The Real Shift

Large consumer companies used to win by controlling shelf space and distribution. Now they're increasingly paying for brands that already own attention, trust, and repeat usage before they arrive at full retail scale. That's what makes this deal worth studying.

Routine Wins

Grüns didn't just sell a wellness SKU. It built a product that consumers appear to use regularly enough to become part of a routine. And in consumer businesses, routine is where enterprise value gets created.

When a brand becomes habitual, several things happen at once:

• Retention improves
• Acquisition spend becomes easier to justify
• Retail expansion gets de-risked
• Strategic buyers stop looking at the business as a single product and start seeing it as a platform

What Unilever Bought

That's likely what Unilever is buying here. Not just exposure to the wellness category, but a brand that proved three things early:

• It could build demand digitally
• It could carry that demand into major retail
• It could create repeat behavior in a category where novelty often fades quickly

FMCG Evolution

This points to a broader shift in FMCG strategy.

Growth is no longer driven by shelf presence first. It's driven by consumer behavior first, with retail acting as the scale layer.

Founder Takeaway

For founders, the takeaway is important: The strongest consumer brands are no longer valued only on product quality or top-line growth. They're valued on how often they enter a customer's routine, how reliably they're repurchased, and how difficult that behavior is to replace. That's the kind of asset strategic buyers will keep paying for.

Final Thoughts

Here's what this deal tells us: In modern consumer, the real moat might not be the product itself. It's the habit it creates. Build something people reach for daily, and you're building something acquirers will pay a premium for.

The brands that win aren't just selling products. They're becoming part of how people live. And that kind of behavioral lock-in is exactly what makes strategic buyers write big checks.

If you're building a consumer brand, ask yourself: Are you creating a product, or are you creating a routine?

The Real Picture

Your bank balance tells you what's there today. It doesn't tell you what's already been claimed by payroll, rent, taxes, supplier payments, loan obligations, or delayed expenses that haven't cleared yet.

That's the difference between seeing cash and understanding cash.

Over the years, I've seen businesses with strong sales, healthy margins, and impressive growth still operate under constant financial pressure. Not because the business was weak, but because the timing of cash was poorly understood. That's where many good businesses get caught.

Hidden Strain

Revenue can look strong while liquidity is under strain. Profit can look healthy while the company is still one delayed payment away from stress. Receivables may look like assets on paper, but until they're collected, they're assumptions.

This is why cash flow discipline matters far more than most founders want to admit. It forces a more honest view of the business.

Better Questions

Not: "How much money is in the bank?"

But:

• What's already committed?
• What's uncertain?
• What happens if a major customer pays late?
• What breaks first if revenue softens for 60 days?

Those are the questions that separate financial confidence from financial hope.

Where Trouble Starts

In my experience, businesses rarely run into trouble because the owner wasn't working hard enough or selling enough. They run into trouble because cash and timing stop lining up.

And when that happens, decisions become reactive. Pressure rises. Optionality disappears.

Better Sequencing

That's why I often say this: growth doesn't solve poor cash timing. Better sequencing does.

• Tighter invoicing
• Better payment terms
• Clearer visibility on committed outflows
• A realistic view of receivables
• A forward cash flow model that shows pressure before it arrives

That's not just better finance. It's better leadership.

Final Thoughts

A bank balance can make you feel safe for a moment. But a real cash position tells you whether you actually are. The key is moving beyond surface-level numbers to understand what's committed, what's uncertain, and what breaks first under pressure.

Growth won't save a business with poor cash timing. Discipline, visibility, and honest questioning will.

How often do you think founders confuse cash in the bank with real financial control?

That's the part most people skip.

The Real Problem

People get weird about trust funds. But the issue isn't kids having money. It's kids getting money with zero understanding.

If you put away $200/month for a kid (or even $100), over time it becomes meaningful. Not "never work again" money. But real, life-opening options.

Capital Needs Context

The difference-maker is the conversation that runs alongside the capital:

• Why the money exists
• What compounding actually means
• Where it's invested (and why)
• What responsibility comes with it

Because capital without context is where things go sideways.

If you want to brush up on the basics, I put together a list of 30 finance terms every business owner should know.

Making It Personal

With my nephew, the conversation got personal fast:

He liked sports, so we looked at Nike and Under Armour. He liked video games, so we talked about gaming companies. And yes, he loved the meme stock craze with GameStop. Where my diamond hands at!

Money stopped being mysterious. It became specific.

Conversations Evolve

Now he's in trade school, and our conversations sound like:

• Will AI replace parts of your job?
• What infrastructure still has to exist no matter what?
• Where does opportunity move next?

That doesn't happen if money stays taboo.

The Real Goal

The goal isn't raising rich kids. It's raising kids who understand money before they're forced to learn the hard way.

Here's the thing: starting small and having real conversations about money can shape how the next generation thinks about finances. Whether it's $100 or $200 a month, the deposits matter less than the dialogue.

If you could teach one concept first, whether it's budgeting, saving, investing, or earning, what would it be?

The Pattern

Here's what I see in real businesses, especially services and agencies:

• You get paid in 45 to 60 days
• Payroll hits every 14 days
• Vendors want cash in 15 to 30 days
• Taxes and annual software renewals land on fixed dates

Nothing mystical is happening. Your cash cycle just doesn't match your payment cycle.

Timing Gaps

When I diagnose this with a new client, I look for three timing gaps:

• Collections lag vs payroll cadence: If customers pay monthly but payroll is biweekly, cash pressure shows up even with healthy margins.
• Payables discipline: Paying suppliers early feels responsible. It can also quietly squeeze working capital.
• "Lumpy" expenses treated like surprises: Taxes, insurance, annual renewals, equipment, and one-off contractors. Predictable costs that rarely get planned properly.

The Fix

What fixes it isn't a motivational speech. It's mechanics:

• A rolling 13-week cash forecast reviewed weekly (not monthly)
• Invoicing habits that shorten time-to-cash (invoice fast, make payment easy, follow up on a schedule)
• Clear rules for when money leaves the account (due date, not whoever emails the most)
• A payroll and tax buffer you don't touch

The Takeaway

You can be profitable and still feel cash-stressed. That doesn't mean you need more revenue first. It means your timing is working against you.

The fix isn't about working harder or closing more deals. It's about getting your cash cycle and payment cycle to actually line up. I also wrote about why your annual budget is already outdated if your planning process needs a reset.

If you had to fix one thing this month, what would it be: collections, vendor terms, or surprise expenses?

The Fallout

Revenue was 30% under plan. Marketing had spent nearly 2x their allocation. Burn rate was climbing. This is exactly why I built a 7-part revenue framework for clients. And the worst part? Nobody noticed.

There was no process in place to monitor performance against the plan. No review cadence. No reforecasting. No accountability.

The Fix

That engagement changed how I work forever. I started using a simple 90-day rule with every client:

• Review the budget quarterly
• Reforecast using actual results
• Realign with leadership before it's too late

Why Quarterly?

Because business changes too fast for annual planning alone. New hires. Pricing changes. Missed sales goals. Unexpected churn. Market shifts. You can't set your budget once a year and expect it to stay relevant.

Living Tool

A budget is not a one-time event. It's a living tool. One that should evolve as your business evolves. If you're not reviewing it every 90 days, you're not really managing the business. You're hoping. And hope isn't a strategy.

Here's the bottom line: a budget that sits untouched is a budget that fails you. Quarterly reviews keep you aligned with reality, catch problems early, and create accountability across your leadership team.

Your KPIs need the same regular attention. I wrote about that in Stop Hoarding KPIs!

If your team is still operating off a January plan, it's time to change that.

Defying Expectations

Regional banks weren't supposed to be doing this. For years, the story was clear: Fintech would take over. Neobanks would replace the old guard. And regional players would slowly fade out.

But that's not what happened. This wasn't a quiet exit. It was a bold move forward.

Strategic Gains

Here's what this merger actually delivered:

• Expanded footprint without losing the local relationships
• Stronger balance sheet to handle compliance and capital demands
• More coverage in key Southern markets with room to grow
• A structure built to compete in both community and digital banking

This was not about survival. It was about scale, timing, and long-term positioning.

The Pressure

With interest rates climbing and tech investments becoming mandatory, smaller banks are being forced to choose. Merge up, or fall behind. Renasant and First Bancshares didn't wait. They acted early and set the new model.

Real Impact

The impact is already visible:

• More capital available for small businesses
• Stronger lending in towns that big banks overlook
• A real banking presence where it still matters most

This deal protected something critical: a business model that still serves millions of Americans outside the major cities.

