wait and track it later? If it’s the latter, you’re missing out on revenue, and Lexicon has some shocking stats to share, along with tips on how to accurately capture all time in your firm. Since 2007, annual hours for attorneys were down about 132 hours per year. This could be attributed to lifestyle changes, lower productivity, or attorneys attempting to work smarter, not harder. Some smaller firms may not see the necessity of tracking time if they are billing on a fixed fee basis, but we would highly advise against that. Accurately and efficiently tracking your time by utilizing tools and technology can make a meaningful change in your business, ultimately optimizing the revenue in your law firm.


    Many people make the mistake of thinking that their memory is better than it is in reality. Studies have shown that if you wait until the end of the day to track your time, you may be losing up to 10% of the time you had actually worked. If you wait until the end of the week, you could be losing up to 50% – 75% of the time you had put in, depending on the attorney. Read more about those studies here, on the ABA website. Whether you are billing by the hour or using a flat fee, it is very important to know where you are spending your time. Tracking ALL time (not just billable) will give you insight about certain tasks for which you or your staff are putting in more hours on a consistent basis. There could be services that you have under-priced and are consequently losing money on every time you do that task. In that case, you are not making as much money as you think. The same is true conversely for tasks that take less time that could be over-priced. 


    So what are the potential impacts of these losses? Even at the lower end of the studies, losing 10% of potentially billable time is a very material number. Scott gave an example highlighting how these things add up. “Even if you just miss 10 minutes a day and you bill at $200 an hour. At the end of the year you’ve lost $8,000 in billable hours, just through what feels like a very minor miss of 10 minutes across a single workday.” Take this shocking number and multiply it by all attorneys in your firm and the losses can be very impactful when considering only a 10 minute loss. This is why accurate timekeeping is so important.


    Best practices for collections

    Concise timekeeping and clear descriptions of what your work entails is the cornerstone of effective billing, and eventually in collecting that bill. Billing with ethical guidelines, using accurate notes for time entries, and making sure associates fairly represent the work that they actually perform is paramount to collecting payment for your services. The easiest way to help you enable better billing practices is to use a practice management software that has a timer built in, so while you go about your day, you can start and stop timers for specific tasks and clients. Many of the time-keeping fundamentals flow through into your collection efficiency. In general, only 81% of billable hours are actually invoiced. On average, firms only collect about 85% of what they actually invoice. Math is not in your favor on this one. 


    The collection cycle starts at the time that you make the engagement with a client. Best practices show that It should outline how the client will be billed, how might any retainers work, and sets the expectations of payment terms. Having those expectations up front not only meets a firm’s ethical guidelines, but shows great business fundamentals of having that communication upfront. You can continue that communication with the client throughout the engagement with a quality timekeeping system that shows the accumulated time throughout the month, and allows a firm to know just where the client stands.


    A quality timekeeping system in your firm can be customized for a variety of different ways, to set alerts, and kick off tasks associated with the billing process. Technology has really evolved, and now it is much easier than it has ever been to keep time and it’s not as big of an administrative burden as many people once thought it was.


    Why quality should remain a focus

    While timekeeping is often the first thing that comes to mind when it comes to how much revenue your firm is bringing in, the client experience is just as important and often overlooked. Having a client centric-quality system in your firm keeps your focus on relationship building and customer satisfaction. Setting expectations with your clients, setting key audit points during the process, and measuring your own performance will give you the tools you need to continuously improve the client’s experience and get the feedback you need to make improvements and focus on quality within your firm.


    When you have institutionalized a quality system for improving your internal processes, you can benefit from outsourcing things that aren’t core to your firm. Perhaps there are things that your firm does that could be better handled by a professional firm that specializes in that task. This can allow your attorneys to really focus on practicing law and managing their client relationships. The other potential benefit is that you can actually demonstrate to professional liability insurance companies that you have a quality process in place, which could dramatically decrease the cost of your professional liability premiums.


    Optimizing your revenue is always top of mind as you lead your law firm towards the future. But could you be leaving money on the table? Our friends from Lexicon share with us the best practices for timekeeping, collections, and implementing quality processes for a strategy that will help you keep your hard-earned profits. We talk about timekeeping best practices, ways that you can improve internal processes and the overall impacts of ignoring this in your firm. Then we talk about collections and the importance of communication in your communications procedures. Lastly, quality should always remain a high focus to continue improving client experience and potentially even lower insurance costs. If you are looking for more content focused on the legal industry, feel free to check out our other legal podcasts here


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    #69: What is a Level 10 Meeting™ & How Can It Help Your Leadership Team?

