#177: Avoid Critical Early Business Mistakes
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Welcome back to another episode of The Richer Geek Podcast! Today, we have Byron Wolfe, founder of CFOAF, sharing unparalleled tax benefits and insider tips to help you master business financial principles. With Byron's expertise in hospitality real estate and real estate investment, you'll discover strategies to maximize your average return on investment and position your business for long-term success.
In this episode, we're discussing:
Understand common early business mistakes and how to avoid them
Leverage unmatched tax benefits to save your business money
Optimize your cash flow for better financial stability
Learn the importance of focusing on profitability
Maximize your average return on investment (ROI)
Implement strategic financial planning for sustained growth
Resources from Byron
Resources from Mike and Nichole
+ Read the transcript
Mike Stohler
Everybody welcome back to another episode of The Richer Geek Podcast. Today, we have Byron Wolfe. And Byron's gift is translating the complexities of business financial principles which all of us hate, you know, keep that to the experts. He focuses on small business, and easily understood communication has made him one of the most highly sought after financial and business consultants. He's the founder of CFOAF. I don't know what AF stands for. I'm thinking of something else. But the financial services business consulting firm, specializing in industries ranging from construction to crypto. His true passion lies in helping small business owners expand their financial reach and success through various tools like R&D and tax credits. How are you doing, bud?
Byron Wolfe
I'm doing fantastic. Well, thanks for having me on. Excited to get into this man.
Mike Stohler
Yeah, so a little bit about yourself a little bit back your background? Why should people listen to this podcast? Where you came from, where you're at? And what do you do?
Byron Wolfe
Yeah, of course.
I started originally, a long, long time ago, I started to work as an employee, figured out that was not the way that I wanted to go, went into small business at a very young age, and said, Hey, I want money. I don't really want to work for somebody else to get it. How does that do that? And so that's where small business came from. I started my first small business, I was around 14 years old, started cutting lawns the way most normal people would, but then very quickly found out that I am more lazy, and I thought I was in so I employed the rest of the kids in the neighborhood to cut the lawns. And I would go and I would collect the money. Because dealing with adults is difficult when you're that age. I would get a yard, I would somebody else would cut it, I would go collect the money, I would keep $5, so that was kind of the start of small business for me. From that went into other arenas, went to college to try to play college football. I was not big enough or fast enough. I was a practice domine for a very short period of time, at the University of Tennessee, and then got back into small business started a bartending school teaching people how to bartend which put me around some really amazing people. That's where I first learned that partnerships are horrible. If you don't set them up for success from the jump, I had a partner with really poorly. But I learned a lot of great aspects. From that I learned that like, hey, partnerships can be amazing if you set them up properly from the jump. But if you don't do that, and you're just hoping that things work out or trusting that they're gonna work out, you're gonna end up in a bad spot because things change from that multiple other businesses throughout, you know, from college, the accounting degree, got my CPA license worked for a firm for a while, again, not the greatest employee so went out on my own, and started my own firm, co founded CFOAF, actually with my my wife. And so she is my life partner as my wife, but she's also a business partner, which has been amazing. But that is a whole nother conversation to have. I love it. I really do. But I understand that there's a lot of people that don't love that and wouldn't do that. I like it. I love it.
We actually owned and operated a dealership before we were even married. We were in business together before we were even married, which is, you know, again, another story, but it's kind of crazy. But from that we've grown together, we've learned the lanes, we work really well with each other, which is amazing. But we are very, very specific. Like my lane is my lane, her lane is her lane. And we have learned that that is the way that we work well together. We have built this, we've got a massive team at this point. We're full service from bookkeeping, all the way to CFO services. You know, even with the tax strategy that comes into play, there is a big difference between tax strategy and tax prep. We're looking to save you a bunch of money on taxes, not just give you a tax bill after running your numbers through our computer. So we do all of those things. I love what I do, I really, really do. I love helping businesses to find new profit, new cash flows. I love taking businesses that are built from love and turning them into really big profit centers that allow people to have the life that they've only ever dreamed of. That's the spot that I really love to be in. I tend to focus in the fractional CFO space, but again, we're full service bookkeeping all the way to the fractional CFO.
