The Truth About Scaling a Fractional CFO Business with Stephanie Skryzowski

 "I think as business owners, or maybe just me personally, I like to go really fast. So slowing down to speed up is so painstakingly hard for me, but I know it's also necessary." - Stephanie Skryzowski

The Truth About Scaling a Fractional CFO Business with Stephanie Skryzowski

As consultants and business owners, one of the biggest challenges we face is scaling our business in a sustainable way. A key part of scaling is building a team to support your growth.

In this week's episode of The Confessions Podcast, we spoke with Stephanie Skryzowski, founder of 100 Degrees Consulting, about how she built her team to over 16 people. By delegating work to her team, Stephanie is able to step into her role as CEO and focus on strategy, culture, and business development. Building a team is challenging, but also rewarding. To hear more about how Stephanie scaled her business through building a team, listen to the full episode. You'll come away with actionable insights to start putting into practice in your own firm.

• Prioritize your people. Stephanie believes that when her team can disconnect, they do higher quality work. So she offers generous PTO, limits work to 40 hours/week, and invests in her team’s wellbeing. This mindset has enabled 100 Degrees to scale in a healthy way.

• Don’t be afraid to change course. Stephanie made the bold choice to sell part of her business in order to refocus her efforts. While scary, it allowed her team to align around their purpose and opened up new opportunities for growth.

• Follow your vision. Stephanie built the business of her dreams by staying true to her purpose of empowering nonprofits to create change. Don’t cling to convention—you have the power to forge your own path.

  Be willing to let go of what is not working and make strategic decisions that will benefit the long-term success of your business.
  
  

Find Us Online:  https://www.confessionswithjessandcindy.com/

Connect with Stephanie Skryzowski:

100 Degrees Consulting: https://100degreesconsulting.com/

Linkedin: linkedin.com/in/stephanieskryzowski

Twitter:  https://twitter.com/Steph100Degrees

Connect with Cindy:

Cindy Wagman Coaching: https://cindywagman.com/

The Good Partnership: https://www.thegoodpartnership.com/

Connect with Jess: 

Out In the Boons: https://www.outintheboons.me/

Transcript:

00:00:00 Cindy: Welcome to the Confessions Podcast. I'm Cindy Wagman.

00:00:03 Jess: And I'm Jess Campbell. We're two former in-house nonprofit pros turned coaches and consultants to purpose-driven organizations.

00:00:11 Cindy: After years of building up our separate six-figure businesses from scratch, we've thrown a lot of spaghetti at the wall and lived to see what sticks.

00:00:20 Jess: We're on a mission to help other nonprofit coaches and consultants looking to start or scale their own businesses past the six-figure mark by pulling back the curtain.

00:00:30 Cindy: Whether you're still working inside a non-profit and thinking of one day going out on your own, or you've been running your consulting business for years, you understand that working with nonprofits is just different. We're giving you access to the business leaders who serve non-profits as their clients. You know, the people who truly get it.

00:00:52 Jess: No more gatekeeping, no more secrets. This podcast is going to give you an inside look at what running a successful nonprofit coaching and consulting business looks like. Basically, we're asking people how much money they make, how they get paid, and what has and hasn't worked in their businesses.

00:01:11 Cindy: Listen in as these leaders share their insights, their numbers, and the good, the bad, and the ugly when it comes to building a nonprofit coaching or consulting business. We're going to empower you to make the power moves that give you the income and freedom you set out to create from day one.

00:01:28 Jess: You ready?

00:01:29 Cindy: Let's go.

00:01:30 Jess: Hi, Cindy.

00:01:33 Cindy: Hello, Jess!

00:01:36 Jess: We're having a back to back day for the audience listeners. So it's always fun to say hi, when we've actually already been talking. I'm pumped. We've got a real pro.

00:01:47 Cindy: Yeah, I'm like, our guest today has been at this for a while. I'm super excited. And I feel like she's one of those like under the radar, but killing it kind of people. We talked about her, we're like, oh yeah, yeah. So I feel like she's like a quiet success, but maybe she doesn't feel like she's being quiet, but.

00:02:12 Jess: Well, I think that's what we're gonna get into because my impression of, drum roll please, Stephanie Skryzowski. Skryzowski. Skryzowski. We should spell this out for folks. From 100 Degrees Consulting. I feel like she is loud in the finance space of the nonprofit. She is the go-to CPA for nonprofits and finance and operations. but there's like, you and I play in a fundraising world, and so, you know.

00:02:46 Cindy: Maybe that's it, maybe like, yeah.

00:02:49 Jess: No, I feel like she's the only one I know.

00:02:52 Cindy: She is the only one I know too, but I don't know, I just feel like she does such a good job of like, just quietly killing it, you know? Just like, being out there, but like, yeah, but just like, consistently, over, cause like when Stephanie's the second interview today. Someone I met very early on in consulting, I remember we had a call and we're like, Hey, and like, she's been out there consistently, you know, just like, yeah.