    #69: What is a Level 10 Meeting™ & How Can It Help Your Leadership Team?

    Meetings are a part of life in business, but everyone has been a part of a meeting that didn’t get anywhere and, as the saying goes, could have been an email. So how do we increase efficiency, productivity and accountability in meetings to actually achieve results? Today, we are continuing to talk about Traction® by Gino Wickman, the Entrepreneurial Operating System (EOS®), and all it has to offer. More specifically, we are talking about the idea of a Level 10 Meeting™. 

    What we cover in this episode: 

        • 05:22 – What is a Level 10 Meeting™?
        • 08:52 – The meeting pulse
        • 11:34 – Begin the meeting on time
        • 14:11 – Start with good news
        • 16:47 – Reporting mode
        • 25:06 – Identify, Discuss, Solve (IDS)
        • 28:04 – Meeting conclusion

    What is a Level 10 Meeting™?

    Before we get into definitions, we want to clarify that we will be explaining how we have implemented this in our own firm, but you can access Gino Wickman’s explanation of the Level 10 Meeting here.  If you aren’t familiar with the term “Level 10 Meeting” or you haven’t heard us talk about Traction and EOS in the past, we encourage you to go back and listen to episode #68. In fact, you may want to go listen now, because today we are digging into Level 10 Meetings and we want you to be up to speed. 

    A Level 10 Meeting has its name because on a scale of one to 10, your meeting should be rated 10/10 when it’s concluded. After each meeting, all attendees need to rate it on a scale of one to 10 based on the productivity of the meeting. The purpose of this is to give you the most efficient use of your time. Stopping to evaluate the meeting gives you time to consider if you got anything out of the discussion, need more clarity on something, understand the direction you are heading, etc. It also gives those involved to see who is being held accountable. Essentially, you should aim to have a Level 10 meeting every time. 

    When implementing the Level 10 meeting concept, it is important to maintain realistic expectations. It may take some time to get into the groove of the meeting; it did for us! When we started, our meetings were not 10/10. They were more like 6 or 7/10. Some may have even considered those meetings a little rocky. But, that’s ok. We made it work for us and made adjustments where we needed them. 

    The meeting pulse

    The meeting pulse, which could also be called a meeting cadence, is essentially how often you are meeting and your routine surrounding the meeting. If you haven’t implemented the Level 10 Meeting structure, you may be meeting with your leadership team once per week, once per month, or maybe your meetings are all over the place. When following the suggestions from Traction, the recommended meeting cadence is once a week. This meeting should be held the same day each week, at the same time, and should be run on the same agenda. This meeting also should start on time and end on time. Period. 

    Before scheduling your Level 10 Meeting, determine how much time you will need. A fair and recommended time for this meeting is 90 minutes. With 90 minutes you preserve everyone’s time by only discussing topics that need all of these stakeholders involved. If 90 minutes doesn’t work for your business, adjust the time to fit your agenda. 

    Begin the meeting on time

    The most important part of your Level 10 meeting is starting on time. Starting on time shows everyone involved that you value their time. This is an area we could improve upon. We are fairly flexible with our start time with internal meetings because one of our core values is about life in balance. Our entire team works virtually in different time zones with different situations. We currently have team members home-schooling their children, husbands working from home, and a recent snowstorm hit part of our team, leaving them without power. We stress less about being completely on time, although we’re improving so we can be better at respecting everyone’s time. 

    Regardless of your starting time, clearly communicate your expectations to your team. If you are starting your meeting at 10:00 sharp, make sure everyone knows this in advance. If someone is late to your meeting, you need to get started, and you are meeting virtually (using Zoom, GoToMeeting, etc.), like we do, hit the record button and allow everyone to have access to the recording once the meeting concludes. 

