What a CFO Can Do For Your Agency
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What a CFO Can Do For Your Agency

What a CFO Can Do For Your Agency

By John Jantsch

Marketing Podcast with Jason Blumer

In this episode of the Duct Tape Marketing Podcast, I interview Jason Blumer. Jason is a Co-founder of Thriveal, a firm that helps entrepreneurial CPA firms connect, learn and grow. He’s also the CEO of Blumer CPAs where they serve as an advisory firm for the design marketing and creative agency services niches.

Key Takeaway:

Jason Blumer is the CEO of Blumer CPAs which is an advisory firm for design, marketing, and creative agency services. In this episode, Jason and I dive into the importance of financial guidance for agencies and what small businesses are missing when they don’t have a CFO.

Questions I ask Jason Blumer:

  • [3:35] The virtual or fractional CFO has actually been around for some time – is that a space that you play in or teach people  You know, for some time, is that a space that you play in or that you teach people to play in?
  • [5:08] What are businesses missing when they don’t have a CFO? And what’s the key distinction that a CFO adds?
  • [8:16] Are there things that you find that are just unique to the creative businesses from an accounting standpoint?
  • [11:02] A lot of agencies today have chosen to grow by getting freelancers or third-party services to do certain aspects. Does that muddy up the forecasting, the models, or the accounting?
  • [12:31] When someone comes to you, and they want to scale, is there a certain stage or indicators that show that someone is ready for it?
  • [15:59] What’s the first strategic sort of leadership hire that you think an agency needs?
  • [17:07] I’m seeing more and more agencies talk about growth through acquisition – is that a good way to grow? Is that fraught with lots of challenges?
  • [19:44] Where can people find out more about you?

More About Jason Blumer:

More About The Duct Tape Marketing Consultant Network:

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John Jantsch (00:00): This episode of the duct tape marketing podcast is brought to you by the salesman podcast, hosted by will Barron brought to you by the HubSpot podcast network. Look, if you work in sales, wanna learn how to sell or just peek at the latest sales news. Check out the sales podcast where host will Barron helps sales professionals learn how to find buyers and in big business in effective and ethical ways. One of my favorite episodes lately, how to personalize your sales outreach at massive scale, who doesn't want to do that, listen to the salesman podcast, wherever you get your podcast. Hello, and welcome to another episode of the duct tape marketing podcast.

John Jantsch (00:50): This is John Jantsch and my guest today is Jason Blumer. He's a co-founder of Thriveal firm that helps entrepreneurial CPA firms connect, learn and grow. He's also the CEO of bloomer and associates, CPAs, where they serve as an advisory firm for the design marketing and creative agency services niches. So Jason, welcome to the show.

Jason Blumer (01:14): Hey John, thanks for having me. And I've been a long time follower, man. So I'm excited to be on the show. I appreciate it.

John Jantsch (01:20): Well, let's get the CPA, Joe got outta the way, you know, right, right at the top here, entrepreneurial CPAs. I mean, it almost feels a bit like an oxymoron.

Jason Blumer (01:29): Yeah, well we serve a community of them and they're, I was saying off, off hair, they're just as weird as normal entrepreneurs and need just as much care. But of course the accounting profession, which I know you've served some firms, they are a market that doesn't quite understand positioning, you know, you know, marketing and things like that. So it's a tough market. They need a lot of help in building a business. Right.

John Jantsch (01:53): You know, though, I always tell people that to me, there's such great opportunity there. You know, years ago I started getting, you know, remodeling contractors and plumbers, you know, blogging and on social media and they thought this is the stupidest thing in the world, but it, it was such a competitive advantage for them because nobody else was doing it. You know? So if the ones you could get to do it, you know, really had a great advantage, don't they?

Jason Blumer (02:16): Yeah, for sure. Well, and I think it what's even harder is I guess you could get a firm to do some marketing rhythms. You get into habits, but branding and then personal promotion is just even weirder for them. And I think, you know, we serve a lot of the younger generations and they do it really well, but you know, there's a lot of self promotion in it and it's hard for firms to get into that. I think.

