Side Hustle City
Step into Side Hustle City, the ultimate podcast for entrepreneurs, creatives, and anyone eager to turn their side hustle into a full-time passion. We bring you real-life stories of resilience, innovation, and success from diverse entrepreneurs who’ve made the leap from side projects to profitable ventures. Whether you're exploring entrepreneurship, looking for business insights, or seeking inspiration to fuel your journey, join us for valuable tips and motivational tales. Transform your passion into a thriving business with Side Hustle City, where dreamers become doers.
Side Hustle City
Building a Strong Financial Future for Your Business with Hurley Fox
Ever struggled to understand the financial complexities of running a business? You're not alone. This week on Side Hustle City, we promise to unravel the mysteries of business financial management with Hurley Fox, founder of Fox and Partners. Learn how aligning financial strategies with your business goals can be the game-changer you've been searching for. Hurley shares his journey and expertise, illustrating the indispensable role of outsourced CFO services in bridging the gap between entrepreneurs and financial stability.
Imagine having a financial expert who turns raw data into actionable insights, just like a doctor interpreting medical tests. That's exactly what a skilled CFO can do for your business. Hurley underscores the importance of having competent accountants from the get-go and the pitfalls of relying solely on tax advice for business growth. We'll discuss why understanding cash flow, revenue, and profit is crucial, and how proper financial planning can help avoid common entrepreneurial mistakes. Get ready to empower yourself with the knowledge to make informed, strategic decisions that drive growth.
What's the secret to maintaining clean financial reports and optimizing cash flow? It's all about building a solid foundation and separating personal from business expenses. Hurley Fox will guide you through best practices for financial management, emphasizing the importance of human-centric relationships through fractional CFO services. We'll also explore how mastering personal finance can be a stepping stone to business success. Join us for an episode packed with insights that could transform your financial strategy and set you on the path to long-term success. Don't miss out on this invaluable conversation with Hurley Fox.
As you're inspired to embark on your side hustle journey after listening to this episode, you might wonder where to start or how to make your vision a reality. With a team of experienced marketing professionals and a track record of helping clients achieve their dreams, we are ready to assist you in reaching your goals. To find out more, visit www.reversedout.com.
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Welcome to Side Hustle City and thanks for joining us. Our goal is to help you connect to real people who found success turning their side hustle into a main hustle, and we hope you can too. I'm Adam Kaler. I'm joined by Kyle Stevie, my co-host. Let's get started. Welcome back, everybody, to the Side Hustle City podcast today, special guest Hurley Fox, coming to us from New Jersey. How you doing, hurley?
Speaker 2:I'm awesome, Adam. How are you?
Speaker 1:I'm excellent. Been running around all day, been in the car and in meetings, going from neighborhood to neighborhood meetings. I've been busy, so hopefully you haven't had it as bad as me. And it's hot out today, hot out.
Speaker 2:We have a bunch of rain and I've also been running around meeting after meeting. Oh no, but you've been running in the rain. That's worse, I know it is, it is, it is.
Speaker 1:Hey, man, it's great to have you on the show. So you run a firm Fox and Partners and guys, you can check that out. Do a little Google search for it, but it's foxandpartnerscom Pretty easy to find. But essentially you help businesses with the hardest part of owning a business, with the finance part and helping them understand how to position their company for sale Potentially, uh, you offer outsource CFO services. Uh, you know. Full package of things that as an entrepreneur, as someone who can attest to this, I hate doing the financial part. I hate it. I just want to work on my business all day, early. I don't want to mess with accounting. I don't want to. You know, I want somebody else to help me with that that knows what the heck they're doing.
Speaker 2:Yeah, I feel you, and that's how I. I worked at a small construction management firm for a few years and then I went to go work at an accounting firm because I was doing some of the accounting business, all the business stuff of the construction management firm. I was doing that. Everybody else is doing the construction management part, and and so then I had an opportunity to go work at an accounting firm. I went to go work there.
Speaker 2:When I was at that accounting firm, I realized what you just said. There was just a huge void between business professionals accountants, lawyers, financial planners etc. And business owners. And the business professionals weren't really helping the business owners with what they truly need help with. Right, they were filing the tax, but were they even asking a question of hey, was this what you wanted to do? What are your goals for next year? Why is this year worse than last year, et cetera. And so there was just this need out there where the business owners needed this help with stuff they don't want to be doing.
Speaker 2:Right, the boring stuff of, hey, do you keep stuff organized, do you look at your financials? And then the gap between that and what the business professionals were kind of caring about, which is just checking their boxes off, right? Hey, the returns filed, the bookkeeping is done, you're good, you have perfect accounting and you're losing money. What's the point, right? So we exist in that, in that middle ground between the kind of the accounting and business professional world and the entrepreneur business owner world, and we're in the middle and we're acting as a liaison between the two.
