Everett resident David Lightfoot works for B2B CFO, a firm that provides part-time financial management on an as-needed basis. Lightfoot, a 30-year-veteran of the financial services industry, works as a part-time chief financial officer for companies in the Seattle area.
He recently took a few minutes to answer some questions about the job.
What led you to be a CFO for hire?
I’ve been a CPA for 35 years and been a CFO for various small to medium-sized businesses for most of the last 25 years. I enjoy working with entrepreneurs and solving problems. I’m really in the dream business — helping people realize the dreams they have for their companies. Plus, I’ve always wanted to have my own business.
By joining B2B CFO I can do all these things plus I have the expertise of all my partners nationwide to help me with any issues I don’t have prior experience with. I have the backup of a large company but I have my own practice with clients I enjoy helping.
So just how does this work? What does your involvement in a company look like?
The businesses we work with are too small to afford or justify a full-time CFO, but they are big enough to need CFO-level of expertise at times. They hire us as their part-time CFO.
At first, the involvement can be pretty intense, as we’re usually called in to solve a problem. After that initial problem is solved, we work with the business owner on things a chief financial officer usually does. This includes increasing sales, profit improvement, cash-flow planning, banking relationships, strategic planning and exit strategies.
The internal financial staff is usually doing historical work; that’s their job. The outside CPA is usually doing tax filings and other compliance tasks. We work with the business owner, looking forward, to improve the business.
What usually leads companies to hire you?
Typically there is a problem to solve. For example, a banker is trying to make a loan to a business. But the business’ financial statements are not accurate or timely. To make a loan, the banker must have timely information that they can count on being accurate.
The banker refers the business owner to us to help get the financial information in order. Right now I’m working with a business owner who needs to buy a building to expand their business. We’re working on an SBA loan so that the business can acquire a building.
Other times, the business owner wants to grow but isn’t sure how to do it. Growth can mean that processes and systems need to change. People may need to change, too, if the business outgrows them. We’ve seen it before and can help.
What’s the biggest challenge for you?
Getting business owners to think about their exit strategy. Every business owner will exit their business. Typically they have most of their wealth tied up in their business. To unlock that value, the business owner needs to have an exit strategy. And executing that strategy takes at least two years. More typically it is five years.
It is a challenge to get people to think about an exit strategy because they’re busy or they can’t let go or a variety of other reasons. Many aren’t emotionally or financially ready to exit their business. It is very important but very few do it.
Are there problems you find you’re not able to deal with, given your hired-gun status? Does it make some problems easier?
We don’t generally think of ourselves as “hired guns” because we intend to have a long-term relationship with every client. Being an objective, outside observer, with lots of business experience, certainly makes it easy to identify problems.
There are lots of problems where we are not the appropriate solution. For example, if they need a human resources system, I’ll refer the client to a company that specializes in HR. If they need a bookkeeper, I’ll refer them to someone competent to do the bookkeeping. I know resources that can address virtually any business problem and I will make whatever referral or suggestion is in the client’s best interest.
When I make a referral I consider it a deposit to the “karma bank.” We are rewarded for doing the right thing.
What advice do you find yourself giving small companies most often?
You’re not in the accounting business. But you need good information in order to make good decisions. Let’s get your accounting so that it is accurate and timely. Then you can get back to doing what has made you successful.
Read Amy Rolph’s small-business blog at www.heraldnet.com/TheStorefront. Contact her at 425-339-3029 or arolph@heraldnet.com.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