00:03:27 Jess: Welcome to the show, Stephanie.

00:03:32 Stephanie: What an intro. Thank you for having me.

00:03:35 Jess: Let's just like really quick, like how long have you been at this in your business?

00:03:40 Stephanie: I officially started my business in October of 2015. So it is coming up on eight years.

00:03:52 Jess: Wow. Okay. Yeah.You are, you are the OG that was playing in this space when Cindy was starting.

00:03:57 Cindy: Yeah. Like we met super early on. ‘Cause I started in 2015 as well in the summer. And I remember, uh, I can't even remember how we met, but I remember it was online and we're like, yeah, let's chat. So for our listeners who don't know you yet, because maybe they're not in the finance space, tell us a little bit about what you do.

00:04:22 Stephanie: Yeah, so I am a CFO. So that's Chief Financial Officer. And I spent a long time working in nonprofit organizations as a CFO, and then started my company 100 Degrees. And we provide fractional CFO and bookkeeping services to nonprofits. So we're basically like an outsourced finance team for nonprofit organizations.

00:04:44 Cindy: Love it. You know, I'm a huge fan of fractional.

00:04:47 Jess: I'm just going to say kindred spirits right here.

00:04:50 Cindy: Yeah. Although I think it's Stephanie like figured it out way sooner than I did. She's been doing the fractional piece, I'd say a lot longer, but it is such a great model. So how do your clients work with you?

00:05:07 Stephanie: So basically, they work with us on a monthly flat fee basis and it's ongoing, which is a really great business model to have where when you sign a client, they never leave you. So it's basically that. We come in, we assess what the scope of work is going to be like, we assign a monthly rate, and then we do the work. So we're closing the books on a monthly basis, we're helping with budgeting, we're helping run their audits and do their 990 and all of that good stuff on a monthly basis. And then they stay with us for usually a really long time. And we like to say that our clients stay with us until they hopefully outgrow us and get to the point where they can bring somebody in-house full time.

00:05:57 Cindy: Oh, you know, I love it. I love it. So tell me a little bit about who's in your company, because if it was just you, you're going to run out of capacity. It's great money, it's great stability, but there's a capacity limit there in terms of retainer work. So I know that you have grown your company and it's not just, you know, your capacity. Tell us a little bit about the structure. Who's who's with you? What are they doing and all that good stuff?

00:06:34 Stephanie: Yes. So team is huge. And I feel like in the beginning, it didn't take that long to get the momentum going to get me to the point where it's like, okay, I need to make a decision right now, and that is to either tell these people that want to work with me, no, because I don't have any more capacity or to hire somebody. And I chose to hire someone. The first hire I made was another bookkeeper. I'm somebody to take that very low-level work off of my plate, this is client work off of my plate and take that on. I don't think I, like, when I made that decision, I wasn't consciously saying like, which of these two paths shall I follow? Shall I stay a consultant? Like, I just was like, oh, okay, well, the next step is I just need to hire some help.

00:07:19 Stephanie: But anyway, that continued to grow and who we have right now, we have a team of 16, including me. And so we have a director of finance and operations, who I would say. is kind of like my right hand person. She's like the most senior person on the team besides me. And then we have an operations assistant that works under her. Then we have a client relationship manager who is responsible for all of our discovery calls and onboarding and really making that connection between our clients and our team, and making sure clients are happy, that kind of thing. And then everybody else is directly client-serving. So, CFOs and bookkeepers, that each have a portfolio of clients that they work with on a monthly basis, and they're working directly with the clients.

00:08:10 Cindy: I have so many questions. Jess and I are competing. Who's going to ask the first question? Are your staff on payroll? Like, are they employees of the company?

00:08:19 Stephanie: Yeah. Yes, everyone. Everyone is a full-time employee. And I experimented with part-time employees, contractors, And what I found was that I really didn't like it when… Basically, I was hiring people that also had their own businesses. And so they were doing work for my business, and they also had their business. And at the end of the day, Like they're always going to choose their own business over working for somebody else's. And so I just did draw a line in the sand and was like, okay, we're not doing part-time. We're not doing contractors anymore. We're doing full-time employees. I think we have like, one or two exceptions where it's a part-time employee, but, but still a W2 employee and they don't have any other work. They just are not able to work 40 hours, but yes, everyone is an employee, not no contractors.

00:09:11 Jess: Okay, so you have this team of 16, which is bananas. That's so impressive and congratulations. I'm curious, like what does a CEO of a team of 16 do? Like where do you see your responsibilities? How do you spend your time? Because you have a very different role now compared to when you were a solopreneur doing the client work, doing the biz dev. You know, what does that look like now?