Speaker 2:The firm where what we do each month kind of get our foot in the door with people is we do the monthly accounting for businesses, right? So anything monthly that's going on with your business and that could be bookkeeping, ar, ap, monthly closeout, monthly controller duties and monthly CFO building reports, all that fun stuff, we do all that. We don't do tax returns and financial planning, but we act as the liaison, making sure that they're all talking amongst each other and kind of communicating that and putting that into the jargon that the business owner understands and is looking for, right, yes, so, yeah, we exist between that space between those business professionals and the business owner, because they often they talk past each other.
Speaker 1:Just send me my balance sheet and my yearly report and show me that. And that's what I want to know. How well did my business do? What do I owe in taxes? You know, that's what I want to be concerned about. And then also, I mean, let's talk about this A lot of business owners guys, if you're out there and you're thinking about starting a business, this is literally the most.
Speaker 1:You have to understand this. It is so hard as a business owner to get a loan because you don't have a W-2. Yeah, you're, you're. You may be 1099 in everybody that you're working with, you may have a 1099 yourself or whatever, but all the monies, if you're a solopreneur, you got all this money coming in. You don't have a W-2 from a big company. You're probably trying to write off as much as you possibly can and at the end of the year it looks like you have no money. So what happens when you go out and try to try to get a loan from a bank? They're going to tell you like it looks like you don't have enough money to put gas in the car. Talk a little bit about that. I mean, I'm sure everybody is dealt with this.
Speaker 2:Yeah, so, and again, that's why it starts with what are your goals right? Because then you want to structure the financials and your business around what those goals are right. If it's to save money on taxes, then you know having that income. You know be lower is not the worst thing, but it'll bite you when you go and try to get a loan. So I'll just give a personal story. I went to go. We bought a house last year.
Speaker 2:But a couple of years ago, when I first started to look at buying a house, I went to go talk to the banks. Hey, look, I want to kind of line up and get pre-approved. They said, okay, great, we need not only this year's P&L balance sheet and forecasted income okay, which they don't even really look at. They look at last year's P&L and balance sheet and the year before that and they took the average of the two years. So just think about how frustrating that is for a business owner. I was, I was doing business in that year. I was going to do you know, the business was going to do seven figures right and I was going to do pretty well. And but the year before I did okay, but the year before that I did terribly right In terms of where the bank, what the bank was looking at. So, even though I knew I was going to do well into six figures in that year, they didn't really look at that at all they took.
Speaker 2:You know, 2019 and 2020 income at the the forecast was was 10 X what that average was. They took that average Right and so it took me. So I couldn't get a loan. You know the way I wanted for um for another year, cause I had to let that back year kind of time out to get the average up.
Speaker 2:So you know, that's something where, even if you are planning in there, like if, if you're in 2024 right now and you think you got it all together well, if you are planning in there, like if you're in 2024 right now and you think you got it all together, well, if you didn't plan correctly in 2022, which is two years ago, which, when you're running your own business and stuff is like eons ago, oh man, that's what the banks look at, and so that was really frustrating for me. Kind of experiencing that was was just like man, you're not looking at the right thing, but that's what they look at. That's how banks today, you know they have their checklist. It's not about personal relationships anymore. It's about do you fit the software's checklist and if you don't, you will not get approved.
Speaker 1:That's interesting. So really the software is their underwriter in a way.
Speaker 2:Oh, yeah, software is their underwriter in a way. Oh yeah, yeah, I mean they're, they're. They're the days of you knowing the banker and the and the local bank and them saying, well, look, your numbers are okay, but we know that you work for so-and-so and we've known your family for a while and you know, we know your customers, so we're going to kind of give you a little bit of wiggle room here. That's all. That's all. You know. That doesn't happen anymore. It's they send it, they have their. This is what we need to see in order to approve it, and if you don't meet that criteria, you do not get approved.
Speaker 1:Wow, scumbags, the bank's the worst. And you don't know what their criteria are. So you can't really prepare for it. And I'm glad you're telling us because I never knew that, like I knew, they asked for the last couple of years. Sometimes they asked for three years. Yeah, and you know, my coworking space is an example, right, we signed a bunch of leases last year. Not a lot of people wanted to be in an office. You know, a couple of years ago, during the pandemic, right? Yeah, so yeah, the same situation you were through, you were having that we had, right, we had a great year last year. We're going to have a great year this year.
