In this episode of the CFO project podcast, we answer your questions around getting a prospect to say yes to your Hit advisory service.

Welcome to the CFO project podcast. Today we're talking all about getting prospects to say yes to your advisory service. To help me with the discussion, I've invited Sharon Nick Comey. He is the owner of Acco tech, which is an acronym essentially for advisory, compliance and Oversight Technology to the show. Ruth, welcome. Hi, Adam. Thanks for having me. Appreciate it.

Yeah, I'm really excited because you're also a member of the CFO project, and I love talking to members of the CFO project because, you know, we're all we're all collectively passionate about what we do, and we want to help business owners. And we were talking before the show about your name, Echo Tech, the your company's name. So so it stands for advisory, compliance and oversight tech technology.

So what why did you decide that name? Oh, so we are helping, business owners and a lot of manufacturing companies, across the world to streamline their processes. Mainly they're looking for someone, a trusted advisor that can help them streamline their process to automate some of them, mainly their financials, manufacturing processes, operations and stuff like that.

So, we also provide the technology they need, that can be anything from using multiple, softwares or stack of softwares or ERP software. Is it ERP stands for Enterprise Resource Planning Softwares, which basically streamlines and automate a lot of processes across different departments. So we do that, and since we are considering ourselves as a technology company, we added the tech.

Yeah, the ACO and we called it aquatic group. Love it. And it makes sense because, you know, because you think that. All right. The CFO or the advisor who's advising based on numbers, well, where the numbers come from. And for something like a manufacturing company who has all these, you know, these, these various inventories in certain stages, whether they're uncompleted or completed inventory and all of that just is a lot.

And in order to do our jobs right, that part has to be taken care of. And you sort of have this one stop shop. Yeah, that's for sure. Yeah. Excellent. This is very cool. All right. So let's get into our first question. You met with the CEO of a company in the Pre-revenue stage who hired you. Walk us through why they wanted to work with you.

So this particular customer or prospect, I would say at the beginning, was looking for someone to help them understand their financials. So they had, an external bookkeeper and, someone who files their taxes. But that company really doesn't provide any advisory services to them. So when they were getting their, financial goals, they couldn't really understand what's going on.

Like, one of the questions was, okay, what does the gross profit margin mean to me? I don't know if this is right or wrong. Are we doing anything right? Is there anything wrong here? What is the typical benchmark of a gross profit margin in my industry? Yeah, those are the things that they couldn't they couldn't answer. One of the one of the things that we we talked about this basically, they were talking about their operations and the great idea they have about their platform that they're launching very soon.

And she was like, I understand all of this. But when it comes to financials, I look at this and I have no clue what what they mean. And so if one of the investors asked me why your gross profit margin is at this percent or this much, I have no idea what to say. So they needed someone who understand numbers, someone who can help them understand what it means and interpret it into business terms.

That's what they were looking for. And and so they knew they needed someone, like someone to understand those, to help them out, but, they didn't know how to get someone like me in their roster to help them out. Yeah, yeah, I've I've always said that business owners know they need somebody like us. They just don't know who we are or where to find us.

And because they're not looking for CFOs necessarily, nobody's not that many people, especially small business owners, are, you know, waking up thinking, oh, I need to hire a CFO today. But when they come across somebody like us and you explain that, hey, I could do this, I can help you understand your numbers. Then all of a sudden it's like, yes, I need you.

So in this particular case, the this is a, this is an actual there's a larger company. I'm assuming that. But they were in the pre-revenue stage meaning and I'm assuming they, they needed to understand their numbers because they have investors. Is that right? That's right. So they're they're putting their financial projections and business plan in front of, their investors.

And yeah, they were very worried that they're going to scrutinize them on the financials. And so they have no answer for them. Yeah. And they should be worried because investors is their money. This their hard earned money that they're heading over to somebody. And if you can't clearly explain what you're going to do with it and how this business is going to work in a way that makes sense, then it's not going to then they're they're going to be concerned.

So if somebody like you comes along and says to the CEO that or the founder, whoever says, look, I'm going to come alongside you and make sure you clearly understand these numbers so that you could go to your investors, you could go to your board, and you yourself know how to run the business better. Who would say no to that?

Especially a non numbers CEO or non numbers business owner. And there's not that many people that really understand numbers right. Exactly. Yeah. No that's fantastic. Everybody listening. If you haven't already, sign up for our five minute weekly email with practical tips for accountants and bookkeepers to escape the accountants trap, go to the CFO project. Com forward slash newsletter.

All right, so what's our next question? What is your advice on pricing best practices to get a prospect to say yes. That's an interesting one because I basically went through a whole different strategies for pricing with different clients, and I'm going to share my experience about those. So yeah, initially when it started, my, consulting business, we started so the business that I am in, prior to my to CFO advisory, which started with the CFO project, everything in this industry of consulting is timing material.

So, basically you you give them a pro, or they give you a pro, and then you provide a with scope of work in the hours required in the read to it, and then you build them based on the hours. Whatever that rate is. Right. And so the majority of time you are selling your time and, and so, it works in the business, in the consulting business.

