Guts, Grit & Great Business Podcast
Jeff Prager, co-founder of The CFO Project, is the Cash Flow King. His company has one purpose: to help you make more money. They created a system where they go through your numbers on a monthly basis and show you what to look at, when to look at it, how to interpret it and what to do about it. And, you don’t need to understand accounting or finance.
Jeff’s breadth of experience is remarkable and extremely valuable to entrepreneurs. He was a CPA for over 35 years so he understands all the confusing numbers stuff. But he’s also an author, speaker, and life-long entrepreneur, not just some paper pusher.
Because of his vast experience as both a CPA and a business owner, he has a firm grasp on the challenges businesses face whether they’re start-ups or seasoned pros. He’s great at simplifying the numbers and an expert at providing a clear road map to improved profitability and cash flow.
Join me and Jeff for our conversation on the podcast, Guts, Grit & Great Business, where he shares experience from his many years as a CPA who specializes in growing businesses (not saving taxes), his time as an owner, partner or CEO of over 156 companies. Jeff’s sole mission is to help business owners make more money. We talk about numbers and finances in business and how we can get it right.
Biggest takeaways (or quotes) you don’t want to miss:
- The profit is not the bottom line.
- Owners of a business do not think like accountants.
- “If you can’t put it on the back of a napkin, you are probably overcomplicating it.”
- Financial statements don’t get me where I need to be.
- “If you find yourself in a negative mindset, ask yourself who you should be talking too.”
Check out these highlights:
4:41 The way we think as a business owner is not the way financial statements are written.
14:19 “Everything I learned as a CPA didn’t help me at all.”
15:30 The people who are successful are looking at their numbers going forward.
22:00 “If you don’t know how to use it, you ignore it.”
28:26 “We get into business because of our specialities. Very few people get into manufacturing because they are good accountants.”
34:08 “It takes years to connect the dots.”
36:08 The profit is not the bottom line.
44:00 “People without half our talent have done it. So the key is to surround yourself with people who have been there and done that and who can help you get through it.” – on mindset.
50:25 “Don’t be afraid of your numbers. Take it positive as opposed to negative.”
How to get in touch with Jeff:
You can also find him at: www.theCFOproject.com
Imperfect Show Notes
We are happy to offer these imperfect show notes to make this podcast more accessible to those who are hearing impaired or those who prefer reading over listening. While we would love to offer more polished show notes, we are currently offering an automated transcription (which likely includes errors, but hopefully will still deliver great value), below.
GGGB Intro 00:00
Coming up today on Guts, Grit and Great Business.
Jeff Prager 00:04
After I stopped being a CPA and started running my businesses as a CEO as the owner, that I had my real education, realize that financial statements didn’t get me where I needed to go. And everything alert as a CPA was irrelevant to me as an entrepreneur.
GGGB Outro 00:26
The adventure of entrepreneurship and building a life and business you love, preferably at the same time is not for the faint of heart. That’s why Heather Pearce Campbell is bringing you a dose of guts, grit, and great business stories that will inspire and motivate you to create what you want in your business and life. Welcome to the Guts, Grit and Great Business podcast where endurance is required. Now, here’s your host, The Legal Website Warrior®, Heather Pearce Campbell.
Heather Pearce Campbell 00:59
All righty, welcome. I am Heather Pearce Campbell, The Legal Website Warrior®. I’m an attorney and legal coach based here in Seattle, Washington. Welcome to another episode of guts, grit and great business. I am super excited today to share with you my friend and a mentor really truly as well. And somebody who I jokingly refer to whether he likes it or not as my business bestie Jeff Prager, Welcome, Jeff.
Jeff Prager 01:31
Heather Pearce Campbell 01:34
So, I love what Jeff is up to and, and I love the evolution of his background. So we’re gonna talk a little bit about that up front. But Jeff Prager is the cash flow king. He’s also an author, speaker and lifelong entrepreneur. He understands the challenges businesses face, whether they are startups or seasoned pros. He his current business is called the CFO project, which is a team of CFOs, who specialize in working with small to medium sized businesses. They’ve built a five step process to make more money from your business with less stress and frustration. Jeff is a retired CPA and former CEO, and CFO. He has been a CPA for over 35 years since then he’s helped hundreds of business owners who are stuck or struggling, or in more money, retire profits and strengthen their teams. His company has one purpose to help you make more money. And Jeff walks the walk. He is not just somebody who talks the talk, he has built several multi million dollar companies himself. Jeff, welcome. I’m so excited to have you here.
Jeff Prager 02:48
Oh, great expectations.
Heather Pearce Campbell 02:52
No, I love it. Well, you’re so understated. The thing is, I want people to understand, like, the really the full breadth of your experience, because you just have so much to share with folks and everybody who’s in business, needs your message and needs to be hearing from you. Because so many people get the financial side of their business wrong.
