John Vogelpohl was a Canton-area Fractional CFO who served with FocusCFO for several years. Upon his retirement, he shared his experience as a Fractional CFO:
My Experience as a Fractional CFO
I was flattered to be asked to share my experiences as a fractional CFO (also known as an outsourced CFO). It's a rewarding career path, but it's not for everyone. I can guarantee this is not a job you can bluff your way through. My clients were patient as I learned their businesses, and they valued the expertise I brought to the table. If you have CFO-type skills, this is a very satisfying way to be useful. And frankly, I cannot imagine a better way to practice than the FocusCFO model.
The Arrangement
The agreement between FocusCFO and me as a CFO was easily worth the percentage the company retains from the billings. In my experience in public accounting, I saw people starting similar businesses (janitorial franchises, childcare franchises, personal trainer franchises, and many more) often encounter problems long-term. Their actual service providers would regret the percentage given up and believe they could go on their own and keep the whole pie. I never had an inkling of that feeling with FocusCFO. I received immense value that I never second-guessed:
- Powerful marketing, name recognition, and instant respect.
- Effective qualifying of leads, so that when they reached me, they were appropriate and likely productive. FocusCFO set the rates, relieving me of that sometimes agonizing task.
- A proven methodology to process referrals.
- Relief from nearly all administrative tasks.
- Continuing education and learning from monthly team meetings, semi-annual meetings, and a network of bright CFOs always ready to share experiences and advice.
- Liability insurance coverage.
- Support in the background when needed. The folks I reported to at FocusCFO were always welcome resources and treated me as a respected co-professional.
Customer Service - A Priority for Me
I was trained in customer service starting 45 years ago by Thomas R. Flynn at his accounting firm. He was the best example I ever worked for. I don't think he remade me from something I was not, but he awakened a natural resonance. Like him, I knew I liked the accounting business because it was primarily about helping to make good people successful. It was not about audits and debits and credits; it was about helping people solve problems and achieve success. That has always been fun, and it cements strong relationships and loyalty. For Tom (and me), it wasn't simply a business style or tool; it was sincere and satisfying. I was able to bring that to FocusCFO in spades.
Pivoting from CPA to CFO
A switch from a lifetime as a CPA (38 years for me) to a CFO was not an easy transition. I would discourage most CPAs from doing it, and FocusCFO de-emphasizes CPA backgrounds. The first thing I did was retire my certificate. FocusCFO clients are glad you know GAAP when you need to, but it's not why they hire you. Your valued skill set is not APBs and FASBs: instead, it's strategic vision, problem-solving, crisis averting, seeing the future, explaining the dynamics of a business (especially financially), and sometimes simple coaching. (Remember: Gray hair is valued!)
The digression here is that CPAs have been trained to be two-dimensional, straight-line thinkers. Thank you, linear audit programs and little boxes to initial! Most accountants are lost when asked to think three-dimensionally. They know the correct answer is NOT a piece of paper with a signed letter on the front, but they practice as though it is. Hence, they have commoditized themselves. I may spend a bit too much time on this point, but it is to contrast it with FocusCFO practice.
Here's how it's different:
- Price is less of an issue. With clear results and benefits, clients pay the rates.
- FocusCFOs are welcomed in weekly (in some cases, almost festively!), while accounting clients look at their watch multiple times when you visit and seem nervous. Accounting services are seen as incremental and are to be minimized. A FocusCFO's cost is a sunk cost, already committed, with the attitude of "now let's make the most of it."
- My clients were also looking for wisdom, even if they didn't say it that way. How wonderful to be pushing 70 and have that be a primary positive qualifier!
- You get to use your brain fully and meaningfully. Your input is welcome, and you are a clear factor in your clients' success.
My Day-to-Day Operation
Here's how I operated, including some lessons learned along the way:
- Insist on regular client conversations/face time (weekly). Don't let client busyness deprive them of this. They want it and need it even when it doesn't seem like they do. A few weeks without personal contact can be the start of a problem.
- Don't make your product boilerplate. Don't just fill in the blanks for a monthly report. I wrote all reports from scratch. For that matter, provide written monthly financial commentary. Clients cannot remember all you tell them in a verbal-only session. It can also be handy to remind clients that you've discussed a point multiple times. Facts and information are not enough. Reports must conclude with "what does this mean?"
- Devise meaningful reports that highlight important information and help develop great metrics and KPIs.
- Teach and coach. My clients (mainly) did not understand financial statements well or financial concepts, but they can learn. To some degree, that is an important function for a CFO. I wanted to lift my clients "out of the fog" at the very least. Blind faith in others, even their CFO, has a limited lifespan.
- Manage strategic relationships, like the outside CPAs, some lawyer services, insurance and bonding services, and the banking relationship. Sometimes "manage" means understanding conversations better than your client and explaining back to them what they must understand.
- Solve problems. I've helped clients explain positions to collect receivables, explained misperceived financial information to win customers/contracts (faulty D&B reports, for example), and held CPAs to a higher quality of service.
- Help clients manage and deal with their accounting team. One of the first questions each new client asked was, "Is my controller doing a good job?" On that note, help good controllers become great controllers (and, "No, they are not out for your job" - different skill sets, and they know it).
- Lastly - service, service, service. Be available, respond to emails and texts promptly, and be flexible to meet with critical business partners like bankers.
I Am Proud to Be a CFO with FocusCFO
FocusCFO had such a clear vision of who and what they were and were to be that I felt great constancy. That is wonderful and, sadly, rare enough. Their primary "secret" has been a commitment to hiring great people and trusting them. My most memorable experiences included:
- Frequent recognition of the name (on my shirt) and hearing people's overwhelmingly positive perceptions and experiences. I felt like I worked in a prestigious operation.
- All bankers and attorneys know and like FocusCFO. One Huntington banker told me they were coming to feel like FocusCFO was their "workout" division!
- Every FocusCFO client I spoke to was happy with the company, spoke highly of it, and bragged on their CFO. That says a lot!
This is an especially great second career that pays very well. I was going to say, "work as hard as you want to," but that's not true; you will always work HARD in this business. To some of us, hard work is a gift that connotes value. But it is satisfying and rewarding work. What I would mean is that you can work as many hours as you want. Enjoy the back-office support and services that FocusCFO provides, and you will be amazed at what you can do.
