Unknown Speaker:
[Music]

Jamie (host):
As a small business owner, have you ever felt overwhelmed by the pressure of choosing the right hire or leading a team? Or have you ever found yourself tolerating a bad hire because you fear trying and failing again as you repeat the hiring process? If so, you’re not alone and you’re in the right place. Welcome to the Growing Your Team podcast. The Growing Your Team podcast teaches business owners like you to expand your unique business by teaching you to master the hiring and team management process. Hiring and managing a team does not have to be a challenge. You just have to learn to do it right, and the Growing Your Team podcast teaches you how to become a confident leader who hires right every single time. Now let’s jump into the show, where each episode you will learn tips on how to identify what type of help you need on your team, how to source amazing candidates, how to conduct interviews that lead you to your ideal team member, how to onboard successfully, and how to lead every person in your business. So you have a team of rock stars who you are happy to pay every single paycheck. So let’s jump in and teach you how to hire like a pro.

Jamie (host):
Hello, Jamie Van Cuyk here, and welcome back to the Grow Your Team podcast. Today I have on guest Kathy Svetina. Kathy helps small businesses with 3 million plus in annual revenue build financially healthy and sustainable businesses. She is the founder of NewCastle Finance, a company offering fractional CFO services to growing small businesses. For nearly 14 years, she did senior-level Financial Planning and Analysis for Fortune 500 companies. She saw firsthand how big companies use financial information to drive their business forward, and she shows small businesses how they can use those same strategies to create thriving businesses. She is also the host of the Help! My Business Is Growing podcast and in her free time, loves touring castles, which inspired her business name.

Jamie (host):
In this conversation, Kathy and I are talking about financial anxiety and how that can impact your business’s success. So we talk about a few ways to really look at your business and navigate decisions so you can lower the anxiety you have about your finances that might be holding you back in ways that they shouldn’t be. We also talk in this conversation about understanding the type and level of support that you need. For example, do you need an executor? Do you need a manager, or do you need a strategist? These are all different levels of support, and you want to make sure you hire the right person, so that way you get the biggest bang for your buck, which will help alleviate that financial anxiety that you feel with hiring. So let’s jump into the conversation with Kathy. Hi, Kathy, thank you so much for joining us today on the Growing Your Team podcast.

Kathy (guest):
Thanks so much for having me here, Jamie. Super excited.

Jamie (host):
Yes, I’m so excited to have you. Before we jump into today’s conversation, can you tell us about yourself and your business?

Kathy (guest):
So I’m a fractional CFO for growing businesses. And a fractional CFO might sound a little bit complicated, but what that means is that I do CFO work for a fraction of the time, a fraction of the cost for businesses. Essentially what it means is that instead of having me full-time in your business, and you know, paying all this money that you would pay for a CFO, you get the same type of support for a fraction of the time and for a fraction of the cost. So I support multiple businesses, and I’ve been doing this in my own business for five years, but I hail from corporate finance, and I was there for 15 years. So I worked with big Fortune 500 corporations. And you know what always bothered me is that in big companies, you have a lot of finance support. You have people who do accounting, you have people who do planning, you have people who do all sorts of things. But when you come to the small business space, there’s really not that much support. I mean, you have the accountants and the bookkeepers that take care of the day-to-day operations, but there’s really no one that does that strategic type of work that you need as your business grows. So that’s what I focus on with small businesses.

Jamie (host):
Yeah, and it’s one of those things, like, you got to one of the questions that I had before I had the opportunity to ask it. And, you know, it’s great that, as you broke down, like fractional CFO is really getting that expertise at a fraction of the time, at a fraction of the cost, because the reality is, as small businesses, we don’t always need full-time support for what we need help with. And I feel like that’s one of the mindset things that sometimes we need to get over, especially if we’re coming from a corporate background. Not everybody needs to be full-time in an organization. We can get the support we need in a part-time capacity, and sometimes that’s all we have the work for, and that’s all we can fit in our budget. So having that expertise at that time and budget that will best fit our company is so important. But when it comes to the financials, I feel like it’s one of those things, as you mentioned, like you can get the bookkeepers, you can get the accountants, you can get that stuff. And we know, I think a lot of times, that we need that, but I don’t think we always think we’re big enough to go to that higher-level strategic financial support. And sometimes I feel like we don’t even really know that it exists, if we haven’t been in that arm of an organization before, in a corporate organization. I don’t think we even know what that looks like, or what that does at a corporate level to even understand that this is something that we need at a small business level. So can you help us really understand what, in everyday terms, for those of us who are not in that industry, what does a CFO do that is different than what you get from accountants, that is different than what you get from a bookkeeper, and why, when you’re a small business, this is important?