Mike Stohler
Yeah and that's so nice because it's instead of like now I have five people that I could juggle because they all do all the same things. It'd be so nice just to have one umbrella, one company that I work with. These are things that I've learned and made mistakes at earlier times. When I first started my business, what were some of the concepts that trip the business owners up? At the beginning? Is that, “Well, I just do it on my own, not getting my mistake was that getting a CPA that specializes in my type of business?” What are some things early on that a business owner really needs to watch out for?
Byron Wolfe
Yeah. I love that question. So there's really two main things that we see over and over again, with small businesses. The first is like wearing too many hats. Yeah, like you said, trying to do everything on your own. I'm the CEO, but I'm also the CEO of running operations, I'm running marketing, I'm running tech, I'm running sales, you know, I'm doing everything. And I'm running the books. And I don't even know what QuickBooks means. People just do it too many things, right? You can't wear every hat. Realistically, at some point in the business. Everybody figures out, they can realistically wear two hats. If you choose to be the CEO, you can probably do one other department, you can be CEO, and you can run marketing, you can be CEO and run sales. But like, it's really only two. And if you eliminate CEO, which I see a lot. They're like, "Oh, well, I do sales, and I do marketing, or I do sales and operations." Well, you know what? You're also CEO, you're just leaving that out. Like, if you're making all the decisions, you're wearing three hats, that's the reality. And so I think that a lot of us will fall into that, because we know, hey, I can do it better than anybody else. But here's the reality, if you're doing three things, you're really only given 33% effort to those three, right? And so even somebody that comes in at 60%, of what you can do, still almost twice what you're doing. Knowing that you can't do everything, and that overall, you need to be working on the business, not in the business. That's a huge, huge thing. It seems simple. But it's a hard concept for most people to realize. The second really big thing is cashflow. People don't really think about this, they're like, "Oh, well, I'm making money." Well, yes, technically you are. But if your money is coming in slower than the money that's going out, if your cash flow is poor, it's really hard to operate. Like, if you are selling all this product, or you're selling all these services, things that nature, but that money isn't coming in as fast as you need to pay out for how you're providing the services or the product, you're not going to have enough money to operate. It's the same concept that allowed Walmart to become massive, they would find these great products. And then they would go into an agreement with them, "Hey, we'll buy all your products on Net 30. Net 60, Net 90, as much as you can make at that price point, we're happy to pay it, we're going to do great for you." And then if the product did well, they would make these massive orders that they couldn't provide, because they're not getting paid for 30,60,90 days, they could do it. So they'd come back, hey, we can't produce that because we don't have the cash to do it. And then Walmart would just take that product over right, you know, well known story, but that happens all the time. It's not just big companies. It's small companies, too. And I think as a small business owner, if you have employees, I think we can all answer this question, if we put it into our mind. But if you don't have cash to make payroll, do you really think your employees are going to show up tomorrow? Probably not, and that's probably the fastest impact to cash flow. But if you can't pay your suppliers because your biggest customer, which is always the biggest customer, right? Your biggest customer has a net 60. Net 90. And then on top of that he's slow paying you, well, if that customer isn't providing the cash that you need to continue to operate, that's not your best customer. That's your worst customer. And so a lot of times we find that out, we get into it, we're like, "Hey, what's going on with Bob?" You know, Bob owes you 100 grand, "Oh, that's my best customer." You know, he buys more products than anybody. Well, Bob hasn't paid you in three months, you know, you've got six payrolls that have occurred for the services you provided Bob, and he needs to pay you like, this is why your business is failing. That's your worst customer, not your best. It's knowing that cash flow is the lifeblood of your business. You have to have cash, it doesn't matter what your revenue is, honestly, it doesn't really matter what your expenses are. You have to have cash flow coming in. And it's got to be more than the cash flow that's going out.
Mike Stohler
That's business 101, isn't it? I love what you mentioned, but working in the business on the business. We all struggle with that. Because it's like, you're free to spend money. Yeah, hiring people, right? But you look at, is there an ROI? And then the importance of your unique ability? My unique ability is not accounting. So why the hell am I doing accounting?
Byron Wolfe
Yes, yeah.