    Start with good news

    Beginning your meeting by allowing each person to share some good news is a great way for everyone to transition into work mode from whatever they may be doing personally before the meeting begins. At PJS & Co. CPAs, each of us talks about one good thing personally and professionally. We like to share things that have gone well with clients or our team over the past week and things that have gone well in our personal lives. We enjoy the camaraderie within the team, learning more about each other, and having the ability to acknowledge that there is life outside of business. The good news portion of the meeting isn’t a storytelling time. In order to keep the meeting effective and efficient, ideally, it should be kept to around five minutes. Like other sections in the meeting, the good news section is very quick and to the point. Share a few things and then move on. Quick updates are beneficial and then later you can figure out the appropriate time to dive into those topics. 

    Reporting mode

    The next part of the meeting is the reporting mode. This element of the meeting lasts about 15 minutes and contains three different sections. The intention of this entire portion of the meeting is to report high-level. If any further discussion is needed, you will make note of it and drop it down to discuss later on, which we will cover later. 


    The scorecard is a list of important items you establish that you want to track and the time period in which to track them. These are KPIs (Key Performance Indicators) that will move the needle forward in your business and make sense to keep a finger on as you conduct business.  The scorecard should show approximately three months at a time so you may also see trends from week to week. We have between 15 or 20 items on our scorecard. These are things like cash flow, accounts receivable, number of leads coming in, number of people in the pipeline to be hired, etc. We talk through these things for about five minutes and if anything stands out that we need to discuss further, we take note and save that to what’s called the IDS, which we discuss later. The IDS portion of the meeting is when we can identify, discuss, and solve issues. The brief scorecard discussion makes everyone in the meeting aware of any issues. All of the information presented may not always be relevant to everyone, but it’s helpful for everyone to know what’s going on.


    The next topic of conversation is the Rocks. If you aren’t familiar with Traction, this term may sound foreign, but quarterly Rocks are a foundation of your goals. Within the EOS® (Entrepreneurial Operating System), you’re creating goals for each quarter, the next year, and the next three years. Those goals are where you focus your time and energy on each quarter. Tasks to reach those overall business goals are assigned to each member of the team individually as well as on a department level. These tasks are considered your Rocks. After your brief scorecard discussion, there should be a brief Rocks review that takes about five minutes for the whole team. We try to limit the Rocks to between three and seven goals per person. 


    Next, each person gets about one minute to give a quick customer and employee headline, if they have any. This is where we are brought up to speed about any employees that need to be discussed or a new client that is likely going to take more time, for example. Like the scorecard and rocks, the headlines part of the discussion takes about five minutes and is focused on reporting the information, high-level. 

    To-do List

    Next, is a brief discussion on the to-do list. If it is your first meeting, you will need to create and add items to the to-do list. More typically, the to-do list has been accumulated in prior meetings and contains items that need to be addressed within the next week. Without this component, things tend to be discussed, but many times items fall off the radar and are pushed to the back burner or forgotten completely. In a Level 10 Meeting, those items go on the to-do list with the goal that 80-90 percent of the to-do list items will be handled each week and then drop off the list. Taking five minutes to discuss the to-do list lets everyone know what was completed and what may need more time, and why. Sometimes tasks even need to be reassigned or adjusted to get handled appropriately. This helps keep things moving and holds your team accountable.

    Identify, Discuss, Solve (IDS)

    IDS in the context of this meeting style stands for Identify, Discuss, Solve. The IDS part of the Level 10 Meeting is where the majority of your time should be spent, and typically lasts about one hour. As you are going through the first part of the meeting (good news, reporting, and to-do list items), you will make a note on the IDS list if further discussion is needed on any topic. This keeps the focus on reporting and to-do and helps avoid derailing your meeting. 

    When it’s time to address the items you documented on the IDS list, everything you put on the list will need to be prioritized before just diving into discussion. Then, you’ll spend the next 60 minutes or so discussing and solving those prioritized topics. You may be able to get through each item on the list, but if a couple of the items take the majority of your time, at least you know you’ve started with the most important topics. 

    The goal is to get through the entire IDS list and stop after 60 minutes. If there are items that weren’t resolved in that 60 minutes, they remain on the IDS list for next week. If there is one overarching issue that needs to be discussed for the entire 60 minutes, so be it. That’s what the time is for. We are typically able to talk through several items on our list, but if there is a team member who isn’t performing as expected and we need to talk through that and it takes the full meeting, we do what is necessary. The goal during the IDS discussion is to solve problems. If you can solve all of the problems on the list, great. If you can only solve one, focus on the fact that you’ve solved something. The IDS conversation is also a time when additional items can be added to your to-do list. 