The Takeaway

Most people will scroll past this. But the smart ones are watching where the quiet power shifts are happening. This isn't just a banking story. It's a case study in how legacy players can still outmaneuver the noise. For more on what makes deals succeed or fail, read The Silent Killers of M&A.

Pay attention to moves like this. They show you where the next era of real growth is coming from.

But when deals fall apart, it's rarely because of the price. It's almost always because something was missed in diligence. Not the obvious stuff, but the quiet stuff hiding just beneath the surface.

These are the 7 mistakes I see again and again:

Revenue Isn't Cash

I've seen businesses doing $5M+ in revenue that couldn't make payroll. Revenue gets inflated, deferred, or booked on weird terms. Cash flow tells the real story. Always check collections, AR aging, and burn.

Customer Concentration

In one deal, 68% of revenue came from one customer. We only caught it after digging into invoices by client. The seller brushed it off. That's not diligence, that's a gamble.

Normalize Everything

Owner salaries, personal expenses, missing hires, all buried. We rebuild the P&L from scratch to reflect reality post-close. Reported EBITDA means nothing if it's not normalized. I go deeper on this in The Silent Killers of M&A.

Working Capital

Most models stop at the closing date. Then buyers scramble 60 days later. Always model Day 1 to Day 90.

Tax and Legal

A missed payroll tax filing from 2019 can kill a deal. You need advisors who understand small business M&A. Dig through past filings. Ask dumb questions.

Seller Transition

In small businesses, the seller is the business. Without a structured handoff, everything breaks. We always push for timelines, knowledge transfer, and retention.

Beyond Numbers

Culture doesn't show up in a spreadsheet. Shadow the team. Sit in meetings. You'll learn more in two days on-site than two weeks in Excel.

The Takeaway

Diligence is not about confirming what the seller shows you. It's about finding what they don't. If you're serious about buying a business, you need more than a checklist. You need reps. You need real-world frameworks.

That's what we teach in the ETA Bootcamp. Real deal reviews. Real processes. And the exact system we use to diligence deals across industries.

Learn more here.

It's a fair question. Because in fast-growing companies, those lines get blurry. Everyone's moving fast. Everyone's solving problems. But without clear boundaries, growth turns messy fast.

The Breakdown

Here's how I explain it:

• CEO: Owns vision, strategy, and growth
• COO: Owns execution, operations, and delivery
• CFO: Owns financial clarity, discipline, and foresight

All three roles need to be in sync. But each one has a distinct focus.

Distinct Roles

The CEO sets the direction. The COO makes it happen. The CFO ensures the business can afford to make it happen without burning out cash, team, or leadership.

My job is to make sure financial decisions are grounded in reality. Not assumptions.

What I Do

I help companies:

• Build financial clarity for founders and boards
• Prioritize spend and manage risk
• Track performance and drive real profitability

Final Thoughts

It's easy to blur roles in the name of speed. But the companies that scale well know exactly who owns what.

Clear boundaries between the CEO, COO, and CFO don't slow you down. They actually help you move faster with less chaos.

Not sure if your leadership team has the right balance of vision, execution, and financial discipline? Let's talk.

The Real Problem

The problem isn't the business. It's the lack of preparation. Buyers don't care about your dream multiple. They care about clean EBITDA, predictable revenue, and

• 

  30 Finance Basics Every Business Owner Should Know

  Jul 19, 2025

  To run a successful business, you need to understand money. It helps you make smart…

. That's it.

Messy Financials Kill

The fastest way to kill a deal is messy financials. Sloppy books can slash your value by 20 to 30 percent. I cover the essential prep work in

• 

  What To Do Before Selling Your Business

  Jul 14, 2025

  Thinking about selling your business? Here is the reality too many owners learn the hard…

. If your books are off, even slightly, expect a lower offer or no offer at all. And hoping it all works out isn't a strategy. Buyers want proof that the business runs on systems, not memory.

Exit Ready

That's why I built the Exit Ready Financial Model Template. It helps founders:

• Know what their business is actually worth today
• See the red flags buyers will spot
• Build a plan to exit on your terms

Here's the bottom line: most businesses don't sell because owners aren't prepared. Clean financials, predictable revenue, and documented systems are what buyers want to see. Whether you're thinking about selling or just want to run a tighter operation, preparation is where it starts.

It helps you make smart choices, grow your company, and stay secure.

This guide explains 30 important finance terms that you should know.

Measuring Profitability

This section is about how you figure out if you're making or losing money.

• Revenue: The total income generated from business activities.
• Cost of Goods Sold: The direct costs incurred in producing goods sold by a business.
• Gross Margin: The difference between revenue and the cost of goods sold.
• Net Profit: The amount of money left after all expenses and taxes are deducted.
• Break-Even Point: The point where total revenue equals total expenses, resulting in no profit or loss.

Your Financial Snapshot

This shows what your business owns and what it owes at one point in time.

• Balance Sheet: A financial statement showing assets, liabilities, and equity.
• Assets: Resources owned by the business that have value.
• Liabilities: What the business owes to others.
• Equity: The owner's share in the business after liabilities are deducted from assets.

Tracking Cash

Profit and cash are different. Knowing how cash moves in and out is key to keeping your business running.

• Cash Flow: The movement of money in and out of your business. I wrote more about why timing breaks profitable businesses.
• Cash Flow Statement: A report showing the cash inflows and outflows over a given period.

Day-to-Day Finances

These are the terms for managing your business's daily cash needs.

• Accounts Receivable: Money owed to the business by customers for goods or services provided.
• Accounts Payable: Amounts the business owes to suppliers or vendors.
• Accounts Payable Days: The average time it takes to pay suppliers.
• Working Capital: The difference between current assets & current liabilities, indicating short-term financial health.
• Working Capital Cycle: The time it takes for a business to convert its assets into cash.

Valuing Assets

Your business assets can lose value over time. It's important to account for this.

• Depreciation: The reduction in value of an asset over time due to wear and tear.
• Amortization: The gradual reduction of an intangible asset's value over time.

Strategic Decisions

Finance helps you plan for the future, not just track the past.

• Budgets: A financial plan that estimates income & expenses over a specific period. I explain why your annual budget is already outdated.
• Tax Planning: The process of organizing finances to minimize tax liabilities.
• Investment Strategies: Approaches to investing business profits for growth.
• Risk Management: Identifying, assessing, and controlling financial risks.
• Dividends: Profit payments made to shareholders from a business's earnings.

Funding & Leverage

This is about how you get money for your business and manage any debt.

• Capital Structure: The way a business finances its operations through debt or equity.
• Debt Management: Strategies for handling and reducing business debt.
• Debt-to-Equity Ratio: Compares liabilities to equity, showing business risk.

Key Principles

These are the rules that make sure your financial information is correct and trustworthy.

• Accrual Accounting: Recording transactions when they occur, not when cash is exchanged.
• Revenue Recognition: The process of recognizing income when it is earned, not when it is received.
• Internal Controls: Systems & procedures used to safeguard assets & ensure accurate financial reporting.
• Financial Ratios: Key metrics used to evaluate a business's financial performance.

Conclusion

Knowing these 30 money terms is very important for any business owner.

When you understand them, you can check if your business is doing well, talk clearly about its finances, and make better decisions.

Start by looking at your own business numbers today to take charge of your company's future.

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Here is the reality too many owners learn the hard way.

The Reality

Messy financials can destroy your deal.

I have seen it over and over. Buyers either walk away or slash your valuation when the numbers are unclear or untrustworthy.

What Buyers Want

It is not enough to show strong revenue.

Serious buyers expect clean, well-documented financials that prove the health of your business.

Essential Groundwork

Before you even think about listing, do this groundwork:

• Separate personal and business expenses completely
• Prepare at least two years of accurate, organized P&L statements
• Track and document your true cash flow

Conclusion

This is not glamorous work. But it can easily add six figures or more to your exit.

If you are planning to sell, start cleaning up your books now. Your future self will thank you.

Here's the 7-part framework I use with clients to build a revenue engine that doesn't break down.

One Offer

Start with ONE solid offer.

Don't chase five ideas at once. Pick the one that solves a painful problem, has a high margin, and is easy to deliver over and over.

This is your engine block.

Know Numbers

Revenue is worthless if your CAC is too high, your gross margin is too low, or you're collecting cash too slowly. I share how to pick the right KPIs in another post.

A strong offer with weak economics is still a broken engine.

Best Customers

Not all revenue is equal.

Track lifetime value, referral rate, and profit per sale.

Serve your best customers better and the engine keeps running.

Sales Path

A lead hears about you. Then what?

Build a clear flow: Attention, Interest, Offer, Close.

Don't wing it. Document it and repeat it.