Speaker 1:And you know, passive income, the income is twice as much, actually almost two thirds, what the expenses are. If you take out the loan right, that I already have, you know you want to refinance it or something like that. And it's tough because you know if I went to go get a loan, they'd be like, well, this and that, and blah, blah, blah. And you look at 2019, look at 2020, well, they do 21, 22.
Speaker 1:But same issue, right, and people gotta understand this kind of stuff and have a plan ahead of time. That's why, when you go and you start a company, you wanna start working with a competent accountant immediately. I would say I mean, you don't want to be in there messing around like, because then when you go to work with a competent accountant they're going to look at your stuff that you did in quickbooks the last two years and it's going to take them eons to go through. All the bad accounting you did is, yeah, you know, uh, the the you know barbershop owner who doesn't know what they're doing. Right, and it's just going to cost you more money.
Speaker 2:Yeah, and, and you know two things there, right, and I would say working with a competent accountant is a really good step. The problem with accountants that I've seen all of my clients that I have have always had accountants before they came to us Right, and the problem with a lot of accountants is the same problem with the bankers how many bankers and accountants own their own business? And the answer is not a lot. And you are a business owner or you're a business, you're, you're, you're trying to become a business owner and you're talking to people who are giving you advice, who have not done and do not do what you're trying to do, and so, like from the bank, we're trying to get the loan.
Speaker 2:You know, how frustrating it is to talk, to talk to somebody who has no skin in the game, who has never had their own business, and they're telling you hey look, we can't pre-preview and the we is a black box that they don't even know. And then on the accountant side, the account you know most accountants don't own and run their own business and don't think entrepreneurially, and so they're structuring your books just to make sure again that they're checking the boxes is was office supplies correctly categorized in office supplies and QuickBooks, and that's great and they keep you organized and there's a there's a science to accounting and you need accountants. However, you want to make sure that when you're talking to and getting advice on how do I scale this business, how do I grow this business, that the accountant either thinks entrepreneurially or has more of a business sense and can help you do that than most accountants do, because I've seen a lot of entrepreneurs fall into the trap of they're only talking to their CPA for all things business advice, and I would highly suggest getting a diverse range of opinions, just like if you were in the medical field. Right, I consider us business general practitioners. We're your daily contact, right, for all the day-to-day stuff you'll come in, you'll get your checkup here's your numbers, all that stuff and then we will tell you hey, you know what you need to see a specialist. We're going to.
Speaker 2:You know, your tax situation is really unique. Here's a tax accountant that we work with that we're going to pair you up with. Hey, you need a certain amount of financial planning. Here's a financial planner that we connect you with. And you're talking just like in the medical world you would get different opinions. You should be getting different opinions on your, on your business and on your business's accounting.
Speaker 1:I love that. Well, okay, so this brings us to something, cause maybe I'm using the term incorrectly. So what separates your firm from just a regular accounting firm? I mean what? How do you? You're saying we're, we're fractional CFOs. Yeah, how does a fractional CFO differ from an accountant for the random person out there? The basic person hasn't started a business yet is thinking about it. Explain the difference.
Speaker 2:Yeah. So again, these are general terms. So I'm sure there are accounts out there who are saying I'm a really good CFO and there are definitely accounts who are good CFOs out there, but generally for most small businesses, the accountants that we are interacting with are tax accountants or, um, or you know, like managerial accountants. Okay, and what that means is they are, from a tax perspective, they're just filing the taxes for your business, right? And that is a different skill than monthly business accounting, which is a different skill than kind of what a CFO needs to have. So, again, using the medical world as an analogy, you wouldn't go to your heart doctor if your foot was hurting you, but that's what most people are doing in the business world by going to their tax accountant for advice on how to grow their business.
Speaker 1:I'll give you another.
Speaker 2:I'll give you a really good example on how you can figure this out. We talk about all the time as business owners. You're trying to get out of your business instead of in your business. Day to day, right On, not in. Call your CPA or your accountant anywhere from February to April and see if you can go grab a two-hour lunch with them. You won't be able to, why? Because they're in their business. Most accountants, and even those who own the accounting firm, have not set their business up to work on their business instead of in and you can figure this out just by trying to get a dinner with them or lunch with them during tax season, that's a good point.
Speaker 1:See how stressed out they are.
Speaker 2:Yeah, and so you want to take business advice from somebody who is still working in their business after 30 years?
Speaker 1:That's a great point. That is a great great point. I never even thought of that. No, that that's 100%. Somebody has a there's a saying it says never take financial advice from someone broker than you, right, and I was like that's great advice. Well, you just dropped another thing Like why would you take business advice on not having to work in your company Right From someone who's still working in their company?
Speaker 2:Yeah, exactly. And again, you need different skill sets, right? Just like you don't need to go to your heart doctor every month for a checkup, but when you have a heart problem you need that heart doctor, right? Your main doctor is not going to do the job. There are the tax accountants.