Jeff Prager 03:15
Everybody talks about their accomplishments. And, you know, the most noteworthy one, of course, is I was one of the founders of Ashworth golf clothing. If you’re a golfer, you’ve probably heard of that brand. It’s International. And we took it from startup through, actually we were supposed to go public on Black Monday in 1987. That was a horrendous day for us. But it was after I stopped being a CPA and started running my businesses as a CEO, as the owner, that I had my real education, realize that financial statements didn’t get me where I needed to go. And everything I learned as a CPA was irrelevant to me as an entrepreneur. And the bad story is that we got upside down over a million dollars in our homebuilding business. And that means that I owed a million dollars more than I had. And it’s not a great place to be. And it’s a dark place, a very dark place. And luckily, because of my experience as a CPA, I had seen hundreds of businesses. So started inventorying every one of them to find out why some were successful and some weren’t. And I found out it came down to seven numbers. And five of them have nothing to do with accounting. And the way we think as a business owner is not the way financial statements are written in NetSuite elaborate on any one of those, but we as owners think in terms of cash in and cash out. That’s it. But financial statements are profit, which is really a bit of generally accepted accounting principles and the way the IRS thinks. But it’s not the way we think. So think about going to your CPA, they give you your tax return and go, you made, let’s say, 100 grand this year or 30,000, whatever the number is, and you go, Well, then why is it not in my bank account? Where is it? And no one answers that question. And it’s because the way you think is an accountant is totally different than the way you think is an entrepreneur.
Heather Pearce Campbell 05:33
Yeah, that’s amazing. I mean, your statement about every you know, when you made that switch from CPA to a CEO that everything you learned as a CPA was irrelevant to actually running a business. Like that’s just mind boggling, right? I think it’s easy for us as business owners to think like, oh, CPAs have all the secrets, they know how to do the financial side of our business, we don’t and I think a lot of people can relate to that.
Jeff Prager 05:59
And the fact of the matter is, they know how to lower your taxes, but they don’t know how to, for the most part, the large majority of them do not know how to run a business. And that was my aha moment, if you will, after practicing for over 20 years, is Oh, my God, I don’t know half what I thought I knew.
Heather Pearce Campbell 06:20
Yeah. No, amazing. Let’s, let’s go back a little bit, though, in time, because you have a wealth of experience. And you really have done some phenomenal things in your career. Talk to us a little bit about how you got started down the path of becoming a CPA. what interested you there?
Jeff Prager 06:39
Well, when I got out of college, my wife and I got married a while she had two years to go. And I had a degree in economics, and I was going to get an MBA in accounting. And my promise her father was I put her through college. So I started, I couldn’t get a job. And so I started selling real estate. Now who’s gonna buy a house from a kid who’s 22? That looks like he’s 13. Right? So, so I found this book. And I really wish I could have afforded to buy it. But I got it at the library. And I don’t even know the title. But it was written by a guy in Boston about how to sell commercial real estate, which is over the phone. So people didn’t know how young I was. Alright, and so I started selling apartment houses, and land to builders. And as I did that, I realized I was selling a lot of tax benefits. Now gone, wow. And with my background in economics, which was about doing projections, man, I was knocking it out of the park. And so I finally got my wife through college, I went back. And having that three years was probably it was awful, to be honest with you. My wife and I were as poor as church mice. So when I went back to college, with that experience behind me, I overnight, became an exceptional student. And when I applied to go to CPA firms of the Big Eight, that’s what they were called back then, I got offers from everyone I interviewed with and went with touche Ross. And that became Deloitte. That’s Deloitte today. But man, was that a great experience in in terms of learning? I call it my apprenticeship. Because it was they worked us like nobody’s business.
Heather Pearce Campbell 08:39
There’s a couple of parallels. I want to point out. I mean, we’re, we’ve been recent friends, but I think there’s still plenty that we don’t know. I’m laughing at your story about who wants to buy real estate from a kid who’s 22 and looks like he’s 13. So when I graduated law school, right, and I went straight through I was 20. What would I have been 2425. Think 24. And I just had a couple of the craziest experiences were like I went through a Starbucks drive thru one day. And this was near the place where I was working on a large construction litigation project, actually, legal work for a massive piece of construction litigation. And I worked in this building that had been rented and a huge portion of it reserved just for this project. Right. And it was called the war room and had 200,000 pages of documentation related to this project. So I had to go there to do the work because that’s where the documents lived. I was going through Starbucks one day, and the woman at the drive thru, leans out of the window and calls me by the wrong name and says, What are you doing driving? And I was so taken back, I looked at her and I was like, I’m sure she could tell by my eyes. I was like, What do you mean, what am I doing driving and she was like, Oh, I’m sorry. I thought you were my best friend’s daughter who’s 13. I’m just dying inside, like, Oh, my hopes of ever being taken seriously as an attorney have just been like totally flushed down the tube.