00:09:43 Stephanie: Yeah. So I used to say that the hardest part of having a business is, like, dealing with the people and not like in a bad way, like, I got to deal with these people. Not like that. More just like all of the people things, hiring the people and making sure the people are happy and whatnot. But right now, because I have my director of operations, she's really responsible for the people. And so they have one-on-ones with her, they're reporting to her. I only have one direct report, and that is her, my director of operations. So for a long time, it was like every CFO on the team, maybe there were two or three at that point, they would all report to me, the client relationship manager, everyone reported to me. And I was like, wait a second, this is worse than what it was before when I only had a couple of contractors. And so now they're all reporting up through the director of operations. And she's the only person that I have a regular check-ins with.

00:10:42 Stephanie: So she and I check in once weekly, she kind of gives me the update on the rest of the team. And then I’m really spending my time when it comes to the people, the team, in building culture. What do our, what does it look like on our monthly team meetings? What do our team retreats look like? What does the team need overall? What benefits are we going to offer? So I'm kind of thinking from that 30,000-foot view of the team versus the day-to-day. Honestly, I don't know what all of our bookkeepers are doing on a day-to-day basis because that is not my job. That is someone else's job, but not mine.

00:11:20 Stephanie: So a little bit on more big-picture culture stuff. I do still have a few clients. These are long-time clients that we've had for a while that I worked with from the beginning and that haven't transitioned off of my plate for one reason or another. And it's, I kind of also, like still being in the work ‘cause I'm seeing what, what's happening and whatever. And then the bigger things that I'm thinking about are like, okay, what does the five-year picture look like? What does scale look like in an organization like ours? Like how do we get our name out there in new, different, bigger ways. And so I'm really, I try to think of that like 30,000 foot level for the most part.

00:12:01 Cindy: Okay. See, like when I say quietly killing it, I mean, like from the outside, you, you would never know that you have like this for like, I feel like everything you just said is like what everyone is raving in terms of like, hey, you have a massive team, which is amazing. You aren't in the weeds of managing the people you are doing the CEO work. That is, just like killing it.

00:12:33 Cindy: So I want to ask you about that CEO work and like, you know, the culture piece. Let's start with, I want to talk about all of it, but let's start with the culture piece because I think that I've experienced a lot of people in our sector where they just transition into consulting and they bring a lot of the bad habits of working in nonprofits with them. Like not paying people super well, and feeling like you don't have much control over culture, like, you know, there aren't that many levers that we can pull. So tell me a little bit about, like, what you're doing to keep those 16 amazing people happy and doing good work and, you know, invested in the strength of your business.

00:13:28 Stephanie: Yeah, that is a really good question. And something like I'm constantly thinking about, because I do think we have a really incredible team. And so I'm always like, oh, my gosh, what can we do to make sure they stay and don't go anywhere else? Because they're awesome. I love them. For me, the biggest thing I think that I try to focus on is like, working an appropriate amount of hours and not beyond that. And so for me, it is a red flag anytime anyone is working more than 35-40 hours. And so we try really hard to balance clients, balance workloads, balance everyone's portfolio so that nobody… I do not want a single person in our company ever working 50-60 hour weeks.

00:14:14 Stephanie: That's not okay. Because we all have lives outside of work. You're a better… You're going to be a better employee, a better CFO to our clients if you're not working 60 hours a week and you can go enjoy your life. And when you turn off your computer at 5pm, you're not thinking about anything until 9 o'clock the next morning. So that is huge for me. And anytime… We do track our time, not for client billing purposes, but just for internal. Let's make sure we're spending an appropriate amount of time on certain clients, that kind of thing. And anytime anybody is over 40 hours, I'm like, okay, flagged, we need to do something about this. So I think that piece is huge. This work-life balance situation is really, really important to me.

00:15:00 Stephanie: Last year, we added health insurance benefits, which made me feel like a big girl employer. that that was something that we could do because it's not cheap. It's definitely an investment, but I feel super proud that we're able to do that. And I think the team really appreciated that as well. And then I think just really encouraging camaraderie and collaboration, which is kind of hard to do because none of us live near each other. We are literally all over the world. And so like, I don't know, just doing silly little things on Slack and, you know, people send pictures of personal things that they're doing and we're always wishing each other happy birthday and asking questions, I don't know. Like, so just trying to build that culture, even in a remote environment, and then we do a team retreat every year. So that is also quite a large investment as we are getting so much bigger to bring everybody in person, but that is, that's huge. That really helps us all get to know each other as people, beyond just employees, teammates, whatever.

00:16:06 Stephanie: And actually, sorry, one more thing I will add to, about building culture is we ask for feedback from our team a lot. And I will be honest, sometimes it is not easy to read the feedback because you're like, why isn't it all positive? But we ask for feedback a lot, and we take action on it a lot, as much as we can. And we've had additional feedback from our team that they appreciate that we ask for feedback. And then we actually do something about it. I don't know. I think it's like, I just really genuinely care about everyone. And so we try to take actions that show them that we care.