Stop Leaks

Billing delays, scope creep, and loose payment terms drain your profits fast.

If you don't enforce pricing and track profitability per customer, you'll keep bleeding.

Set Targets

Growth needs structure. Monitor pipeline value, close rates, and revenue vs. forecast.

If you're not forecasting, you're guessing. I explain more about why static budgets fail.

Review Weekly

Every week, look at sales closed, cash in, cash out, and pipeline progress.

Your engine won't run itself. Open the hood.

Conclusion

A fancy website won't save a broken business model.

A real revenue engine does four things:

• Finds customers
• Sells profitably
• Delivers with margin
• Repeats predictably

That's the benchmark.

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At the start of this year, I promised myself I’d do more activity-based networking.

I was tired of conference rooms and stale coffee.

Nothing builds trust like getting outside together.

When you share time in nature, the conversations get real.

The energy shifts.

You remember why you love this work in the first place.

Out on the water, nobody cares about your job title or your quarterly targets.

You’re just a bunch of people with fishing rods and a cooler full of snacks.

If you lead a team or manage client relationships, step outside the boardroom.

You’ll come back with stronger partnerships and way better stories.

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They either track too many, track the wrong ones, or pick metrics just to impress investors.

I have uncluttered more dashboards and refocused more teams than I can count.

Below is the method I share with founders to pick KPIs that actually grow the business.

KPIs Aren’t Decorations

If a metric does not drive action, it is just noise.

Your KPIs should punch you in the gut when something is off and offer clarity when things are working.

Don’t Copy Dashboards

Someone else’s "LTV : CAC" might be useless for you.

Your KPIs must match your business model, stage, and real goals—no one-size-fits-all.

Lagging vs Leading KPIs

Most teams obsess over lagging numbers like revenue or churn, but by the time those drop, damage is done. I lay out a framework for this in Build Your Revenue Engine.

Track leading indicators—new pipeline, demo-to-close rate, NPS trend—because they flag issues early.

Only 5–7 KPIs

Not twenty. Not fifteen. Not even ten.

Every KPI you keep should be owner-assigned, updated regularly, and tied directly to a business outcome.

Tie KPIs to People

If nobody owns a KPI, it is dead weight.

Clear owners mean clear accountability and real progress.

Clarity Beats Dashboards

Pretty charts do not pay the bills.

An “ugly” spreadsheet that sparks decisions is worth more than a gorgeous dashboard no one understands.

Reevaluate Every Quarter

Your business evolves, so should your KPIs.

Ask quarterly: Are we still tracking what matters? Do these metrics help us move faster? What is missing?

This pairs well with rethinking your budget cycle too. I wrote about why your annual budget is already outdated.

KPI Cheat Sheet

Early-Stage:

• Revenue
• Customer Acquisition Cost (CAC)
• Active Leads
• Conversion Rate
• Burn Rate

Scaling:

• Gross Margin
• Retention
• LTV : CAC Ratio
• Churn Risk
• Team Efficiency

Track what moves the business, not what looks good.

Conclusion

You are running a company, not a museum.

Here's a quick rundown on everything I discussed.

• Track only actionable metrics.
• Customize KPIs to your model and stage.
• Favor leading indicators over lagging ones.
• Limit yourself to 5-7 well-owned KPIs.
• Review and refine every quarter.

Fewer metrics, more action, clear ownership, and tight feedback loops—that is how real businesses grow.

$200B+ Company Under Pressure

By 2019, Intel faced massive headwinds that would test any leadership team. The company was grappling with revenue growth that was slowing, budget battles across siloed teams, and management complacency that had set in over years of market dominance.

Adding to these internal challenges, 28% of revenue was tied to China amid rising geopolitical risk, and a looming pandemic threatened to rattle global markets.

Most leaders would play defense in such circumstances. Bob didn't.

The Transformation Strategy

He reset Intel's playbook with a comprehensive approach that went far beyond traditional financial management:

Strategic Alignment: He aligned financial planning directly to strategy, ensuring that every dollar spent supported the company's long-term vision rather than short-term departmental interests.

Breaking Down Silos: Bob demolished silos to create transparency across the organization, forcing different divisions to work together rather than compete for resources in isolation.

Risk Management: He managed risk head-on with no dodging of tough calls, confronting difficult decisions that previous leadership might have deferred.

Future Investment: Most importantly, he made forward bets on AI and autonomous driving, positioning Intel for emerging markets rather than simply defending existing ones.

Results and Reality Check

Were there missteps along the way? Sure. No transformation of this scale happens without some trial and error. But here's the part most observers miss: Bob laid the foundation for Intel to pivot from stagnation to reinvention.

In the technology sector, this distinction matters enormously. Standing still equals falling behind, and transformation only happens when leadership is bold enough to challenge the status quo.

Choosing the right metrics to track is a big part of this shift. I explore that more in Stop Hoarding KPIs!

Lessons for Today's CFOs

What can today's CFOs learn from this transformation? The lessons extend far beyond Intel's specific circumstances:

Influence Beyond Spreadsheets: Your influence doesn't stop at spreadsheets. Modern CFOs must be strategic partners who shape business direction, not just financial reporters.

Cultural Change Through Financial Clarity: Cultural change starts with financial clarity. When teams understand how their work connects to financial outcomes, behavior shifts naturally.

Balancing Time Horizons: Long-term bets require short-term discipline. The ability to invest in the future while maintaining operational excellence separates great CFOs from good ones.

Blueprint for Stuck Organizations

If your company is stuck in politics or experiencing flat growth, Swan's approach offers a clear blueprint. Start by mapping where decisions slow down in your organization.

Push for transparency in how resources are allocated and why. Most importantly, reallocate resources to future bets rather than simply maintaining the status quo.

New Role of Finance

Finance is no longer a back-office function relegated to reporting what happened last quarter. It has become a front-row seat to reinvention, with CFOs serving as architects of strategic transformation rather than just custodians of company resources.

Conclusion

Swan's approach at Intel demonstrates that the most effective CFOs of today don't just manage money—they manage change.

As businesses face increasing complexity and uncertainty, the finance function has emerged as a critical driver of strategic transformation.

For CFOs willing to step beyond traditional boundaries, the opportunity to shape their organization's future has never been greater.

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Thank you to Nick Gray, Patron View, and his team for helping me build this site.

As the founder of Frak Finance, I shared insights about helping SaaS companies, e-commerce businesses, wealth management firms, and what I love to call "sweaty startups" (those essential trades and home services companies) navigate their most critical financial hurdles.

We discussed everything from the dangers of rearview mirror management to building scalable financial systems that actually drive growth rather than just track it.

Summary

During this conversation with Jay, we covered the critical financial challenges facing businesses in the $1-25 million range and practical solutions to overcome them.

Key Points:

• Cash Flow Crisis: Most businesses struggle with working capital management, relying on bank balances instead of understanding what's coming in and going out
• Windshield vs. Rearview Mirror: Successful companies focus on forward-looking financial forecasting rather than just analyzing last month's closed books
• Finance Meets Sales & Marketing: The key to growth is connecting sales/marketing KPIs with financial models to make strategic investments with guaranteed returns
• Leadership Gap: The root cause of financial struggles is poor communication between department heads and lack of transparent reporting
• Building for Scale: I shared my journey from independent fractional CFO to building a team-based model, including the challenges of "J-curving" by investing in people ahead of growth

Video Gallery

Watch the full video below, or watch it on YouTube.

Transcript

Jay Kingley: I'm Jay Kingley, co-founder and CEO of Maven, your host of Fractionals Unplugged. I'm joined today by Tom Dillon of Frak Finance. Tom is a fractional CFO who works with SaaS, e-commerce, wealth management, and sweaty startups, from $1 to $25 million in revenue. Whoa, we gotta take a little time out here. Tom, what is a sweaty startup? I gotta tell you, it sounds like me after I come back from the gym, but I'm guessing it means something a little bit different. Please enlighten us.

Tom Dillon: Hey, Jay. Pleasure to be here. Sweaty startups are the companies that are in the trades. You could think of them as everyone that's gonna be touching the home services that might come and fix your roof: electric, plumbing, et cetera, or commercial real estate. Those are what we define as the sweaty startups.

Jay Kingley: Well, I'm down here in the Miami, Florida area, and I will say, particularly in summertime, it is sweaty. But Tom is based in Chicago, Illinois, where it isn't always so sunny. Welcome, Tom, to the show.

Tom Dillon: Waiting my entire life to be here. It is a pleasure.

Jay Kinglsy: Thank you, Tom. I hear that all the time.

Jay Kingley: All right, let's get serious, Tom. When you first meet a potential prospect, it's important for you to give them some context on you so they know how to tell you about their issues and challenges. I'm going to give you a maximum of 60 seconds to give just enough context so that our audience understands where you are coming from.