Mike Stohler
For all these years, I was doing those three, four or five different things, but what was I not doing? I was not buying more hotels. I was not buying any more assets, because 85% of my time was spent doing this. Doing $12 an hour things?You know, instead of big thinking, so I didn't start growing until I was like going, you know what? Delegate, hire and team. And that includes the CPAs, the advisors, the attorneys, the general managers, people running the day to day businesses die.
Speaker 1
I agree with that. I love what you said about the $12 thing. Yeah, that happens all the time. Right?
Mike Stohler
Yeah.
You're an owner of the business? Is your time worth more than $12 an hour?
Speaker 1
When you talk about hiring people. And a lot of people get freaked out about that. I get it, you know, like, "Oh, man, you know, I gotta hire this guy. He wants 100 grand." Like, I get it, that's a lot of money. It's really, it's scary to do that. Well, first off, you're not paying 100 grand, it's 100 grand a year that's paid over time. But second, like you just said, it's the ROI. If that employee that you're going to pay 100 grand to is bringing in 500 grand to the company, and you're at a 50% profit margin. I mean, that's, that's a good rate, like that's 250 to the bottom on profit, they cost you 100 grand, if they're a high level employee, they could probably manage themselves, they're not going to need a lot of input. But like you said, the $12 an hour, how easy is it to bring in the low level $12 An hour person that can take over those small, menial tasks that you're really wasting your time on. But you're now providing a job, you're providing an income to somebody that may be at that skill level, that may be where they live, right? That $12 They may be as good as it's gonna get for them right now. You're gonna give them that opportunity to make money, better their life, increase their skill set, maybe that $12 employee becomes that 100 grand employee, because they're watching what you're doing their learning your business, they become so invaluable to you that you gladly give them 100k Because they're generating 500 or more $1,000 and your business. Yeah. So I love what you said, I love our ally, don't do the menial tasks. I couldn't agree with that more. That was a great insight.
Mike Stohler
Yeah, thank you. For those listening. It's like, you don't have to, you can also hire VAs. When I first started out, it's like, I can hire these people that they want to work for $5 an hour. $7 an hour, no benefits. And they actually want to work.
Byron Wolfe
Yeah. Which is amazing. Right?
Mike Stohler
Which is amazing.
So don't get me started on that part.
Byron Wolfe
Yeah. And that's the range, right? We have some that work in our organization really, like admin type stuff. I think our lowest is like $8, $9, I think our highest, I think is like $18. I had somebody say, well, like, Don't you feel bad about paying them? You know, $8 an hour? No ,$8 An hour is like really good money? No, I don't. If I gave $8 to somebody in the US, they're not going to do anything, right? You can move to California and get a job at a fast food place, making $20 An hour and do 10% of the work and probably not get fired. So nobody here wants a dollar an hour. And I'm not trying to get political, but like it's unreasonable. If you haven't done admin stuff, you're giving somebody you know that $8 An hour job that's like a game changer for them. Right? They can live there for $8. Now they can support a small family at $8 an hour.
Mike Stohler
It's upper middle class there and for me, $7 an hour, they saved up to buy a house, with $7 an hour. And they don't understand they're looking at it as American equipment. But when the minimum wage or average wage over there is 2$.50 an hour or $3 an hour. You're paying them $7. It's a win win.
Byron Wolfe Yeah. We've hired. I remember, I think we have like, we have a ton. I think we have like seven or eight right now. But we hired our first I think two through an agency. Our third one was kind of through an agency, but it was a referral from one of the first two after that. It's all been referrals. And this is the point I make to people that say, Hey, how do you get away with $8, $10, whatever. Every single employee after those first three that we've got that's overseas has been a referral, because of the fact that we pay that by now blows their mind. They're like, "Oh, they want to come to work?" Yes. Because they know that we provide a good work environment, we're not unreasonable on hours, expectations, anything like that. And we're paying in that eight to $10. You know, range to start, that's really good money. So we don't have to recruit. We're not interviewing, we have a stack of people that want to work for us for that pay. So I feel like if that's the reality, then there's no way I can feel bad about an $8. I know I'm doing a service to them, but you're right I mean At $18 an hour a task that you're talking about that can be taken over by a $7 an hour VA most of them, right, unless it's something on site that can be taken over. So if you're worried about hiring that first employee or bringing somebody in the fold, that's a great place to start, like, the impact of that. I mean, we can all do the math $7 an hour, give him 40 hours a week. I mean, you know, that's nothing like, that's literally nothing. I don't wanna say that sounds conceited. That sounds like we're gonna burn that on dinner. But yeah, most people have, right? So try it out, give it a couple of weeks, see what happens. But you know, if you can start to give some of that stuff away, almost all of us will start to realize, once we start giving stuff away, we start to step up our own game. And we can do more stuff, like to your point, you can buy more properties, get more hotels, like, those are the game changers, you know, you digging into your credit card statement and finding that you know, that second Netflix charge for $11.99 a month, like whoo, you save $12 That ain't moving the needle, you know, it's just not right.
