Dave Cain: Welcome to unsuitable on Rea Radio, the award-winning financial services and business advisory podcast that challenges your old school business practices and their traditional business suit culture. Our guests are industry professionals and experts who will challenge you to think beyond the suit and tie while offering you meaningful, modern solutions to help you enhance your company’s growth. I’m your host, Dave Cain.
Sooner or later, you will me to call on somebody outside your organization for help. When that day comes, wouldn’t you rather reach out to somebody you’ve already built a relationship with rather than choosing from a search result on Google? I know I would. As a founder of FocusCFO, Brad Martyn has developed a vast network of business relationships throughout his career from marketing professionals to financial experts and everything in between. Whenever he or a client faces a challenge, he is always able to pick up the phone and find a solution. Brad is truly a solution’s finder. On this episode of unsuitable, we will try and learn why surrounding yourself with other business owners is a great way to invest in the continued success of your own business. Welcome back to unsuitable, Brad.
Brad Martyn: Dave, great to be here.
Dave: Brad, I understand you’re a National League fan.
Brad: I am.
Dave: We’ll start out with a little baseball question. Do you like the two sets of rules between the National League and American League or would you like to see you one set of rules?
Brad: Well, I think it’s interesting when pitchers actually get to hit and that’s the case in the National League. It’s not the case in the American League, which is probably why the American League pitchers hit other batters all the time, because they don’t get a chance to be hit in return.
Dave: As a fan, it’s always exciting to see a pitcher bat about 120 during the year about have two hits.
Brad: Who was the guy who had two home runs on opening day, the pitcher?
Dave: Let’s get into the topic. Obviously as an avid baseball fan and American League fan as we well, appreciate you being here. I want to talk a little bit about FocusCFO. Most of our audience, at least in central Ohio, knows FocusCFO. You’ve got a well-known name in the area, but for our listeners throughout the state of Ohio and around the country let’s talk about what FocusCFO is. Give us a brief overview of your company.
Brad: Great, thanks Dave. FocusCFO has been around since 2001. We are a provider of outsourced CFO services primarily to businesses that are in the small to lower middle market segment. Most of the businesses that we work with are between half a million revenue and $10 million of revenue. We allow them to have a very experienced, high-end chief financial officer as part of their management team on an outsourced basis.
Dave: Great. In today’s topic, we’re talking about building a business relationships and bringing these various business relationships to customers and clients throughout Ohio. One of the things I think you and I both talked about over the last several years is there’s this kind of do-it-yourself type of mentality for a lot of things. Whether you’re doing your own electrical work, you’re doing your own yard, you’re a new building, putting up some drywall. That seems to carry over a little bit into the business world where maybe the business owner now is the HR, maybe playing CFO, the controller. We’re seeing a little bit more of that. Is that what you’re seeing out in the community?
Brad: We’ve seen a lot, it’s certainly a natural thing to do. When a lot of business owners start their business, even early in the business development cycle, they do everything from take out the trash to conduct board meetings. As you get into all the things that are critical to running a business, you get into a lot of things related to developing sales strategies and customer strategies, how you hire and train people, how you run your production. It’s not unusual for someone initially to do all of those things, but as businesses grow, most business owners find that it’s better to surround yourself with other people who can do some of those things and allow yourself to focus on the things that you do best.
Dave: CFO, controller, COO, CEO, CPA, a lot of words there, but some companies are interchanging those titles. I think with your company you strictly stay with the CFO track and that seems to be one of the up-and-coming strategies in business relationships that your firm has built throughout the state.
Brad: Most businesses that when they get to a certain size, let’s call it $20 or $25 million, they’re usually large enough that they can go out and they can bring on a full-fledged CFO. Somebody who’s a permanent part of their management team that can really take control of all the financial aspects of the business, get involved in strategic planning and develop a forward-looking plan for the business. But until that point, it’s really hard for a business or it’s been really hard for a business to be able to afford and find that level of talent. But the reality of it is, and for all of you that are business owners, when you’re running a $3 or $4 million business, you have all of the same issues as somebody running a $300 million business. You’re just trying to do it all yourself and that’s where it gets really challenging for people.
Dave: I think ultimately that leads to burnout and maybe a devaluing of the business and profitability and I think your firm helps to get that company back on the rail.