00:16:46 Jess: That's amazing. I love just the thoughtfulness you've put into being a business owner and the responsibility. I can tell that you have for running a team of as many people as you have. And I'm sure your retention levels don't lie with people staying on and working with your clients year over year. I'm wondering if we could go back in time or if you could go back in time, now you know, what did they say if I knew then what I know now, and for all the people listening that have aspirations of bringing on maybe a full-time staff member, what would you have done differently? Or what are you super glad you prepared? Is it a book you read? Is it having X number of dollars in a savings account? Is it a hiring process you followed or model?

00:17:41 Jess: I think as business owners, or maybe just me personally, I like to go really fast. So slowing down to speed up is so painstakingly hard for me, but I know it's also necessary. So I'm just curious on any advice you might have for folks who maybe in the next year, two, three, might want to bring on their first employee and just really want to get it right.

00:18:06 Stephanie: Yes. The one thing that comes to mind is slightly embarrassing because I'm a finance person. But what I wish I had done was dig a little deeper and crunch the numbers a little bit better on profitability and what it would mean to bring on an employee at a pretty high salary. How many clients and what average monthly retainer would they need to be able to handle to have a certain percentage of profitability, per like per employee basically? And I kind of did that. But I think then what happened was that we sort of strayed away from like, we may have, when I did those calculations, I may have overestimated how much our clients were paying us. And so then like our actual profit margins for a couple of years were not great because we had added so many team members, but our client like retainers were not really what I had estimated or what they should be. They're all too low. Like we've all done this, but like vastly undercharging for our services, like still guilty of that sometimes.

00:19:14 Stephanie: So I think that's what I would say is like my biggest, you know, I would have crunched the numbers even more and maybe even added a profit margin buffer in there just in case something, maybe I had to pay somebody more or maybe I give them a raise or maybe a client leaves or whatever. I would have added more of a margin buffer in there because what I'm finding is like, yeah, the profit margin is not necessarily to just go in my pocket and it's not for vanity purposes. It's like, I want to do a 401(k) matching plan, but I can't do that if we don't have the right profit margins. And so we've been working over the last year to increase that and to get our client fees up to where they need to be. But I would say that's my biggest thing. When I first brought on a full-time team member, I wish I would have thought a little bit more about the profit margin.

00:20:08 Jess: And do you mind sharing like, what is there like a standard or recommended? I mean, I don't know, Cindy, you've had employees, too. So maybe you have something and something I struggle with, too, is I'm in a phase where I have more work coming in than I can handle. And I'm like, dabbling with the idea of bringing on a subcontractor. But then that's like, you know, thinking about all those things. And it's like, what is a healthy profit margin? And, and then I have questions after that.

00:20:37 Stephanie: I think somebody once told me a number that was so outrageous that I'm like, are you kidding me? We would need to charge our clients so much like that's not gonna work for us. And I think it was like, I think she told me like two and a half times their, like their revenue should be two and a half times their monthly salary kind of thing. Like, and so, yeah, that's not where we're at. We'll just say that. But what I do think is a factor that people don't think about is like, okay, if it's a full-time employee, there's their salary, yes, but there's also like, I always factor another 20% on top of that for payroll taxes and if you do any benefits, or if there's additional cost to hiring that person. I always factor another 20% on top to get the, what is a little bit more of a true cost. So yeah, I've heard two and a half x their salary, but yeah, we're definitely not there.

00:21:37 Jess: Okay, Stephanie, every episode, we play a game of rapid fire questions. Are you ready to play?

00:21:44 Stephanie: I'm ready.

00:21:46 Jess: Okay, first question, if you had an extra $100 to spend, what would you buy?

00:21:52 Stephanie: Oh my gosh, I'd probably do something silly, like go to Sephora and buy a fancy face lotion.

00:22:05 Jess: But you talked a lot in your episode about investments made in yourself and your business, what are one, two, three investments you thought were really worth their result?

00:22:19 Stephanie: I would say the biggest investment that I've made in my business that was so worth it was a business coach slash mastermind. Just being in community with people who are a few steps ahead of you has been a complete game changer for me, worth every penny.

00:22:35 Jess: Do you mind sharing any specific names? You know, people are going to want to know.

00:22:39 Stephanie: Yeah. Oh yeah, of course. Sure. So Rachel Rogers, I am in her mastermind. You probably know her from her bestselling book, We Should All Be Millionaires. And I also worked with a business coach whose name is Kathryn Binkley. She's really focused on operations and she is the one that helped me go from having basically like 40 hours of meetings a week to streamlining that into like two days a week and really helping me manage my time and free up a lot of space. So Kathryn Binkley was a game changer in our business a few years ago.

00:23:13 Jess: Hmm, she sounds like a dream. And then last question, I know you have two little girls at home. What do you tell? How do you balance both being like a wife, a mom, and a business owner? Any tips? Any tricks? Is it waking up early? Is it working on Sundays? Is it screw all of that? My kids come first. What's your answer.