But when it came to advisory, when I started doing that, I realized that, well, I planned for ten, 20 hours of work per month, but it went way above that, and we were in the middle of the work, and we couldn't get everything done as promised, because of all the complexities that a business has and the indecisiveness, the owners, by itself, like when you were talking about the scope of work at the beginning and then you start diving into it and you do it, and then that blows up again.

Right? So because it becomes so the scope changes over to what you had initially agreed on. Right. So yeah, basically what, what we did, we did that and then they ended up with a huge invoice, which we had, and they were disputing and we had to go through. And then there are a whole bunch of hassles that we had to to sort out.

The other thing that we did at the beginning, we gave them a discount. So we said, okay, why don't so you're going to require about 50 hours and be kind of estimated very high to cover ourselves. And then we said, okay, you know, what's going to be 50 hours, for example, at this rate, where, you know, we're going to give you a discount, like 20% discount on the hourly rate, and that's where we're going to do.

Again, that didn't go well, up until to the point that we met Adam from the CFO project. And. Yeah. And we looked at the fixed price per month, for the work date for, for a limited scope of work that we were going to clearly stated to the, to the prospect or to the client that that's what we're going to do.

Yeah. And and then we realized quickly that this is the best course of action when are dealing with customers on a long term basis. So if you have a very short term budget, project that you're working on and it's only about 2 or 3 months or this much of ours, and you kind of move on to another client.

Still, the hourly rewards. Yeah. But when you want to have an ongoing engagement with the client, the hourly is not is not going to work at all. Yeah, I agree 100%. I think we we all have to remember that a that business owners are not they don't understand at all what goes into advisory services or tax work or bookkeeping or anything accounting related.

And so when we all of a sudden say, I will do advisory service for a, for an hourly fee of, let's say $500 an hour, they don't really understand what that means. And that's too much for them to, to have to understand, because they don't understand what CFO services in the first place. Instead, they want a result. They want to buy the result.

And if we it's so much easier to get a prospect to say yes when we can sell the end result, you having a growing and more successful business. And by the way, I'm only charging a flat rate fee of X amount, let's say $2000 or $2500 a month. My entire goal is to help you make way more than that in additional cash flow.

That's much easier and easier to sell than to say, I will do CFO services, for X, you know, for for X dollars per hour when the client doesn't really understand what CFO services entail. And one of the other thing is the because, what we do is kind of, can expand into different, different areas of the business, right?

So we start with the financials and then we dive into their operations and say, okay, now you not doing things right. And and you need help here. So one of the things that I have experienced is that when we are starting with one scope of work and then we realize that there are over like underlying issues on other areas, and we kind of dive into it.

Then they're going to come back and say, I don't know how to do that. You're asking me to, you know, we get a better efficiency on my shop floor. You're asking me to to increase the cycle time or the tax time of my manufacturing process. How am I going to do that? I don't know, even with tax time, it's the.

So, and then that opens another discussion. If you if you don't know, we can help you because we have people who understands operations and manufacturing. But then again this is okay. Now how much are you going to charge us. And so it's really hard to, for, for us to keep it within the scope, initial scope if we go with the hourly rate.

Yeah. We think if we put it into different chunks or fixed prices for financial analysis, budgeting, forecasting, and then another fixed price for a limited project on helping them, for example, it to efficiently manage their operations. It would be better because they can manage that better and they have a better expectation of the price and the budget they need to put aside for their engagement with us, as opposed to having an hourly rate that can they can get surprised by the English they're going to get at the end of the month.

And then they're going to come back to, oh, we didn't talk about this. No, you're you're too much for us or you're expensive for us, right. Oh. Or they and or they worry that you're purposely slowing down to increase the number of hours you work. I mean, although I don't think many people do that, but I think a lot of customers think that is what's happening that you could if you just work faster, you'd be able to get this done faster.

But like you said, it's very easy. It's so much easier for a prospect or a client at this point because you've already landed them to understand, oh, I'm going to pay X amount to get this result in and very clear. And they're more they would be more willing to pay it when you say, all right, I'll do this project for you can be this flat fee.

And this is what, what we're going to get from it, rather than just saying, all right, well, I'll just send you my hourly billing like I've, I've worked with accountants myself and attorneys. I think they're the worst about this is that they'll do all this work at the end of the month. Austin is Bill, and it's like, I didn't agree to all that.

And it's just it puts this taste bad taste in your mouth. So just make sense. Hey there, Adam Lane with the CFO project podcast. Are you an employed accountant or bookkeeper that would like to start an advisory service on the side? Well, we have a free training for you called Side Hustle CFO, where we'll show you how to start a business on the side offering CFO and advisory services to small business owners.

We conduct this training every Friday at 3 p.m. eastern and 12:00 pm Pacific. Go to the CFO project.com and click on free trainings to register. All right. So what's our next question. What are business owners struggling with that you believe your CFO advisory services can help them with? Oh, that's a good question. Yeah. Yeah. So there are a lot of them actually there are a lot of challenges that they have.