Jeff Prager 10:16
So that gets me to his story is because when I finally met the clients, I looked so young, I hired this guy named shorty Marston, who was six foot something and weighed about 400 pounds to go with me on appointment. And I said, Here shorty, you’re really good at small talk, you make the small talk, and then I’ll do the presentation, no matter what they ask, either say, I agree with Jeff, or, Jeff, what do you think? That’s how I got my credibility.
Heather Pearce Campbell 10:55
Okay, I can’t help myself. There’s one other story that I have to share. It was my first deposition and I’m sitting there, right? I’m the attorney defending my clients deposition. And I’m sitting there. And we’re waiting, like, we’re all there. My clients to the right of me, you know, the court reporters here at the end of the table across the tables opposing counsel and her client. And we’re just waiting. And we’re trying to figure out like, why are we not yet starting? And so the opposing counsel leans across and says, well, to my client, wins your attorney showing up. And I sat there and I was like, Excuse me, I’m, I’m his attorney. And we already introduced ourselves and everything, but it totally was lost on her that I was the attorney. And she’s like, Oh, my goodness, I’m sorry. I thought you were just his girlfriend. Oh, wow. Right. And so yes, the number of times I had that kind of experience at the start of my legal career. I just thought, oh, there’s no hope but you were steps ahead of me, man. Hiring shorty Marston, I needed a I needed a plan like that. Anyways, well, I love that your background is in economics, that you got some real life experience before choosing to go back to school to become a CPA. So talk to me about your career as a CPA, and especially that transition where you became a CEO and business owner yourself and realized there were some things missing from the CPA perspective.
Jeff Prager 12:29
So I took a company that you may have heard of called Ashworth golf, clothing public. And we started from scratch. And it was one of my biggest successes, but they came to my CPA practice, for we specialized in growing companies not in taxes and stuff like that. We did a lot of projections on major projects. And so we helped them get started. And there’s a long story. They weren’t a clothing company when they came to me. And I showed them their projections didn’t work. And then they said, Well, let’s go do clothing. And I said, I don’t know anything about clothing. And they said, Well, yeah, but you’re really good at doing these projections. And that became the foundation of getting into business and becoming Ashworth golf clothing, which was an international brand. So when I finally sold my stock in that, and my CPA practice, I was 42, I was sitting on top of the world. And then when a couple of my, we specialized in real estate, because long term projects, building apartments, land development, and subdivisions for home builders. And a couple of my clients came back to me after the recession in 1986, it was about 1994, and said, Hey, we want you to help us get started in another business. And the one I want to talk about is the land development business. I was an owner, but a minor owner and that my partners were a lawyer and a land developer, and they really knew their stuff. But the home builder Steve Straus, he and I formed a company called Strauss homes. And within two years, we were upside down a million dollars. That means I owed a million dollars more than I had. And it put me in a pretty dark spot. And what I realized is that everything I learned as a CPA was irrelevant. It didn’t help me at all. And, I mean, we really had our backs to the wall. And I started I said, Look, I’ve been exposed to hundreds of businesses. Let me figure out what they did right and what they did wrong.
Jeff Prager 14:48
The first thing I realize is the owners of a business do not think like accountants, and their financial statements are kind of irrelevant, because we as business owners, Think about it as cash in and cash out. And as you go forward, how much cash will come in? And how much will go out? Whereas financial people are stuck in the past with how much did you make? How much taxes do you owe? And how many taxes can how much taxes can we save a different mindset? Incredibly, and then as I went through, I said, Oh my gosh, there’s a commonality, the people that are successful, are looking at their numbers going forward. But it’s not just the counting those were only two of what I call the seven magic or key numbers. The others deal with customer acquisition, customer conversion, number of transactions per customer, average price per customer and customer retention. And when you start developing your strategies around those seven numbers, the world opens up to you. So I won’t go through all the things about how bad it got. But we redesigned our product line, our product mix our messaging, and we became production builders instead of custom builders. And within a few years, we became the second largest privately owned home builder in Colorado. Wow. And we, it was pretty traumatic. It was pretty traumatic. But the key is to plan and use common sense. And everybody thinks we know so much magic. And truly, if you can’t put it on the back of a napkin. You’re probably overcomplicating it, but it takes a lot of work to put it on the back of the napkin.
Heather Pearce Campbell 16:48
Great right into it. Well, and it’s it reminds me of a phrase that, you know, simplicity takes effort. It doesn’t happen on its own. Right.
Jeff Prager 16:59
It’s like Ben Franklin said, I would have written you a short letter, but I didn’t have enough time.
Heather Pearce Campbell 17:06
Right? That’s exactly it.
Jeff Prager 17:08
Do they write business plans in their mind dumps? Strategic Plans? It’s like one page is enough?