Mike Stohler
Yeah, that's true. Now, we've talked a little bit about working smarter, not harder by learning your unique ability, delegating things, what are some of the other ways that people can increase the business profitability by focusing on some of the other important stuff? What are some of the things that we haven't hit on? Yeah,
Speaker 1
no, I love that. And so and I'm gonna rephrase, rephrase a little bit what you said, but I love what you said. So it's increasing the profitability, not increasing the revenue, right? And so I take a lot of slack because I tell people, a lot of times when I come in, and they say, Oh, well, I'm doing this in revenue, or I'm doing this or we're gonna do this next year. I don't care about your revenue, I don't care. The only thing I care about is your profitability. Like you're making revenue, that's fantastic. Let's focus on your profitability. Let's focus on what you're taking home. Right. And to that, I only focus on profit, because I think that's the most important thing. I think what you key is way more important than the brag of, oh, I made this much money, I had this much revenue, well, if you didn't make any money, at the end of it, you got a net loss. That's not a good situation. So profit is everything. And so based on that, we were going to get real granular, right, eventually. But in the beginning, Licious focuses on the main aspects, right, let's pick out your major KPIs key performance indicators, right? And let's start to manage those. What is your payroll look like? Right? And we can break that down even further, right? Like, what's your total payroll? How does that relate to the business? Can we reduce that? Right? Can we make it more efficient to create more profit or create more revenue using the same staff and the same number of people? And then like, what's your ratio of direct to indirect? Because the reality is, there's always those indirect people that aren't really generating money, but they're supporting the people that are your workers, or your salespeople, or whoever's providing the service or the product, there's always that indirect, right? So what's your ratio, and this is different for all industries, but realistically should have one support person for every three to six direct, direct people direct labor, for every worker, you've got, you've got an admin person, you got way too many admin people, you know, like, we got to eliminate that, or we got to find some efficiencies. And then like, kind of a reverse is the marketing, right? That's up all the time, I don't care what you spend on marketing, I only care about the ROI of your marketing. So if you spend $1, you need to have a certain ROI return on investment that comes back on that dollar. So if you're at a 10% profit margin right now, that means for every $10 that you bring in, you only get to keep $1 of it. So if you're going to spend $1, in marketing, that's your breakeven, if you're going to spend $1, you better make $10, you need a 10 to one return your profit margins, 20 for every, you know, $10 that comes in, you get to keep two. So if you spend $1, you better get a five or better return. So I don't really care what you spend on marketing, let's just make sure that it has ROI. That makes sense, right? And some people say, well, I need a budget on marketing. No, you don't, you just need to make sure you're getting a good return on investment. Because here's the reality, if I can spend 100 grand and make a million dollars and keep half a million dollars, and then I can do that times two, I'm gonna find another $100,000. Right. Yeah, who cares what your budget is. So I think that's very important. But then you also got to look at all the other stuff like what's your fixed overhead versus your variable, right? So what are those fixed costs? Those things that even if you don't make $1, you're gonna have to pay for right? Because that's the first part of the break even analysis like how many dollars do I gotta make this day this week, this month, this year, whatever. How many dollars do I have to make to afford to continue to operate? You know, if you rent $10,000 a month, you have to make $10,000 to cover rent. Doesn't matter what you do outside of that. You got to get there. First, right? And