Title Suggestion: Fractional CFO Ben Risser on Vision, Faith & Financials
YT Title: The more Ben Risser loses his sight, the sharper focus he has for his client’s financial vision.
Hi, and thanks for being part of this community of Resilient Entrepreneurs. Today's conversation is with Ben Risser, and we're talking about money. Ben's business has a clear purpose. He's strengthening communities through thriving small businesses. Sound familiar?
His journey began as an aerospace engineer at Boeing Company, and he's now a factional Chief Financial Officer, an entrepreneur in financial services. His business, Provident Financial Services provides small and equity investors with the financial intelligence and advice they need to transform their businesses and that includes fractional Chief Financial Officer services, day-to-day accounting services, all to develop an action business strategy. So today we may be touching on goal setting and budgeting and why it's so important and how to do it well. It's not that often that we get really into the nitty gritty of the money conversation on Resilient Entrepreneurs and I believe we could be doing it more often. So today's a special day.
And something you wouldn't know about Ben is his personal journey with limited sight. He lives with low vision due to retinitis pigmentosa which is a hereditary degenerative retinal condition which he says is a challenging journey of acceptance, growth and faith. And we're going to talk a little about that personal resilience too.
Of course, you're listening to Resilient Entrepreneurs, the podcast where we speak with business owners and entrepreneurs from all around the world and from all walks of life in the hopes that something you hear today will leave your business a little richer. Our business, Two Four One Branding supports new entrepreneurs as you launch your business and we offer you the tools you need to succeed, which is exactly why we invite experienced, professional, and successful entrepreneurs like Ben to this show, to share their wisdom with you on this podcast.
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Ben, welcome to Resilient Entrepreneurs, it is so good to have you here today.
Thank you so much, Vicki. It's a privilege to be here.
Yeah, thanks Ben, we appreciate you. Let's start at the beginning so we can understand a little bit about who you are and why you are on this journey that you're on now. So tell us a little bit about your background, your childhood and were you an entrepreneurial child? I want to know.
That's a great question. I don't think I've been asked that yet, and the answer is no. Both of my parents were very, very employee minded and I really didn't realise the difference between the employee mindset and the investor/owner mindset until I read all the Robert Kiyosaki books when I was a young engineer at Boeing. It helped explain the restlessness that I was feeling at Boeing, having graduated in aerospace engineering, working at one of the largest aerospace companies in the world as a junior engineer, and I was restless. It was driving my wife crazy, it was driving me crazy and I didn't really understand it until Robert Kiyosaki explained his Cashflow Quadrant with the business owner, the investor, the self-employed, and employee. And I realised I was an entrepreneur and always looking to innovate and create value and do things differently and better. And the program that I was in at Boeing and the group that I was in just wasn't very entrepreneurial, which explains why I just felt very cramped in that space. And so I started studying economics and finance, passed the Level 1 Chartered Financial Analyst exam while I was at Boeing, then my second child, my lovely daughter showed up and put the studies on hold and eventually shifted into doing real estate syndication of large multifamily investments full-time after engineering. I got laid off out of engineering unexpectedly and kind of had to make a choice. Do I go back to engineering? Do I continue on this entrepreneurial route? And chose to continue the entrepreneurial route. And just to close the loop as to how I got to where I am now is, we syndicated six large investments and during that time, I found myself with an affinity for the accounting and finance side of things, always migrating to the CFO seat. So I ended up pivoting and just providing, becoming a fractional CFO firm, providing fractional CFO services and not active currently in those real estate syndications, but I'm so grateful for the opportunity and everything I learned during that. But that's kind of how we got from where we are back then to today.
Can you describe for those who are not familiar with the concept of fractional CFO, what that means in real terms?
Yeah, that's great. Cause a lot of people, their eyes just glaze over when you say fractional, and then some people just shut down with acronyms. So fractional is really about the shared use of an asset. So if you were to purchase a fraction of a private jet, you have purchased the right to use that jet for a portion of its availability and it's kind of the same concept with fractional CFO.
You're purchasing a portion of that individual's time and attention, so it's really a shared resource among multiple companies who are clients of that CFO.
So do you have a business where you have many fractional CFOs in your company or is it you dividing you?