Heather Pearce Campbell 17:15
Yes, well, and I love that you’ve got seven magic numbers. And what it sounds like to me is that those magic numbers are really a way of looking at business fundamentals with finances in mind. Right,
Jeff Prager 17:29
Exactly. And that’s what we do at the CFO project is we go through your numbers, and we isolate which numbers are working and which aren’t. And we help you generate the next steps. And it’s really key. People are afraid of their numbers. It’s intuitively not intuitive.
Heather Pearce Campbell 17:53
Well, and why do you think that is like, are all when you come across your clients and you’re working with people in business? Is it most of the people? Is it all of them, like talk to us about that reality of people being afraid of their numbers?
Jeff Prager 18:06
I would say even in the bigger companies I’ve dealt with the CEO is afraid of the numbers. And the reason is think about numbers. They’re punitive. So if you got an 89 on an exam, that was a B plus A 90 was an A minus, essentially, they’re both the same. So people you get on a scale, you cringe before you get on that scale, right? Yeah, I could see you doing it. So people are intuitively we’ve been conditioned to be afraid of numbers. And yet, the very successful people have made numbers, their friends, because you take them not as, oh my god, I’m five pounds overweight. But oh my gosh, if I do this, I could get rid of those five pounds, and think about how much lower my cholesterol will be and how much better I’ll feel. And when I jog, I’m carrying five pounds less. So we’re conditioned in the negative, we’re conditioned for failure. And not for success.
Heather Pearce Campbell 19:23
Hmm, that’s fascinating. I’ve never actually thought of that before, about our relationship to numbers, the fact that generally we’re conditioned from a young age to associate negativity with them in some way or that they’re kind of a punitive function in life. But, you know, I think it’s true. I mean, even you and I, before we went live on this, right, we were talking about sales, I was talking about a recent event where I spoke from stage and comparing those numbers to the last event, which was live pre COVID. And there is, you know, I mean, I think we have a way of interpreting numbers that can really, you know, Send either positive or negative signals to us. And yet I love what you say about successful people really looking at them and just using them as feedback. Yeah, not not seeing them as like necessarily failure, just additional information to look at in the overall picture.
Jeff Prager 20:14
Makes you react quicker. Because what a lot of people do is they just get really negative. And it affects their, their relationships with their spouses, their family, their friends, they deteriorate, your mood changes, and your feeling of self worth diminishes. And when all that negativity starts working on your system, then it starts affecting your health. And it becomes like a domino effect. And that dark place I been there a god knows I’ve been there. When I was running Strauss homes, it’s not fun. And I think we all go there when you own a business. And the other part is our emotions, get out of whack. We’re either overly happy or overly negative or depressed. And, and we’re not finding that middle ground that, you know, allows us to enjoy what we have.
Heather Pearce Campbell 21:22
Hmm. Well, I’m from you know, I come from the legal industry and what you’re talking about as far as financials essentially being able to, you know, spin us into a dark place, or just put a whole layer of stress over essentially, every area of life. I mean, I know that even you look at marriage and divorce and statistics on divorce, or it’s something crazy high when you talk about financial stress, something like financial stress being responsible for like 90% is it’s huge. It’s one of the biggest factors in relationships breaking down and not being able to work.
Jeff Prager 22:02
And here’s the other part. If you don’t know how to use this stuff, you ignore it. And that’s what I figured out in this business is, hey, if I could just show it to you, you don’t even have to understand where I got the numbers, how I got the numbers. Just use them going forward. That’s all you need to know. I don’t want you to be an accountant. I don’t want you to be a financial wizard. You’re a wizard at what you do you and I talk about it a lot. It’s like it would be like me practicing law. I don’t know what you guys do. I just know the results that are protected. Right?
Heather Pearce Campbell 22:45
Yeah, well, and what, uh, whatever leave for people to hear that though. I mean, for anybody listening, like I love just clarity around this, like, you don’t have to understand what I’m looking at. You don’t have to understand how I got there. Right? That’s your job. And you really just help people shift their perspectives and where they focus. Right. And for me, like a little bit of this conversation reminds me I went in after having my son and this is personal but I’m pretty open book and I was having difficulty breastfeeding and the the nurses at Swedish Hospital, which is where I had my son told me you need to go to this acupuncturist, they gave me her name, I’d never had acupuncture before, right. And I show up and I remember asking her this question. Do I have to believe in this for it to work? You know? A little bit the same thing like your clients are probably worried like, do I have to believe in this or understand it? Or you know, somehow like know about it for it to work? And it seems like your answer is no.
Jeff Prager 23:51
Well, I’d like to use your story but it would be just too personal felt like
Heather Pearce Campbell 23:57
it was fine it because here’s the profound let me talk about that experience because I really thought like as some part of this mental is some part of it like what I have to do differently and within and my son was a month old at that point within a half hour of leaving her office. My milk came in for the very first time and I physically experienced what that was like from one session of acupuncture so the answer was no and it was clearly no like I didn’t have to know what’s up she did her magic and I think it’s so reassuring to clients when we can say like look, we’ll give you the golden nuggets, we’ll help you shape you know, shape your, your framework or your focus points or etc. But you don’t have to, you don’t have to dig into the system or be the genius behind the system or be a CPA to know how to run your business the right way.