John Jantsch (02:39): Well, one of the things about that industry or particular or professional services in general is, I mean, trust is a, a really high deal, right? I mean, it's not like I'm going and buying a refrigerator or something that, yeah, I, you know, I think will work. I, you know, if it doesn't okay, you know, it doesn't work, but I'm gonna give somebody my life and my finances and, you know, trust is gonna be a big deal. And so I think that some of the things to build trust, like content and, you know, becoming an ex seen as an expert, I mean, are, are really game changers. I think for, uh, folks that are competing in the professional services business, aren't they?

Jason Blumer (03:12): Yeah. For sure. And you know, that's changed over time. I think it used to be the social media would odd. It is now a platform to build trust. You can do it, you know, within, with content, if you do that well, so it's viable and you know, they're gonna have to embrace it. And I think it is a, it's a generational change. Everybody, you know, in different generations faces and struggles with, I think

John Jantsch (03:35): So in the marketing space, the virtual CMO or fractional CMO, you know, it's become kind of an an end thing, but it, I think the virtual or fractional fractional CFO has actually been around probably more acceptable, you know, for some time, is that a space that you, that you play in or you teach people to play in as well?

Jason Blumer (03:54): Yeah. Yeah, we do that. We do that work. We, we teach others to do that work. And, uh, a think, you know, a lot of things we try to do is actually educate our client base, cuz a lot of people hear that phrase and they're like, Hey, will you be my CFO? And we're we, we try to help 'em understand what they're really trying to purchase from us, which is, you know, that's part of our job as client educators is to help them know what to purchase. A lot of them, a lot of agencies, you know, some business outsourced or what we would call controllership right. Type work and they call it CFO. And so we kind of have to do some analysis cuz the CFO is generally a pretty high level assessment, you know? And you can outsource that, but you're typically outsourcing that to somebody who's been doing it for 40, 30, 40 years. So a lot of times we'll help, 'em understand they wanna buy controllership work, which is just the, you know, the full on financial cash movement of all of their revenue through all of their systems. Right. And then we'll obviously need to bring in some technology because we do it virtually. So we, we do it and then we also have to educate to make sure they know buying the right thing. Really.

John Jantsch (05:03): Yeah. Cause most small firms let's face. It don't have see anything that's that's right. CFO. So, so what are they missing? Because like you said, I mean, so they get a bookkeeper, they get an accountant, what do they miss? What's the chief financial officer. What's the like key distinction that they're adding.

Jason Blumer (05:19): Yeah, for sure. It, it could be a lot of different thing. Some main things are that they do need efficiency in their financial processes. And so if you don't understand that process, it, any process gets glued up right. And slows you down. But the financial processes, particularly for digital agencies and marketing agencies, depending on how big you are, depending on how fast you're growing, those can really slog down. And if there's an inefficient financial process, that's gonna affect your cash. Very specifically, another thing is analysis, right? So it's really, you know, you can open up your QuickBooks or whatever you use and there's just a, a sheet of numbers in front of you. But the analysis of what they mean really is important. And so somebody at a higher level or a firm like ours, we're gonna offer benchmarks that we've created for the agency space that actually produce insights, help them change. They get better, uh, because of what we do. So the, those are some things, you know, a CFO, a controller is going to do that. The agency owner just can't do, they probably shouldn't be trying to do on their own. They need that expert, I think.

John Jantsch (06:24): Well, so you make a good point because you know, a lot of people hire accountants and they feel like, yeah, that's my, you know, I'm getting my books done. I'm getting my taxes right. Done. But it's kind of rear view here. Here's what happened. And so in a lot of what, particularly if they're gonna work with somebody like you or anybody who is working with somebody, who's got experience in an industry, some of what they really just need is coaching. Right. I mean, here's how to make decisions about retainers versus project work or yeah. Right. I mean, so it's not necessarily the chief financial officer, you know, who's worked at IBM or whatever, you know, type of role. It's really just some who can coach you through making decisions based on what's going on. Isn't it?

Jason Blumer (07:01): Yeah, for sure. And that's a part of what that CFO can bring is that coaching. And so some of the things, when we do analysis at the same time, the, the insights that it produces, we'll say you're doing great. Or you do need to true this up. We were just in an analysis call recently earlier today and we're like, Hey, you've got about 175 grand in labor. You can spend on as a risk without putting you outside of the metric. And that, that just that piece of information you tell an agency owner, they're like, okay, yeah, that's two and a half people. I'm gonna go hire 'em now they know. And they know that's not too much of a risk purchase for labor cuz they know they need new team. And so that's coaching, it's saying go do, go get the two and a half people you need. It's not gonna wreck your company cuz they just don't know it is coaching.