Right now, it's me dividing me. My vision for the business is to grow to the point where I can have multiple CFOs and I can really focus on stewarding the vision, serving my team and just making sure that my customers are being served in a way that is fulfilling to the kind of the vision of my company, which is thriving families and communities and nonprofits for people's wellbeing.
So how many fractions are you in? How many fractions are we talking to right now?
You are talking to, I would say right now one fourth. So I'm small right now. So it kind of ebbs and flows depending on the needs of various customers. Right now I'm kind of at a lower point, so I'm at four or five. But a fractional CFO, depending on their scope of work can get up as high as 11 clients or as low as five, depending on the scope of work.
It's very useful for small businesses, this type of opportunity to have a CFO without a CFO full-time salary, right? So is that exactly how you help?
That's the value proposition, though it's very challenging to unpack for two small business owners. So typically I'm looking at companies in the 1 to 10 million range in revenue where they're too small to afford a full-time controller or full-time CFO, but they've long outgrown the original accounting team that they had in place when they started the business. It could have been their wife or whoever just a basic bookkeeper. And right now they're operating in their business with a bookkeeper and a tax accountant and nothing in the middle. So my services seek to fill that big functional void between the bookkeeper and the tax accountant, where I'm walking through with them throughout the year, helping them with financial management, increasing their financial literacy, which is important as the business scales you need to understand that more and more. Helping them set business financial goals that align with their personal financial goals and for startups, cash management and really understanding how much cash is it going to take us to get to revenue and making sure that you raise enough. To entrepreneurs, my counsel is - budget for a CFO. When you do your financial planning, as soon as you can afford a fractional CFO, hire one, even if it's just for a quarterly service where they're coming in doing a quarterly dipstick check, making sure that you're on a good trajectory with cash, you're on a good trajectory with your plan, holding you accountable. Whether you're an established small business or a startup or a business, a small business that's looking to exit, a fractional CFO is key to making sure that you're in a good position to raise equity if you're a startup or to sell if you're established and you're looking to move on.
Thank you for raising the exit part of this conversation as well because we've recently been having conversations on this show about you're building your business, it's your baby yet there's going to be a time when it's time to say bye-bye and make lots of cash at the end which may be some people's vision for it and if you don't know what to do at the early stages, or you don't do it well, that could really kibosh the exit because you've not set yourself up well. So it is something that needs to be considered even as we start our businesses.
Yeah, I would say high quality bookkeeping, which I lump into the term of accounting, high quality accounting makes your business marketable to private equity, but it also makes it marketable to prospective buyers. And it's not only about making sure that your business is reaching certain profitability benchmarks when you're looking to sell so that it's valued well, there's also the operational side of - do you have a system in place that's well documented that actually can be handed off where the owner can train another incoming owner, all that they need to know. And that everything is documented, because it's really going to hurt the business value if a buyer feels like ‘Well, what I'm buying isn't repeatable with me’. All of that tribal knowledge is with the owner, like if the owner leaves the business is just going to dip. And so really having a system in place where the owner is pretty much able to not be active in the day to day because everything's documented, they have a team that's trained, everybody's gainfully and happily employed and they're not going to go anywhere, that's really what's going to help make a strong sale.
Yeah, and a strong business, right? In the process of that building, that system and having everybody working to a system makes a lot of sense. Entrepreneurs often think, hey, if I'm making a profit, then everything's fine and I can just keep rocking along. So tell us what are some of those unexpected mistakes that entrepreneurs make with their money?
Yeah, so profit, if we're talking about net profit, net profit does not equal cash flow. And that's a kind of an accounting mystery that people who aren't familiar or very knowledgeable in accounting, it's kind of like a black magic. It's like I had a great month of net income, but my bank account is struggling. What happened? And just understanding what are the activities that are happening on the balance sheet that are stealing all your cash because you can have a profitable business but be incredibly cash poor and those are decisions, those are things that you should know before you encumber yourself with debt or any kind of obligation that's going to take cash from your net income, because ultimately we want to get to the point where the owner can start paying themselves if we're talking about a startup. And so really, profit and cash balance, there's a lot that goes on between the two.