Jeff Prager 24:49
In fact I would say that almost all of my clients have no clue what accounting is about. Right? And and, and that’s what a CFO do. People don’t know what a CFO is, because only big companies usually have CFOs. And my partner, Adam, and I have figured out how to make this affordable for small to medium businesses,
Heather Pearce Campbell 25:15
Which is amazing. So tell me a bit about how that works. What’s your system? How does that work?
Jeff Prager 25:20
Well, it so the first thing you do is you call us and we have what we call a right fit call to make sure that we can help you and you’re open to what we’re going to do. The second one and we haven’t charged a nickel yet, is we want to look at the big picture and see where you are, and say, Hey, do you realize this is your spot? Once we’re there, what we do is, we do an assessment, once you hire us, we do an assessment, and we get your numbers put together and figure out where you are in terms of the fine print. And then what we do is we target goals for you. So this is the key, it’s like going to Weight Watchers, they say you weigh five pounds too much, you know, you got to lose five pounds, we target those goals with you. And the goals ultimately lead to not only more profit, because that’s important. But you could stay in business without profit, you can’t stay in business without cash. So we take that extra step and say, How’s this gonna look in terms of your cash flow. So we set those goals up. And then once a month, what we do is, in that second stage, we’ve created a scoreboard for you. So we update your scoreboard month by month and it literally flashes on those seven key numbers in your cache, eight numbers, red, green, and yellow, green, you’re doing great read, we got work to do yellow, we got to, we got to change this. And then from there, we come up with an action plan, what has to be done in the next 30 days that you pretty much decline will be able to tell us better than us sometimes. But once you see the problem, the answers become clearer. And then in terms of that, we look in three times frames. What do you have to do the next 30 days? What do you have to do this year? So that we’re we’re in a better position than when we started? And then long term? How do we get your business, so you could either sell it or turn it into a cash cow. So we’re in three timeframes in every meeting. And it’s all about getting you to your ultimate goal, whatever that may be, so that you have the time to do what you want, with the people you want to do it with. Isn’t that what it’s all about?
Heather Pearce Campbell 27:57
That’s right, that’s right. What do you what do you say to people that are feeling some resistance around opening up their books to outside eyeballs? Like how do your clients know they’re ready for your help? Because I think there is a little bit of resistance, especially around people, for people who have been in business for some time and some judgment and shame around like, I should know this already. I should have already figured this out. How do you help people over that hot?
Jeff Prager 28:23
Well, first of all, you should know it. Because we get in business because of our specialties. And very few people are in a manufacturing company because they’re an excellent accountant. You know what I’m saying? So that’s number one. Number two is, no matter what you think, and how bad you think it might be, there’s been worse. Right? And no reminds me of a story. When we were in the 86 recession. One of my clients was a contractor. And he moved to California because he thought it was better in California. And he came back five years later. And I mean, he was at my client through all this thing. And he goes Jeff, I learned something. And I said what, and this is stuck with me since the late 80s. He goes, Jeff, it’s never as bad as you think. Nor is it ever as good as you think.
Heather Pearce Campbell 29:23
Well, I was gonna say there’s probably the folks who you know, you would say them, don’t worry, I’ve seen worse. But even for the people at the top of the chain who think they have things handled, I’m certain that there are ways that you would improve their scenario and make it even better.
Jeff Prager 29:39
And that’s the truth. And that’s the truth is that we all are in continue the journey is the fun part. But for most of us it becomes the nightmare. But no matter what we do, we can improve. Whatever. That’s right. What we want to do is avoid mistakes because running a business is not easy. People go Oh, you’re you know, you tell somebody, you have your own law firm, and they immediately think you’re rolling in money and life is just great, right? And you’re going Shit, I don’t know how I’m gonna pay for tomorrow’s groceries.
Heather Pearce Campbell 30:17
Right. Especially when you’re in business for yourself.
Jeff Prager 30:20
Right. Nobody really understands that. So it’s a lonely place. Yeah, as well. And, and that’s what we’re trying to get at is, don’t make it any lonelier than it has to be. And there are things we could do to make it better. And will it ever be perfect? No. But we want to avoid the mistakes other people have made. And that’s why we hire consultants to help us avoid those mistakes. Unfortunately, a lot of consultants out there have been, you know, middle management and great big large companies, and they want to manage your money, and they don’t have $1,000 to their name. And you go, you’re not for real. But a lot of us don’t know that. Nor have they faced the problems we as entrepreneurs have faced. Yes. And they’re not there. They’re just not there. And it just, that’s one of my things is like, there’s so many people that call themselves consultants, but couldn’t consult themselves out of a wet paper bag.