Tom Dillon: Go. So, the way to think about us are fractional CFOs or corporate finance advisory. We have three core services that you can probably identify as an SMB owner. If you're buying a business, we'll do the quality of earnings, the Q, that's the financial due diligence. Make sure there's no fraud in the company you're buying. And then we have fractional CFO work, which, if you're growing your business, will help you with that. And then if you're selling a business, we have our sell-side advisory. So, we really look at the full lifecycle of an SMB owner, and we differentiate ourselves because we look at both organic and inorganic growth, meaning growth through acquisition.

Jay Kingley: So, if I think about your types of industries you work with, SaaS, e-commerce, wealth management, and those sweaty startups in the $1 to $25 million range, what are the issues, what are the challenges that you see that they struggle with?

Tom Dillon: They are really struggling with their cash flow, having an understanding of the ins and outs of that cash. And a lot of these individuals are looking at the bank account, and they use that as the proxy. But what they don't really have an understanding of is what's coming down the pipeline, what's going to be coming in in order to pay what needs to go out. And so, a lot of that, what we call working capital, is a massive issue. I wrote about this exact pattern in The Cash Leak Nobody Talks About. It hurts these business owners when they don't have an understanding of it because they really can't budget accordingly for allocation of resources for a new hire or spending more on marketing so that they can grow faster.

Jay Kingley: Now, if you take the challenges that these companies struggle with, and if I ask you to boil it down to the one thing that you think is the most important, urgent, and valuable problem that your ideal client profiles—those industries—what is that one thing that they are most struggling to resolve?

Tom Dillon: Top-line growth is really where a lot of the struggles we see, and when there becomes a focus on the sales and marketing aspects of the business with financial responsibility, we can't just be throwing money out and hoping that we get a return. We need to track and actually methodically have a plan in place that's going to absolutely guarantee that return.

Jay Kingley: So, what surprises me a little bit is I think most business owners, when they think of revenue, are thinking about sales and marketing. I'm not sure that finance is a top-of-mind thing when it comes to revenue. So, can you elaborate a little bit more about what the role of finance is? To make sure that the sales and marketing team is optimizing their efforts.

Tom Dillon: What they should be doing is tying in what their sales and marketing KPIs, which are key performance indicators. These are the metrics that you really base your performance. Are we headed in the right direction or the wrong direction? They're your barometer of success and building out a forecast model with those items in mind. And that is what's going to really allow these business owners to be able to invest more in their people, invest more in their businesses for them to grow faster. And so, without having those indications on the sales and marketing side of where are we at? Do I have a finger on the pulse of the health of my business? Then you really don't have a good way of determining how successful you're going to be in the next three, six months. And so, we see a lot of these business owners not do that, and that's what they should be doing.

Jay Kingley: There's that old trite saying, "You can't manage what you don't measure." And I think everyone nods their head. But where companies struggle is how do I take that high-level statement and translate it and execute it so we can get the results that you are talking about. Now, I call this the most important, urgent, and valuable problem that your clients tend to have. Why is this the critical thing that they need to figure out how they are going to resolve? In other words, what outcomes do they want but they can't get because they've yet to resolve this issue?

Tom Dillon: Jay, have you ever driven your car looking in the rearview mirror unless you're going backward?

Jay Kingley: Backwards, well said.

Tom Dillon: Which in business we don't want to do. We want to grow and go forward. And so that's the critical component. It's looking through the windshield and seeing what's coming at you and getting these business owners that do it successfully and what they should be doing is looking through the windshield and thinking about what's going to be coming down the road. And so that all is encompassing of not only cost and resource allocation of the cash coming in. Who can I hire so that we can alleviate part of our team member to go take on another task or help our company grow in that capacity? And that is going to be requiring having an understanding of how those top-of-funnel KPIs are going to flow down through the rest of your P&L, your income statement. And so within all that, it's the week to week because most people get their bookkeeping, they close their books, and they get their statements, and they go, "Okay, we did pretty good last month." But if you said, "How are we going to pan out this month?" "Well, Tim and Sally said that we were going to be doing pretty good." What does "pretty good" mean? That could be very, very broad to a lot of different people, probably different between Tim and Sally. And so when you're measuring those aspects, you can get a better grasp on your cash flow. I go deeper on this in Stop Hoarding KPIs! And you'll know exactly where you're going to come in for that next month, and you're going to be able to invest that money that you know is coming in, or maybe sometimes it's not. There are tight crunches at times where we have to prepare accordingly. Maybe there's a line of credit that needs to be in place with certain businesses where they need a little sway in how they operate so they can make payroll perfectly fine as long as it's done in a responsible way. But we need to make sure that we can go and take those dollars and wisely invest them back in the business and say, "What's the return on those dollars going to look like? How does that help us as an organization, pay our people more or invest back into the growth of the company so that we can continue to expand our team?"

Jay Kingley: Well, we know that what Tim and Sally normally mean when they say "pretty good" is that you're going to keep us on the payroll for another month. And that's probably not what the CEO is thinking about when he wants to drive the business in the right way. Now, as I like to call this, this is the important, urgent, and valuable problem. The urgency part says they are trying to figure this out. They are trying to resolve this key issue. But what you and I know is that whatever they're doing, it isn't working. So, what are the things that you typically see companies doing in an attempt to resolve this problem? And why don't these things typically work?

Tom Dillon: A lot of times, they'll hire marketing agencies or sales agencies that they're hoping have a silver bullet. What's this next best ad or design copy that's gonna win the race of beating out our competition and earning this revenue? I also see throwing more people at a problem, "But we're just gonna hire another person that we can extrapolate these sales." It's not the market or our messaging. It's really gonna be if we have more people, more phone calls going out, more ads going out, more meetings. That doesn't translate. It needs to be a little bit more methodical. We need to get at the heart of the issue. Why isn't this person at capacity or industry standard? Is it them? Is it us? Is it product, service? And so there's just a little bit more meat on the bone that needs to be gnawed on and really kind of chewed and thought about rather than just trying to solve them in some of the traditional manners of what most business owners take upon themselves to do.

Jay Kingley: So, your insight into the root cause that's driving this key problem, and it's either typically one of two things. Sometimes it's a combination. Sometimes clients just don't understand what the real problem is; they see the symptom, but they don't understand the cause. And so, they're busy dealing with symptoms. Sometimes they think they know the cause, but they're misinformed. So, what is it from your perspective that's really going on?

Tom Dillon: What I think is really going on is a leadership issue among the department heads, if you will, and if there's not department heads, and what I mean by that, let's say there's a head of ops, there's a sales and marketing person. They're not having the leadership that's extracting the information from them to understand exactly where the business is at and having that finger on the pulse and also guiding them to it and asking them for budgets and expectations and having those recurring meetings of where we're at and where we think we're at relative to budget. I think it starts at, you know, the beginning of the year, but it has to be that routine hygiene within the organization.

Jay Kingley: If your ICPs—if these industries that you work with—understood this underlying cause that you've talked about, what are the things that they would do differently to, as I like to say, get out of Struggle City and get into Success City?

Tom Dillon: So, what I would do is day one, figure out exactly where are marketing and sales budgets, calendars, KPIs, the revenue drivers of the business. Where are those and how are we tracking them? The business owner should go and ask their department heads where—what—where is that information living if they don't know and have a level of transparency around it, and formulate a budget and forecast around those figures. So, what's driving our business? What's our North Star KPI that has the biggest impact? Sure, there's different levers within your sales and marketing funnel that are going to affect that North Star KPI, but let's not overcomplicate it for the team and feel like they're now being monitored to ad nauseam. Let's just get in there, get a North Star KPI. What's gonna move the needle? The most important figure. And start tracking those budgets. Do you have an event calendar? Are you B2B and are you out there having to go to trade shows or conferences? Do we have an event calendar that we're absolutely all on the same page with regards to what are the expectations are and how it impacts sales? From there, I really want to talk to my department heads about resource management. If we do grow 20%, do we need any more bodies? Do we need any more heads? What's going to break down, and building into their own kind of department-level P&Ls of understanding what those costs are associated with growth and making sure that we budget accordingly so that we can make payroll? We can make that additional investment into our marketing or our extra salesperson to grow top line but responsibly so that we don't have any working capital cash crunch, where, "Oh my gosh, how are we gonna make payroll or pay this vendor?" And so that would be, I think the best thing they could do is really getting a grasp on having people not only put together kind of where their expectations are, what they're tracking, but be transparent about it and report it to the appropriate person so that everyone's on the same page and that there can be an idea of what that windshield and what's coming down the road rather than looking in the rearview mirror at just here's our closed financials from last month. This connects to something I wrote about in Why Your Annual Budget Is Already Outdated. We had a great month or maybe we didn't do so hot. But that is going to be, I think the best thing you can do to really get a grasp on what does future cash flow look like.