    Meeting conclusion

    At this point, hopefully, you’ve gotten through your entire issues list and several have been resolved or you’ve added items to the to-do list to move closer to resolution. During the meeting, if there were to-do items that came up, those should be documented and assigned to someone. Next week, everyone can receive an update on this particular item from the person in charge of the topic. 

    Then, you’ll discuss any cascading items to decide if they need to be a high priority next week, if they should be removed from the list, or if they should be reassigned to someone else. Then, decide if there is anything that was covered in the meeting that needs to be communicated with others outside of those in attendance at the Level 10 Meeting, referred to as “cascading messages.” If there are changes taking place, someone needs to be assigned to communicating that to those impacted and someone needs to be assigned to tracking the change.  

    At the end of the first several Level 10 Meetings, you should rate the meeting on a scale of one to ten. Give your perspective on the success of the meeting. How was the flow of the meeting? Did you accomplish more or less than you expected? Did anyone go off on tangents? If so, was that handled in a respectful manner where the topic of conversation was moved on the IDS? Rating the meeting allows everyone to learn and improve. 

    Lastly, respect everyone’s time and end the meeting at the scheduled time. No matter how many people are in attendance at your Level 10 Meeting, the goal is to be productive, based on the agenda, in the amount of time you’ve established. 


    We know first-hand the benefits of having regular Level 10 Meetings with your leadership team and we want you to experience those benefits too! Having structure in your meetings, using a standard agenda every week and tracking progress really does help make strides toward achieving your goals. Meeting with your team on a regular basis is necessary to move your business forward. These meetings allow you to create a sense of inclusion with your leadership team. Plus, you get the opportunity to know what’s going on across your business, you have insight into what people are working on and what they are thinking. Not to mention, regular meetings like this hold you and your people accountable. If your meetings aren’t as productive as you think they could be, you are simply looking to add structure to your meetings, or you just want to move your business forward, consider implementing some of the Level 10 Meeting strategies in your business. It could be a game-changer. 


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    #68: Gaining Clarity in Your Business with Traction® & EOS®, featuring CJ DuBe’

    #68: Gaining Clarity in Your Business with Traction® & EOS®, featuring CJ DuBe’

    We have referenced Traction®, by Gino Wickman, quite a bit in the past so today we are focusing on this tool and how it can help your business run more smoothly, improve efficiency, and gain traction to achieve your vision! Traction is part of the EOS®, or Entrepreneurial Operating System. To ensure we’ve got all the facts straight, we’ve invited CJ DuBe’, a Certified EOS Implementer, and the Global Community Leader at EOS Worldwide®, on the show to talk to us about leveraging Traction. We cover quite a bit of information in this episode, so please reference the free tools provided or Traction itself for more!

    What we cover in this episode: 

    • 01:31 – Introduction to CJ DuBe’
    • 02:40 – The value of EOS® 
    • 05:25 – EOS and strengthening The Six Key Components of Your Business
    • 07:56 – Vision component
    • 11:53 – People component
    • 12:27 – Data component
    • 17:27 – Issues component
    • 19:37 – Process component
    • 21:34 – Traction component

      Introduction to CJ DuBe’

      CJ DuBe’ has always been an entrepreneur. With more than 25 years of experience, she knows a lot about business and people. As a Certified EOS Implementer, and the Global Community Leader at EOS Worldwide®, she has helped over 110 entrepreneurial companies and their leadership teams gain traction and achieve their vision, by implementing EOS in their businesses. EOS offers practical tools and simple concepts for leaders to master in order to help their business function well and grow to its fullest potential.

      The value of EOS®

      Traction focuses on EOS, or the Entrepreneurial Operating System. According to EOS Worldwide, EOS is “a complete set of simple concepts and practical tools that has helped thousands of entrepreneurs get what they want from their businesses.” By implementing EOS, businesses and leadership teams see improvement in three things: vision, traction, and health. These three things align with our culture at PJS & Co. CPAs, which is a large factor in why we decided to begin using the tools from Traction in our own organization and have been happy to share them with others.