Kathy (guest):
Yeah, that’s a great question, and this is one of the reasons why I do a lot of podcasting, and I have my own podcast, because I educate people that there are people out there that can help you with this type of stuff. And one of the main things is when I always get asked, like, when would I know that I need a fractional CFO? And the answer to that is when you are asking questions to your bookkeeper and accountant and they’re like, “I don’t know, that’s not really in my job description.” One of the things that you should always think about is when you have those roles, generally in the small business, the bookkeeper does the day-to-day stuff. They do your bills. They do your accounts payable, accounts receivable, making sure that you get money from your customers and clients, that your bills are paid out, that your financials are organized in whatever accounting system you’re using. Use QuickBooks, Xero, whatever it might be, so that it’s all nice and clean. So really, they are the people that are doing that foundational accounting stuff. And then you have accountants who might actually give you some advice. A lot of good accountants actually give some advice, like, maybe you should do this. Maybe you should think about that and how the taxes are going to play out. But when you truly are planning to grow, and when you are, for example, dealing with investors, you might be dealing with banks, you might want to get a line of credit and you need to have certain projections that you need to make, that is when the time is to get a fractional CFO involved. And one of the things that a fractional CFO, a good fractional CFO, should do, is they should do your planning and projections, so your budgeting, your forecasting, your cash flow planning, those are the three things. And the other thing that’s really, really important is that they are looking at what’s happening in your business, for example, like, who are you hiring? When should you hire? How are you going to be able to afford that? And also, what is happening in your business in terms of sales, in terms of marketing, in terms of your operations? And they’re taking all these pieces and they’re translating them into the financial projections, because I always say that everything that you do in your business is eventually going to end up in your finances. So a good CFO should be able to see what is happening in your business and will tell you, “Hey, Jamie, I see that this is happening in your operations right now. If we go down that path, this is probably where your business is going to be financially six months, 12 months from now. Do we need to pivot, or do we need to find something else to do? Or do we need to maybe hire more people?” Because it looks like, for example, if you’re doing a lot of hiring and you have a lot of sales happening, if you don’t have the operations to support that, for example, if you need a Director of Operations, a lot of stuff can fall apart. So that is, and of course, because when it falls apart, that’s going to end up in your finances eventually. So a good fractional CFO is always going to be on the lookout for what’s happening in the business, and thinking of how what you’re doing right now is going to affect your business in the long term.

Jamie (host):
Yes, Kathy, you just said something that I feel like is so, so important. You talked about how to think of those things like, okay, you have a lot of sales, but do you have the operations to support that? And I’ve seen that happen so many times in organizations. I saw it happen in the corporate company that I came from. I see it a lot in other small businesses, as we focus on revenue. How do I grow my revenue? How do I earn more money? Because that’s what we look at as sustainable in a business, I have to earn revenue in order to pay myself, in order to pay my bills. And I set these goals, but I always remind people of but what happens when you achieve those revenue goals? Can you sustain? Yes, maybe you can sustain that short little uptick and handle those additional clients for a month or two months. But if that is every day, and it’s not just one additional client, it’s four additional clients, because your sales team is knocking it out of the park. Can you do that if you’re seasonal, and you know business goes up every summer, are you preparing for that business to go up every summer, when sales are going to increase without overworking or flooding your team? So it’s like some of those things where it’s like that planning of what do I need to support the sales? Because if you don’t have the team to support the sales, what happens? Clients aren’t happy because they’re not getting the support that they feel like they should be getting, and then they might pull contracts. They don’t refer you to other people, they don’t come back for repeat business and things like that. So it can impact your future. And we don’t want those sales numbers to be a momentary blip, something good that happens. We want it to be that steady increase of here’s where our business can be and should be and is moving towards.

Kathy (guest):
And there’s another point with sales. Obviously, it’s making sure that you’re operationally ready for it. But the other factor here too is that you have to know that not all money is good money. So what type of money are you bringing in? Is the business that you’re bringing in actually at lower margins, and that is going to affect the business as well, because what ends up happening is that you do all of this extra activity to make sure that the money is coming in, but because you’re spending so much time supporting it, you’re not actually keeping it in your business. And that becomes an issue as well. So looking at it from a perspective of who is really a good client or a good customer for us, especially, that’s really important if you’re in a service-based industry. That is a little bit different if you have a product that you’re selling, but it’s so, so important if you’re a service-based business, to really understand who is the highest producing margin for your business, and what type of clients actually bring you the most money in so that you’re not serving people, and then at the end, you’re bringing all those people in to support them, but at the end of the day, because you’re spending so much on support, you’re not really keeping anything in your business.