John Jantsch (07:50): Yeah. Yeah. And I mean, that's such a great point because I, I think, you know, labor in service industry labor is such a, I don't know, do I need somebody served? You know, we aren't getting enough content written, hire somebody, you know, that's right. But being able to tie it back to objectives and forecasts and whatnot is obviously a piece that many business owners just don't have the desire or the wherewithal to figure out. Yeah. So are there any things that you find that are just unique to the creative businesses from an accounting, uh, standpoint?

Jason Blumer (08:24): Yeah, I think, you know, and these are there's, they're not, you know, hugely, uh, complicated. They do get more complicated as you get larger, but really, uh, revenue recognition is a phrase. A lot of them are trying to maintain. And so that just happens to be that agencies that in large projects that span, you know, three to six months or something like that, how to recognize that revenue on your books is pretty complicated. There's not really strong software that does that. They try to manage a lot. And a lot of that's, uh, complex journal entries you're having to maintain and manage. Yeah. That ties back to like client contracts. There's not a strong piece of software that we've seen. We've looked at a few. And so a lot of times we're teaching them how to do that, what that means, why you want your books, you know, showing revenue only in the that you earned it.

Jason Blumer (09:15): So, and that's kind of leaning them into the accrual world versus cash reporting. And that gets pretty confusing. So that's pretty hard for agencies to figure out some other things are capacity management, which is really more of a strategic aspect that we teach a lot in our consulting. And that is what, what levels of revenue, the pace and the cadence of my revenue, what kind of team members do I need? Who has capacity, who doesn't, how do you plan for capacity, which they sometimes they'll call that resource management. That stuff is super complicated and they just don't have ways to do that. We have growth models that teach a lot of the theory so that they understand what they're trying to do. But those are really two difficult things that revenue recognition and then capacity knowledge. They just don't have handles on those things really well.

John Jantsch (10:06): And now let's hear a word from our sponsor. You know, the universe is ever expanding, but it's constantly adapting to adding solar systems here and there a sprinkle of stars in a black hole or two you to keep things interesting. A HubSpot CRM platform adapts and changes to the needs of your business. So the sky is never the limit HubSpot's reporting dashboard gives you a satellite view over your marketing sales and customer service performance. So you can get ahead of any issues before they happen. And automated marketing tools allow, have you to create consistent multi-channel campaigns for clear, concise communications and less mixed messages. You can even use email marketing tools to send test and optimize your emails for different devices and inboxes. Whether you're business is Jupiter or Pluto size, a HubSpot CR platform is easy to implement and ready to scale with you learn more about how a HubSpot CRM platform can help your business grow better @ hubspot.com. So a lot of agencies today have chosen to grow by getting freelancers outside, you know, third party services to do certain aspect. Does that muddy up the, the forecasting and the models and let alone the accounting,

Jason Blumer (11:22): You know, that's part of their labor mix. It actually is a part of their P and L it's part of the metrics. Yeah. You know, that we'll track for 'em. And so, but I, I think where they get in trouble is where they lean and try to scale on a contractor model when really at a certain level eight people, eight to 10, you're gonna need to switch back to a team model, which is a fixed cost. That's a higher, that's a much higher risk when you pull in a fixed cost. But for agencies flexing their re their growth through contractors is always something they have to do, especially in the more complicated areas. So if they, you know, if they do more digital marketing, right. But they have a complicated development that you, you can't, sometimes you can't hire a developer, they're so expensive. They have to flex their growth through that contractor space. So it, it, there it is, it is definitely part of their labor mix is definitely part of their growth. There's just strategy to it. There is strategy on how to use it and when to leverage it. Yeah,

John Jantsch (12:19): Yeah, yeah. And I think you're right. I mean, one of the beauties of the world we live in today is you get some project on, I don't know, some platform that you don't generally work in, don't have any expertise and you, you can go out there and buy best of class for one project. For sure. That's pretty cool. It's really beautiful. Yeah. It really is. Um, is there like when somebody comes to you and they're saying, you know, we're starting to grow or we wanna scale, we know we need to start doing things like, you know, big people, you know, is there like a certain stage, whether it's revenue, people, you know, that, that you kind of say, yeah, you're ready for this. Or is it just like, Hey, whatever you're objectives are, you know, you're never ready for it. You should do it before you think you are.

