1770 – Custom Advisory with Manny Skevofilax of PORTAL CFO Consulting

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0:58with us right now manny skevo felix manny you are the principal and founder of portal cfo consulting you're found on the web at portal cfo.com manny thank you so much for joining us josh thank you for having me well what our listener of the podcast can't see is we're recording this is you have this beautiful background of a greece island the water is so clear and blue and beautiful and this photo is where your folks are from and that's just it's wonderful what a what a what a wonderful tribute what's the name of it someone wants to google uh what i presume to be one of the most beautiful places on earth sure it's the island of carpathos if I could spell it, K-A-R-P-A-T-H-O-S.

1:45It's in the Southeast Aegean Sea. Nice, excellent. Well, Manny, your website, again, portalcfo.com. Tell me a bit about the work you do and who you serve. Oh, right. I have been very blessed. For the past 20 years, I work with business owners, Josh, all different types of businesses to help them make more money by helping them navigate the challenges of growing that business profitably. Yeah, all right. So you do this, and again, the services you provide, a lot of fractional CFO leadership. Why is this, you know, to someone who might be at this earlier stage and maybe they haven't considered it, I'm sure they have someone helping out with taxes.

2:25I'm sure they've got someone helping out with accounting. And then they've got this data, right? And they may or may not be using this data to make decisions. Can you help connect the dots on all of that? Sure. That's a great point. These business owners are bootstrapping. So they have some kind of help with an accountant, which of course is important. And then it gets to the point where after they've grown that business, they get more interested in trying to understand profitability. We have a big thing in our country where we want to grow, grow, grow. What's easy to grow a business and while you grow, you end up not making any money.

3:06Your profit goes away. So as an owner, if you can have at least a little bit of a handle on the basic metrics, you know, what's my most profitable product or my most profitable service? You know, which one should I do more of? Which one should I do less? It helps you to make progress on meeting your goals. Yeah. And so who do you typically work with? What types of companies? And by the way, I have to point out, Manny, you've been at the helm for over 20 years. So congratulations on your longevity. Yeah, thank you, Josh. I've been very blessed. All different types of business owners, service companies, manufacturers, contractors.

3:44You know, the interesting thing is I work by analyzing the financial statement. And even though the financial statement is three key components, income statement, balance sheet, cash flow statement, it tells a different story, Josh, for each business. It's very cool. And you're able to read in and look at it. That's what I was trained to do as a banker, to analyze financial statements and figure out whether things are going well and what areas could use improvement. Manny, someone who's not trained or really hasn't taken the time to really understand this, what are they likely not going to see that you may be able to see and interpret?

4:26Yes, that's a great question. If they have multiple ways that they make money, they may not be able to see that they're spending 50 % of their time on selling a product or service that maybe only accounts for 10 % of their profit. Because when they got started, that's what they do. It's what we've always done. They might even like doing it, but they just don't understand how much money they make from each little different segment. And if they wanted to make more money, they would probably be better off doing less of that one. And if we could find another segment where it makes more money for their company.

5:04So you may have someone, let's say that they've got some of their clients, let's say they've got 35 % profit margin, and then they've got some of their clients that have a 5 % profit margin, still profitable, you know, it's kind of keeping the employees going and that sort of thing. So, you know, their ego prevents them from wanting to let go of those clients. But tell me about that decision-making, like, how do we make some of those maybe tough decisions or, you know, if we can identify, well, clearly we're making a lot more money here. How might this look in real life. I think that's a terrific example, Josh.

5:41You know, ego does get in the way when the business owner lays out goals. So we're in a situation where expenses are constantly going up, right? So your costs for maintaining your employees, which are your most valuable asset, are constantly increasing. So you're in a situation where you've got to constantly keep growing that business and making a little more money to be able to give raises, to be able to give bonuses, to be able to take care of your company overall. And if you're continuing to focus in the lower margin activities, you're not going to be able to get where you want to go. So you need to take a sharper look at, hey, you know, I need to pay this much in bonuses, this much in salaries.