Speaker 2:I refer clients of ours to tax accounts all the time because tax accounting is its own thing. It's a totally different game and I'm not an expert in that. So I will rely on the experts to help me and my clients navigate the tax field. And you know how do we do this that my client wants to do. But that's a very different skill than month to month. Not only how do I have clean books in an efficient way, but that's just the past. Right, accounting is the past. What happened? You want to know what happened in a clean way. But then where the accountants typically struggle is great.
Speaker 2:Here's the data. Now what do I do with it? As a business owner, I don't. You know. I don't know what to do with this data. What action items do I need to take over the next month to improve these numbers?
Speaker 2:Again, we'll use the medical analogy. A lot of accounts are really good at taking the blood, taking your weight, taking your height, getting your, getting your metrics in. But then what happens next? Right, instead of just giving that to the patient of hey, you know your cholesterol is up, ok, doc, do I work out more? Do I sleep more? Do I change my eating habits? Do I take more tests? What do I? What am I looking for next month? Right? And so when you're working with a good CFO or a good controller, that's what you're getting.
Speaker 2:We're taking your reports, we're making sure they're clean, which most businesses are not, but we're making sure they're clean and accurate. But then the important part is the value you get from those reports. Adam, your business did $2 million in profit last year, but you paid a million and a half through debt, so you have $500,000 in free cashflow. What are we doing with that? Let's look at four different investment opportunities. Let's run the ROI on each of those and then let's put a budget and projection together to say how do we get a million dollars in free cashflow next year?
Speaker 2:That's the value, or it's hey, you're losing money, and here's why. And when we compare you to your competitors, here's what they're doing and you're not. And if you do this, here's what we think what's going to happen, and so we recommend taking these three action items over the next month. In a month we're going to talk. Did you do those action items? Did we see the change we wanted to see? What do we do the following month? That's what a good cfo and financial partner in your business does not just hey, we have clean accounting for you. Good luck, we'll see you in a month.
Speaker 1:Yeah, I mean it's kind of like a business partner. I mean you're the CFO, which is part of the business generally, and would you know the CEO is going to listen to their recommendations. So it's like, hey, there's just not enough revenue. They want to make some sales. I mean that's usually the problem not enough revenue and also cash flow. I mean you know you mentioned on your website too, and everybody deals with it.
Speaker 1:I don't think a lot of people understand. You know, maybe they have a good year or maybe have a good month or something, but that bad month can bite you in the butt. I mean, look what's going on right now with a lot of businesses service businesses. You know luxury type businesses, a lot of businesses, service businesses. You know luxury type businesses. Those are, you know, things that aren't necessary. People are cutting back right now. Even the wealthy they're cutting back. So you might've been living high on the hog and you're really expensive strip mall in a nice neighborhood and all that. Well, people aren't coming into the door like they were two years ago. So now you've got to worry. You know, can I pay the rent, like, do you have a cashflow solution? And what do you normally recommend to people?
Speaker 2:The first thing is education, and so this was another thing that I didn't see accountants or business professionals helping business owners with. Again, teach a man to fish. Don't just catch the fish and give it to him, right. And so everybody who's going into business, the language of business, is accounting. You don't just catch the fish and give it to them, right, and so everybody who's going into business, the language of business, is accounting. You don't need to have a master's degree in accounting. You don't need to do accounting 24 seven. You don't even need to do your own business as accounting, but you should understand the basic principles of accounting, because it's the language of business. For trying to get into business, you should know the basic understanding of how accounting works and what it is.
Speaker 2:And so when we talk free cash flow, we don't. We're not. We're not talking about revenue. We're not talking about money coming in the door. We're not talking about profit, right?
Speaker 2:There's a lot of profitable companies out there that lose cash on a monthly basis. If you don't know how that's possible and you've had an accountant, they've done you a disservice. And if you are wondering why that's possible, it's well, because stuff happens. Cash is spent after the income statement exists on the balance sheet. You have to look at both. If you're not looking at your P&L and your balance sheet and your cash flow statement at least quarterly.
Speaker 2:If the business is more serious than you know, monthly and weekly I can have a million dollars in profit. If I spend a million and a half on my debt servicing, I'm losing $500,000 of cash. And the kicker is you don't get taxed on cash, you get taxed on income, and so if you have a million dollars of income and you spent it all on debt, the government will still come to you and say hey, we, you owe us three to 400 grand. So the first thing we do is does the business owner understand that you understand? Do we understand and again, we're not going to go super detailed, but do you understand the basics of financial statements and the key indicators to look for and why cash is not revenue or profit? And then, once that's once that's you know, talked about and discussed and understood, it's okay. What is your free cashflow right? Where's the benchmark? I get so frustrated with consultants and coaches who give advice and never look at the financials. I don't know if you've experienced that, but it's always that's always so interesting to me.