Jamie (host):
Right? Yeah, I think that is… It’s a great thing. It’s like, I just read this quote, and I’m not going to get it right. It was like, you finally find someone that’s obsessed with you. They want all your time, and they’re like, but they’re your most annoying client. And like, so it’s like, but at first it starts off, it’s like, “Oh, it sounds so good,” because they really like me and that. It’s like, they’re your most annoying client who sucks all your time and makes it so you don’t have time for anything else. And they’re typically your lowest paying clients and things like that. And so it’s like, it doesn’t always work out just because someone’s taking a lot of your time, if you’re not getting paid for it appropriately. I feel like that’s also one of those things, is sometimes you look at that and say, well, this thing I’m offering is 100% something I want to do. It’s in line with my business. But sometimes, is it that distinction of, do you work on it as the business owner, or is that one of the projects you give to your lower-paying team members? So the work’s still being done, you’re getting the same revenue in but it’s not costing your business the same to complete that project because you’re having a lower hourly rate work on that project than your higher hourly rate. I work with a lot of clients in the interior design business, and I know they say when someone’s going to… when they’re hiring someone who’s new, a new designer, and they say these are the projects that they’re going to work on independently. And they’re typically the smaller projects, or, like, it’ll be a one-room project where, here are the projects, they’ll work in collaboration with myself or with another designer, because they’re the bigger projects, and it’s like you can trust them and give them independence on those smaller projects, but you’re going to have the higher-level team members work in collaboration with them on those bigger projects.

Kathy (guest):
Yeah, exactly. And you know, a lot of times business owners don’t really know that, so it’s okay to do certain things as an experiment, as a test, but not rolling it out to the entire company. So if you want to take a certain project on, especially, I know, with designers, especially if you’re doing like a design-build, you might be switching from inside kitchen to bathrooms, or, you know, actually doing a… like an actual design of the entire house. Those are different projects. So if you want to take a small test project and see how it actually works for you, how much time you’re spending on it, how much time your team is spending on it, how much revenue can you actually get from it? And you know, what the cost is from that as a test project, and see if that might be able to fit your business, that’s okay. But you’re going there with an intention. I don’t know what… I don’t know. I am doing this as a test, as an experiment. Let’s see and find out how this works out. So that’s okay, instead of going and doing this, “Oh, I’m going to make so much money,” and then at the end, you end up with nothing.

Jamie (host):
Yes, yeah. And I feel like that’s one of the things we talked about before on this podcast, is sometimes tracking your time, understanding really what goes into executing a project. And I remember a few years ago, I raised my prices on one of the offerings, and I felt really, it was a hard thing for me to do, because I was like, “Oh, should I be doing this? Or should I not?” And then I started really tracking my time on the projects, and I was just like, “Oh, no, no, no. This price is now exactly where it needs to be.” Otherwise, I’m losing money every time I sell this service. And it sounds great, it’s a good revenue generator, but if I’m losing money because I’m executing that, I shouldn’t be selling that. So it’s like, with the increased price, I was like, now I actually make money off of selling this versus going into the red by selling this.

Kathy (guest):
Yeah. And the other thing I also want to say too is pricing is both an art and a science. The science part comes in with figuring out financially how much you need to sell and how much you need to price to cover your costs and have a little bit of profit. But then the art part comes in: who are you actually selling it to, and what is the value of your service to those people that you are selling it to? For example, you might, and I know a lot of people get into, “Well, what if they don’t pay for this because they say it’s too much?” Well, you could go the other way and say, they might not be paying for it because it’s priced too low. There’s a lot of psychology in pricing. So you always have to think of both sides. Again, there’s the science part of how much I need to make money. But then also the pricing side, how much can I price it for this particular customer with the positioning that you have in your business? And that’s, you know, the marketing people can tell you more about this. And who are you actually selling it to in the market? If you go into a high-end market, obviously the price there can be – the market can take a lot higher price than if you go into a lower market where, you know, they’re really, really price sensitive.

Jamie (host):
Yes, Exactly. And sometimes, even within a market, you’re going to find both sides of that as well. I know, for like, my services, I have some people that say, “Nope, can’t afford that. I don’t see it necessarily being worth that. It’s not going to work in my budget,” whatever. And I have other people that say that is 100% worth the cost here. Take my money now. So it really is like, yeah, it’s one of that art. It’s figuring out, okay, well, if I’m always hearing no because of a price from this group of people, what can I do about it? One, maybe don’t market to that group of people anymore and market to the people that are saying yes, or sometimes see, is there something else that you can offer that other group that is worth your time but is not the full thing that you initially went for? Do they need everything? Or can you have a smaller package, a smaller offering that fits what that group needs in the budget they can afford?

Kathy (guest):
Yeah, exactly.