Jason Blumer (12:57): Yeah. Yeah. Wow. That's a great question. It's a complicated question. There's probably a lot of things that go into that. We would do a lot of assessment of that leader and their ability to stay real close to their team and lead. We would look at it's really anecdotal, but team sizes as service based companies. Yeah. Put them in different structures. So a lot of times, if they have, you know, five to eight, they're gonna, I'm gonna need to see a certain kind of structure to their team. They get, you know, eight to 12, I'm gonna need to see a pretty solid two to three person leadership team that, that are titled in certain ways. So these patterns are things you get from consultants like us. We just see tons of. And so, so we're gonna look at their team model. I mean, it's really cool.

Jason Blumer (13:38): I have to having done this for so long. We can pull up their, you know, their team page on their website. We can go, no, they're not structured. Right. So, and if we hear a revenue number, we know how many people, the structure of the leadership team. And if it doesn't match up for us, we're like, okay, we, I think we know some places we want to take you and you just get that, you know, after years and patterns of watching agencies. So if they wanna grow and scale, uh, they're gonna need to lead team in a certain way. I'm gonna need to see a team structured in a certain way, or they can hire us to do that. We can restructure their team with them, which is really tough or restructure or services team. Sure. Cuz you might move people around retitle 'em and that blows up the whole company.

Jason Blumer (14:22): They're like, why did Tom get a promotion? And I mean, you gotta deal with the emotional backlash of a lot of the perceptions of the humans in the service organization. So structuring lends itself to a lot of the emotional contextual things that teams, you know, surmise that's wrong. So we actually have to walk 'em through how to message this, the order of how to message a team structure move. But those are the things you have to do because as revenue paces up, the faster it goes, the team model has to keep up and the processes have to keep up and you need a strong accountable, you know, project manager or traffic manager, all that has to align and grow at the same pace or, or they get broken, they get outta sync. And I mean seen that, you've seen people dump tons of revenue and then they just throw people at the revenue and it just blows up their labor metrics. And then everybody just is chaos. Yeah. And you can't scale a services company in chaos. That is something we've learned. You need a lot of clarity.

John Jantsch (15:26): Plus the client experience goes all back too. That's right.

Jason Blumer (15:29): That's sometimes the first thing to get down the toilet. Right?

John Jantsch (15:32): Yeah. So, so what's your limit, like three dogs on the abouts page. Is that the limit for uh,

Jason Blumer (15:38): Yeah.

John Jantsch (15:39): I love no comment. Well, I'm gonna see

Jason Blumer (15:43): One dog on every team page. Right. You got to see that.

John Jantsch (15:48): So listen, you talk about the structure. I'm sure this happens to a lot of founders, you know, they grow and they've got a team of six, eight people and everything's going kind of fine. But then they realize, I, you know, I need a layer, you know, like what's so in your opinion, I'm sure we could get 10 opinions on this, for sure. What's the first strategic sort of leadership hire that you think an agency needs.

Jason Blumer (16:11): Yeah. A lot, lot of times it's a technical hire. And so that's gonna be somebody that has that technical expertise in that creative work that they may do pretty close is gonna be more operational. Yeah.

John Jantsch (16:24): Higher. That's what I, that's what I thought you were gonna say first was the operation.

Jason Blumer (16:26): Well, you know, it, a lot of times, you know, it really depends on, you know, what they're trying to achieve. So one of those is gonna be a key that they want to invest in. And it's weird. They normally creative entrepreneurs, a lot of entrepreneurs leave out the operational needs of the company. And so a lot of times they feel overwhelmed and glued and they assume it's because of the service revenue. But a lot of times it's what a company takes from 'em. So if they can an offload, a little bit of the creative review to somebody then next in, line's gonna need to start getting that administrative help kind of getting things humming on the process operational side. And if they forego that too long, it'll just swallow 'em up. Yeah. Really consume them.

John Jantsch (17:09): It's probably always been trendy, but for some reason it seems like the last couple year I'm seeing more and more agencies, uh, talk about growth through acquisition. And is that something that you encounter and, and I mean, is that a good way to grow? Is that fraught with lots of challenges? Yeah.