One of them is financial planning and strategy. In my opinion, they don't know how to do that. They don't understand financials, let alone financial planning and projections and how they can interpret their operations into numbers. And that's that's basically one of the key points that I bring in when I, when I'm trying to sell my business to business owners.

So I help you interpret your operations into financials, into numbers. That makes sense. And you can drive data and make informed decisions based on on the data I'm giving you. Yeah. So it's very good to understand, okay. In order for me to produce this vehicle, for example, I have to go through these certain steps. Okay. Or if I'm producing this part, this is what I'm going to do, I'm going to mold this part, and then I'm going to assemble it together that I'm package.

And it should be that, that I understand. Or which part of this process needs being more efficient or which area of this process am I putting too much money into or I need, I need more labor, or I need less labor or stuff like that. So they don't know that. So numbers will help them out to understanding for each cost center how much they have spent and whether this is a cost center is a revenue center.

How should I treat this right? So mainly when I was working as a as a business process engineer in my early days when I started working at a major bank, when we were talking about Six Sigma and quality engineering and making sure that the processes are leaned out and more efficient, the very first thing that people think about is I'm going to cut labors.

Okay. But cutting labors is not the answer to everything. Right. So, so helping the business owners understand that this is how you should treat your, your operations based on these numbers and KPIs will help them to make it better decisions because you cut people, once you cut the people, then you don't. All of a sudden you don't have enough people to do the work, right?

Then there's only so many people you can cut down, right? You need to understand which industry are you in? Is it based on the employees that you have? So should you consider your revenue per number of employees or. No, you are in the SAS or or that industry that it's based on, on the subscriptions and based on the features of your platform and which has nothing to do with labor.

Right? So these are the things that they don't understand. So financial planning to me in my opinion is is a very important piece. Another thing is, budget management, they don't know what their budget is. No one does that for them. They need to look they need to have a budget. And so they know we start going off track based on the budget that is being set.

They don't even know what the budget is. Right. So they know I have this much of money, but they don't know how to allocate it. Yeah. Right. And so allocation of budget is an important piece to me. And I think we talked about this I talked about it to the performance metrics and KPIs. They don't know what to track.

Yeah. And having that financial data and the data they need and put them into meaningful metrics for business owners to to know what to do with them and what they mean and how they can act upon those results, is a key points of having a CFO in their roster to help them out. Yeah, right now, I love that.

I love how you said meaningful way like me, like getting meaning from the data, but there's just so much data that is coming out of business owner and they don't data. And from that inform of the PNL or the balance sheet data inform of, you know, marketing metrics and sales metrics and operations, especially like in manufacture, dream plans, all this stuff.

But it's like what the what the CEO or what the business owner really wants is somebody to just take all that data and put it in a way that's meaningful and digestible, and then just end it. Just tell me what to do with all that data. That's all I want. I don't want to have to be an accountant to understand it.

I want you to understand it for me, and then just put it in a way that makes sense, that's meaningful. And just give me, you know, what I need to do. What's my next step with this data? Yeah. That's right. Yeah, I think this is it for this particular client that is in a pre, revenue stage.

I think the other thing that they were looking for was scalability and, and expansion. So yeah, they didn't know what to do. So they have this awesome backlog of features that they want to develop. So during in SAS industry and they're, they're doing so they have a little bit of manufacturing as well. But they are mainly creating a platform of software as a service, for, for their subscribers and, and clients.

What they wanted to know is that, okay, now this backlog of features, which one should I work on first? Which one is going to have better traction and and attract more, more subscribers to my platform? And so, then how do I scale it? Right. So now I have the feature, is it just go into another region and launch it in a different area, in the world?

Or is it that I have to have a new feature? Do I need to have generative AI in in there? I have no plan for AI integrations in my platform yet, but that's where the SAS industry is going into. So everyone's now claiming that they having AI integrated with their platform. Right. Am I going to do that?

Do I need to do this now? I don't have the capabilities. What is the next step. So these are the things that they also need to look into to better budget and plan, whether they need to hire new people for for new features that they need to do because of the market trend. So that's another area that they had issues and they wanted me to help them out.

And essentially, you position yourself as the person that can help them get their goals accomplished, which is having a, like you said, a scalable, scalable business, a growing business business that works. You didn't position yourself as just a numbers person. You position yourself as somebody that can use numbers to help them get what they want. So they're essentially hiring you to get what they want, not just somebody that can do the numbers.

That's right. Yeah. Yeah. Well is this has been a fantastic conversation. Thank you so much for coming on the show and telling us your story. My pleasure. I them and Marie, thank you so much for having me I appreciate it. It to you. You too. And and if everybody listening or watching, if you haven't already, sign up for our five minute weekly email with practical tips for accountants and bookkeepers to escape the accountants trap, go to the CFO project.com/newsletter.

See you next time on the CFO project podcast.