Heather Pearce Campbell 31:28
Oh my gosh, that’s gonna be one of the quotes, couldn’t consult their selves out of paper. Oh, my gosh, Jeff, I love you. So there’s a couple things that I want to dig into. Because this part of the conversation is really important. I feel like all of us on the entrepreneurial journey, we have opportunities to help ourselves move forward faster if we work with the right people. And we also have the opportunities to really set ourselves back aways if we choose to work with the wrong people. I know what what advice I give my clients about, like how you select an attorney, how you know, whether somebody or not is a fit for you, how do you even approach the marketplace? And, you know, begin those conversations and what that process looks like? What do you have to say to people about how to choose somebody, whether it’s you or somebody else? Who is the right fit? Because there’s lots of people out there, like you say that are giving the wrong advice when it comes to financial issues in business?
Jeff Prager 32:30
Well, the first thing is ask if they’ve been in your shoes. Now you don’t ask it like that. But hey, what have you accomplished? What are your biggest victories? What is the most negative point you’ve been at? What is the most positive? Where you now? Why are you doing it? Is it to earn a living, or this is my gift back? I think, you know, Heather, I retired 13 years ago.
Heather Pearce Campbell 33:00
You could be leaving all of us in the dust Jeff, you’re still here fighting the good fight, just trying to help people.
Jeff Prager 33:06
And that’s what I get off on is if I could turn a business around, if I could see get you to open your eyes. It’s like I was working with somebody doing a projection for furniture store, they were going to open. And we’re talking and I go tell me about your marketing. And then I said, Tell me your marketing budget. I started with your marketing budget, they go be about five grand a month, I go okay, now, and I waited a while. So they couldn’t connect it. And I go, tell me about what you’re going to do in terms of marketing. And as they were listing it off ago, and what do you think that will cost? And the number was $10,000 a month. And you could see the eyes pop open? And go, Oh my gosh, I now see the correlation between the numbers and what I’m talking about. And that’s what I live for that little. Oh, my gosh, I get it.
Heather Pearce Campbell 34:05
Connecting those dots.
Jeff Prager 34:06
Yeah. But it takes years to connect the dots. I know people asked me to teach them how to do it. And I do. But they they still there’s so much nuance to what we do as professionals. And connecting the dots is the hard part. I mean, for us with experience, it’s easy. But it took us years to make it easy.
Heather Pearce Campbell 34:31
Right? Right. Well, and I see in my profession, plenty of attorneys working really hard to serve their clients at a very high level, but not teaching them or doing anything to transform the journey of the client, right? Just delivering a done for you service. That is what they think they’re there to do, but not having either the time or the bandwidth or the personality for actually saying here’s how you actually Just course here’s how you do it differently. Here’s how you become a better more strategic leader of your business.
Jeff Prager 35:05
Right. And that’s the key is we do transform you, but we don’t teach you the nuance, you don’t have to know what we know.
Heather Pearce Campbell 35:15
Right? Right. To deliver what I like to call it as you deliver the golden nuggets, right? The highlights of how you can shift something in a big way, but you don’t have to give them the PhD in it.
Jeff Prager 35:27
You don’t have to know how I figured out what the nugget was and what my alchemy was to make your nugget. You don’t need to know that stuff all you want as the gold nugget.
Heather Pearce Campbell 35:38
That’s right. That’s right. So what do you see, like, talk to me about the advice that you see in your space? And especially where it goes wrong? What are people even from the client side doing wrong when it comes to trying to get a grasp around their financials?
Jeff Prager 35:53
Well, it starts, first of all, a lot of them don’t even look, they just wait to talk to their CPA, or they look at the bottom line, which is the most misleading theory in the universe. The profit is not the bottom line, that cash flow is the bottom line. Okay, so the bottom line isn’t helping you. And so they focus on that. And they could be making a profit. But have you ever gone to the bank and tried to, or to the grocery store and tried to buy a bushel of groceries with your accounts receivable, you can’t do it, we’re not on a barter system, for the most part. So number one is a, be careful that you’re focused on the right things. The second thing is be careful of people who sell you a silo. In other words, here I am, I’m an sp SEO expert, everything is going to be answered by SEO. In reality, what transform a business is not one big thing. It’s a lot of little things. Love that. So if we could get your gross profit up by half a percent, for a here’s a good one, I had a doctor, they saw their patients on average four times a year. By making it 4.1 times a year, their bottom line increased by a quarter of a million dollars. Now, if you focus on customer retention only, or number of transactions only, you wouldn’t have figured that out. So what you have to do is go okay, what do I have to do with my customer journey? What do I have to do with my product offering? How do I transform my nurses and other doctors to sell this other service? So it had implications throughout the whole business. And people talk about the funnel. And the funnel usually means getting people in your marketing funnel getting their name? Well, what about the business funnel? How do you get them from that name to cash in the bank? And that’s the focus. And rarely is that one thing? Mm hmm. You know, having an illegal agreement is one piece of the puzzle. Understanding your financials is one piece of the puzzle. But how does it interact with all the others? You have an engine? You and I are like a carburetor, and or a gas pump or whatever. What we have to look at is how do you get that whole engine? So it’s really a racing engine.