So you're a one man band, you're an entrepreneur, you're a service provider, you're a contractor basically, and your clients are paying you well, and you pay your bills at the end of the month, and you take the rest. Good or bad approach?
Yes, that is not a bad approach. However, I think there should be more forward looking strategy involved there because I think there's a linkage that needs to be made between an individual's personal financial plan and their business financial plan. And that's one of the things that I see a lot of small business owners, and I'm guessing entrepreneurs as well, where they're just focused on getting the business up and running and getting the revenue. But really thinking about how are your business activities going to get you to your financial plan and being intentional about that. So we actually build budgets, where we start with the personal financial goals and then we back into the business and come up with a top line sales goal that's going to be required, and year-over-year growth that's going to be required, and then we actually even can back out into, if it's a business like a services business where you need to be writing proposals, how many millions of dollars in proposals do you need to be writing a year if you have a 50% conversion rate or 30% conversion rate and really making sure that the entrepreneur’s doing all those activities that they need to be doing to grow that business to plan. And also with regard to taking home all the rest, no, you can't take home all the rest. You do need to squirrel some away and save up for funding your own growth because if you can fund a good bit of your growth without taking on debt, that's great. If you can fund your growth without having to give away half of your company to a private equity firm, all the better.
Not that those things are bad, you might have to do it for certain leaps in scale but I would say leave as much cash in the company as you can if you're a startup and growing because you don't know when there's going to be a rainy day. A strong balance sheet is how you weather difficulty. A line of credit isn't the solution, it's a strong balance sheet. A line of credit is the emergency handle.
So what are the things that the really successful ones get right? Ones that are able to scale, that are able to get to the point where they're hiring you and then moving quickly to the next stage where they need a full-time CFO. What are those business owners doing right?
They're surrounding themselves with people who are smarter than they are in the areas that they need that support in. So if it's accounting, if it's legal, if it's tax, if it's finance, they're surrounding themselves with, it could just even be a peer group, just be around people who are smarter and more successful than you because they're going to lift you up and help you not make the mistakes that they all made getting to where they are.
So I would say it's very much about surrounding yourself with the right people, hiring a fractional CFO as soon as you can afford them and whatever package you can afford, and just making those wise financial decisions and having people that you can brainstorm with and mastermind with as far as when you have a fork in the road, a decision to make that you're not making it alone. I think that's one of the reasons that some business owners fail is because if they're at the top of the org chart, who do they go to to ask the tough questions? If they ask somebody lower in the org chart, that person might lose confidence and jump ship. And that's where having a partner like you two have each other to bounce ideas off of, but a solo entrepreneur, who do they talk to? A fractional CFO is a great accountability partner and somebody that's independent and can tell them what they need to hear, not what they want to hear.
Yeah, that's got to be important. So Ben, the other part of your story really is about situational awareness. You talk about financial situational awareness, yet you've shared with us that you do live with a sight limitation. So how does that play into your business world and making you who you are today?
As my vision fades, I'm trying to increase the vision of my clients, as far as being financially situational aware, but with regard to financial situational awareness, it's being able to answer four questions.
Where have you been?
Where are you at?
Where do you want to go? and
Where are you actually heading?
So those are the four questions that a CFO should be able to answer for any client and it's not a trivial matter to actually figure that out and quantify it, because depending on the state of the accounting of that particular company, it could be very difficult. But financial situational awareness consists of financial intelligence, which is concise, high level, actionable data. And financial literacy is the ability of an individual to understand financial content and format. And we provide both. So we help increase people's financial literacy so that they can make decisions in their business autonomously and we provide the financial intelligence with it, which is like the financial dashboards that have operational key performance indicators, financial performance indicators, where the owner, the more we can provide that and the more the owner comes up on their financial literacy, the more strategic our conversations can get. Did I answer that question adequately? Financial situation awareness, it's a big word that requires a little bit of unpacking.
Yeah, thank you for that and I love the four questions. You made it very simple, simplified anyway.