Jay Kingley: Tom, very insightful, well articulated, and we are going to take a quick break and when we come back, we're going to learn a bit more about Tom.

Jay Kingley: Welcome back. We're talking to Tom Dillon, a fractional CFO who works with SaaS, e-commerce, wealth management, and my favorite vertical, the sweaty startups, from $1 to $25 million in revenue. Tom, let's find out a bit more about you, and I love to start with this question: What happened in your life—be it personal or professional—that most explains why you're doing what you do today?

Tom Dillon: That takes us all the way back to senior year of high school. So I tripped and fell on success with working for a company called Vector Marketing, which for everyone that has worked there, they know that's Cutco Cutlery. Selling knives did really well. Probably a byproduct of my community that loved and supported me and ultimately made good money for an 18-year-old. So I was sitting on maybe $22,000 and went to my dad and said, "Hey, I want to do something with this." He said, "All right, I might be able to set up a meeting with our wealth manager." And at the time, it was with Citibank. His name was Chris Crawley, and he taught me the rule of 72, and that is if you divide interest rate into it, you figure out how long it takes, how many years it takes to double your money. And so right then and there, finance was, you know, absolutely where I was running towards in my life. I thought it was so fascinating, and just seeing all the tickers and everything on the screen, I knew finance definitely was the life for me. And that's why.

Jay Kingley: So to all parents out there, if you want your child to have a career in finance, get them selling door to door right now. I love that story. Well, let's see if you can top it with your answer to this one: What's one thing that few people know about you that if they did know, they would be surprised?

Tom Dillon: Hey, I'm a pretty open book, so that one's kind of tough. I don't, I'm going to search really hard for that, I guess. And I mean, this is not that cool or fun of a story, but one of my buddies invited me to go on a hiking trip, and I decided that sounds great, get out into the woods. And it was kind of an end of COVID, need to get back out there. And I failed to read the email in detail, which is unlike me. And about a week before the trip, my friend Mario said, "Are you all ready? You've been training hard." Training hard for what? I thought he was joking. I went back, I read the email as I was supposed to do, and I realized that we are about to summit a 14er, so some of the highest mountains in the world. So we went out to Estes Park, and we were set to go do Longs Peak. So the week before, I start going to the gym with a backpack on, I buy my boots. You know, I am a novice. Like I should not be out there. And, and you know, that week prep, I'm feeling decently well. I'm climbing stairs. I'm thinking this is going to be great. And so risk-averse as I am, and I'm in a profession where I talk to a lot of my clients, that might surprise people that I was that ill-prepared and taking that big of a risk. I actually tore my labrum in my hip. And so, yeah, next week we're meeting. I am actually going to be going to PT for that still.

Jay Kingley: Wow. Yeah. Now I understand why you've given up mountaineering for golf. That now tells the tale. So, Tom, what's next for you over the coming 12 months?

Tom Dillon: It's a good question. These last six months, and maybe if I back up for a second before then. I've been doing this for about 11 years, and ultimately what I realized was that there's one, a capacity issue in terms of my bandwidth, and then two, there's certainly going to be an issue if there was any desire to sell the company. So there wasn't a transferable asset. This is me being a 1099 and working with great clients and adding a lot of value to them. It was wonderful. It was great feeling good cash flow. But those two aspects of burnout and transferability really resonated with me, and I wanted to make sure that I was building something that potentially could secure a financial future for my family. So two years ago, we really branded the company and started working towards building out a team. And so for the last six months, we've been really building out the team and investing in our own sales and marketing and tracking those things accordingly. But we've been what we call J-curving the business model before. You're investing in your company, your people, and it's one of the hardest things to do in business. Hire ahead of growth. And so for the next six months, we'll continue doing just that. Had a nice conversation with my wife about margin, and I was like, "Think cash flow. We're going to cut that in half." That really made her learn very quickly the different margins that I was speaking about. So that's what we're going to be doing the next six months. And over the next 12 months, we're just going to continue focusing in on our clients and focusing in on building a phenomenal team. I think our big focus is really building and developing that pool of talent.

Jay Kingley: Outstanding. So, I'm sure we've got people in the audience who are thinking, "Tom is someone that I should be talking to." So, what's the best way for our audience to connect with you? Tom@frakfinance.com, and I'll drop that in the show notes. Make it super easy. Everyone can just copy and paste and reach out to Tom. Engage him. You will not be disappointed. Tom, I want to thank you for being a guest on our Fractionals Unplugged show. Be sure to subscribe to both our podcast on all the major platforms and our YouTube channel for our videos. Use the power of your one big idea to differentiate you from everyone else who does what you do. Enjoy a pipeline consistently filled with clients you want to work with, who value what you do. Choose the freedom, flexibility, and control that comes from having your own fractional or consulting business, and enjoy being financially secure and professionally fulfilled. Until next time.

Podcast Notes

In this episode we talk about:

• Why “hiring before you’re ready” can be the smartest move you make
• The moment I realized I had to fire myself from parts of the business
• How to remove emotion from tough financial decisions
• What most CFOs miss when trying to scale with clarity and control

If you’re building something bigger than yourself - not just a high-paying job - this episode will hit home.

Video

Watch the podcast below or watch it on YouTube.

You can also listen to it on Apple Podcast or Spotify.

Full Transcript

James Donovan: Today I am joined by Tom Dillon from Frak Finance based in Chicago. Tom, I know we were going back and forth a little bit here before the recording. I'm super excited to dive into your story, hear a little more about you, and for the listeners to learn about you as well. So welcome to the show.

Tom Dillon: Thank you. Thank you for having me. It's a pleasure to be here.

James Donovan: Awesome. I want to start off real quick because your background, it's showing a picture, what looks like a golf course. You have a flag from one of the pins. I would love to hear a little bit about that golf course. There must be some significant meaning if that's hanging up in your office.

Tom Dillon: Yeah, so I couldn't. Normally I blur that out. I couldn't get the thing to upload on Zoom, but yeah, that's Arcadia Bluffs. It's where I got my first hole in one.

James Donovan: Okay.

Tom Dillon: It's a top public course up in Michigan, right on the bluffs of Lake Michigan. It's a beautiful course. I would highly recommend it if you can get out there to play that one, for sure.

James Donovan: Well, congratulations on the hole-in-one. And you mentioned that was where you got your first one. So how many holes-in-one do you have?

Tom Dillon: That's just the first. I'm hopeful.

James Donovan: That's awesome. Well, hey, hole-in-one, that's... I'm not a great golfer by any stretch, but every time you get up to the par three, it's like, is today the day? Is it going to happen? So it's cool that that happened.

Tom Dillon: Isn't that the best feeling? Especially heading to the Masters with everything kicking off today.

James Donovan: I...

Tom Dillon: You just get that good feeling, that first birdie of the season. Yeah, it's coming. So I'm super excited to kick off the season, that's for sure.

James Donovan: That's so good. So, Tom, tell me a little bit about how you got into becoming a fractional CFO. Is this something that you knew growing up? You're like, I cannot wait to be older and get into accounting and work with numbers. Or how did you get to where you are now?

Tom Dillon: You know, that is a great question because no one just starts out as a fractional CFO. It's a leadership position that everyone has to build toward. So everyone has a story, and I guess here's mine. The original origin story of how I got into numbers was I had tripped and fallen into success with selling Cutco cutlery and made a bunch of money as an 18-year-old. I talked to my dad about what I should do with it, and he said, maybe I'll try to get you a meeting with my wealth manager, and he'll sit down with you. So I sat down with a guy named Chris Crawley who was at Citibank at the time, and he taught me the Rule of 72, which is if you divide the interest rate into 72, it tells you how long it'll take for your money to double. Immediately, I was hooked. I knew I wasn't going to go into any other profession but finance. I put together a guide on 30 finance terms every business owner should know for anyone starting that journey. So that's what I did. I signed up for a finance degree. After school, I worked at William Blair, which is an investment banking firm here in Chicago. From there, I quickly realized that there was this entrepreneurial bug that wasn't going to go away. It's a sickness in all of us. I had to do something about it. Being in finance, you're trained to be risk-averse, so I wanted to de-risk this crazy jump out of the plane. Before doing that, I wanted to make sure I had some experience in what I called ops chops. At the investment banking firm, you're sitting in the ivory tower pontificating on people's business decisions, but you're not really making any of your own. I wasn't hiring, firing, or managing people. So I knew I needed that experience if I wanted to be successful. I had this big idea of wanting to change the world. Before doing that, I worked at a private equity-backed company as their CFO and then was promoted to CEO. Ran that for a bit and then went back to school to start putting this idea through the ringer. At the end of it, the night of graduation, I raised money for this blended idea. It was a tech company that was going to disrupt the market for ordering and payment in hospitality. This was pre-COVID, and we had a QR code-based ordering and payment system. We had a successful pilot, and we were launching to the public the week COVID hit. We had a native app in both operating languages, which, looking back, was a huge execution error. We ultimately realized this wasn't going to be sustainable. So I fired myself financially, not operationally, to keep the team together and keep operating, which I'm sure many entrepreneurs have done, digging into credit cards just to make payroll. In those moments, I realized, man, I have to pay the bills. How are we going to do this? So I went back to my roots and started moonlighting as a fractional CFO. Eleven years ago, that's when that started. At the point where you come to the realization that you're going to have to swallow this painful, disgusting-tasting pill of failure was the real entrance and commitment into the fractional CFO space. It was born out of necessity and then turned into a real passion and love of mine.