6:26I want to add some people. I might need a bigger space. So how can I make some more money in this business to fund this? Because I like to use my own me. I wouldn't want to have to borrow if I couldn't help it. Yeah. And someone might say, but why would I, should I let go of a client that I'm, you know, at break even on or, you know, because there are more costs than maybe just kind of the balance sheet of labor costs or operating cost of goods, Right. So cost of goods sold. Yes, it's marginally profitable, but it's still profitable. Right. I mean, there are more there's more impact to maintaining that customer than just maybe what might be directly observable.

7:10Again, another excellent point that you make. I should ask that in the in the form of a question. Excuse me. I know. It's a great point. And I'm glad that you brought it up that way because it's a tough decision. So if you do an analysis and you see that, yes, you are making that 5 % margin on this one customer and you've got three people deployed on it, you're making 35%, as you mentioned, on the other customer with two people deployed on it. that helps you see better that you've got three resources that's netting you 5%. And then you got two on the other one making you 35. So it becomes easier, thanks to your example, to see that if there's no future for this client, so we can just be direct.

7:55If there's no way that I can sell an additional value-added product or service to this client, because we do want to take into consideration the lifetime value of a client. You're absolutely right. But if there is no way and we have additional employees we'd like to hire, take care of our existing employees with bonuses and stuff, we're going to have to make that tough decision maybe and move on from that client. When somebody comes to you and they're complaining, Manny, of stagnation, what questions do you typically look at or what data do you typically want to start peeking at to help gain them some clarity?

8:32Because stagnation, I think, it can impact a lot of us. And I think there's, you know, it's like in business, there's you got moments of growth, you got moments where going, your profitability goes down a little bit. And then you just got those doldrums where it's like, man, I feel like we're stuck. We can't seem to break through that, you know, that can't get over the eight figure hump or, you know, we're stuck in the, you know, one million and we just can't seem to cross into two million a year. And it's frustrating because they feel like they've been there for too long. Yeah, this is, again, a great point that you make.

9:05It happens every day. There's the peaks and troughs of business, right? It's not that steady upward trajectory. So the first thing I'm going to do is I'm going to ask that business owner a lot of questions. I'm going to interview that owner and say, hey, how did you get here? What are the things that have been working? And I'm going to do a lot of listening. I'm going to want to get educated on the dynamics that are going on inside that particular business. Because there are a host of things that may have impacted it. Part of it could be like technological obsolescence, you know, might be impacting them.

9:43Service offerings are not perceived as giving the value that they once did. You know, your client's saying, eh, you know, I loved it, but not so much now. So a deep introspection with leaving the ego out of it and just saying, hey, let's take a look at this as unemotionally as we can and figure it out. Why are people not buying our stuff anymore? Because we got from zero to a million. We got from four million to five million. So we've got a proven track record. What could it possibly be? Manny, you have a pretty good blog here and you share a lot of this content on LinkedIn as well, which I really like.

10:22And what I like about your blog articles is they're pretty punchy. You have really good lists and like checklists. It's pretty actionable. So one that I'm looking at right now is three simple ways to improve your decision making skills, which, again, I'm sure when you're working with clients, you want to help them gain some clarity on some of these decisions that they need to make, where they invest their money and growth, you know, are there opportunities for savings? But, you know, I just want to maybe kind of share these three items here and let you comment on whatever inspires you. But I thought this was pretty valuable.

10:57So, again, three simple ways to improve your decision-making skills. Number one, try to find flaws in your own ideas. Number two, don't let emotions cloud your decisions, which that's pretty much we think that we're, you know, operating logically as a business owner. It's mostly not. And then number three, don't assume many sure things. that's a great outline, but take that anywhere you want. Cause there's a lot, there's a lot to discuss there. Thank you. I'm going to try to keep it simple, you know, cause I'm passionate. So I consider myself emotional. I get excited about stuff. There are a lot of topics that business owners just don't really want to talk about.