then you got to cover utilities and all the other stuff. So what's your fix? What is it in relation to your revenue? What's your profit look like? And so fixed overhead, I got no problem with that going up, I just want to see the percentage going down, right? So you can increase the dollars. But let's make sure that your fixed overhead that you know, those things that are just they're gonna, you're gonna have to pay them regardless, I want that to continue to be a smaller and a smaller percentage of your revenue. And then the other thing that I really love to look at in the beginning stages, coming back to employment is that revenue per employee, it's a fantastic indicator of where you're at and how your efficiencies are running. So for every employee that you have that revenue per employee, so if you've got 10 employees, right, and you've got, you know, a million dollars, right? Well, you generate 100,000 per employee 100,000 Per, you know, million dollars divided by 10 $100,000. apiece. So that's a great indicator from kind of a high end overview of how I'm doing, but how are we efficient? You know, do we need to hire people, right? Do we need to find more efficiencies, hopefully not fire them, right? If you've got the right people in the right seat, hopefully, you're not terminating them. But maybe it's an indicator that you hopefully have the right people in the wrong seat. But you may have a situation where you got the wrong people. And obviously in the wrong seat, or maybe the wrong people in the right seat are taking up space for the right person to get in the right seat. So you have to have the right people. And don't throw every employee out just because they're not doing well in that if they meet your core values, they have a good work ethic, you know, all the other stuff who's clicking, but they're just not clicking where they're at, they're probably just the right person in the wrong seat, find them a new see, you know, find out where they at, like, you should be interviewing your employees, even after you hire them. Right? Find out what they enjoy doing. Right? What do you love about this? What would you love to show up to work to do, right? Because a lot of times you'll find out, they're doing something because they think that that's what they're required to do. But they see an opportunity within your business that they don't think they have the right to jump into because you haven't told them. And they can say, hey, if we did this, I think this would be a game changer for the business. You know, and you're just like, oh my god, yeah, that's amazing. Let's do it. You can't always see the forest and the trees analogy, right? We can't always see every aspect of our business. Granted, we're the high end, we're, you know, we created it, blah, blah, blah, we live on this pedestal, you know, and so employees generally aren't going to tell us things that they think we know. But the reality is, we don't know everything we really don't. And like, the older I get, the more I realize this stuff, I don't know. And I think that that's true intelligence is realizing, man, I don't know squat about squat. So if you can get there, and then start the process of learning it and like letting other people you know, feed into your lives. And it's a game changer for you.
Mike Stohler
Yeah, be a humble owner, right? Yes. Go in and just say like, let's sit down one to one. I am nobody. Here's the thing, my employees are more important than I am. Yeah. You know, from janitors, housekeepers, front desk, because I spent the money but I'm not in the day to day, I'm not the one seeing the customers every day, you know, I am nothing. Without, if I have bad employees, all those one star reviews come in. And then there's no hotels, right? The employees are so important. We've talked a little bit about profit, profitability. Now let's get to that end of the year, and maybe a quarterly stuff. Now let's talk about maybe a part that people don't really know a lot about, and that's tech strategies, in order to save some of that profitability, you know, the NOI at the end or the abita at the end? What are some of the proactive things that break down tech strategies that, you know, kindergarten level that we can take away from?