Since we're on a podcast, I can't show you the graph, but the dashboard has a chart where it answers those four questions for sales, gross profit, net income, and cash flow and cash balance. And so we work our way down from sales all the way down to what's the balance in your bank account and is that balance heading in the direction it needs to be heading or are you heading towards zero and how long do you have? And so where fractional CFOs can really add value to entrepreneurs is, when you're pre-revenue you're always heading towards zero until you start bending that curve up and realising the revenue to start making deposits in your checking account. So it can give them an idea of how much runway they have as far as cash goes. And that's something that a lot of entrepreneurs, unless they have an accounting or finance background, they would struggle to tell anybody, how many days of cash on hand do I have? And when do I have to be going back to investors to raise more equity?
Big questions. How does your personal journey of overcoming site limitations play into who you are today?
So going blind, it sweeps so many distractions off the table. I grew up loving aviation, cars, boats, and all these things that require eyesight and as you get older, I think we hopefully all get wiser, and your priorities change, and you really start thinking about ‘What do I want my legacy to be? What's all of this for?” And so blindness has accelerated that growth for me. Maybe I wouldn’t have been thinking about those things for another 10 or 20 years, but because of this blindness, it started for me in my 20s, now I'm in my 40s and I'm very focused like a laser on my purpose. For me personally, it's about helping advance the kingdom of God, being a Christian, for me it's helping other businesses thrive so that they can be generous, myself being involved in community activities, being on the board of nonprofits and really just, my desire professionally at a very high level is, I want to create pipelines of capital to fund kingdom work. Kingdom work being Christian, work that's based on Christian values, pro life, pro family, pro freedom, and just looking to bring relief to people who are suffering, bring freedom to captives and to teach my children to do the same. And so that's really the kind of influence that I'm looking to have on my customers through this very intimate relationship that the CFO has to another owner. Because finances are one of the most personal things and there's so much trust that has to be built before someone opens their finances up to you because it can be a dirty closet. But that's the overarching vision of what I'm doing, is to help people to be able to be generous and to influence them to do good things with their generosity.
Sounds like a purpose-driven business you're trying to build. I love that.
Yeah, it's very impact-focused and you'll find that a lot of fractional CFOs are very impact-focused or mission and impact-focused people because the role of a fractional CFO, you can have such a huge footprint. Because you're serving some, you can serve up to 10 customers or 11 customers each, you may have 10 to 50 employees and there's four people at home for each of those employees generally that are depending on that person's paycheck and they're looking towards the leadership of the owner and the leadership of the owner is influenced by the leadership that the fractional CFO is providing. Being that close to the owner, you can have an impact on how they view the world, how they view their employees and how they make decisions that affect their employees. So there's a huge opportunity to have an impact as a fractional CFO.
Do you carefully select who you work with? Are you careful in that process?
Yes, I do seek to work with values aligned organisations. Organisations that are looking to accomplish the same things in the world. I will not contract with businesses that support people's vices. I'm looking for businesses that are, like I said, favourable to life, family, faith and freedom and if it's not in support of those things, that's kind of the litmus test - it’s life, family, faith, and freedom, and country, that's the last one. I think with any business, they should look at their values when they're considering a decision, whether that's to take on a new customer or business decision of any sort.
We love to talk about values. We share this story on the show quite often that the very first thing Laura and I worked on before even setting up the business was our values. That way we knew that we were right for each other as partners in this business and we had a lovely strategy session. My mind goes right back to that room and the board that we had and sharing our values was such a personal and beautiful conversation because we also learned so much more about each other in that time and it's such an important part of life and business.
Yeah. And if you think about it, I mean, can you think of any business deal that's gone wrong, whether it's something that was so big in the news or just between you and customers where it wasn't, the business deal went sideways and it wasn't because values were misaligned. Most of the time value misalignment eventually bubbles up and causes a breach of the relationship and ending of the agreement and engagement. I think values alignment is so important inside of a partnership, but also between a business and its customers.
And it's an important conversation to have with oneself because quite often until you have that conversation in business, you may not even be mindful of what your personal values are. And when we become more aware of what our personal values are, then life changes too.
Yeah. And I think it'll guide you when the going gets tough. Cause when the going gets tough, you have to go back to your values. What's your purpose in life? What kind of legacy are you leaving? And is that legacy worth fighting for? Whatever tough situation you're in.