James Donovan: That's so good. I mean, failure only happens when you quit, though. And it doesn't sound like you've quit. It sounds like you've just kept going and you've adapted and found a way to make it work. So I wouldn't chalk this up as failure at all. Or maybe I'm missing something, but it seems like things are moving, things are in a good spot.

Tom Dillon: Things are great.

James Donovan: Yeah. That's awesome.

Tom Dillon: I appreciate that. Yeah. I think it's only a failure if you don't learn from it.

James Donovan: Yep.

Tom Dillon: Raising capital and being a fiduciary, having that fiduciary duty to your shareholders, is tough. When you're a steward of people's capital, it's a very tough position to be in. It sucks when things aren't going your way, but it's the reality most entrepreneurs who raise venture capital face.

James Donovan: Yeah. What do you find is one of the biggest challenges that you're facing in this season right now or something maybe in the last year that you faced and overcame where you can look back and be like, wow, that was really hard, and I'm so happy I pushed through?

Tom Dillon: I would say it's the J-curving of the business model. Hiring ahead of growth is one of the most challenging things to do in business. Before, we didn't face this problem. I'm so happy to be here and love everything you do for this community, James. Part of that is the transition from being a one-man band and being at capacity, where cash flow is good, to then having that conversation with your wife, realizing I don't have a transferable asset, I'm going to get burnt out, I need to build a team. Honey, we're going to be cutting our margins in half. If your significant other doesn't know what margins are, they're going to quickly realize it means you're going to have half the cash flow. That's ultimately what we did here in the past six months, well, seven months. We're going to continue doing it for the next five months, which is J-curving the business model, hiring ahead of growth, and continuing to build out our pool of talent, our bench, where we are looking to bring other fractionals onto our team and develop them as well.

James Donovan: Yeah. One of the intensives I was at a couple of months ago, one of the speakers there, a really successful marketing company owner who's been doing it for 10 or 15 years, spoke about hiring ahead of growth. The point he made that really stuck with me, and it's interesting you're bringing this up, is that you're always either overstaffed or understaffed. So you might as well be overstaffed because if you're in that sweet spot, it doesn't really exist, it means you're not growing. If you're understaffed, you're putting too much strain on your team and resources. It was a hard reality for me to accept hearing that from someone significantly more successful. But that is the reality. I look back at our team at times, and I'm like, yeah, I know we've been understaffed, and it's tough. It kind of makes everyone in a more panicked state all the time because you feel like you're chasing your tail. But on the other end of the spectrum, it's hard as the owner to be like, let's carry more payroll than we technically need right now, all the time. So how are you handling that mentally, knowing the bills are just going to be more expensive on payroll, and we technically don't need this person right now?

Tom Dillon: I have an abundance mindset, not a scarcity mindset. For me, it's keeping the positivity, knowing that there are a lot of opportunities out there. As you know, the success and failure rates of many entrepreneurs mean people need help. For us, it's the same thing we do with our clients, which is seeing those micro-traction metrics of success. It's those little wins that build upon each other that encourage us to keep going, that we're heading in the right direction. But it's about having a roadmap and building a roadmap to do that. So we're always thinking about what goals you want to achieve. Are you looking to sell your company? Are you looking to double the size of your team? That is the point of critical mass where you really start to cover overhead, and you're earning the cash flow as a business owner that you want in distributions. Then reverse-engineer that. How do we get there, where are the KPIs, what's our marketing funnel, and our conversion rate in sales? Really focusing on those KPIs and making sure we're headed in the right direction or making tweaks to ensure we're moving and pulling the levers the right way.

James Donovan: I love what you mentioned about the abundance mindset because that is so true. A mentor of mine in the past used an analogy that was kind of burned into my brain about the hand. When it's closed, you can't grab anything more, but when you open it up, it sounds so obvious, but really opening up your hand for that abundance means more can come in, and there's more available instead of holding onto every last dollar. So yeah, I really love that you're looking at it that way. The other thing I'll add here is I don't know where my business would be if I didn't choose to start working with accountants and fractional CFOs. I feel blessed more than other marketing companies or other business owners I speak to. I get to talk to fractional CFOs and accountants, people who are so smart with money and strategic thinking all the time, to get that insight into the business that I think a lot of people don't have access to without hiring a fractional CFO. That's been a massive step for me and our business's growth. What are some of the things you notice when you jump into new clients where they have that penny-dropping moment or their brain just breaks when you give them some information that might seem so basic to you?

Tom Dillon: A 13-week cash flow is a big one. I wrote more about this in The Cash Leak Nobody Talks About. Giving visibility to a business owner to feel comfortable that money's going out, but it's coming back in, and having predictability around that, there's no better peace of mind and clarity. It's very scary to make decisions about your personal cash in a void. That, I think, is the number one aspect where it's not just a light that goes on, it's more that now I can see. I can actually look and see where we're going and not be in the dark. Those moments of realizing I'm not in a siloed echo chamber of decision-making, that I have a strategic partner who's the financial adult in the room who I can bounce anything off of and get strategic insights like, yeah, we've been here before, we understand this, here's a playbook on what's been successful in the past, are super helpful. The same thing with you, when you talk to people in our community, James, you're like, yep, we've been down this path, I know it works, let's ride. I think it's very similar there. A lot of times when you ask about how you know if things are going in the right direction, for me personally, we focus a lot on our depth and experience, and we really lean into that in a heavy way where we can't service clients the right way without that experience. So continuing to grow our bench and experience with new team members is really how we continue to grow. Having that abundance mindset, hiring ahead of growth, allows us to do just that. For the clients, it's the same thing. It's bringing that extra level of experience that they otherwise would not have had on their team. Those moments are wonderful when they feel like they're making the right decisions and have someone in the room checking to ensure that financially this is the best and sound decision.

James Donovan: That's... one of the biggest things I've noticed with your industry and the clients we work with, the conversations we've had with other guests... You guys do such a good job of removing the emotion from decision-making. Then it just makes it so clear: this is what the data tells us to do. There's no emotion behind it. Emotional decisions generally don't lead to good outcomes for the most part, especially in business. You guys do such an amazing job of saying, here's the math, here's the numbers, this is telling us what we should do. But not every business owner knows how to look at the numbers that way. So it's pretty cool.

Tom Dillon: We're not completely callous. We do have emotions, but it's a very good point. Removing them takes a lot of effort. I think you have your physical health and your financial health. If you talk with a lot of doctors, they're trained to remove emotion from decisions when giving bad news or putting a path in place to rectify issues and problems someone has from a health perspective. I think it's the same thing that's somehow ingrained in us along the way, and you do become a little callous, but the emotions are still there. You just learn to move past them quicker.

James Donovan: That's cool. Is your team all in-house, or do you have some remote workers as well? What's the structure of your team like?

Tom Dillon: Yeah, so we're mostly remote. We have three people here in Chicago, which is incredible. We're bringing on a new CFO this week, which is, you know, just wonderful. The best feeling, helping the clients, growing the team—those are the most wonderful feelings you can have as an entrepreneur. We really have three core services. If you're buying a business, growing a business, or selling a business, we look at the entire life cycle of an SMB owner. From that perspective, our team is a little diverse. We have bookkeeping, forensic accountants doing quality of earnings, and then our fractional CFOs looking at growth and M&A from a sell-side perspective if companies are looking to sell their company. So our team's a little diverse; it's not just fractionals.

James Donovan: Yeah, that's cool. What's been your success recipe when it comes to hiring talent, or where do you source talent? Do you have any insight you're able to share there? Because I know a lot of other firms out there are also growing and hiring, and finding good talent is tough. What's been working well for you?