Jamie (host):
Yeah, Yeah. So I want to circle back, because I feel like this is so important when you’re talking about kind of the difference between the bookkeeper, the accountants, the CFO, because I feel like there’s sometimes, if you’re – so people listening, this might be like, “But I’m not a money person,” even though I’m like, “Whoo, it’s over, it’s over my head. I don’t get it.” So I just want to, kind of, like, break that down into something else that people might relate to. And if we look at the different levels. So we talked about the bookkeeper, kind of, they’re the executors, they’re the people that are going and doing the work. They’re going in and labeling the transactions and doing all that stuff. They’re making sure your everything is up to date and accurate. So if you think about that like, let’s equate all this to marketing. That could be the person that comes in and schedules your social media. They’re taking the templates that you provide and maybe just changing the verbiage out based on what you’re telling them to do. They’re not putting in a whole lot of strategic, or any strategic level really, thought process. They’re kind of executing what’s in front of them. So yes, it might take strategic thought for them to do it. It might take some thought of, okay, here’s a template, but based on what we’re put in, how do I change it? How do I adjust it? How do I make this work for the brand, for this? So we’re not saying it doesn’t take any thought process to do this, but it is one of those things where the strategic thought that they do is just based on the information that’s in front of them. Then if you think about your accountants, those could be that next higher level person, the person that’s saying, okay, no one’s telling me what to do marketing-wise, but I know there’s a launch coming up. Here are the pieces we need to be successful for a launch. We need emails, we need social media things. We need this, we need that. We might need ads. And so they’re kind of creating all those things because they’ve been told our business is doing this. We need marketing pieces to support it. And then I kind of see, like, the CFO is kind of like your chief marketing officer, where they say, “All right, well, you want to increase your sales by 5%. How are we going to increase your sales by 5%? Okay, we need to do this in marketing. If we do this in marketing, we need this over there. This is how we’re going to do this.” Okay, you’re not going to tell me that you’re going to do a launch. I’m going to tell you that you’re doing a launch, because that’s how we’re going to get that increase. That’s how we’re going to achieve this. Okay, we’re having a downtick in our sales. What’s causing it in our marketing? What has changed? So they’re really that person that’s thinking at that higher level, saying, because you want to do this elsewhere in your business, we need to do this within marketing.

Kathy (guest):
Yeah, that’s an absolutely fabulous analogy. I love it because it brings that very close to especially the smaller businesses that have to deal with marketing. And I love it. I love it. It’s great.

Jamie (host):
Yes. Yeah, because I feel like relating a lot of things back to marketing sometimes works, because even if we’re not good at it, we all know that really has to happen in our business. We’re not overlooking it, we’re not ignoring it, but we tend to overlook and ignore a lot of the other important things in our business because it just doesn’t sound as fun. So like, like the finances. But okay, so let’s now talk about these different levels. And so a lot of times businesses, once they start hiring, they start off with hiring the people that are going to execute things. And I think that’s fine. I think that’s fine. A lot of times when we’re going to start getting work off our plate as business owners, we need to hire the executors first, the people that are going to free up our time. And if they can free up our time executing, it gives us more time to really be at that higher level, which is where we should be, as the owner of our business, as the CEO and everything. You know, we should be doing that strategic planning and that thought process, but then, as our business continues to grow, we can’t be the only person operating at that higher level. So of course, we talked about, you can have your CFO, you can have these other people that are helping you financially. But I feel like these positions become really difficult for business owners to add to their teams, because of fear, because of anxiety, because of a lot of things that say, “Ooh, am I there yet? Should I be making this move? Is this okay for me to do? What if I can’t afford this person six months from now? Maybe I shouldn’t hire. Maybe I should just hire another person at the execution level, or maybe I just shouldn’t expand at all.” So what advice, Kathy, can you give us around that?

Kathy (guest):
And that’s 100% valid fear. And the good news is that you don’t have to hire these people full time, or even part time, like 20 hours a week versus 40 hours a week. You can hire them on an outsourced basis, meaning that they’re only doing the things that are relevant and needed in your business. For example, a bookkeeper. There are levels of bookkeepers. There’s a bookkeeper that you can – and I call this outsource bookkeeper – that it’s not really part time. So I would think of it in three different levels. An outsource bookkeeper is a bookkeeper that’s doing a couple of hours a week in your business because you don’t have that many transactions. Or maybe a lot of this can be even automated. And then you have, when your business grows, you might need someone to be part time in your business that they’re really, really, because you have so many more transactions, you have to do a lot of payroll. And even with the payroll providers, you can outsource that as well, and a lot of people do. And then the third level, which is like the highest level of support, is when you’re a multi-million dollar business, probably 5 million and up at this point, close to 10, when you’re like, “I really need someone to be there and do my books every single day from nine to five and make sure that you know the invoices are coming in, that the things are rightly organized, and all of that,” right? So there are different levels of support. So if you’re just a really small business, just, you know, less than a million or a couple of million, an outsourced bookkeeper would do really well. And then you can add more support as you need it, right? And then, with the accountant, it depends on what they’re doing in your business, if they’re doing tax, if they’re providing tax advice to you. So you can also figure out how much of that tax advice do you need? Do you need it once a year? Do you need it once a quarter? Do you need it once a month? I mean, there are different packages that you can get from your accountant to figure out what you need. Obviously, you need to find that type of accountant that actually offers these types of services, because, unfortunately, a lot of accountants only do it – you know, we’ll just do a tax return once a year, and that’s it. But there are services out there now, especially because they’re using a lot of technology that does a lot of the work, and they’re able to offer better customer service to their clients because they, you know, they can actually spend more time with them because they have more time now. So you just keep that in mind. So it really depends on what you need in your accounting, and in terms of the fractional CFO, it really, again, the fractional CFO – the good thing is, it’s very, very custom based to your business. Like, for example, the way how I work, I always go into the business before we actually sign any type of contract, how I’m going to support the business, is I actually do an audit of the entire business as an assessment to figure out where they are, and then based on what I see, I’ve come up with a package for the business to be supported at that particular time and where they are right now. So you’re always getting what you need versus like, “Oh, I need a full-time bookkeeper. I need a full-time accountant, and now I need a part-time CFO.” No, just get where you are and what you need right now, and as you need to grow, the people that you’re going to have with you are going to grow as well in the services that they’re going to provide to you.