Yeah, exactly. And guide us through things like we've been through the last few years, where all of business was in a huge upheaval and we all had to pivot and change and figure things out. And it's going to become even more so in the age of AI that's coming rapidly. And there's a lot of people fearful about AI taking their jobs - I just saw a post yesterday about the robots are taking over Chipotle and people are up in arms about it. There are absolutely furious, they're taking our jobs. I've always been of the mindset that it's a tool and you just got to learn how to use the tool, right? You could say that about anything that's happened in history, that's disrupted employment in general. So what's your thought on AI and what you do in the financial areas of people's business? Do you feel like there's going to be a lot more tools for people to use that will help them? What do you think on that?
I think AI eventually is going to commoditize financial reporting and analysis to where it's going to be able to suck in accounting data and do basic financial reporting and analysis. So one of the areas that I'm trying to focus on in my business is really providing that strategic human value, the value of discernment and strategy that I don't think AI is there yet. I don't think AI is going to replace human wisdom and just the ability for humans to contemplate complexity because AI is looking for patterns. It's looking at data sets and it's looking for patterns and saying, What have humans decided in the past about this thing, but I don't know how much have you messed with ChatGPT and some of those AI platforms, but it's not too hard to get something back from AI where you're like, yeah, that's not correct. It’s not there yet, and I think it's going to be a long time before it replaces human discernment and the ability to smell if something's wrong. I don't know, maybe I'll eat my words in 20 years. I think as far as in my space, I think fractional CFOs, I don't think they're going to be replaced because helping business owners navigate their complex marketplace, I think is a very human experience and wisdom dependent task.
Talking about being replaced by technology, that brings to mind the whole conversation about failure, and we do like to ask our guests on the show what your failure mindset is.
My failure mindset, so far my experience, it's always been ‘Yes, it's painful, but all right what did we do wrong? And what lessons learned are there that we're not going to repeat? And I think that's the value of human experience, that's where wisdom comes from. It comes from failures and learning from those failures and not making those failures again in the future. And so my view of failure is that it sets you a step closer to success because you're all the smarter and you're not going to make that mistake the next time.
You've already paid for the mistake, exactly. Now you've learned from it, right?
Yeah, that's why history is so, so important. Whatever the history is, whether it's world history, American history, history is so important to study. It's so worthwhile. Let's not repeat the mistakes of the past.
Yeah, tell that to the teenagers. That and they don't want to do history class. Why do we have to learn about history?
Put it in story format where it's not just dates and names and places, but it's a story because I think it can be an engaging story.
Yeah, absolutely, absolutely. And we know storytelling is the way that we remember things, the way that we can easily share information and has been through history. So I love that, thanks. So Ben, what's your opinion on resilience? What does it take for someone to become resilient from your perspective?
For me, it comes from my faith, I have, my faith in God is unlimited. For me personally, I can be courageous, I can get up when I fall flat on my face because I know that God has a purpose in all of this. And I can press on because I am depending on his future grace to carry me through and I'm just going to be obedient to what I think he's calling me to do. So my resilience comes from my faith for me personally.
Do you think that follows through for someone who doesn't have a strong faith such as you, yet they may have faith in anything, they have faith in the system or in anything. Faith in itself as a concept that may keep us going, it gets us through.
Faith in yourself can get you pretty far because I think a lot of people can go further than the otherwise would have - if they didn't have faith in themselves, where they look at their successes and failures of the past and say, I survived this in the past, I know I can survive this going forward - that can make them resilient. I guess for me, if I didn't have my faith in God, I guess I would have a very much more pessimistic view of my own capabilities, I think it's probably just the way I'm wired. I'm definitely wired to kind of be self-deprecating and undervalue myself to other people. As far as just having resilience from a secular perspective that can be somebody's just as tough as nails, they have piss and vinegar running through their veins and they're just tough. So I think it depends on the makeup of the person.
Thank you for sharing that, and thank you for sharing your own faith and your own place in life and I would even consider it vulnerability, and for sharing personal resilience that you've shown since you were in your twenties living with sight impairment and still staying so upbeat. Different people could take this in different ways, right? If you were granted news that you were given in your 20s, that could have started somebody on a very different trajectory in their life.