Brad: Absolutely and I know before I started Focus in 2001 I had the chance to work in a couple of corporate environments where the entrepreneur, the founder, was still there, but the thing that was interesting … And they were in the 50 to hundred-million-dollar range when I got there, was both of these entrepreneurs had brought in a management team years earlier that had taken control of some the things that the business owner really didn’t have the skills to do. The entrepreneur was now able to go out and do the things that they wanted to do. Whether it was going out in the shop and work on equipment, or work with the R&D people on new products, or spend time with customers. Usually, we didn’t know where they were, but we knew they were doing what they loved to do and what they enjoyed. The challenge that a lot of businesses have is if you’re not at that point yet, the entrepreneur or business owner is really stuck doing a lot of the other things that they don’t enjoy and often they’re especially good at.
Dave: You’re a music connoisseur. In fact, I think I saw you maybe at an Eagle’s concert several years ago.
Brad: I’ve been to a few Eagle’s concerts.
Dave: One of the things that Get By With a Little Help From Your Friends, who sang that? Was that the Beatles or maybe Joe Cocker had a little bit?
Brad: I think that was the Beatles and Joe Cocker.
Dave: So really with business owners, what you’re really saying is that business owners, you can get by with a little help from your friends.
Brad: There’s nothing wrong with having good friends and people that can help you. Whether it’s in your personal life or whether it’s your business life. I’ve yet to actually meet the person that can do everything in business.
Dave: One of the things as we started in the intro was building these business relationships. Start out with your friends. There’s a lot of friends that went through a lot of the same experiences that maybe you are and have and I think you point out that’s a great resource.
Brad: What a lot of people do in their career is as you’re going through the business development cycle is you have other people that are business owners. Perhaps their trust advisors could be your CPA, could be your attorney, to be someone you know that’s been in the corporate position, maybe a CEO or a president of a larger company. Those people are a wealth of information. They’ve been there, they’ve done it, they can give great advice. The challenge a lot of business owners have is not always as willing to take the advice or would be receptive of the advice.
There is a reason why when you look at the market, that there are so many companies that are small. Oftentimes, companies that are small simply act like they’re small. They continue to try to do everything themselves. They don’t bring the right people in. They don’t have the right mentors. They don’t have the right advisors. They act small so they stay small, but there is a crossing point that you can make. It’s almost like a chasm. Doug Tatum wrote a great book about it. It’s really gets into this bridge that you have to go through when you’re actually too big to be small but you’re not big enough to be big. He calls the book No Man’s Land. He talks about this in lot of detail.
Dave: I think I hear you saying, “If you want to be small, act small. If you want to be big, be big.”
Brad: Absolutely, absolutely. We’ve all got connections and we’ve got people we reach out to. One of the best ways to actually find people to connect with is to ask your friends or ask your advisors because great advisors and great business friends, they don’t feel like they can do everything themselves either. They’re more than willing to introduce you to other people and connect. It’s one of reasons why advisory boards are such a great thing and Columbus and even in Cleveland, Cincinnati, they have a great reputations for having strong groups of people who put together advisory boards. The purpose of the advisory board is to bring these experienced business resources to the table to allow the business owner to access them and to be able to ask them questions. Oftentimes, the answer to their question is simply, “I know someone you should meet.” Business owners in a proactive way will really reach out and just spend time talking to people and trying to understand and trying to see if they can find a connection that works for them.
Dave: As you travel throughout the country with FocusCFO, do you ever run into maybe the ego gets in the way of a business owner asking for help, asking their friends for help, asking their advisor? Maybe they think they know more than the advisor.
Brad: It’s interesting. One of the things that makes entrepreneurs so great and business owners so great is their ego. Because they’re not afraid of risk, they take chances, they’re willing to try different things, they don’t get locked in the structure. But, sometimes the reason that makes you successful as an entrepreneur actually causes you to fail as you try to scale your business because that strategy of being the person that does everything isn’t scalable. It takes other people and other advisors and other relationships to actually make that work.
Dave: Tell me, help me out here, as a business owner and I look to build a business relationship, I’m already thin in many areas. I’m running HR, I’m doing this, I’m doing that. Is there one area I should focus on first or are there maybe three areas, four areas, maybe the power of four?