Speaker 2:Yeah, wild yeah, and so um, and so it's it's education, it's where are we now? And then it's walking through a plan on how do we improve that right? And building a financial base to weather the storm. And positive free cash flow. Positive free cash flow each month is so important because it allows you to reduce how much money you need to keep aside for emergencies, right? If you know fairly certainly that you're going to have positive free cash flow, even if it's a dollar, if you know you're going to have a dollar more in July than you will in June, you need to keep less money aside because you know it's going to be a dollar more, not $2,000 less.
Speaker 2:The companies that go up and down are the companies where the business owners are scared and keep 3x what they need to in the bank, and so the problem with doing that if you have $200,000 in the bank or $50,000 in the bank and you only needed 10, again, typically most small businesses are not C-corps, right?
Speaker 2:So they're flow pass-through entities, and so what that means is, if you have $50,000 in your business bank account by the end of the year, you've paid tax on all of that income, but the cash is still in the business bank account, it still doesn't hit you as the business owner, even though you've paid tax on that money. And so and you're keeping that money there because you're going up and down cashflow wise each and every month. And so if you can get that amount that you're keeping to a normal, healthy amount, you can take that cash that you've already paid tax on and either invest it in your business or you take it out. You can take that cash that you've already paid tax on and either invest it in your business or you take it out, build your personal financial base and you invest it personally.
Speaker 1:Wow, yeah, I mean you already, every day you don't invest that money, I mean you're losing.
Speaker 2:I said, if it's just in the bank.
Speaker 1:You're not making much of anything on it unless you got it in like some kind of treasury account or something that's paying a decent amount right now. But most people aren't going to do that. Now we're talking about cash flow. We're talking about cash. I don't think a lot of people even understand on the personal side of things. When you're a business owner, a lot of times you don't live above your means. I don't know too many business owners, especially ones that are two or three years in their business, that as soon as they start the business they have a good month or they have a good year or something. They go out and they buy a bunch of stuff.
Speaker 2:Right.
Speaker 1:I just I see people living below their means. You know being smart about how they spend their money, but every once in a while you'll get a business owner that you know they want to live out in the nice neighborhood, they want to get a nice car. They kind of their personal desires get in the way of the ups and downs of running a business and you just can't let that happen either.
Speaker 2:No, and in that vein, one of the most important things that we do with all of our clients when we start working with them, we separate the business from the personal and I work with. I work with with clients often when we start and the business is paying for personal expenses right, and so if somebody else were to buy the business, would they spend that same expense, right? If the answer is no, then it really shouldn't be coming out of the business, because you want to get true and real business metrics, but then also you want to have the business take care of itself and the personal take care of itself. And if you need $5,000 a month to live personally, great, the business can cut a check for $5,000, $6,000 a month. And then if the business grows and sustains and can pay you more, then, just as if you were an employee of your own business, the business can give you a raise or an extra dividend check a year and then, when that's consistent, then you can slowly increase, you know, your cost of living.
Speaker 2:Where I see people get in trouble is they increase their cost of living personally through the business. Right? So the business buys a nicer car. The business starts paying for the cell phones. The business has more stuff that's personal, and so then it never goes to the person. Right, you've intermingled and then, when stuff starts to get shaky, you now have to either put money back or you're like, wow, where's all this money coming from? I don't know where it is. I feel like I'm never being able to pay the bills. It's because you didn't silo, silo consistently and scale things as if you were an employee of your own business. The business can afford to give you a raise. The business gives you a raise. If it can't, you know that you're getting paid consistently and you're able to pay your bills.
Speaker 1:That's right.
Speaker 2:And when you have to pay your, when you have to give yourself a raise, you would only do that if the business can truly afford it. The problem with paying for stuff right out of the business is you think I just got this100,000 contract, I'm rich, let me go buy this new car. Well, that's on revenue and that's not a continuous thing, right? And so now you just loaded up the business with more expenses and now it can't give you the raise. But if you said to yourself ahead of time if could I cut myself a hundred thousand dollar check right now, you wouldn't because you can't. And so if you can't do it, then you can't do it in the future. You're just saving yourself the pain of the decision in the middle there.
Speaker 1:That's right. That's right. Now people are probably listening to this and they're wondering man, this sounds like he's doing a lot of work and I'm, you know, a young business or whatever. What kind of money do they need to have? Or is there? Is there a target? I'm sure there is a target that you have. Do they have to be a new business or can they be a new business? Do they have to be a three, four-year-old business? Do they have to be doing a half million in revenue? Like, who are you looking to work with?