11:37And that's one of them. You know, you don't go out there and say, Hmm, I wish I could improve my decision making, right? That's something that you keep personal. So, you know, the first thing is, let me look at me, you know, what am I doing? Let me give myself just a little report card without beating myself off too bad, right? So, you know, I try to provide the lessons that I've been taught, Josh, by my teachers and mentors over my career, you know, do a little bit of, you know, looking at yourself, you know, how self-aware are you? Do you understand how you're being perceived. Like one of the things, a little bit off of the topic, but I used to get frustrated because I couldn't learn very fast.

12:17If you talk to me about something, I could not absorb it. I could not pick it up. But if you get up there and write it on a board, I got it. Well, I didn't know, but that's called being a visual learner. So there wasn't anything wrong with me. That's not how I learn. Other people learn by just talking. There's a big tribe of visual learners out there. So that's like the first thing I do is, hey, by the way, Josh, how do you learn? Do you get it by somebody talking to you or do you need to see it? So I try to ask questions that help with introspection and, you know, kind of going to places that you might not really care to be real public about.

12:57Yeah. Manny, what does it look like when you're working with your clients? So let's say that someone says, well, I don't know. Should I hire a fractional CFO? Can you maybe explain what that looks like? Sure. You know, we start with what they're doing. Do they feel that they have timely and accurate information at their fingertips to make their decisions? That really is the be all end all. A lot of owners are working with their financial information that's months and months old. And, you know, I'm a firm believer based on what my teachers and mentors have taught me. hey, you need to have a fresh financial statement in your hand within two weeks after the close of the month.

13:40Josh cannot afford to not be looking at a financial for three months, because if there's any negative trends that are occurring, you want to be on top of them as soon as possible and not let them take root. So that would be the first thing. How do you feel about the quality of your information? Are you able to make informed business decisions? That's where it starts. Yeah. Your website, portalcfo.com. Someone that's been listening to our conversation, where does someone start? And what does that sound like? So if someone says, listen, I don't know. I'm open. I think we're at that level where maybe I would like a little bit of kind of that executive level leadership when it comes to making sure that we're making more data-driven decisions.

14:26but what do those first conversations usually sound like? How do we make it sound less scary? Yeah, we start by having a meeting that's informal. You know, we might meet over coffee in person is my preference, but we might meet over a Zoom, just have a conversation. So I can ask you, you know, Josh, where do you think you could get better? Where do you think you're missing? It's not my perspective. I've been trained my whole life to do this in my particular field. Now I need to ask the other human being, that business owner, hey, where do you think that you could use some horsepower? Where do you think you could get better at this stuff?

15:06What could really help you? And that's where it starts. And I try to do things as simply as I can. I don't bring any complex, you know, present value, future cash flow, and blah, blah, blah. I do everything very, very simple so that the owner can understand, teach it to his or her team and make it actionable. Because if it's too complicated, my experience has found that people are not going to follow it and stuff's not going to get done. Yeah. You are also, Manny, you're a speaker, but again, your website, portalcfo.com. Someone's been listening to our conversation. What would you recommend they do next?

15:43I think reading a couple of blogs would be pretty cool because you can go in there and my IT people have it set up so you can search it. So if you've got a topic that's a hot button, You can type it in there and search and it'll bring some articles that, you know, that are what you're looking for. And then, you know, probably look at some of the testimonial videos because I've had, you know, this conversation in the past. What is the best way to share with someone what it is that you do exactly? Well, that would be to probably hear from a business owner in their own words what it's like working with me.

16:20So I would say read a few blogs. Mm-hmm. No, your blog, as I mentioned earlier, is very, very valuable content. Also, Manny, you're a good LinkedIn follower. I just got connected with you there as well. So again, your website, what's that? Yeah, portalcfo.com, Manny Skevofilax. It's been great having you. You're the founder. And it's been a joy having this conversation, Manny. Thank you so much for joining us. Josh, thank you for having me. I enjoyed it.

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