      EOS focuses on vision from the perspective of getting everyone 100 percent on the same page, moving in the same direction. This means defining not only where you’re going, but how you’re going to get there. Then, it focuses on traction, which is really the execution within your organization. Last, but not least, is the focus on being a healthy, cohesive leadership team who works together for the greater good of the business. This is usually the hardest part. There can be a bit of resistance to getting every member of the leadership team on the same page because it is normal for everyone to have a little variation of what the vision means. Once everyone is on the same page, they can then take the vision to all of the employees in their business.

      Early on, when we were learning and implementing EOS at PJS & Co., we identified one of the benefits of doing this was the fact that we were able to gain clarity surrounding our goals and what we are trying to achieve. We all knew in a general sense, but EOS led us to have them on paper in a concise way. When everyone knows where you want to go as a company, you can all push in the same direction and make much more progress together.

      EOS and strengthening The Six Key Components of Your Business

      The EOS model is made up of six key components. Each key component contains two tools, which we cover in greater detail below. At a high-level glance the six key components are: 

      Vision – Get everyone a hundred percent on the same page and heading the same direction.

      People – Get great people in your organization.

      Data – Remove the subjective to analyze hard data. 

      Issues – Get things out of your head and move toward a solution.

      Processes – Get everyone doing things the same way.

      Traction – Execute, get results, and make things happen.

      Vision component

      According to CJ, “the first tool with the visual component is what we call ‘the eight questions.’” The official name of the tool is the Vision Traction Organizer (VTO). 

      The first five questions relate to vision within the VTO.  

      What are your core values?

      This is a list of 5-7 characteristics that describe your business. Everyone should be on the same page and understand what those values mean.

      What is your core focus?

      Core focus is really defining your business sweet spot, what you do better than anyone else, aligning with your passion, and figuring out your niche. 

      What is your 10-year target? 

      This is your big, long-range goal. It’s anywhere from five to 30 years. Identify that goal and decide what’s the one big thing you want. 

      What is your marketing strategy?

      This is a simplified approach to marketing. You’re answering several questions within this section. What is your target market? What are three uniques/differentiators that set you apart from your competition? Do you have a proven process for doing business?

      Do you have a guarantee? Some businesses have a guarantee and some businesses don’t. For example, FedEx guarantees your package by 10 AM the next day. Establish whether or not this is required for your business.

      What is your three-year picture?

      Get things out of your head and onto paper. This is a short amount of time. Where are you going? How are you going to get there? 

      The final three questions focus on the traction piece and hone in on your one-year plan. 

      What is your one-year plan?

      What do you want your revenue to be in 12 months? What do you want your profit to be? Then what are you measuring? What are the one to two key measurables you’re going to have? What are the three to seven most important goals for the year? Identifying what those goals are as a leadership team, being on the same page, ensuring that you’re writing them in specific, measurable, attainable, realistic, and timely ways. Another way of saying this is by asking, as clearly as possible, what does ‘done’ look like? 

      What are your quarterly Rocks? 

      The term Rocks comes from Steve Covey’s book, First Things First, which is really talking about living your business 90 days at a time. First, thinking through your goals for the year and then living your business in a 90 day world. Again, narrowing it down to the three to seven things you want to get done in a quarter. What are the three to seven most important things you want to get done? 

      What are your issues?

      List your issues on paper so you know what you’re going to tackle and how you’re going to solve it to move it forward. 

      CJ then shared, “The second tool in the vision component is what we call ‘shared by all,’ where everyone is going in the same direction and everyone knows all the answers to all the questions.” The vision components are a tremendous part of what makes up EOS. 

      People component

      CJ stated, “One survey from all of our clients asked what the most important component was and 82 percent answered the people component.” CJ went on to explain, “That’s partly because frustration comes from all people – employees, leadership team members, owners, vendors, clients. With your company, you should want to be able to get the right people in the right seat. There’s a couple of exercises that we do to get the right people and that ties directly back to core values.”

      A tool known as the accountability chart helps you identify the right accountability and the right seats for your business. The structure should come first and people come second. Your accountability chart is like an org chart on steroids and is crucial to finalize before you begin filling the seats. This can avoid creating seats for someone who may not be a fit for your organization either based on skills or timing.