Speaker 2:I mean our typical clients are, are, uh, doing, you know, seven figures in revenue. Um, our, our largest clients are doing nine. Um, but I talked to anybody in the business world and, um, um, I'm happy to take a free call, free, you know, I'll review your financials free, give you some advice, like I love seeing entrepreneurs succeed and I love seeing business people, you know, kick some butt. And so I love talking to people in the business world and I've helped a lot of businesses who are just starting and then, a couple of years later, they now have the revenue and the infrastructure where they say, hey, now we can actually work together kind of on a on a consistent basis.
Speaker 2:And so if you're, if you're looking to see are my financials correct, how to read a P and L or balance sheet, or how do I think about personal finance and business finance, or, you know, is my accountant doing the right thing? Shoot me an email, we'll book a quick, a 30 minute zoom, I'll look at your financials, I'll tell you. And then you know, go kick some butt and come back. Come back a couple of years later and say, hey, now we can, now we can work in a bigger engagement.
Speaker 1:Yeah, here's how you're going to make money so that I, you can be a client of mine here. Let me help you out a little bit. Exactly, you know what? Like I say, we do good work for good people right.
Speaker 2:So all entrepreneurs and business owners are the best group of people that I've met, and so when you do good work for them, even if it's for free, because they're just starting out, they may know a business owner who's 10 X where they are and they say, hey, look, they just helped me out. You should, you should call them up, right, that's how most of our businesses is. Uh, is gotten this through referral and then, um, you know, it's just the best sort of marketing is a really good product, right? And so people remember hey, that advice you gave me a couple of years ago worked and you know, now I'm ready to work with you. But we also, you know, you mentioned earlier being a partner in people's businesses.
Speaker 2:This is why we don't have any sort of contracts. We're month to month with all of our clients. If we ever don't provide the value we say we're going to each and every month, a business can leave at any time. We want to have to earn our keep month in and month out. We want to make sure we're incentivized correctly in the structures there to help business owners, not drag them with a six month contract of, hey, you're going to pay us this and here's the services we're going to do is you're going to pay us this on a monthly basis, and here's the problems we're going to solve. And if we don't solve it, then go find somebody who can, because we don't want to be a burden to you.
Speaker 1:Well, and see, this is one thing I also learned. Running businesses is, uh, that's actually good for the customer, right, so your customers are benefiting, but it's actually hurting you because if you ever wanted to sell your firm, you don't have contracts in place. But it's like, look, that's part of our businesses to not treat people like that, it's not to lock people into something that they don't think they're getting value out of.
Speaker 1:If we're not delivering value, then don't use us anymore, I mean, it's that simple and you know you're kind of taking an L to benefit your customers and I don't think people understand that.
Speaker 2:Yeah, yeah, and and and the risk is there. The counter to that is because the relationships are much more holistic and, from a truly supportive way, they're actually much tighter and it's a stronger relationship than you know we would have had if we didn't kind of interact that way. And so it's a it's a longer term approach where short term it might it might hurt us, but long-term it will win out, because when you treat people like humans, good, you know good things will come back to you.
Speaker 1:And that's right. Yeah, and I mean people are afraid that their business isn't going to be open next month, regardless. Like oh, I got this year long contract, I have tied in with uh, with these guys and I got to worry about that. Or it's just as bad as having a lease. Like you got a lease you want to get out of and you can't. Maybe you want to go into a better space or whatever and you can't get out of that lease. You're going to end up for another year or two years. I mean that's. That's rough when you get into those kinds of positions. But I mean it sounds like you're you're treating people right. So what kind of? I don't know if you want to talk about costs or is there a percentage? Or like how does that kind of work with a fractional CFO? Cause you hire a full-time CFO, you're paying crazy money. That's why fractional CFOs exist.
Speaker 2:Yeah, you know, I mean, it really depends on kind of where they are in there. You know, a hundred million dollar company is going to have a totally different you know structure with us than somebody who's just kind of starting out. A typical engagement will look something like you know, we have a free coffee intro session. Then, you know, we will send you an onboarding retainer and that's just to make sure we're protected on time. We get paid before we, you know, put a lot of time into it and the client knows okay, look, I'll put a few thousand dollars into this because everybody wants clean financials and you mentioned this earlier. But then when it becomes, hey, you have three years of bad data and it's going to cost us X amount to clean up, then you've got to make this decision can you afford it and do you really want to do that? And so by having that retainer, it allows both sides to say all right, we can step our toes in the water, we can see the lay of the land and then we can kind of better understand what are we really getting into and do we want that Once we work through the onboarding and we've cleaned the financials to a place where we can work month to month, then we have a fixed monthly cost that doesn't really increase unless the scope of work changes dramatically.