Byron Wolfe
Yeah and you nailed it, right? We got to be looking at a quarterly getting into the end of the year, you know, and say, oh, what what should we have done all year, right? You need to be looking at a quarterly, you should have forecast, you know, like, Hey, we're at this point, if we continue to do this, this is where we're going to end the year and constantly be reassessing that, but if you know, if your $10 million business, you know, annually, and the end of Q1, you're a quarter of the way there, you're at 2.5 million, your 20% profit margin, right, like, you know, you've got $500,000 in profit, if that continues, we're going to have $2 million in profit into the year. Right. So we know from that forecast, I gotta find $2 million in write offs, or I gotta find the equivalent tax credits for that tax if your corporate rate 21% Currently, hopefully it stays that way. Not gonna get political, but you know, 21% So just call it 20. So if you're, you know, $2 million, that 20% You know, okay, I'm gonna Have 4000 options, so I've got to find $100,000 in tax credits, or I gotta find $2 million and write offs. It's really hard to do on December 30. Right? But if you're planning ahead, like you said, if you're doing it quarterly, the end of q1, we're in April, Hey, man, we're on track, it looks like we're gonna do 2 million, what do we need to do? What do we need to invest in, right? And so breaking it down very simply, I'm not going to go into the 179 168. But everybody knows what depreciation and so you're a real estate guy, you use Cossacks all the time, I'm sure. That's not just for professional real estate people. Like I know, you don't want me to tell everybody the secrets, right. But like, the reality is, as an individual, a business owner, you can take advantage of the things that Michael is already taken advantage of guys like, use that to your advantage, you can get a call sag. And we were talking about this earlier, but get a call sec. And I'm going to do a quick analysis. So if we're looking at a building, and let's say it's commercial, right, and we don't have any special things to get our payment down, let's say we're very traditional, we're looking 20% down, is what we're going to have to do. So we're going to finance this building, we're going to have to put 20% down with a cost segregation study, you're looking at 30 to 35%. So in that 30 to 35%, that you're gonna get back that 20% That you are investing in that property, now you have the loan, you know, or the payments or whatever, you're putting 20% down, but you're recovering 30 to 35. And that costs a right. So you put money out that goes into this property, but you get to write off the first year 30 to 35% of that. So you essentially have made money by investing money, right? Which is crazy. I know it sounds nuts, but that's the reality. Okay, so that's called segue, that's a property, you say, “Hey, I don't need a property.” Well, maybe you need trucks, maybe you need infrastructure. Maybe you need some equipment, maybe you need a machine, right? 179-168 comes into play. So everybody knows about the G-Wagen. The 179 doesn't have to be a G-Wagen. Right? That's just a weight restriction. If it's not a weight, you can go 168 or buy a G-Wagen. If it makes sense in your business, whatever you want to do, right? But we can invest in these things. We can buy trucks, we can buy equipment, we can buy machinery, whatever you need in your business, to increase that revenue, increase your profitability, if you're gonna make money, right, and you're gonna pay taxes at the end of the year, right? This is not a trick, the government isn't going to find out and come after you. They want you to do this stuff. Instead of giving that money to the government invested in your business, that's going to create a higher ROI for you, right? Don't just give it to the government and say, “Oh, well, you know, thanks for putting potholes in my roads.” Let's spend that money on something that makes us more money. And the government's fine with it. Because I know, when you do that, you're going to increase the tax bubble, right? Like you're creating more jobs, you're going to make more money, which is going to result in a higher tax bracket later on more taxes are gonna come back to them when you eventually have to pay it, or you build this massive empire that you're going to sell at some point, that's going to trigger massive capital gains taxes, they're playing the long game. So as business owners, we have to do the same, we have to play the long game as well. And that means taking advantage, like you said, quarterly, where are we going to be? What do we need to do now to limit that tax liability going into the end of the year? And that's tax strategy, you have to do that you have to be thinking about it. Now. Same thing is your business, right? If you wait till payday to figure out how to pay your your employees, not a good strategy, you know, you're constantly knowing, okay, Friday comes around, it's payday, I gotta have 60, grand or whatever, you know, for payroll, you're thinking about that long before Friday when it comes due. So it's the same concept. Think about the things you need to take advantage of. So pay attention to depreciation, do a cost segue, if that's where you fall, make sure all your write offs make sense, like don't pay for things personally, that could be a business expense, write those things off, you know, that's important to do. Tons of people leave stuff out, because they're like, Ah, I don't really know. Is it business? Is it personal, like, it's probably more business than you think. And that's really where I like taking good notes, like having a good calendar, you know, you mentioned the real estate professional status, if you have that option, and you can get that designation, not real estate for selling real estate, but for tax purposes, real estate professional view and get that. I mean, you open up all kinds of great tax strategies, the way that you're structured management fees, you know, if you're a sole p right now, you're very limited on your write offs. And what you can do is create an LLC, do an S corp, go see a corporation that makes sense. Create a management company that oversees all your things. Instead of buying all those trucks and the business name by him in an asset holding company that can now lease that back to your business. You've increased your write offs. You get that depreciation there plus you get to write off on the leases. As plus your business is taking care of the maintenance, there's tons of strategies you can take advantage of. Right. But the thing that happens, and you mentioned this, the very beginning of this, is we try to do everything, you know. And so we don't reach out to the professional and say, Hey, here's my situation, what can I do to make it better? Right? And if you can do that, and I will say that with everything, like I'm on the accounting, you know, the CFO side of it, but I would say with everything, like, I hate marketing, you know, this, right? I'm not going to try to do it. I'm gonna reach out to the best person I know. And I'm gonna say, “Hey, I'm gonna give you every dollar you can give me as long as it meets this ROI standard or higher, as long as you can meet that. I'll keep writing checks. I don't care. I don't care how the sausage is made. Just bring me really good sausage.” So as long as you're doing that, rockin out, have that conversation you'll find that CPA or Byron Wolfe 0:00
VAT tax strategists write and say, Hey, here's what I've got. Show me how you're going to make me money, not cost me money.