      The ability to assign and delegate to people is also important for growth. In Traction, Gino shares a story from the book, The One Minute Manager Meets the Monkey, by Ken Blanchard. This monkey story resonates with many business owners because it illustrates problems as monkeys that your employees may bring to you. With each problem (or monkey) that you take back, soon you have a room full of monkeys that were never yours but got passed off on you. CJ shared with us that when she teaches leadership, management and accountability, the equation is leadership plus management equals accountability. For leaders, the main takeaway from this story is, when employees come in with a problem, make sure they leave with the problem still being their responsibility. Don’t allow the employee to pass the problem to you. One good technique to do this is to ask your employee what the issue is and how they think they should solve it. Get ideas from them and talk with them to determine what the solution could look like, and then guide them back out your door… with their monkey.

      Data component

      Next is the data component. The tool that allows you to focus on, and consistently track, data is called a scorecard. A scorecard is a culmination of your KPIs (Key Performance Indicators) and allows you to see 13 weeks at a glance. We come back to that 90 day world focusing on what you are measuring, who owns that measurable, deciding the goal for that measurable, and measuring it every week. Then, look at it 13 weeks at a glance so you can see the trends that are happening in your business. 

      This data component is very helpful because you can’t argue with the numbers. Intentionally reviewing this data every week and analyzing trends will allow you to see weaknesses and opportunities more easily. This helps with accountability as well because every role will have an assigned number that they own and should be able to provide more insight about that information.

      Issues component

      After you have your vision component, people component, and have compiled your data component, that’s when issues may start to bubble to the surface and you can start solving problems. The first tool is the issue solving track. It is laser-focused on building the list of problems that need to be addressed. First, all of the issues need to come out of your head and go onto a list. Then, it’s time for the second tool. This is where you identify, discuss, and solve (IDS) the issues.  

      Identify – Don’t focus on the issue by looking at the surface; get to the root cause of the issue.

      Discuss – Ask clarifying questions, make sure you’re on the same page, discuss options for how to solve the problem. 

      Solve – Determine what the solution is for that issue. The solution could be something you say or do today, which solves the issue permanently or could be more long-term. 

      If you are at this point in the IDS process and get stuck, you may want to go back and listen to episode #64 where we covered how to overcome fear of making business mistakes and/or episode #32 where we shared how to take action in your business during difficult times. 

      Process component

      The process component is the fifth key component and is where you identify your core processes and get everyone on the same page. If everyone is doing things their own way, your business will lack consistency and struggle in many areas. The first part of this component is to identify your core processes, document and simplify them. The second part of the tool is to ensure those processes are followed by everyone. This component can give much more structure to your business and help give direction. 

      Traction component

      The tools within the traction component are “Rocks” and the meeting pulse. “Rocks” are your 5-7 quarterly goals. The meeting pulse is where the “Level 10 Meeting” is introduced. CJ shared, “I always tell every team I meet with, if you only pick one tool, pick the level 10 meeting because the level 10 meeting is about keeping your circles connected and keeping everybody on the same page together.” 

      The Level 10 meeting is where you’ve got five rules to a meeting. Those rules are, the meeting takes place on the same day, at the same time, the meeting will start on time, the meeting will end on time, and the meeting will have the same agenda. For a leadership team, this meeting is usually every week for 90 minutes where everyone is laser-focused. 

      An overview of the agenda for a weekly Level 10 Meeting looks like this:

      • Segue – Everyone gets grounded and asks questions like, “What’s your personal best? What’s your professional best together?” 
      • Scorecard 
      • Rock review
      • Customer/employee headlines
      • To-do list
      • IDS 
      • Conclude

      We cover the Level 10 Meeting in further detail and how we conduct our meetings in Episode #70 of the Cultivating Business Growth Podcast.


      Today’s episode was jam-packed with a vast amount of information to help you grow your business. So much information was presented that you may need to listen to this again! The intentional integration of these tools can help your business move forward toward goals with fewer distractions. Your larger vision is important to refer to often, but when you’re in the day-to-day, focus on the 90 day world, 90 days at a time, and remember not to overwhelm yourselves. We are all human and can do great work together when you have the right tools and leadership team. As Gino Wickman would say, “Vision without traction is hallucination.”