Heather Pearce Campbell 38:47
Right is not one thing.
Jeff Prager 38:49
It’s not one thing, and you don’t I don’t know how to pull apart an engine anymore. Okay. And with the new tech, egg electronics, I mean, I grew up on we gapped our spark plugs. I haven’t touch I haven’t lifted the hood of my car in probably 15 years. But I know when the engine is, you know, if my car is bucking, I know something’s wrong. If my brakes are squeaking, I know something is wrong. And I bring it to the mechanic who looks at everything and fixes only what needs to be fixed.
Heather Pearce Campbell 39:26
That’s right. Well, the thing that I love about your experience that I do think sets you apart is you’ve got both this experience as a CPA but also being on the inside of not only your own but so many other people’s businesses over the years. Right. It just gives you a phenomenal perspective.
Jeff Prager 39:47
So you brought up something Heather at my peak back in about 2004. I was an owner, partner, or CEO of over 150 The six companies at the same time. And that comes down to running it. Oh, this is something Heather. My whole management philosophy is you could run a company by pointing your thumbs, thumbs up, or thumbs down. And if you have it running correctly, those reports come to you every single Monday. And all you do is you pour through them in 10 minutes per company, point your thumbs. And you have two piles, the ones that are working great. And the ones where you have problems. And you look at the problems, you isolate the problems based on those seven numbers. And you give it to your executives to fix.
Heather Pearce Campbell 40:42
That story alone, Jeff, for anybody listening in case you doubt Jeff system, or you wonder whether or not what he’s saying is accurate. I mean, imagine sitting and looking at reports from 156 companies and being able to analyze them in 10 minutes. I mean, you’ve got a superpower, Jeff, that people need to know about, I love that.
Jeff Prager 41:05
That’s what we’re bringing to small to medium sized businesses. It’s, here’s here’s your 10 minutes.
Heather Pearce Campbell 41:12
I love it. So how are people? Yeah, go ahead. Well, I mean, I think you’re you’ve offered a very generous gift to people who are listening, if they are in the field and their immediate, the medium size, sorry, describe what size of business they are, again,
Jeff Prager 41:29
Small to medium business businesses, ya know,
Heather Pearce Campbell 41:33
You’ve offered a right fit call, right and a download of what you are doing, giving people some feedback and an overview of how to run their business. I just, I think it’s one of the most generous offers. I mean, if anybody’s listening and you are in the in the world of needing support with your financials, I mean, I’d be racing to the phone. How how do people get in touch with you? How do they connect with you to find out if that’s a fit for them?
Jeff Prager 41:58
I’m gonna give you two ways. Yep. The first way is go to our website cfoproject.com. And there, you could sign up for a right fit call. And we have a video going through our five step process. Okay, it’s a pretty neat, I think it’s about 40 minutes long. And make sure we’re the right fit. Because if you go into it with a bad attitude, or we go into it with a bad attitude, there’s no fit. Okay, um, certainly, the second is just contact me, Jeff. Directly, firstname.lastname@example.org. That’s it.
Heather Pearce Campbell 42:39
Yeah, I’ll put that information on the page was shownotes. So people can also find those at Legal website warrior.com, forward slash podcast. But Jeff, a couple of final questions for you. One, you know, just based on the name of my show, I can’t help but ask this question. Right guts, grit and great business. Give us an example. And mostly I’m interested in your thoughts and experience around mindset, you know, of, of having worked yourself through some really tough times, and what are the distinguishing characteristics or, you know, stories around mindset that really made a difference for you.
Jeff Prager 43:22
I’m going to go back a little further. Remember, I told you I was selling real estate, commercial real estate, I grew up very poor, and sort of my wife, okay. And I was selling real estate, and I’m selling commercial real estate, well, who owns these buildings, wealthy people, right? You realize they’re no smarter than you. They don’t know any more than you. And you realize it is all about mindset. It’s sort of like the little train that could you’ve read that to your kids, right? times. It’s the same thing. It’s like, look, people without half our talent, have done it. So the key is to surround yourself with people that have been there, done that and can help you get through it. And that alone, having people encourage you to go forward, because trust me, when you’re in the dark spot, you can’t talk about it with your spouse, you can’t talk about it with your employees, you can’t talk about it with anybody. And so you start quartering yourself, and it gets worse. No, no, the exact opposite. Your mindset should be somebody who’s been through this, who is that that’s been through it that can show me how to get out of it or give me ideas. And that’s why people who are older like me. We have a lot of experiences to offer those who are going through it and like that, and that’s where we come in Yeah, technologically, I’m not as good as a lot of the younger people, I’ll admit that. But in terms of wisdom, they don’t have the wisdom that people that have been through it done that been there have. So if you find yourself in a negative mindset, ask yourself, Who should you be talking to, and find that mentor. And that mentor is not your spouse, it’s not your employees, it’s probably not your friends.