Yeah, just my positive outlook on everything does link back to I think God has a purpose and there may be things that God could use me to do blind that I otherwise would not have been able to do because I would have been so distracted with X, Y, or Z. Like maybe there's a purpose and a plan for it all. I know in the Bible, Apostle Paul says that he had this thorn in the flesh and people think it was blindness. And he asked God how many times, three times to take it away. And God said, no my grace is sufficient for thee. And so he was using that to keep Apostle Paul dependent on him and looking to him and not try to trust in his own strength and ability. So I submit to that if that's how God wants to use my life or I pray for healing all the time.
Absolutely. Yeah, I think that faith in a purpose is so huge for anybody, regardless of your personal choice of faith that you wanna believe in, but having that purpose-driven life, I think leads us to creating greater things. And there's no doubt that vision or no vision that you can create something great with the knowledge and expertise that you've built over the years, right? Because that is what no one can take from you, no one can take that from you. And I love that you focus on strategy because we focus on strategy too. And I do believe that is the thing that AI is not going to take from humans is the ability to strategize and that forward thinking and the planning and the one-on-one growth that happens when two people get together to coach and learn and mentor and help and grow together. That partnership between a coach and an employee or like you, a financial expert and an entrepreneur. That sharing of knowledge leads to such growth that you can't take that away yet. Who knows you may be right, in 20 years we might completely come back here and say, well, we were wrong. But I still want to believe that strategy is gonna play a big part in that, so I love that that's something you're focused on too.
So Ben, we've had an amazing conversation about a lot of topics and we’d love to throw you a curveball for a change. Vicki and I are usually the ones asking the questions so we'd like to throw it to you and invite you to ask a question of us. It could be on anything.
Yeah, so I've been reserving 10% of my brain during this whole conversation and been thinking about this. What I thought would be a great question to ask, for the entrepreneurs in your audience who are providing some kind of professional service that is really a very strategic professional service, it's a service that is difficult to unpack in 30 seconds - if you get face to face with an owner and you have to explain what you do, is there any general rules of thumb for professional services when what they provide is so complex, it's extremely valuable when somebody understands what it is, but very difficult to unpack in 30 seconds - is there any tips or pointers for those types of people to be able to communicate their value in a very short period of time.
It's one of our favourite things to help people with and my short answer to that Ben, would be to consider first how you help your client. What value you bring for your client. Don't worry about how you do it, don't worry about what service you're delivering, think more about how you change their life. How you impact them through your service.
So focus on the high-level quality of life impact first that creates the interest, that gives you more time to unpack it a little bit further.
Yeah, I think it's that slow unpacking that really helps them to understand. So you want to keep it as simple as possible and invite them to ask deeper and deeper questions, because if you go into a five minute pitch about what you do, most people's eyes are going to glaze over and they're going to be like, ahhhh, I was just trying to say hi. Because you don't know what they want to know yet. Actually, we learned in an entrepreneur accelerator Vicki and I were in at the beginning of building this business, one of the things they said was, simplify what you do down to the most basic thing. Because I used to explain what I did in lots of words and lots of ways. And I said, oh, I do marketing. So now somebody asks me, I say, yeah, I do marketing. I have a marketing agency. And then I wait to see what they want to know next. Oh, that's cool, I'm an entrepreneur. I'm just about to start. Oh well we specialise in launch strategy. Oh, that's really good. And then I just let it go a level deeper and deeper and deeper like that.
Yeah, that's helpful because I imagine I'm not the only service provider that has something, has value to deliver that's very difficult to unpack. Thanks for that opportunity to ask you guys a question.
Oh, it's fun. I enjoyed it.
Thank you for the question. It's a great question. And thanks for your time Ben and insightful conversation. It's been really an interesting and important conversation.
Yes, thank you so much, Laura and Vicki for asking the questions you asked. I agree that it is a very important conversation, and I hope that it resonates with your audience.
I have no doubt that it will. It is always important to discuss money and numbers and find someone that you trust and get that CFO on board when you're ready for them and can afford them. And I love the idea of a fractional CFO, so I'm gonna look more into that. And if there are people in our community that are looking for that, then let us know. We think it's amazing what you do, Ben. Thank you so much. All the best, and we really appreciate your time and expertise on this very important topic.
Thank you so much Laura and Vicki.