00:23:42 Stephanie: Oh, that's such a good question. I feel like we need 15 minutes for this not rapid fire. But, no, I would say I plan my weeks on Sunday. So I kind of know where everyone is going to be. And then I shape my work hours accordingly. And then on a sort of bigger picture basis, I have my days when I know where, like, I know when I have childcare, I do not have full-time childcare, but I know when I do have it. And so I plan my meetings accordingly. And then I make sure that I've got enough like chunks of time. So for me, it's just like strategic calendar management helps me feel like I can do what I need to do in my business. And I can be really present for the moments and the things that I want to be present for with the girls. So I would say like, it's all about the calendar.

00:24:25 Jess: It's all about the calendar. Isn’t that the truth? Okay, thanks for playing.

00:24:31 Stephanie: Thanks.

00:24:36 Cindy: It's hard to, because as you said, Stephanie, clients come and go, even with the retainer model, right? Like sometimes, employees can come and go too, which is really hard. That was actually the hardest part for me, but yeah. And then there's all the other expenses that are not related to staffing that eat into the profitability. So I also didn't have a perfect equation, if you will, when I had staff, so yeah. But I think like with those nuances when you can sort of start to zoom out and it's not going to be perfect math, but it will get you close enough. So I can't wait to see where you go with that.

00:25:23 Jess: I have a question for both of you, just as, you know, cost of living increases and you hopefully want to be being, you know, giving people raises and things. How do you all balance that with increasing your clients’ rates? Is that an annual raise? Do you do it every couple of years and it kind of staggers? These are all things they have to think about when it's beyond just you. And I don't know if it's realistic to tell your clients every single year that your rates are increasing just because cost of living increases. So how do you all work that out?

00:26:04 Stephanie: Oh my gosh, it is so hard. And I will say, our first priority has always been our team. And we're like, we'll deal with the clients and the profit margin later. But everyone's getting a raise. And we do bonuses as well, which is a percentage of their salary. So that varies depending on how the year went. But yeah, we do give raises. And I'm pretty sure we've given them every year. And we had so many clients. We basically have gone through a whole process this year by which we are reviewing all of our clients' pricing and getting everyone right-sized where they should be based on our new pricing model. But we've had clients that we haven't touched their rate in 4 years.

00:26:50 Stephanie: And so in some cases, it's like, okay, well, they're kind of shocked. Why haven't you raised our prices in four years and now you're doing it? Who do you think you are, kind of thing? But it's like, dude, you've been having the same price for four years. We're in a very different world than we were four years ago. And so it's been really quite an interesting thing to navigate. Some clients are like, okay, yeah, totally makes sense. All good. We’ll pay the new rate. Moving on. Other clients are like, no, we can't. We can't do that. It's not going to work for us. We need to leave. And it's been very hard for us to be like, well, I think we're okay with that. Like, yeah, exactly.

00:27:32 Cindy: And where are they going to find someone to do what you do with the price you do? That's the beauty of fractional is like, they're not going to be able to replace you for less than probably double what your new prices are. So it's kind of like shooting themselves in the foot. That's crazy.

00:27:52 Stephanie: Yeah, I know. There are some, like bookkeeping, just bookkeeping. Not the CFO piece, but like, yeah, there's some inexpensive solutions, but they're really bad. And so it's like, I feel like, yeah, you're gonna come back to us in like 12 months and be like, can we circle back to that rate increase again? So yeah, it's tricky to balance all of that out for sure. Yeah, the revenue side with the client pricing as well as making sure our team is taken care of.

00:28:20 Cindy: And before you answer the question, ask your question, Jess, I also want to say, like, there's the opportunity cost because you are so successful. And we can talk about business development, but I feel like for every client that leaves, I can't imagine it's too difficult for you to replace them. So you know that you have another client coming in at the prices you need to be charging versus someone who's on four-year-ago pricing. It's like, if as a business owner, despite obviously you want to serve the organization and their, you know, long-term clients and all that, but you're going to start losing out personally if you don't get them up to the sort of current prices. So, yeah.

00:29:06 Stephanie: Exactly. I know. And it's so hard though, because so much of our heart is in this and it's like, oh, I've been working with you for so long. And I really love you. And I know you're bored. And like, it's so good. But at the end of the day, like what we've had to kind of tell her and even some of our team, I think is like, you're raising prices on this client, because I love them. I don't want to lose them. Because our team has built relationships with them, too. But at the end of the day, it was like, okay, well, if you want benefits, like if you want your health insurance, I kind of need to, we kind of need to make this move because it is, it's a business, you know, it really is.