Jamie (host):
Yeah. So some of the things that I heard in that answer that I think are really important to stress on is one, once again, you don’t have to jump automatically to full time when you’re going to go to higher – even at those higher level positions, it does not have to be full time. You could start part time, start with what you need. It can also be contractors, one of those things, like the fractional CFOs, the fractional CMOs, the fractional HR directors, a lot of times those are contractors. You’re not hiring them on as employees, and so they’re doing this for a lot of other clients, and that’s their business, and they’re going to provide you the expertise that you need and that strategic thought process that you need, without them having to be fully a part of your business, and it’s a great way to do that. One of the other ways, I think, we’re sometimes starting with contractors is great is the fact that you can kind of test it out. You’re hiring a contractor. Sometimes it’s good to have that long-term relationship, but it’s a lot easier to cut ties with a contractor than it is with an employee, because, you know, they have other clients. You know that sometimes in your contract, there is that exit, okay, it’s going to be six months, and then we’re going to reevaluate to see if it’s still needed, or you’re going to re-sign another contract in six months, or whatever that time frame is, that it kind of gives you that ability to test drive and then see, okay, now that we’re a few months in, is this working? Do I need more? Do I need less? Was this the right thing? So a contractor allows you to dip your toes into hiring without just shoving full force into everything.

Kathy (guest):
Yeah, that’s a really good point that you can have your contract. Obviously, you can have a 12-month contract. You can have a three-month contract. You can have a six-month contract. Just be aware that if you’re doing that with financial people in what you’re expecting in three months, because especially from a fractional CFO, we need more runway to actually make a difference. So if you’re really, truly working with a fractional CFO, six months is the minimum.

Jamie (host):
Yeah, yeah. And I think that that’s really important is like, I think that’s true with every position, you know. You really need to see, what can I get out of this person? And so much time – there are sometimes when it comes to even, like, okay, so if you’re hiring a contractor, your onboarding is going to look completely different than if you hire an employee, but if you think about it, that onboarding time, even if you hired an employee CFO versus a contractor CFO, it’s about really understanding what’s going on in your numbers. It’s about seeing the patterns. It’s about all these things that take time to do that. It’s not that – do they know what they’re doing? Are they learning? Are they learning on the job? No, they’re learning about your business and your expectations and what’s going on and unique about your business. And those things take time. It’s like when people hire salespeople, they typically want sales made right away. And I have to remind people, salespeople take time to be able to start really effectively selling for your business. So unless it’s a cold caller or someone just answering the phones, because your phones are ringing off the hook, and you want them to build the relationships and them to get the leads and them to bring in sales, they need time to do that, because even if they have a wide network, they still need to sell your product or service to that network without being that person that’s just shoving your product or service down their network’s throat. They need time to build it up and to connect with the right people and everything. So I think a six-month runway to test out any type of position is needed, because it is going to take that time to really see, does this person understand what they’re doing? Can they do it? Can they get the results and everything that we need to be able to make good decisions?

Kathy (guest):
That’s great. Yeah. I completely agree with that.

Jamie (host):
Yeah. And then the other thing that you had said that really stuck out to me in your answer was just really understanding what you need, and I feel like that’s so important, because you might know that you need help, you might know that you need financial help, but if you don’t know really what type of help you’re looking for, you might hire the wrong person. And it could very well be that you need a CFO, but you need a CFO that has expertise in this area, or focuses on this versus something that’s over there, like you made the example of an accountant. Some accountants will help you with those taxes once a year. Other accountants are going to help you throughout the entire year, make sure you’re making all those right decisions so you can take advantage of everything that you should be to have the best tax outcome at the end of the year. So it’s like, what do you need versus what’s compared to what’s out there? And really knowing what you need so you find the right person to help you. Because even with contract work, it’s just kind of like hiring an employee. We want to make sure we’re hiring the right person for our organization, not just hiring someone who’s good at what they do.