Tom Dillon: We look for people who have been battle-tested, in a sense, who have worked with companies that may have been distressed or in hyper-growth mode, where cash has been a huge focus, and they've managed that cash appropriately for capital allocation and resource allocation, with a proven track record there. Talking about it and recruiting in that way has led to an extremely strong team because if they understand that you get it, and they've done it before, they want to work with a team that's equally strong and will help add perspective. If there's an issue, maybe someone hasn't done an M&A deal before, but they have a client who wants to grow through acquisition for inorganic growth, we can tap someone else. That's where you recruit the talent you want by offering more resources to people who are already high-caliber.

James Donovan: That's cool. What's your firm doing to get new clients interested in working with you or to get on the radar of potential new clients? How do you guys market?

Tom Dillon: Yeah, that's a great question. Just two years ago, we really branded ourselves, and it was just me as a one-man band. Now we're shifting our entire mindset to growing as a team and focusing on leads, our marketing funnel, and the sales conversion funnel. I'm thrilled to have found you, James, because we're in the process of going through that as a firm, figuring out how we can improve in this aspect. Originally, it was just, hey, I'm at capacity, I get clients, now we're here making great cash flow, and you don't really have a concern because a lot of those easy wins are from referrals and a handful of networking events. But then it goes beyond that. Once you have a team, you have to start feeding the machine consistently. We're in the process of learning a lot of that and trying to expand and learn. I was listening to all these incredible guests you've had the past two days, and it's super impressive, all the talent out there, and all the people assisting and helping this community of fractionals and accountants from that exact angle. For us, what's been working is trying to be an authority, getting on podcasts, speaking engagements, and putting yourself out there. I think the only way to do that, if you're starting out and looking to transition to becoming a fractional CFO or an independent accountant and hang your own shingle, is in the early days, maybe go work for another firm, learn best practices, get some clients, get some experience, get battle-tested. Once you're stepping out and hanging your own shingle and worrying about that business development aspect, that's where you really lean into those experiences. A terrible word, but case studies—when you're speaking and able to pull from those experiences, whether on a podcast, webinar, or getting on stage at a conference and being a value-add speaker to the audience, that's where you draw from. In terms of cadence, how do you get there and become an authority? If you feel like you have imposter syndrome, you're not alone. Everyone who started had that. You have to break through it by getting experience. One of the best ways is to just start doing. Now you can draw from those experiences and be the authority, saying, wait a minute, I remember when we did this for a client, and that was super successful, maybe this could help other people.

James Donovan: Tom, is getting on podcasts and getting on stage something that comes naturally to you, or did you have to develop and level up into this version of who you are right now?

Tom Dillon: I grew up with three brothers, so four boys in the family. We were a pretty rambunctious group of boys. So I think there was some level of competitiveness that's constantly driving me and pushing me into probably the uncomfortable. I was the third in my family, so with two older brothers, you're always trying to keep up, probably always uncomfortable, pushing yourself and trying to compete. Innately, there's something inside that's driving. But from the perspective of, do I love public speaking? No, I don't think everyone loves public speaking. Have I gotten to the point where the nervousness goes away? Yeah, but that's all through preparation and reps. When I was thinking of coming on here last night, driving home from Milwaukee after a networking event, I was thinking of some amazing people I met there, and I was also thinking about what I was going to say. There was a little nervousness that pops in. You know, James has had these amazing guests; how am I going to add value to his community and audience? I don't think that ever goes away. It's with preparation and reps that you move past it and learn to kind of love it. Do I like it now? Yes, absolutely. I enjoy it because I find that it's helpful and gives you a clear picture of what you're trying to convey to your audience. There's still a ton of work to do. I was listening to one of your guests, Ken, and I thought he was just such an incredible speaker.

James Donovan: Yeah, he's good. Very well-spoken.

Tom Dillon: That's motivating. It's like, okay, let's get polished. I was telling my wife, man, one guest was incredible, super well-spoken. There were tons of them, but he was one of the more recent ones that came to mind. So, you know, I know that was a long-winded answer to your question.

James Donovan: No, it's great.

Tom Dillon: That's greatly helpful to those who are a little more nervous, who don't want to put themselves out there.

James Donovan: You're extremely well-spoken. That's why I had to ask, because it seems like it comes so naturally. I was wondering if this has always been like, hey, I can just jump in front of the camera and speak, or if you've morphed into that version. That's a great answer. I was the best man at a friend's wedding two summers ago, and I was so nervous to speak and give a presentation. My friend told me, and the way he presented it erased so much of the nerves, and I'm going to try to carry it into any talk. It's not about you. People aren't looking for you to fail. They want to hear what you have to say, and you can leave a lasting impact. So it's that mindset shift of what can I give to the audience instead of, where are they looking at me, what if I trip on a word? It's not about you as the speaker; it's about who you're delivering the message to. That's helped a lot, and you've provided a ton of value and awesome insight. So thank you so much for that. My last question for you, because I know we're running probably a little over time. I hope you're good for another minute or two.

Tom Dillon: Yes, I'll be a couple of minutes late to this call. Not a problem.

James Donovan: Okay, so last question, real quick. What advice would you give to any other entrepreneur out there listening?

Tom Dillon: Failure is a good thing. The most monumental change in my perspective as an entrepreneur was failure. Failing. I failed. Okay, that was horrible. It feels terrible. That's it. I can keep going and keep moving forward. Yes, you can. So just fail quickly, move past it, and keep going. Just keep going.

James Donovan: I love it. That's so valuable.

Tom Dillon: So powerful.

James Donovan: Tom, thank you so much for coming on, for hanging around a little bit late. This was an amazing conversation. Where can people get in touch with you if they want to continue this conversation with you?

Tom Dillon: FrakFinance.com, that's F-R-A-K Finance.com, or Tom@FrakFinance.com, and then you can follow me on LinkedIn at TomDillonCFA.

James Donovan: We'll put all those links in the show notes so people can get in touch. Again, Tom, really appreciate you coming on. Thank you so much.

Tom Dillon: Thank you for having me and thanks for everything you do for this community.

99% of businesses fail because they run out of cash.

Yet, most founders chase funding the wrong way, pitching too early, taking bad deals, or relying on hope instead of strategy.

If you need funding, here's how to actually secure it without wrecking your business.

Know Your Funding Options

Different businesses require different capital sources.

Consider:

• Bootstrapping (self-funding, best for control & lean startups)
• Bank Loans (SBA, term loans, lines of credit)
• Investors (VCs, angel investors, private equity)
• Revenue-based Financing (funding based on sales)
• Grants (free money, but competitive)

Get Your Financials in Order

No investor or lender funds chaos.

You'll need:

• A solid business plan
• Cash flow projections (Can you pay them back?)
• Profit & Loss statements (show financial health)
• Collateral (for secured loans)

Leverage SBA & Bank Loans

Banks love businesses with:

• Strong financial history
• Profitable operations
• Clear repayment ability

SBA loans can be easier to secure for small business owners (10-20% down needed).

Pitch to Investors the Right Way

If going the VC or angel route:

• Show market opportunity (Is it big enough?)
• Have traction (Revenue? Users? Growth?)
• Prove why you (Your expertise + execution plan)
• Be clear on what's in it for them (ROI, exit plan)

Explore Alternative Financing

• Revenue-based financing (funds based on sales)
• Factoring (sell invoices for upfront cash)
• Crowdfunding (public backing, pre-sales)

Build Relationships with Lenders & Investors

Funding is about trust.

Start networking before you need the money.

Don't Just Take Any Money

Funding comes with terms & trade-offs:

• Debt = repayment risk
• Equity = giving up control
• Alternative financing = high fees

The key? Pick the right funding for your stage & strategy.

Conclusion

Securing the right funding at the right time can mean the difference between business success and failure. Take time to research your options, prepare thoroughly, and choose funding sources that align with your long-term business goals.

Side Note: Consider creating a funding roadmap that aligns with the different growth stages of your business, rather than seeking all funding at once.

I'd love to know what's been your best (or worst) funding experience?

While the thrill of closing a deal is undeniable, the real challenges emerge during post-acquisition integration.

Recent studies show that up to 70% of mergers and acquisitions fail to meet their expected objectives, with many of these failures traceable to overlooked details during the deal process.

Understanding these critical pitfalls isn't just about protecting your investment—it's about ensuring your acquisition delivers the value you envisioned.

5 Critical Pitfalls

Here are the 5 critical pitfalls that derail business acquisitions after the deal.

1. Reported EBITDA

While EBITDA is often presented as the golden metric of business valuation, it's merely the tip of the iceberg.