00:29:40 Jess: Okay. So I want to switch directions a little bit because so far we've talked of all the things that have sounded pretty smooth in your business and that you've got really right. And, you know, it wouldn't be any business if there wasn't some kind of like twists and knots. And so For those of you who don't know, at one point Stephanie was working and serving 2 audiences actually. She was serving both nonprofit consultants as a fractional CFO, as well as nonprofits. And then I don't know if it's been like the last 12 or 18 months, Stephanie, that you've shed that side of the business. But maybe you could just tell us a little bit about that journey and where you are now and how you came to make those decisions and why and just all the juicy details.

00:30:30 Stephanie: Yes. So not only were we serving nonprofit consultants, we were serving any and every type of small business you can imagine. We had swimwear, retail, e-commerce companies. We had online education businesses like course creators that were not in the nonprofit space at all. We had influencers, we had marketing agencies. If you gave me like five minutes, I could probably think of 10 more industries that we were serving. And we sort of lumped them all into small businesses. That is a very vast like, oh, I think we had a med spa, like a, you know, like a place that does Botox. So many different businesses. In the beginning, I was like, oh, yeah, we could totally serve small businesses and nonprofits because at the end of the day, their problems are all the same, cash flow, budgeting, bookkeeping, like all of that stuff.

00:31:24 Stephanie: But in the beginning, perhaps that was true. But then we just kept saying yes. And I think it was a little bit in the beginning, it was like, okay, well, a little bit of that scarcity mindset, like, okay, well, if this client goes away, maybe there's not going to be another. So we said yes to everyone, lots of different small businesses. And we just kept getting referrals from all these random industries that we kept saying yes to.

00:31:50 Stephanie: And so it was probably like midway through or maybe the beginning, yeah, probably midway through 2022, where it just seems like we were having issues with all of our small, not all, but a lot of our small business clients where the clients weren't happy. They were like, why aren't you helping me think of new revenue streams? Why is my revenue so low? Why is my profit so low? And we're like, well, that's not really our job. But that meant they weren't happy with our services because we weren't able to do that. And so, we kept trying to figure out, what is going on here? Do we not have the right people on our team? Should we let some of these clients go? What is happening? Because we were not seeing any of these issues on the nonprofit side of our business.

00:32:38 Stephanie: And we were charging, or for whatever reason, our small business portfolio was way less profitable than nonprofit. And which is really interesting, right? You guys are both like, have confused looks on your faces. Nonprofits were paying us way more than small businesses were. I think because nonprofits know that they need our services. And so they more intentionally budget for it versus a small business, a CFO kind of feels like an extra or like this cool thing to have at some point. So we just, I don't know, like prices were not aligned.

00:33:14 Stephanie: And it was in Q4 of last year that we really started digging into the numbers and realized… I don't even want to say this out loud. It's so embarrassing, realized on our small business portfolio, our profit was like a couple thousand dollars a month. Like a few thousand, literally like less than five grand a month. And that didn't include my time, my director of operations time. So when you add all those in, we were making basically no money. And so we had all these headaches. We were making no money. And it was like diverting my attention between nonprofit and small business. And so I was like, okay, well, we have two choices. We shut down the small business side or we really put some effort in to fix this. Maybe it's, you know, go all in on one type of small business or whatever.

00:34:04 Stephanie: And so I was on a call with my business coach and I was like, here's where I'm at. What do you think I should do? Do we shut it down or do we go all in and try to fix it? And she's like, you don't shut it down. You sell it. I was like, wait, what? She was like, no, you sell that. That is a huge asset. You have spent years building this portfolio, building your systems, building your processes. You need to make money from that. And I'm like, oh, I didn't really even think about that as an option. And so I was like, that sounds good. Like that feels like a win, win, win, right? Like we win because it gets offloaded and we're still compensated for the years of effort that it took to build up this practice. The clients win because we don't have to just tell them, oh, we're stopping, go find somebody else. Good luck. And then whoever purchased it wins because here's a business that now you don't have to build from scratch.

00:35:02 Stephanie: So I got really excited about the idea and I started reaching out to a few people that I know that do similar work for small businesses and just having conversations like, might you be interested in this? And it turns out we ended up selling the portfolio to the CFO that was working for us. So she was already working with those clients. We sold her the portfolio. And so really for all of her clients, there was virtually no transition. It was like, you're not going to pay 100 Degrees anymore. You're going to pay her new company. And like, we got them off our plate and it's been so good ever since.

00:35:35 Stephanie: But it wasn't like, I don't know, maybe I'm making the story seem rosier than it was. It was really hard at those times when we felt like we were just doing a terrible job because our clients weren't happy. And even the transition was like, looking back, there are definitely things that we could have done better. And so it was bumpy. And there were people that were quite unhappy with us, because we didn't handle things the way they would have wanted. So it was hard, but while we were in it. But I'm so glad, so glad we did that. It was probably the best decision I've ever made for our business.

00:36:10 Cindy: Okay. As a finance person, how did you go about researching or determining the value of that portfolio? Like I'm in the process of selling one of my podcasts, my other podcast. And I think I just like picked a number out in the air. It's like, I feel like this is an appropriate number, but I would, you know, it kind of was a guess. And so I'm super curious, where did you come up with the value of that part of your business?