Kathy (guest):
Yeah, and I think that is the hardest part with figuring out what exactly you need, and then figuring out who is the right role for that. Because a lot of times businesses come to me and they say, well, one of the interesting pain points that the businesses come to me is like, “I don’t know what I don’t know.” So it makes me nervous. So that is usually an indication that we need to do some type of assessment to figure out, what do you have right now, where do you want to be, and what’s the bridge that we need to cross. And a lot of times when I do that, I will even tell the businesses right now, it’s not the time to hire me or a fractional CFO. You need a better bookkeeper, because the bookkeeper you have is just not doing what you actually need at this point. Because keep in mind that as you’re small, like, for example, if you’re 2 million, and if you grow to a $6 million business or a 10 million business, the person that you hired for that particular role at the beginning might not be suitable anymore as you’ve grown so – and I know you’re smiling because you probably are. You know, you see this all the time. Jamie, right?

Jamie (host):
Oh yeah, I definitely do. Like I always say it’s like you have to hire the person that you need now, but the person that you need now might not be the person you need a year from now, might not be the person you need two years from now. And we need to make the good business decisions and make sure we have the person that we need at the stage that we are at, and not keep on people just because we love them, and they’re doing a great job with what we needed two years ago.

Kathy (guest):
And that’s the benefit of having someone on your side who is strategic, like a fractional CFO, like a fractional CMO, like a fractional HR person that is going to say, “Okay, I see you, I hear you. This is going to be the plan on how we’re going to fix this.” And it could be that we need to shuffle some roles around. We need to get you a better, more upleveled person, or that we just need to train the person that you currently have in your role if they’re trainable. I mean, that’s an option too. So these are all the things that you can do, but you need to have someone on your side who is able to see that holistically and advise you on it, right?

Jamie (host):
Yeah, I love that. And like, oh, what you said was so great. Because one of the things I was thinking about was like, “Ooh, my next question I’m going to ask,” and you already answered it, but I’m going to, like, want to go through that question, just so people can see kind of this from a different light as well, because I was like, Well, what if you think you need this financial help, but you think you need the financial help because things are looking pretty tight in your finances, you’re like, “What is going on? How do I do this?” But can I really afford to hire someone? So I love how you said sometimes you can come in and kind of do that analysis and help them figure out what type of support they actually need. And sometimes you’re going to tell them, “I’m not the right person, yet. You need to do this, because this is going to solve your problem before you get this type of help.” And I think that can – you know, as we talk about anxiety with hiring, going to the right people that are going to guide you to the right thing or person or company or position to hire is so important because a lot of times we are too close to things, we don’t know what we need, and it really is going to reduce that anxiety when you have someone helping you make the right decisions, instead of just selling you what they have.

Kathy (guest):
Yeah, and you know, I’ve seen that a lot with my marketing people, when people get – and I’ll tell you an example here, because one of my clients just went through this – is that they had a lot of the marketing wasn’t working, and the person that they talked to was selling SEO services. So of course, the first thing that they suggested is, like, you need more SEO services. So they bought the SEO services. Unfortunately, it didn’t really make a dent in the business four months, five months later, and now they’re back where they were. And the reason for that was SEO might have worked, but it’s a tactic in a part of the bigger strategy, the same thing with finances as well. These are – you need someone who’s looking at things holistically so that they can see what exactly is needed. It might be a thing, for example, in marketing, if you’re hiring a fractional CMO, they might say, “Yes, you do need SEO services, but you also need this and this and this. And on top of that, this is how we’re going to figure out if this is working or if it’s not working, and these are the things, how we’re actually going to be tracking it.” The same thing in finances. When I go into the business and I look at the finances, I look at, obviously, how the accounting, how the bookkeeping is done, and if it’s not done correctly, none of the planning, none of the analysis, is going to work because it’s garbage in, garbage out. So we really need to start at the base level of finances to figure out, where do we need to go?

Jamie (host):
Yes, yes, I love that. It’s going back to the whole thing of just because someone’s good at what they do does not mean they’re right for you. You know, as you talk about those SEO services, great, you’re going to get someone to your site, but are things set up so you can make those sales afterwards? I remember in the past, like working with someone before, they were supposed to help me with – they were helping with ads. They’re like, “The ads are working great,” and I’m like, “The ads are not working great,” and they’re like, “Well, what are you talking about? We have this great click-through rate. We have the great this.” And I was like, “But I’m not making any money. I’m not making – I’m not even getting a sales call off of it so it’s not working.” And I don’t care how many people are clicking on it, is it even the right people clicking on it, because it’s not producing the results. So yeah, sometimes it’s so important to have that thing of like, is it doing what it’s supposed to be doing? Where do you really need the most help and getting the right support versus just getting support.