Brad: A lot of people have written about this and a lot of people have different ideas about it, but when you cut through it all, there are really three or four key areas that are critical for every business. Certainly, you get into you have to have a product. You have to be able to develop new products, to have good products, to spend time on refining that product, manufacturing or creating that service very efficiently. The operations, production side, is one part. You have to have phenomenal marketing. You have to know how to find the customer and connect with them. You have to be able to really get great people and so particularly if you’re in a growth mode. It’s so common throughout the state that particularly manufacturing companies are having … They’re struggling with getting skilled labor. People that are in their early part of their career that actually know how to weld and are electricians and things like that.
Business owners have to spend a lot of time on that, but then the one that seems to take a lot of people down is with the financial side. You have to have tremendous financial management and understanding. If I’m a business owner, I’m looking at all four of those things, one of the things that I want to decide is which one do I do best and what is really my skill set. Because the worst thing that I’ve seen a business owner do is if they are tremendous at customer developing and meeting with customer, but they’re trying to take care of the finances or the accounting, they’re really diminishing their time. To where, they’re spending all their time on something they’re not good at work where if they took those 8 or 10 hours a week and they turned it around and went out and looked for customers, they could generate tens or hundreds of thousands of dollars of revenue for their company every year.
Dave: Or they could just take a badly needed, well-deserved family vacation.
Brad: Imagine that.
Dave: How about that?
Brad: Imagine being able to take two weeks off or four weeks and go away with your family. That’s when you really decide how well your business works is how it functions when you’re not there.
Dave: Wouldn’t you rather see the designated hitter instead of the pitcher?
Brad: No, not at all, not at all.
Dave: Gives one of your superstars an extra at bat.
Brad: It takes all these guys who are pretty far along with their career and allows them to play for five more years. It does do that, but I just like a good double switch every once in a while in a game to keep it exciting.
Dave: I just can’t get you over to the American League, can I?
Brad: You’re not. I thought when the Reds lost their first game this year, I might actually start watching Tribe games, but I’m a diehard Reds fan and we are seven and two with the best record.
Dave: By the time this podcast hits, they may be under 500. Do you want to bet a steak dinner on that?
Brad: Well, we’re actually lobbying, they’re talking about a shortened season. We’re actually lobbying for the 10 game season.
Dave: Make the playoffs that way.
Brad: Because we’d be there. We’d end tomorrow night.
Dave: Let’s get back to getting a little help from our friends and maybe set the table for me little bit. I’m uncomfortable doing that. I’m uncomfortable reaching out to certain relationships I’ve had or built to ask for help in my business. Can you get me over the hump?
Brad: Well certainly talking to people you know and helping them facilitate introductions is one, but even before that, I’d probably take a step back and try to determine what your biggest need is. If your need is really customers or your need is some type of a revenue strategy, there are lots of places you can go and lots of people you can connect with that’ll actually help you with the revenue strategy. Interestingly, a lot of companies actually look at their competitors as a potential source of a strategic relationship when it comes to revenue. Other companies will look at strategic acquisitions where they’re trying to perhaps find or access another product or another technology that they can offer their existing customers. Even within our employee basis, we can get connected to competitors or other companies within our advisory group, but even reaching out to our bank or our CPA, our attorney, I mean those individuals are really well-connected throughout the market and through the state. They can be a tremendous source of introductions for us.
Dave: It sounds like if I hire a CFO, then as a business owner that’ll free me to do the customer relations or the customer sales. Hiring that financial person may make a big difference.
Brad: I think anything where you’re spending a lot of your time in something that you’re not especially good at and you bring in an expert resource to do it, it’s going to free up your time to do something else but it’s also going to give you tremendous information. I mean from our side at FocusCFO, we are highly skilled at really getting inside the business DNA of a company and figuring out how it works. One of things that we find often is that, and every business has this and it’s hard to come to grips with, but everybody has customers or products that they lose money on. One of the places that people get into trouble is when you really don’t understand your profitability at a very micro-level, really get into the DNA of the business and your products and what it costs. Because if you can actually figure out where you make money and do it more and figure out where you’re not making money and stop, that actually creates good things inside of a business.
Dave: You know with your vast experience you’ve seen companies that develop these business relationships and those that have not. Do you have a sense or feel the impact on profitability, one versus the other?