Smart acquirers must dig deeper, examining non-recurring expenses, operational inefficiencies, and normalizations.

Success lies in focusing on normalized numbers supported by detailed quality of earnings (QoE) reports.

2. Cash Flow Analysis

Cash flow analysis demands more than historical review. A comprehensive evaluation must consider recurring payments, one-time events, and payment patterns.

Understanding the cash conversion cycle and working capital trends is crucial, as current surpluses can often mask future deficits.

3. Synergy Myth

While synergies are frequently touted in M&A discussions, they're notoriously difficult to achieve.

Success requires careful attention to cultural alignment, operational compatibility, and post-close communication.

Integration planning must begin well before the deal closes to ensure smooth transitions.

4. Earnout Structures

Earnouts can serve as effective risk-mitigation tools, but they require careful structuring.

The key to successful earnouts lies in establishing clear milestones, defined metrics, and achievable targets.

Simplicity in structure helps minimize post-close conflicts.

5. Due Diligence

Effective due diligence goes beyond identifying red flags. I cover this in depth in 7 Due Diligence Mistakes That Kill Deals.

It requires a thorough examination of financial records, customer contracts, and understanding the business's dependence on current ownership.

This process forms the foundation for successful post-acquisition integration.

Conclusion

Successful M&A requires looking beyond the initial excitement of deal-making and focusing on the fundamental elements that drive long-term success.

By understanding and addressing these five critical pitfalls, acquirers can significantly improve their chances of executing successful transactions that create lasting value.

Remember, the real work begins after the deal closes, and preparation for these challenges should start well before signing the purchase agreement.

Over the years, I’ve collected countless golfing moments that have made every round unforgettable.

From the first tee shot to the final putt, each hole tells a story.

I thought I’d show you a glimpse of my golfing journey and adventures through special snapshots, each capturing the essence of the game I love.

Start of the Round

Instead of standing on the first tee, club in hand, I thought I’d kick things off with great company, beautiful views, and a shared love for the game.

Here’s to making memories and sinking putts—one shot at a time.

Tee off with the gentlemen

Cart Conversations

Golf carts are like rolling comedy clubs.

Whether it’s a dramatic retelling of a questionable play or a perfectly timed glance, this moment reminds me why golf is as much about the company as it is about the game.

Cart Conversations

Iconic Landmarks

Every course has its signature feature, and this one didn’t disappoint.

These landmarks aren’t just obstacles; they’re the soul of the course.

They challenge us, inspire us, and sometimes even humble us.

Beautfiul landmark

Golfing for a Cause

It’s more than just a game—it's about growing relationships, supporting the community, and sharing a passion for the sport.

Frakfinance made an appearance

Legends of the Green

An unforgettable moment catching seasoned golfers strategizing and showing their love for the game.

It’s all about precision, camaraderie, and the pure joy of competition.

Legends on the green

Fun Accessories

A life-changing putt!

This adorable golf ball revealed the gender of our little one in the most creative way.

Moments like these remind us that the course isn’t just for swings; it’s for milestones, too.

Gender revel golf

Drama on the Green

The green is where the magic happens.

The collective breath-holding, the agonizing roll of the ball, and the eruption of cheers (or groans) make these moments unforgettable.

Every putt tells a different story.

Quiet on the green

A Quiet Moment

Amidst the competition and camaraderie, golf also offers moments of quiet reflection.

Standing on a secluded fairway, surrounded by nature’s beauty, you can forget the scorecard and appreciate the game.

Eyeing the perfect shot

End of the Round

The game doesn’t end on the 18th green—it continues at the 19th hole.

Whether it’s a cold drink, a hearty meal, or a lively retelling of the day’s highlights, this is where friendships and memories are made.

Group photo to end the round

Beauty of the Game

Golf is more than a sport—it’s a journey.

It’s about the laughter, the challenges, the quiet moments, and the shared experiences.

Each round is a new adventure, a chance to create memories that last a lifetime.

Whether you’re a seasoned pro or a weekend warrior, the beauty of golf lies in its ability to bring people together, to inspire, and to remind us of the joy in the simple things.

So here’s to the greens, the fairways, and the moments that make it all worthwhile. See you on the course!

Join me as I take you through moments that stole my breath, filled my plate, and left me dreaming of my next trip.

Here are a few photos of my trip to Italy.

Coastal Bliss

The calm, crystal clear waters seem to stretch forever, reflecting the azure sky.

Wooden piers extend into the sea, offering perfect spots for sunbathers and swimmers.

Brightly colored umbrellas lined the shore, giving the perfect shot some vibrancy.

Coastal views

Unexpected Street Art

Tucked into a narrow alley, this bold mural brings the walls to life.

The art feels spontaneous yet intentional, embodying a mix of local pride and creative freedom.

It's a reminder that beauty often hides in the most unassuming corners of a city.

Beautiful street art

Seafood Delight

The dish is simple yet profound.

A plate of fresh, handmade pasta with a rich tomato-based sauce, topped generously with clams, mussels, and shrimp.

Each bite carries the freshness of the sea, perfectly complemented with a chilled local white wine.

Linguine pasta for the win

Hillside Serenity

Under the open Tuscan sky, the air is filled with joy and celebration.

The backdrop of soft hills and a hint of the sea sets the stage for a truly magical evening as we came together to celebrate our friend's wedding.

It’s a moment of connection, laughter, and memories we’ll cherish forever.

I like the view

Villa Hideaway

This breathtaking view of the Tuscan countryside stretches as far as the eye can see.

The rolling hills, dotted with olive trees and cypress-lined estates, are bathed in soft, golden light.

The inviting pool adds a touch of serenity, making this spot an idyllic retreat for relaxation and reflection.

Villas in the countryside

Ceiling of Wonders

Looking up, you’re greeted by an explosion of color and detail.

The ceiling is beautiful, each panel telling a different story with scenes of myth, faith, and history.

Gold accents highlight the vibrant blues, reds, and greens, making the artwork appear almost three-dimensional.

Ceiling art

St. Peter's Square

The square buzzes with life—street vendors, performers, and visitors from all corners of the globe.

The dome of a historic basilica commands attention, its intricate façade glowing softly in the sunlight.

This is a place where the past and present converge seamlessly, leaving you in awe.

St.Peter's Square

A Golfer’s Paradise

I couldn’t end my trip without canvassing some green.

The air is crisp, carrying the faint scent of fresh grass and blooming flowers.

Every swing felt amplified by the peaceful setting, where sport and nature intertwine.

Check out my golfing blog for more moments like these.

Can't forget my golfing course

Wine with a View

Savoring a glass of Tuscan Cabernet Sauvignon while surrounded by rustic charm—and oh, my beautiful wife by my side.

The stone walls, soft lighting, and delicate floral accents create the perfect setting for an evening filled with rich flavors and even richer conversations.

Tasted plenty of wine

A Masterpiece

Standing before the iconic statue, you’re struck by the sheer size and lifelike precision of the marble figure.

Every muscle, every vein is carved with painstaking detail, as if the statue could step down at any moment.

Its gaze is both distant and intense, leaving you contemplating the genius of the artist and the timeless beauty of the human form.

Michelangelo's David

Final Thoughts

As I look back on these snapshots of Italy, I realize it wasn’t just the landscapes, food, or art that made this trip unforgettable—it was how effortlessly it all came together. Italy isn’t a destination; it’s an experience, a feeling.

Whether it’s the laughter over a shared meal, Italy has a way of etching itself into your soul.

I hope these glimpses inspire your next adventure—because trust me, the magic of Italy is something everyone should see for themselves.

My wife and I turned this into our own friendly competition - I was convinced it's a girl, while she bet it's a boy.

We even dressed for our teams - me in pink, her in blue.

Our Setup

We had this gorgeous white cake sitting there, decorated with the most beautiful swirling roses I've ever seen.

The frosting work was incredible, and there was this subtle "It's a..." message that just added to the suspense

Out on the golf course, we had this special golf ball waiting.

It had these tiny blue and pink footprints printed on it - probably the most important golf shot I'll ever take.

The Big Moment

My heart was racing thinking about that swing. One hit and we'd know if Team Pink or Team Blue wins.

I set up the shot, took a deep breath, and swung...

PINK powder exploded into the air! It's a GIRL!

My intuition was right on the money - Team Pink takes the win!

Watching that golf ball burst into a cloud of pink was one of the most surreal and joyful moments of my life

Looks like my wife will be paying up on our friendly wager, but I know she's just as thrilled as I am. Can't wait to meet our little princess!

Video

I posted the gender reveal video on my X account.

Watch the full video here: Our Gender Reveal Story