Heather Pearce Campbell 45:31
And it’s probably not your uncle Bob, or your, you know, friend, Joe, who is, you know, in a parallel business, but same stage, right?
Jeff Prager 45:40
And like, your spouse is gonna say, I trust you, I believe in you, you’re gonna do well, meanwhile, you’re still left with a problem, and no ideas how to solve it. You don’t need encouragement, you need help?
Heather Pearce Campbell 45:54
Well, exactly. And you need help from somebody who is experienced. The thing I love about that I was on a phone call, actually earlier today with a client who is facing a tough time with her boyfriend. And, you know, they’re looking at bankruptcy as a potential option, because they’re tenants and they’ve got a lease and you know, people everywhere with COVID are suffering who are in similar circumstances. But the question they had is whether or not they should approach the scenario, and it’s going to require some negotiation clearly with the landlord, whether or not they should try on their own or get counsel ahead of time. And I wouldn’t be the counsel for them. Because I don’t do landlord tenant stuff, even though I’ve got some experience with it. But it’s a little bit like the question of, you know, just because you have a pair of scissors, doesn’t mean you should be the one to do the cutting, right? Or giving yourself a haircut right there, even though they might have to pay for three or four hours of the attorneys time to draft a letter, what they’re really benefiting from way beyond just that single item, is the fact that that attorney has walked through that scenario, probably hundreds, if not 1000s of times with other clients. And the nuance and the the strategic difference that that’s going to make to the overall picture goes far beyond just a single touch point in a single letter.
Jeff Prager 47:20
Right? It’s like touching a hot stove. You don’t want to touch it if you could avoid it. Yeah. And people don’t realize it sometimes. You exasperate your situation, because you’re trying to solve it yourself. And again, you don’t know the nuances. It’s what I’ve learned about finance. People don’t hire me to teach him accounting. Yeah. Just tell me what it’s telling me. What’s the story? And one last story if I can’t, yep. So Mike, I remember my oldest son, when he was a child, he I go, boy, I’d love it. If he became a CPA. And he goes, Dad, I could never do what you’re doing. It’s so boring. And I started thinking about it. And if I had to do accounting, the way most people think of accountants, I would have shot myself years ago. I don’t do bookkeeping, and I don’t do tax returns, even when I had my CPA practice. Do you know how many tax returns? I did? Zero? Mine was the strategy going in and coming out of it? Yes, I had my partner’s do the tax returns. And, and just like you, your strategy, going into and out of reviewing your financials is what’s important, how they come together, all you want to know is that they’re telling a true story. And have somebody tell you what that story is.
Heather Pearce Campbell 48:52
That’s right. That’s right. Well, and the benefit of getting somebody like you getting your eyeballs on their business is way more than even just the time spent there. It’s, you know, you bring hundreds and hundreds and hundreds of of, you know, similar experiences and the wisdom that comes from walking people through strategically a very similar scenario to the table and that one instant, so it’s right, but it’s, yeah, the value is just, it’s so it’s so important for people to have advisors like you in their business. So, Jeff, I’m so grateful that you are here with us today. I love this conversation I love I mean, even the part about talking about why we’re essentially negatively trained in our relationship with numbers and why it’s important to understand that but not be stuck there as business owners.
Jeff Prager 49:45
It’s so true, and I get stuck on something that’s so inconsequential. And yet it has so many consequences if you don’t pay attention to it.
Heather Pearce Campbell 49:56
That’s right, which a lot of people do. Well, I so appreciate You I’m so glad to be connected. Thank you for joining us today. Any last words for folks before we sign off?
Jeff Prager 50:07
You know, Heather is phenomenal at what she does. And I’m not seeing it idly. I work with a lot of attorneys in the course of what I do. And if you haven’t had a chat with Heather at this point, you owe it to yourself to do it. And the second thing is, please, please don’t be afraid of your numbers. Take it positive, as opposed to negative.
Heather Pearce Campbell 50:31
That’s right. No, I love that. I think that’s a great note to end on. Thank you, Jeff. I’m such a fan will be in touch soon.
Jeff Prager 50:38
Thank you, Heather. Bye.
GGGB Outro 50:44
Thank you for joining us today on the Guts, Grit and Great Business podcast. We hope that we’ve added a little fuel to your tank, some coffee to your cup and pep in your step to keep you moving forward in your own great adventures. For key takeaways links to any resources mentioned in today’s show and more. See the show notes which can be found at legalwebsitewarrior.com/podcast. Be sure to subscribe to the podcast and if you enjoyed today’s conversation, please give us some stars and a review on Apple podcast, Spotify or wherever you get your podcast so others will find us to keep up the great work you are doing in the world. And we’ll see you next week.