00:36:49 Stephanie: That is a very good question. And I think in our case, we had pretty black and white numbers. We knew exactly how much revenue this portfolio is worth on a monthly basis, and therefore annual basis and multi-year basis. And we also knew what it cost, the direct costs to service those clients. So like the people, the CFO and a couple of bookkeepers, we knew exactly what it costs and we knew the profit. And so we basically crunched those numbers and looked into the future, like, okay. Assuming this is the profitability for the next five years, here's the, you know, here's the value in. Honestly, it wasn't like what we ended up agreeing upon was not the first, you know, there were several rounds of going through this legal process and negotiating and things like that, which I thought was interesting, because I was like, oh, it's gonna be like, so straightforward, right? I'll just give you this cute little contract, and you sign it, and we're like, good to go.

00:37:48 Stephanie: And no, there was not. It was not that. That there was a lot of back and forth, and just making sure that everybody felt really comfortable with what they were getting into. So, I mean, what was maybe not more important than the money to me, but what was really important to me was just a smooth transition because I kept telling myself, I was just going to shut this thing down like 2 months ago. So honestly, anything I can get feels like a bonus. Yes, I want to be compensated for building this portfolio and building this business. But at the end of the day, making sure this transition is really smooth for everybody is almost equally as important to me. So I don't feel like I got what I had initially wanted but I do feel like what we landed on was fair.

00:38:34 Jess: Incredible and like I just want to commend you and tell you how brave that is because that's just really hard to admit, say out loud, execute, like the whole thing. And there's a lot of people I think out there probably doing things that aren't serving themselves or their businesses, and they just like keep doing it anyways out of, well, for a lot of reasons. And for you to step into your CEO seat and really look at and analyze and say, what is the best thing for not just me and my business, but my time? I think it's just like super duper brave. And I guess I would just follow that with like, what are some of the benefits… we're 10 months from when you were having these conversations. So like, yeah, you just said it was the best decision of your business. What are some of the things that have come out of that decision that have benefited your business?

00:39:35 Stephanie: Yeah, I mean, I was saying around this time last year that it feels like I'm running 2 different businesses. We had 2 email lists. So every time I was writing an email to our list, like a marketing or just general communications, I was writing 2 different emails. So 2 different email lists. We had 2 different teams. So a team of CFOs and bookkeepers that worked with small businesses and a team that worked with nonprofits because they're different skill sets and they're different experience that you need. And so we had two different teams. I was constantly flipping back and forth in my head between like, who should I go all in on? And even like, what is my identity? Am I a small business? Like CFO, is that the world I want to live in? Or am I a nonprofit CFO? Is that the world that I want to live in? What conferences should I be going to? I was running two different businesses.

00:40:27 Stephanie: And so now I would say the clarity that I have in like, okay, well, what is, what is next? What is our mission? Who are the people that we need on our team is, it's incredible? I would say our team probably, I think our team feels a lot more aligned. They had questions in the beginning, like when we initially told them, they were like, are you sure? Is this a smart decision? You know you're throwing away a lot of revenue, right? And I'm like, yeah, but that doesn't matter because we're throwing away basically no profit. But it took a little bit to get them to kind of get on board. But I think they feel really clear now because we're all talking about the same thing when we're talking about the 990. The whole team knows what we're talking about. And I was going to say there was one other thing that I was going to say too, but I don't remember. I forgot. Anyway, if I think of it, I'll jump in.

00:41:25 Jess: It happens to the best of us. Okay, the last thing I want to talk to you about before we go into our confessions question is just this idea around business development and marketing and your responsibility of owning that as a CEO. So we've talked a lot about team and your responsibility around hiring and culture. We've talked about how, you know, like focus and making these kinds of business decisions. But where does it… whose responsibility is it to bring in new clients to market the business? And is that you? And how are you deciding where to spend your energy, what rooms to be in, where to show up? And is that how you attract clients? Or is it more maybe like a referral-based business? How does that side of it work?

00:42:17 Stephanie: Yes. So I definitely see new business development and attracting new clients as a big responsibility of mine for sure. One thing that is really cool is that this year, we have added to our client relationship manager, like a sales piece, just meaning that they need to go out and look for new business as well, which is so cool because our client relationship manager lives in Montana. So she just went to the Montana Nonprofit Association Conference. She spoke there. She had a table there with 100 Degrees stuff. I'm like all this stuff is happening across the country and I'm not part of any of it. This is incredible. And so she started to do more proactive outreach on behalf of 100 degrees, as well, which we have never had before. It's always been me.