Kathy (guest):
And I think this is, this is really important factor too, is because a lot of business owners look for people who are specializing in certain things, because they think, “Oh, I need an ad person. Let me go find an ad person.” Specializing – finding people who are specialized in certain things is great when you know that you actually do need that thing. But if you don’t know, like, I again, if you don’t know what you don’t know, and you just have a hunch, like, “Yeah, I do need some ads,” you’re going to find someone like you did, Jamie, when they said, “Well, the ads are working,” but yes, they might be working, but the problem is they’re not working for that particular audience that you need, and it’s not giving you the revenue that you need. And again, it comes back to, you know, full circle, everything that you do in your business ends up in your finances. So if you don’t do it well, you’re really going to be hurting, right.

Jamie (host):
Right. Exactly, yeah. So really figure out who it is you need. And if you don’t know who it is you need, there are people out there that can help you, like, that’s the only thing they’re going to do is help you figure out who you need. I even know with my business, like I’ve turned people away before and said, “All right, yeah, right now you have a hiring need, but you can’t figure out who you need to hire until you actually have your processes set up internally.” Because once you have those processes, you figure out your systems where you think you need help right now, might not – you might not need help because it’s automated and things like that. So it’s like, I can help you hire somebody, but you might not need that person three months from now. So it’s like, go to your systems first. Go do this first. And you know, as much as I’m like, “Oh, I would love to make that sale,” like, to me, it means so much more to be able to say, “This is what you need to do next to be successful. Go do this instead of giving me your money,” that is going to be a waste.

Kathy (guest):
Yeah, exactly. Yes.

Jamie (host):
Yeah. All right. So before we wrap up today, any other advice that you can give someone about how to feel more comfortable financially when it comes to making hiring decisions?

Kathy (guest):
It really comes down to planning. And when I say planning, I don’t mean planning in terms of you do a budget once a year, because maybe your bookkeeper did it, or maybe your accountant forced you to do it, and then you just stash it in your Excel spreadsheets or whatever you’re using, and you never look at it again. So it’s really planning, financial planning. It’s a live animal. You have to maintain it. So if you are concerned about, “I don’t know if I can afford this person,” or “I don’t know what I should do,” one of the things is go play with it on the spreadsheet, because the spreadsheets are a safe space for us as business owners to figure out scenarios. What happens if, think of it, what happens if? What happens if my business goes five times more than I expected? Who will I need, and how many people I need, and how much the cost is going to be, and when will I be needing them to actually support that business? And again, it’s not as the business happens. You have to figure out, you know, we have this ramp up of people onboarding. Keep that in mind when you’re putting these projections. So spreadsheets are a safe space for that. And you might say, “Well, I don’t, I don’t, I don’t feel financially comfortable with that.” And there’s a couple of things that you can also do. You can start putting a financial cushion together so you’re putting money aside, which is a good idea to do anyways, so that you have that cushion. If it is – you end up being in a bad place financially, that you can actually draw from that cushion. And of course, the next question probably you’re asking yourself was, “How much is that?” That is what the planning is going to tell you, because you’re going to know what your expenses are. You’re going to know what your revenue is, and you can figure out, well, if I have this much in the bank, this will float me for the next three months, six months, 12 months, whatever it might be. And the other thing that I will also say what a lot of small businesses really don’t take advantage of, especially when they’re in good times, they don’t plan for the bad times. And what I mean by that is, as we’ve talked about, business is cyclical. You know, you’re going to have good times, you’re going to have bad times. Plan for those bad times when you have the good times. And one of the good ways to plan is that you get a line of credit with a bank. Because a line of credit, the best time to get it is when you absolutely do not need one, because you’ll be able to shop around, you’ll be able to show the projections that you have where your business is doing well, and you’ll be able to get the rates that are more beneficial to you than if you need it tomorrow. And then you’re scrambling like, “Oh my God, I don’t know where to go, and the rates that I’m getting are horrendous.” So a line of credit is really important, it is a safety cushion for you. If so, if you have a line of credit and you can have money that you stashed away yourself, you’re going to be in such good care financially.

Jamie (host):
Yes, exactly. And that line of credit is so important because when you have those bad times, you can use it on payroll, you can use it on those things where you can’t put it on a credit card, you know? So you need that cash in order to be able to sustain and so that we don’t have to feel like you immediately need to cut your team just because you have a bad month. That you could really look at big picture. The other thing that you mentioned is kind of saving up and having that buffer that is super important, like as we talked about, it can sometimes take people to get to the point where they are producing what they should be producing in a role that is a natural part of onboarding a team member. If you onboard a team member that’s supposed to be taking work off of your plate so you can be going out and making more sales and bringing more revenue. It takes time for you to train up that team member, and then it takes time for you to ramp up the additional time and those additional things that are going to help generate that revenue. So it’s not an overnight thing where a position is going to start helping your business make more money. So how do you afford a position before that position’s paying for itself? And that is from that buffer that is like one of those things that you always need to be thinking ahead of, how do I afford this next thing where the ROI is not going to come for three months, six months, nine months, and everything, because there’s a lot of things we have to pay for upfront, that the ROI comes later.