Speaker 2:And it's not based on time, it's not based on how many times you call me. You can call me, text me, email me, work with the team as often as you want to provide the value that we're telling you we're going to provide, as often as you want to provide the value that we're telling you we're going to provide. And you know a typical cost for a small business. You know that on the smaller side of ours is, you know, between one and five thousand dollars a month. Oh, wow, ok, yeah.
Speaker 1:Yeah, do you ever work with companies like? So I'll just throw myself out as an example I own an ad agency, right yeah, I also. The ad agency is inside of my co-working building that I own, which has its own set of revenue, and I've got rental properties and I've got, you know, an STR down in Miami and I do Turo. I rent my car out on the side, you know, and so you got all these things and they all separate bank accounts, right, yeah, but I file everything kind of like you know me, and I think a lot of people do that too. So do you work with, like, if you're looking, say you know, you're like, oh man, I only really work with people that are over this amount of money. Would you take on like four or five?
Speaker 2:So you're actually a typical client in that case because, uh yeah, side hustles and a lot of real estate, a lot of real estate, right? And so the reason of this is because it gets complicated or harder to keep organized quicker than you know. If you're running just like a general store, you know, I mean, I'm happy to talk with you, show your financials, but there's just, there's not a lot of complexity there, you know. It kind of is just like, well, hey, spend less here, make some money here, you know, good luck. But when you have enough either size or complexity, that's where we can really provide a lot of value. And so we have 35 clients that we work with on a monthly basis. Of those 35 clients, there's 250 businesses underneath of them, right? So that that that kind of will show you that most of our clients are, you know we're talking have, you know, a dozen plus entities and the other, you know, kind of where we got started is there's not a lot of help out there for those people, right? So if you have a Merrill Lynch account, let's say, or a TD account or something like that, they can give you in a snapshot here's your net worth, here's your holdings, everything's on a nice clear presentation bada bing, bada boom. If you're in the private world, there is no one giving you. Hey, here's a snapshot of your portfolio.
Speaker 2:And so that's what we started to do. Is we said okay, adam has these five businesses, we're going to make sure we have the accounting for those five businesses. We have software that we use that will pull the accounting from all those five businesses. Put that into the software that we use, creates reports based on your entire portfolio and it will give you a dashboard to see in Adam's portfolio, just like your Merrill Lynch would. How's your portfolio doing? What's your operational performance? We can go buy business. We can go whole portfolio in general. Right, is your whole portfolio cash flowing to you on a monthly basis? But then dive deeper Is each entity cash flowing to you on a monthly basis and, if so, what's the best return? Because that's where you can put more money in next time.
Speaker 1:And so, like damn Adam, why do you drink so much coffee? Like you should stop going to Starbucks, Right.
Speaker 2:Right, or or hey, this real estate did three times better than this one. Why, right? But when? What happens when? When? When business owners have that many side hustles or that many entities, money flows all around and they just think, well, it's investing it, you know moving, somehow it's making me money, but it may not be. You don't really know that. And so by actually looking at each one and making sure that we're we truly understand how the portfolio and the specific businesses are doing, you can then make better decisions for what to do next.
Speaker 1:Yeah, totally. Oh, I love it, man. That's, that was a big question I had for you. And how do people reach out to you? I mean, you've got the website. I mean, are you? You're on LinkedIn? I'm sure people can kind of hit you up there. Yeah, your background and things like that.
Speaker 2:Yeah, you can read on our website. We have a bunch of different case studies and blogs on like exactly what we've done with businesses before. So in your example, you can actually go see how we've done and we lay it all out right? We want people to be as successful as possible, and so you can read a ton about us on our website, wwwfoxandpartnerscom, and then you can just search for me, hurley Fox, on LinkedIn. Thankfully there's not that many of them, and so I'll come right up. Those are the two biggest ways to find me.
Speaker 2:And then just kind of one last word I would say to your audience who is maybe they're working a full-time job and they're looking and they're trying to start a business on the side, right? So I would say first, if you are not personally budgeting and personally tracking your net worth each month, start there. Use your personal financials to give you a really good 101 of finance, because it's not that much different than business and that will teach you the basics for the business when you get into. So, essentially, take care of your own house first and then you can expand, right? So if you're not personally budgeting, how do you really know what you want from the business, what you need from the business. How do you know how much money you need to set aside to give you six months of emergency fund? And so make sure you have a personal budget, make sure you have a personal financial plan with your family, make sure your personal house is secure by that I mean very little debt, good emergency fund and good cash flow and then expand out to the business and the side hustle. Track the same metrics there.