Be bold say, "Hey, man, I don't want to pay you money to do nothing. I want to pay you money for you to save me way more money than I give you, and then hold them to it." You hold your employees accountable. Hold your CPA accountable.
Mike Stohler Yeah. And that's great, great, great business strategies. It's just things that I learned. It's like, "Mike, why are you buying your courage and need to leave something, if you're going to be in the business," why I don't like leases. Well, there's this capital gain thing, it's like lease it, turn it down. Lease another one, you have a brand new car every three years or two years. There's no capital gains. And it's the same thing. It's like, you have a hotel, and you have another company, it's gonna be a holding company that owns the land. Now you're going to pay rent, you know? And I'm like, "Well, you know what's going on, because they're all these strategies." And people don't do it on their own. Don't go to YouTube, find out all this stuff. Get with a professional. I've saved so much money by going with the professionals by delegating things out. Because I don't like it. I don't like accounting. I don't like marketing. Now. I don't like anything, you know, but I do like analyzing the business and looking at assets. So concentrate on the thing that you love, and delegate everything else.
Now, one last thing before we go talk about your website talking about cfoaf.com. Yeah, people click there. What are the things that you learn when you click on the website?
Byron Wolfe Yeah, so if you go to our website, we have some, like learning material and some other things on there. But the reality is, you're gonna find out what our pillars are. And so we're a full service we run here from bookkeeping to CFO, so if you go to CFOAF, like Chief Financial Officer, "Hey, if you know what it stands for cfoaf.com, right? You're gonna see all these pillars. And what we have found is wherever you're at in your business, or whatever your needs are, we can meet you there, right? And then we're going to show you that you're going to ROI with us to the point where we're going to start to take over more and more things, kind of what you said before, why do I want five people to do stuff, and I've got to coordinate these five, when I can hire one person that does all of that stuff for me, right? It's one firm that can take care of all of this stuff. But I'm completely okay with people dipping their toes in. If you think your bookkeeping could be better, let us show you how much better it can be. And then you're gonna give us your other stuff, you're gonna give us your tax strategy, you're gonna want that CFO insights, you're gonna want the high level advice that comes from that, right. But you I understand, I want you to force people to show you that it's an ROI. I love that we live on a raving fan mentality. All of our employees know, all of our clients, all of our customers need to become raving fans, if you can't turn a client into a raving fan, you're not doing your job, or they're not our client, right? That's it. So I don't want people that say our services are okay. I want people that love us, that tell everybody else how amazing we are and how much money we've saved them, and how we grow their business and increase their profitability. Those are the stories I want. And so I know that we have to go out of our way to over-provide for what we're doing, we have to exceed those expectations to create that. And so if you go to our website, you're gonna see a lot of people that reach out to schedule a call with anybody in any division in every one of our clients, even if you're in one pillar, within that you have access to the whole team. If you're just a bookkeeping fine, for example, right? And I hate that just a bookkeeping client, we all start somewhere, right? So if you're a bookkeeping client, you're like, "Hey, I just got a quick tax question." You have access to us, right? Like, ask your rep. "Hey, man, I have a quick tax question." But as soon as you are onboard, you get a list of everybody in every department. So all you have to do, you're already in our system, you're in our ecosystem, you just reach out and you say, "Hey, so and so's my rep. I got a quick tax question. Can I hop on a call? Or can I shoot you an email? Or just send it right?" Like, "Hey, I'm with so and so I'm bookkeeping. Here's my tax question." They know all of our employees, though all of our partners know, we're gonna immediately reach out and answer those questions. Because we know when we provide you additional services, and we go above and beyond that, you're going to stay with us forever, and you're going to become that raving fan client that we strive for.