Kathy (guest):
Yeah, and planning is so important. And again, the planning is not just the planning on, you know, when do I need this person, what my revenue is going to be and what my expenses are going to be, but also what planning I mean, planning in terms of what type of business are you bringing in, and is it actually profitable for you?

Jamie (host):
Yes. Bringing us full circle, Kathy, let’s make sure that the business that we’re selling is profitable, that we’re not going into the red every time we sell, like immediately when we sell something new, because it’s going to take more time to produce it or create whatever it is, than we’re earning by selling that service, by selling that product?

Kathy (guest):
Yeah, exactly. You don’t want to feed the beast.

Jamie (host):
Yeah. And I think it’s so much more important for you to plan on it, because as a client, I remember working with someone once, and there were some mishaps that happened along the way, and they tried to say, “Well, now we’re not making any money off of this.” And I’m just like, these weren’t like – these were things that it was in construction. So these are things where it’s just like, these things are pretty common for them to happen. I was like, “But why are you blaming on me? Shouldn’t that have been built in to begin with?” That, you know, sometimes things happen. You build that cushion so you’re not just, like, breaking even on everything. You have a little bit of that profitability, because as a customer, I’m just like that doesn’t feel good, or that I’m just where that you have to hear, as a customer that the business is no longer making a profit off of something. So make sure that you’re planning ahead of time so you don’t have to put that pressure on your customer.

Kathy (guest):
Yeah, especially like – and, you know, we can have a whole other episode of construction and remodeling businesses, and the way how to do the finances, because that business lives and dies by the project management, good project management. And if you don’t have that fixed, oof, it gets really bad.

Jamie (host):
Yep, yep. So alright, Kathy, we have to start wrapping up. So tell everybody how they can get in touch with you.

Kathy (guest):
So you can get in touch with me via my LinkedIn. I am the only Kathy Svetina on there. So please, please connect with me. I also will say that I have a podcast called “Help! My Business Is Growing,” and Jamie was a guest on there as well. She was fabulous. So I invite you to listen to that. And yeah, so if you ever need support looking for a fractional CFO or you’re in terms of, “I don’t know what I don’t know,” get in touch with me. I’m Kathy Svetina on LinkedIn and NewCastleFinance.us is my website.

Jamie (host):
Awesome. Isn’t it nice to have a name that no one else has? So it’s like, I know you’re gonna look it up, and it’s just like, I am the only one with this name. There is one other Jamie Van Cuyk, but they spell Jamie differently than I do. So I’m like, if you spell it right, I’m the only one that’s out there.

Kathy (guest):
Yeah, it’s, it’s, it’s pretty convenient, yeah.

Jamie (host):
Pretty different than I came from a maiden name where, if you Googled it, there was some character in a TV show that had that name, and then I think there was a bunch of other people. So I was like, you could probably never find me through SEO. I’m like, at that point in time, I’m like, it’s good. I don’t want to be found. And I’m like, now I want to be found, so I’m glad I have a unique name.

Kathy (guest):
Exactly.

Jamie (host):
All right, last question that I love to ask all my guests, we’ve all had leaders or managers that have stood out to us. Think of a leader or manager that has stood out to you and share one thing about them.

Kathy (guest):
So I had a manager when I first, when I first started my corporate job, and we were going through a lot of changes. You know, change is kind of inevitable, but one of the things he told me that really stuck out to me, and it’s been, it’s been kind of like my guiding light in my corporate career and now as I own my own business, and it’s that, you know, the only constant in life is change, so you gotta make sure that you do the best with it. And I really love that. So when I think of that, when I get uncomfortable with change, I’m like, well, things are going to change again. The only thing that’s constant in life is change.

Jamie (host):
Yes, yes. That is very, very true. Change is happening all the time. And as a small business owner, our businesses are constantly changing, constantly evolving as we grow, as we decide what packages are working or not working, what type of clients we really enjoy working with, that’s all change, and it’s all change that is positive change, and we have to navigate it and work through it. So that is great advice that he taught you so early on in your career.

Kathy (guest):
Yeah, I’m grateful for that.

Jamie (host):
All right. Kathy, thank you so much for joining us today on the Growing Your Team podcast.

Kathy (guest):
Thanks so much for having me, Jamie, it’s been a pleasure.

Jamie (host):
And that wraps up this episode of the Growing Your Team podcast. Thank you so much for listening. Be sure to follow or subscribe to the podcast so you don’t miss new episodes, and if your favorite podcast app has the ability, leave a review and let us know what you love about the show. As you wait for the next episode, be sure to follow Growing Your Team on Instagram, at Growing Your Team, or head on over to GrowingYourTeam.com to access more resources and learn how Growing Your Team can support you as you master the art of hiring.