00:43:06 Stephanie: But we get 80% of our clients from referrals. So we do have a pretty steady inflow of clients without us having to do anything. That being said, we are trying to be more proactive about getting in the rooms with other non-profit leaders and so in addition to our CRM going to the Montana conference, we have one of our CFOs is going to conference in Erie, Pennsylvania and I'm not going. And so this is a model that we're just kind of trying out, is like getting booths at conferences and I don't necessarily have to be there. And trying to connect with people more directly that way. We've always been like relationship people. I've always been a relationship person versus a Facebook ads, one-to-the-masses person. I've tried it because I've seen all these other online business owners kill it. But it just, I've wasted a lot of money. I've wasted a lot of money chasing that shiny object.

00:44:07 Stephanie: So that's kind of what our strategy has been. Let's get in the room with people. I'm speaking at a couple of conferences this fall, and I am doing something that is terrifying to me. Exciting is at these conferences, I'm hosting an intimate dinner of 15 to 20 people and just inviting people, having them invite people. So we have a room of 15 different nonprofit leaders that maybe we don't all know each other. And I'm very nervous about this. What if nobody shows up to my party kind of thing? But I think it's really cool. And it really just aligns with I don't know who I am. I just do better in small groups versus a conference of 1000 people. So that's the work that I'm doing.

00:44:50 Stephanie: And I would say the other piece is working on the education side of our business. So we do have an online course. I do workshops, I do trainings and working on scaling that. Because as you can imagine, the profit margin on that is huge because it's really just my time. There's no expenses related to people. So I've been working on like, okay, what does that look like on a big picture? I don't know that I've necessarily figured it out yet. But that's like my big thing for this year is growing, scaling the education side of our business.

00:45:28 Cindy: Love that. Also I just read slash listened to Mike Kim's book, You Are The Brand. And he taught, have you read it?

00:45:37 Stephanie: Yeah, it was in his Mastermind a couple of years ago.

00:45:39 Cindy: Oh cool. So ‘cause in the book he actually talks about these like small intimate gatherings where he, that he did a lot of business development, especially, I think in the early days. So there you go. Okay, before we run out of time, you know we have to ask for a confession. So share with us something juicy that you haven't shared elsewhere about your business or you as it relates to your business.

00:46:08 Stephanie: Oh, gosh. Well, I would say like, I have definitely kind of like I just mentioned, but going into a little more detail, I've definitely chased the shiny object syndrome and invested a lot of money with consultants who, because I was trying to be something I wasn't right. I'm trying to be like the Amy Porterfield for nonprofits. And like, yes, let me spend $20,000 on this Facebook ads agency to create this funnel that is going to make me millions. And it made me literally zero, like zero.

00:46:43 Stephanie: So spent tens of thousands of dollars with an ads agency and got nothing. I'm like, did you guys do this right? Because shouldn't we have had at least one sale? It just, it just bombed. And it was really disheartening. And I was like, how are these other people making literally millions of dollars doing this exact same thing, but I made zero? So yeah, I would say that's a pretty big confession. And I feel like a lot of people think that like, oh, you're a CFO, so you must be perfect with money. You must make every good decision and have this amazing profit margin and you never waste a penny. Sadly, I wish that was true, but it's not. I make bad money decisions, too.

00:47:26 Jess: Thank goodness you're human.

00:47:30 Cindy: Welcome to the club, I think. I mean, that is one of the things that we talk a lot about because we're all sold this perfect vision of like passive income and, you know, all these things that work for other audiences that just don't translate to nonprofits. Like it just doesn't. We've been there. Jess and I feel your pain. I guarantee our listeners.

00:47:58 Stephanie: Yep. I don't think I've ever made any money, like truly passively, like not a dollar. I think I've worked for everything that I've made.

00:48:05 Cindy: Yeah. Totally. Okay. Stephanie, where can our listeners connect with you and learn more about what you do?

00:48:14 Stephanie: Yes. So our website is 100DegreesConsulting.com. And then I would say I spend most of my time on Instagram at Stephanie.SKRY. I don't have the whole last name spelled out. You're welcome. Or 100DegreesConsulting anywhere and you'll be able to go find my Instagram.

00:48:33 Cindy: Thank you so much for joining us.

00:48:35: Jess: Thank you.

00:48:36 Stephanie: Thanks for having me.

00:48:40 Cindy: Thank you again for listening to the Confessions Podcast for nonprofit coaches and consultants. If you enjoyed today's episode, which I sure hope you did, you can show your support in one of three ways.

00:48:51 Jess: Number one, post a screenshot of this episode to your Instagram stories or LinkedIn profile and tag Cindy and I so we can repost you.

00:48:59 Cindy: Number two, share this podcast with a fellow nonprofit coach or consultant.

00:49:03 Jess: And number three, leave a positive review on Apple Podcasts so we can continue to grow and reach new listeners.

00:49:10 Cindy: And of course, make sure you subscribe so you can get the latest and greatest interviews as they drop every Thursday.

00:49:16 Jess: And to our fellow nonprofit coaching and consulting friends, remember we're an open book and here to answer your burning biz questions.

00:49:24 Cindy: See you next time.