Mike Stohler And what is your client base? We talked a little bit about the small SBA, small to medium size, who has that as your sweet spot?
Byron Wolfe
Yeah. We start with essentially that 1 million in revenue and kind of come up from there, but it's really anybody that SBA defines as a small business.
So it's that 68, 65, $68 million in revenue and down, everybody that falls in that we don't deal with public companies at all, I love closely held companies, I feel like I can have the biggest impact there. But really that sweet sweet spot that I love to work with is that like that five to 40 million that kind of right in between, where, you know, you've absolutely crushed it, you've done an amazing job and your business, you've built something that is going to be a legacy holding. But now you know, what got you there isn't going to take you to the next level, right? You've got to bring somebody in, you know, you're starting to see it, you realize that wearing four hats isn't gonna work, I've got to get down to two, right? So you realize that you know, somebody needs to step in, I can have a huge impact in that arena. Because I've been there, I've grown them, I've sold them, you know, I've been there. So it's not necessarily that I'm just a CPA that's never been there, never done that. That's what I did to get here. That's what I've done. I've grown it. I've grown businesses, I've sold businesses, I know what it takes to get there. I've been through it. And so for me to be able to show you the mistakes I made, right, you learn a lot more from your failures than you do from the wins, but show you what I did wrong. And how I corrected that. And what we did to grow this out on that financial side, while still allowing that client to be the technician to be the expert, and what they do, if I can support them in that endeavor, and increase that profitability and help them to grow to the point of an exit. Man, that's, that's amazing. That's the stuff I live for. I love it.
Mike Stohler
And do you just do the business side? What if they have a bunch of LLCs that do the flow through? They do the business side plus the person or the whole package?
Byron Wolfe
Yep. for them. We know it's all connected. So even with our tax strategy, we won't we won't separate. So with tax strategy, it's full. So our tax strategy includes your business down to your personal we want the whole thing. We're not interested in piecemeal. We want to know the whole plan so that we can really wow you with what we're going to do. So yeah, it's not just the business. But you know, it's everything. It's business down to personal. I will say we don't do individual W-2 taxes. It's not really what we do. That's not our specialty. We want business owners that are out there that are crushing it want to do it. If you're a W-2 earner. And that's all you're doing right now. Like I have nothing against that. I'm not saying anything like that. That's just not what we specialize in. Yeah, I love business owners. I love guys that are out there like creating their vision chasing their dreams. That's where I love to play. And so that's the like minded people that we tend to bring in and tend to have the best results with as far as clients go.
Mike Stohler
Perfect, everybody. Byron Wolfe, www.cfoaf.com Before we leave, got the plug from our sponsor. Today's episode is brought to you by REI words. They are your go to SEO agency for increasing traffic to your website. Check it out at reiwords.com. If you want to increase your traffic, build up your website, all the backlinks, all those ratings, all that sort of stuff that they do. They've done a fantastic job for a lot of people. Check it out at reiwords.com. Byron, it's been a pleasure. Thank you so much for coming on The Richer Geek Podcast. It's been enlightening. I think you might have a new client and myself, perhaps but thank you so much for enlightening us.
Byron Wolfe
I appreciate it, man. Great show. I appreciate you having me on.
Mike Stohler
All right. Take care.
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ABOUT BYRON WOLFE
Byron is a leading financial and business consultant known for simplifying complex principles for small businesses. As Founder of CFO•AF, he specializes in financial services across diverse industries including construction and crypto. Byron serves as CFO for an INC 5000 company and acts as fractional CFO for businesses with revenues from 3-25 million annually. His expertise extends to crypto, NFTs, and the Metaverse, focusing on tax strategy and advising DAOs and crypto firms. Byron's passion lies in empowering small business owners through R&D tax credits, proactive tax planning, creative funding, and hands-on financial management.