Speaker 2:What's my free cash flow? What's the business's accounts doing on the balance sheet? A net worth statement. Your personal net worth statement is a balance sheet. Your personal budget is the P&L. And so if you think about those two things and you kind of master on the personal side, that gives you a really good first step into the business world. And then you start that with your side hustle. That will impact your personal financials. And then, once you get to a place where you can say either the business can run on its own or it can support me fully, or hey, you know I've reached my personal goals and so now I can jump off in a more secure place, that's a really good first step. You know, I think a lot of people want to jump into the fun stuff of the businesses. Let me make a website. Get cards, go get sales. Well, take care of your. Take care of the boring stuff on the personal side first, and you'll just be much, much better off.
Speaker 1:I've never heard it explained like that. That does make sense about you know your balance sheet versus your P and L, right? Like those things being like yeah, your net worth is your balance sheet. What, how much money do you have? How many assets do you have? And then, on the other side of that, how much debt do you have? Right, that's a balance sheet. And then your PNL, obviously like, what do you? You know what's going on every month, what's happening, like, how much money are you spending? And, uh, you know what do you got in the bank and things like that. So, yeah, that's a really good way to explain it. And using your personal finances books or anything basic accounting for business people or anything that a course or something on YouTube maybe they should look up. There's a lot of YouTube's a really good place to start. You've got some case studies and things on your site.
Speaker 2:Yeah, we've got some case to. I mean, you know, I think it's hard. On the book front, there's not a lot of good technical accounting books that, like the art you know, the audience would want to read, I'm sure, and so, and so you know a couple good ones. You know, like profit first is a good book that is not super technical in the accounting side but kind of hints at some accounting concepts, the biggest one being, you know, focus on profit and cashflow over revenue, and so that's one that's readable, readable that does discuss some accounting concepts. But I would say the most effective way to learn would be take care of your personal financials first. That's it. Get a personal budget in place. That's a P&L, get a personal net worth. If you're starting a business and you don't know how much personal debt you have and what you're personally paying, what are all your loans, interest rates, right. If you don't know that stuff, don't kind of expand before you know that. And what's why I like to use that as a good first step or a good kind of teaching mechanism, is it relates to them very deeply, right? If I'm talking about general business income statements, everyone here is going to fall asleep. But if I'm talking about your personal budget or net worth, you're interested. Oh man, I have a 15% loan and my student loans are 10% and I have a credit card loan of 22%. My auto loan is six. I never really knew that before, but seeing that okay, I now kind of know which ones I want to pay for first, or whoa. This is my monthly payment and how much is going to interest. That's a lot. Or you run the personal budget A lot of people you know.
Speaker 2:An exercise I like to do with people is, before we even look at any bank statements or anything, what do you think you spend in food a month? People say 500 bucks. Then you look at the budget, it's like two grand, right, and so that $1,500 is where the money is going. When you're saying I make all this money is where the money is going. When you're saying, I make all this money, but how do I not have cash in the bank Because of stuff like that? And if you have a personal budget, you will know where your personal money's going.
Speaker 2:Same thing will happen in the business world. I have all this revenue. Why don't I have money in the bank? Look at the P&L, that'll tell you. Look at the balance sheet and the cashflow statement. That'll tell you, and so you know it's it. That's a really good first step and that's how I would recommend learning kind of accounting is. Do your own personal budget and net worth statement first. If you're still interested and you're not asleep yet, then start just searching for some terms of you know why cash doesn't equal profit, why you know cash, how to how to understand cashflow, how to read a profit and loss right. What's the difference between gross margin and profit margin Things like that. What's EBITDA?
Speaker 1:Yeah, ebitda, nobody knows. They think it's gross profit. It's like EBITDA mean, I don't understand it. So, yeah, it's just basic terms that people throw around in the business world that you have to understand and you have to know where those come from. And working with a guy like Hurley here, we'll, uh we'll help you out a lot and you'll get those nice little, uh clean reports at the end of the month, the end of the quarter, the end of the year, uh, that help you make sense of what's going on.
Speaker 1:Well, hurley man, we really appreciate you being on today. And again, guys go to fox and partnerscom and make sure you reach out to Hurley. Thanks a lot, hurley. Thanks so much for having me. Adam, thanks for joining us on this week's episode of Side Hustle City. Well, you've heard from our guests. Now let's hear from you. Join our community on Facebook Side Hustle City. It's a group where people share ideas, share their inspirational stories and motivate each other to be successful and turn their side hustle into their main hustle. We'll see you there and we'll see you next week on the show. Thank you, bye.