      We thank CJ DuBe’ for sharing her expertise with us on today’s episode, as well as many free resources available to our listeners! She is also available for more support (reach out via email) or if you’re interested in integrating these tools into your organization. Here are the tools mentioned for additional support: 


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      #67: Quarterly Business Checkup with a Virtual CFO

      #67: Quarterly Business Checkup with a Virtual CFO

      We are quickly moving through the first quarter of 2021 and this means it is time for quarterly meetings! We are constantly learning and growing as we go through business cycles. As we learn and grow, it’s important that all business owners meet regularly with their virtual CFO, CPA, or other advisor to ensure the business is performing well. In today’s podcast episode, we are talking about what quarterly business checkup meetings should look like in case you have never been a part of one and would like to start!


      What we cover in this episode: 

      • 01:51 – Where to start with a quarterly business checkup
      • 04:10 – Review financials and performance
      • 12:26 – Tackle key issues
      • 16:02 – Begin the proactive stage
      • 16:57 – Actionable steps
      • 18:35 – CPA, advisors, and virtual CFO involvement
      • 21:05 – Stick with it

      Where to start with a quarterly business checkup

      We begin the quarterly business checkup by reviewing the strategic plan that was established during your year-end planning session. We covered year-end planning and strategy in episode #60, so if you missed it or need a refresher, give that episode a listen. As you may recall, in that episode, we talked about planning for the year and the actions you need to take in order to have the right trajectory. We shared the importance of establishing goals, budgets, cash flow projections, and quarterly “Rocks” (mini-milestones) to help move you toward your annual goals. If you haven’t done that yet, don’t stress. You can still have your quarterly meeting. However, if you have planned for the year go ahead and reference your annual strategic plan so you can evaluate where you planned to be versus where you landed in reality. 

      It is also helpful to make an agenda for your quarterly checkup. Don’t go into a quarterly meeting without any direction or sense of what you’d like to accomplish. Having an agenda will help you and your team stay focused on the task at hand within the given time frame. Throughout the quarterly meeting, you will review many things and notate issues as they arise. You will then prioritize and tackle your issues once you have your full list, so avoid the urge to fully discuss and solve each issue as they arise since that can quickly eat up a full meeting.

      Review Financials and Performance

      Review your financials and determine if you are on target and in alignment with your goals for the year. Review your budget versus actuals to see if anything is out of the ordinary. Take time to look at any line items that don’t look right to determine if you may have budgeted incorrectly. This is an opportunity to identify if you are controlling your costs appropriately or if you may have missed something when you originally budgeted for the year. You will also want to look at your key performance indicators (KPIs) and whether you’re meeting those goals you’ve set. If you need more information, take a look at episode #08 of our strategic planning podcast series focused on KPIs. 

      Analyze your progress compared to your strategic plan and have an open discussion among your leadership team and advisors regarding each line item in the agenda. As you go through each agenda item, you want to be looking for ways to move forward toward your goals and note any issues or problems that may stand in your way. We know this can be a bit of a process because you first want to identify all of the issues and then later come back to discuss them more in-depth. 

      When it comes to reviewing the financials and the purpose of your agenda, this is where you want to stay focused. Once you identify a problem during the review, add it to an “issues list.” You may naturally want to start down the road of solving it but for now, avoid that. Stay focused on the agenda and know you will come back to your “issues list” later. For this meeting to be effective, keep everyone’s attention on the task at hand, which is to review the financials. Once you have the complete list of issues, you can then prioritize that list to ensure you cover what’s most important. You may even discover some of the problems are best suited to be discussed next quarter. Next, review the plan for the year and see if you need to revise that plan.

      Review Tips

      • Be honest in everything you review. Bring the facts to the table, whether they are positive or negative. There will be things that worked well and others that didn’t. Regardless, they all need to be brought forth. 
      • Clearly identify what didn’t work so you can make improvements. 
      • Celebrate your accomplishments. Identify three things that went well in the quarter and acknowledge how far you’ve come. 
      • Review your “Rocks”, or what you said you wanted to accomplish in the quarter. Did you accomplish everything? If not, why? Were there roadblocks that got in the way? In one of our favorite resources, Traction by Gino Wickman, the author says to revisit your metrics to see if you are accomplishing, on average, approximately 80 percent of your “Rocks.” If you are reaching 100 percent, you likely need bigger “Rocks.” If you aren’t reaching the 80 percent, your goals are a bit unrealistic. 
        • Reviewing your “Rocks” gives you the opportunity to also see if you need to adjust any delegation of work or if you need to hire another team member.