Jason Blumer (17:25): Well I guess probably any, any type of growth is risk, right? Yeah. And we know, you know, entrepreneurial endeavors don't really move forward without risk. So it is some you're always gonna have to take acquisitions are pretty tough, you know? Yeah. That's a pretty risky move. A lot of times people, they, they just think about, wow, I'm gonna get all of this revenue and some great team. Yeah. Uh, they're gonna come in, but ultimately you're gonna want 'em to operate the way you operate. And so cultural clashes are really a bigger deal than I think they, they plan for. So we're working on some mergers right now and we're man, we're gonna do a lot of teamwork, tons of teamwork, team analysis, just figuring out what they all think, leading a retreat to bring them all together, making the, a, all of these things are really done in certain orders so that their questions are answered. You know, because teams really start to develop. Gossip comes with teams that are not informed or told the things they need to make sense of. They

John Jantsch (18:23): Gotta, they gotta make up their own stories. Right?

Jason Blumer (18:24): Yeah. So they make up their own story and then they get that approved by the person in the cube next 'em. And so gossip en Sue. So, but great leaders will feed that will give them the right information. They need to make sense of their cultural joining and why. And then they cuz teams to grow. They have to all move and sink and they have to, you know, row the boat in the same direction. And when they're not, you can't really scale that kind of organiz. So acquisitions are they're, they're tricky. They are, they do work. They are good to do. Just like adding a partner is pretty tricky, but it does work. You need a lot more care to do it.

John Jantsch (19:01): Yeah. I, I think we're, it, it seems to have some real interests and opportunities when you're actually acquiring something unique. Like if some were, were going to acquire your firm, they're going to be picking up more than a book of business. They're gonna be picking up all the stuff you've built, the memberships, the, the SOPs you've built that are really unique. So I think if you can find an op an opportunity to acquire a framework or acquire something that, that I think, you know, probably would make it better than just acquiring customer list.

Jason Blumer (19:33): That's right. Yeah. Yeah. And I think, you know, traditionally just getting a customer list is what most people would want, but you're right. It's the internal workings. That's really where the value is. I think we, a lot of people are starting to realize that yeah. You know, a lot of books are written about that. You've written about that. So yeah, that's definitely the way to go.

John Jantsch (19:50): So tell people where they can find out more about, and again, maybe give kind of the two minute, like here's all the ways in which you could engage us. Cause you know, it is not just simply a matter of saying, can you do our, can you look at our P and L that right. A lot like deeper.

Jason Blumer (20:03): Yeah. We, yeah. As unlike most firms and we consider ourself a, you know, a CPA firm devoted to the digital agency space, but we do a lot of insulting and coaching. So I do a lot of speaking and writing Jason blumer.com is a place that lists all the things I've done. But then our one site BL CPAs, CPAs can lead you to a lot of things. We do. We've had a business podcast for 10 years on the BL side and then thal, which is a weird word we made up. So it's the word thrive. And then add thriveal.com is for, we teach, uh, CPA firm entrepreneurs, how to build and scale businesses and agencies and entrepreneurs that run firms, CPA firms. They're very similar, right. They're service based organizations. So right. And then the thrive cast is another podcast I've been running for 10 years on the th rival side. So we have two, I run two businesses. So, you know, with my partner. So there's a lot of things we do. And you can find us on YouTube too. So just search thrival or Blumer or CPAs and you'll find us awesome.

John Jantsch (21:09): Well, Jason, I appreciate you stopping by the duct tape marketing, uh, podcast. And hopefully we'll, uh, be able to run into each other one of these days out there

Jason Blumer (21:16): On the road. Thanks so much, John. It was an honor to be here. I appreciate it.

John Jantsch (21:22): All right. So that wraps up another episode. I wanna thank you so much for tuning in and you know, we love the, those reviews and comments. And just generally tell me what you think also did you know that you could offer the duct tape marketing system, our system to your clients and build a complete marketing consulting coaching business, or maybe level up an agency with some additional services. That's right. Check out the duct tape marketing consultant network. You can find it at ducttapemarketing.com and just scroll down a little and find that offer our system to your client's tab.

This episode of the Duct Tape Marketing Podcast is brought to you by the HubSpot Podcast Network and WorkBetterNow.

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