Brad: I think it depends too on exactly what you’re trying to accomplish because if what you want in your business is to create a small lifestyle business where that you’re simply … You’re going to work there for 30 years or 40 years and you’re not trying to create value or anything like that or you’re not trying to create a succession plan, you can probably do it all yourself. Now you’re still going to have a lot of periods of inefficiency. You’re going to still have a lot of things that you struggle with and you’re not going to get that vacation time that you mentioned with a lot. But, if you’re really trying to take your idea and turn it into something that really has value and can benefit the lives of many people, whether it be people that come to work for you or people who need your service or your product, really having the people to help you do that is really critical.
Dave: If I get some help from my friends, focus on a few metrics, maybe the power of four, whether it’s marketing, operations, people, or finance, act like I want to be a big business, a big boy business. Maybe dress for the job that I want, get that mentality going. That is certainly an equation for profitability success.
Brad: Absolutely. I mean if you’re really have your hands around things and if you really focus on what is it that you’re really good at. I just go back to the point about, if I’m … I went through this in our business. My goodness, I mean we were two years in or something, this is in 2003 or 2004, and I was that same person like everybody else. I was doing everything. I was doing all the recruiting. I was doing all the business development. I was doing all the administration and-
Dave: Did you do the bike racks?
Brad: I think I did.
Dave: Think they balanced?
Brad: Yeah, probably not as well as they could have. One of my partners actually handed me our brochure and said, “You really ought to hire these guys.” That’s a funny story when we think about it because I was doing what I was telling people not to do and that was a life-changing discussion for me because the next day I hired one of our people to be our CFO and I went out and spent time growing our business. From that point, we’ve gone from 4 or 5 people to 40 or 50 people around the state. I do the things that I really love to do and it’s still hard. It’s always hard running a business, but at least, I’m doing the things I know add value and get us to where we all want it to go.
Dave: So working on the business instead of in the business.
Brad: Yeah, it’s a coin, the E-Myth phrase, absolutely, Michael Gerber. It’s really easy.
Dave: You’re doing a little name dropping today.
Brad: I’ve read a few books here and there, but it’s really interesting to think about how easy it is to get pulled into the day-to-day. How many of us … And it doesn’t matter if you’re a business owner or you’re a really good, hard-working employee of the company. How many of us come in on Monday and we have four or five things that we really need to do and life just gets in the way. The business side gets in the way and we get the Friday and it’s like I didn’t get up, I didn’t get to them. But as business owners, as key members of management, we have to be able to take a step back. We have to be able to focus on the things that really create long-term relationships and long-term value. It may be part of your plan. Maybe part of your plan is to find suppliers that you can partner with that can guarantee you have the right products. They can guarantee you get them at the right place. They guarantee that you’re going to have on-time deliveries. Maybe that’s better than having five or six different suppliers.
I remember reading the story about when Walt Disney started I think it was Disneyland, one of his strategic partners was Coca-Cola and he offered them exclusivity inside of the park. It’s been a tremendous success for both of them and so that’s one of the things as business owners we have to think about is what are things that really add long-term value. Whether it be on the employee side, the finance side, the sales and marketing side, or the operations side, and let’s make those things work. Let’s reach out and find the people that can help us. Nobody knows everything. I think that’s one of the challenges that everybody has is, as somebody running a business, you really believe that you’re supposed to know how to do everything and you don’t. What you have to do is you have to know how to find the people that can do the things that aren’t in your wheelhouse and then focus on what you do best.
Dave: Great. Our guest today has been Brad Martyn from FocusCFO, Columbus, Ohio. Thanks again for joining us on unsuitable, Brad.
Brad: Great. Thanks, Dave.
Dave: Great insight on why business owner should build strategic partnerships. I think we just scratched the surface and we’d love to have you back and go a little bit deeper into that topic. There’s a lot of areas we could go into. We’ve included some great articles and insight in line with this topic on our webpage, www.reacpa.com/podcast. If you want to learn more about how developing strategic business relationships can help you out, check us out on our website. As always, don’t forget to subscribe to unsuitable on iTunes and follow us on Facebook and Twitter. Until next time, I’m Dave Cain, encouraging you to loosen up your tie and think outside the box.