      Tackle Key Issues

      This is where you will discuss all of the company issues you’ve compiled. These could have been identified during the review earlier in the agenda or may contain some items you thought of as you prepared for the quarterly meeting. Put this list in order of priority and go into discussion about each of these things. In this discussion, you really want to get to the root of the issue. Many times, the initial issue is surface-level but not what is actually causing the problem. Make sure you have enough discussion to get to the root of what is going on so you can deal with it, not just a symptom of the problem. Do a little peeling of the opinion to get to what is beneath the surface. Then, devise what steps you can take to resolve the problem and establish a plan. What comes out of this key issues list and conversation is commonly a list of new “Rocks,” or quarterly goals. These new “Rocks” are the steps necessary to resolve the issue. Once you have a prioritized list of issues and the list of new “Rocks,” you need to assign those out. When doing this, take into account each person’s capacity to take on more work. Do what you can to avoid putting too much on any one person. 

      Begin the Proactive Phase

      Once you’ve looked at what’s occurred versus what you expected, identified your results, discussed the issues, and delegated someone to work towards a resolution, now it’s time to go into the proactive phase. You’ve got a plan in place to resolve the “Rocks” identified from this quarter. In looking ahead, identify your next quarter budget and the goals you’d like to accomplish. Ask yourself and your team, what is it we are trying to accomplish as a company and as individuals? The answer to those questions will allow you to see what you’d like from your employees under each of the leadership team members. 

      Actionable Steps

      The steps you take at this point are going to be dependent on the structure of your business, the number of employees, the number of departments you have, and how you have your teams set up. . Maybe you have certain teams handling certain things. We’d like to assume by now that each leadership person is responsible for a “Rock” (or more than one). They need to take that “Rock” and break it down into a task list, delegating responsibilities as much as possible. Each leader will be the main control function for that “Rock.” They will oversee the project. This means they are the one primarily responsible. You need to have that responsibility and accountability in place, even though that doesn’t necessarily mean they’re the ones performing all the tasks in order to accomplish that “Rock.” The leaders can decide to take their problem back to their team or even their department. Again, it depends on how your business is structured. But, they will hopefully have a quarterly meeting with their department to share what they are looking to accomplish and then further break those tasks and assign them to individuals in their department. The leaders will need to monitor the tasks during the quarter to ensure progress is being made towards the goal. It is likely the tasks are broken down with timeline goals where some things will need to be accomplished each week or each month, depending on the size of the issue and how often it needs to be revisited. 

      Virtual CFO, CPA, and Advisor Involvement

      Again, we want to emphasize the importance of involving your virtual CFO, CPA, or advisor in each of your quarterly meetings. The quarterly meeting is a strategic meeting, similar to the annual meeting. It is integral to any business to involve these educated and experienced partners in decision-making conversations. They’re going to lend their experience and invaluable expertise to the discussion and this kind of involvement keeps that person integrated in the business. You want them in the loop with what’s going on because they need to be able to properly advise you as the owner and your leadership team based on that knowledge. If they’re kept in the dark, not involved in these meetings, they won’t be able to provide the level of advice they could have if they were involved.

      Stick With It

      We encourage you to keep the accountability going throughout the quarter, not just at the end of the quarter. Be diligent about having your weekly meetings with leadership, Be accountable to others. Weekly, quarterly, and annual meetings may be annoying, but having them really pushes you to the next level in your business and will pay back dividends. Get these meetings on the calendar and make attendance a priority.


      It’s easy to get caught in the day-to-day details as an owner, but it’s imperative to the success of your business that you meet with your advisors on a regular basis to check in and ensure you’re still moving in the right direction. Your advisors need to be aware of what is going on in your business and involved in decision-making conversations. If you are meeting on a regular basis, you will want to start by discussing the goals you’ve already established. Then, you can review all of your financials and performance data to see how you are measuring up. Sometimes adjustments need to be made to ensure you move closer to reaching your goals as you continue through the year. As you do this review, you may start to notice issues that need to be addressed in order for you to be able to reach your goals. When this happens, take time to hash out a plan and delegate the right people to solve the problem. Then, when it comes time for your next quarterly meeting, you can follow a similar process and continue to make changes. When it’s time for your next annual strategic planning meeting, your advisor will be completely in the loop with everything that’s happened in your business.


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      10-Part Strategic Planning Intro Series

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