as an account. I went to school for three years to learn create right, interpret financial statements. Most entrepreneurs didn't and yet most entrepreneurs are expecting the accountants to kind of think like they do, like what problems are we facing etcetera. But most accounts are just trained in debits and credits. What are the country's top ceos doing to build extraordinary teams and cultures who thrived even during the pandemic. You're about to take a deep dive into the minds of wildly successful c suite leaders who are evolving the way that we work in The 21st Century. Welcome to this special edition of how to be mesmerized everybody. Welcome to how to be mesmerizing. It's tim sure. And all. We have another extraordinary ceo with us Spencer Shannon is in the house. Spencer Welcome to the show. Hi tim. Thanks so much, really stoked to be here. Yeah, we're very stoked to have you here. So let me introduce you because you're pretty cool. You're an entrepreneurial accountant, Which you don't always hear those to put together your also founder and ceo of shift financial insights based in Canada and your firm provides accounting and financial insights for businesses on the rise.
You have over 15 years experience as an entrepreneur combined with the extensive financial experience as a C. P. A. And investment banker. So you've got all kinds of cool information in your head about how to help businesses and entrepreneurs to be more financially successful. So let's jump right, in amazing, right? Yeah. So Spencer, you've said that many companies have challenges with their financials often because the leadership and accounting teams often struggle with poor communications. So tell us about your observations with this. Yeah, that's a super interesting question. I think there's kind of two elements to this. Number one is accounting and entrepreneurship are different languages, right? Like as an account, I went to school for three years to learn create right, interpret financial statements. Most entrepreneurs didn't and yet most entrepreneurs are expecting the accountants to kind of think like they do like what problems are we facing etcetera. But most accounts are just trained in debits and credits. So, you know, we walk in and we end up really just butting heads and where I think accountants have done a disservice as well, often go to the entrepreneur hand a set of financial statements and then run as fast as we can the other direction and the entrepreneurs sitting there going like I've never really understood these like it's letters and numbers that I understand, but in the form and function, I can't, it's truly not a complete solution.
So I think that's one of the core problems were just speaking different languages and expecting different results from the other person. That's kind of one. The other thing is I think on the entrepreneur side were expecting the wrong things from accountants often. So I think about it like building a house, right, have you ever built the house like with the contractor and stuff? Yeah, Okay, so we all know that the your lead point that you spent most of your time talking, it was probably the contractor right. Once the house was designed, they're going to have some skilled sub trades, the plumbers, electricians, carpenters, that type of thing. And then maybe there was one or 2 laborers hauling bags of cement carrying lumber sweeping up at the end of the day, we all know that in that super intuitive what we often make a mistake or where entrepreneurs make a mistake. Especially small and emerging accountants, companies like 1235 million event is we'll hire a bookkeeper and expect them to run the entire accounting department. Well that's kind of like hiring a labor and expecting them to build your entire house. They're part of the picture, but they're not the whole picture.
So and these smaller entrepreneurs can't afford the entire accounting, said they can't afford a bookkeeper a controller and CFO. So smaller business again, 23455 even send this with eight and $10 million business is going, well, my bookkeeper is not telling me that and it's like, well yeah because you're going to your labor are expecting them to do complex plumbing, they probably know a bit of plumbing, they know what a pipe is, they know how to maybe fit pipes here and there, but there's some technical stuff that just isn't higher level. So that's kind of the other reason why I think there's a communication problem and the words that I hear from entrepreneurs all the time. My accountant never told me that. Yeah, my account never told me that. And so that's where some of the frustration I think comes in. Yeah, I've uttered those words before because even when you have a really good accountant, you want them to be kind of to think like an entrepreneur and to keep finding new ways to grow your money or save your money or create write offs or be aggressive and always learning and always charging forward. And that's not often the personality that goes with an account unless it's someone special like you, but that makes a lot of sense.
So just just have fun for a second. Give me like three or four words to describe accountants, you can't offend me, Go ahead. Well, I have friends that are accountants and they're very cool. So yeah, I mean cautious, They're going to be cautious, right? Conservative, meticulous, right? Very detail oriented, detail oriented and mounted entrepreneurs tend to be more big picture, right? So then the entrepreneurs are big picture, they're creative, they're 100 miles an hour, impulsive. Yeah. Then you think about the person, you can't even see my hands, they're so far apart, like our personality traits, I'm a little bit schizophrenic that way. Our personality traits are risk averse versus risk taking rule following versus real breaking. So, you know, we're expecting to be of the same mind, but we're just inherently different people. Yeah, yeah, very good. Well that makes a lot of sense that communication would break down if you're not aware of that and you're not actively working to keep the lines of communication open and make sure that you don't have assumptions that are made.
I find when I'm working with high performing teams that people make a lot of assumptions that they're on the same page and then it turns out they're not. And so like if you say you get this to me soon For one person soon might be in 10 minutes for someone else, it's in two weeks and so there's a lot of so and then take that exact thing with the assumptions is what is a good job in accounting for an accountant might having a perfect set of financials that are error free and on time scores for the entrepreneur it's going to be like understanding the stories and the messages that are hidden and buried inside the financials so I can make better decisions for the business so I can drive better results. I don't care about the financials, I care about what they're telling me. And that's kind of the other major gap is we're busy again if you've just got to either a bookkeeper only or maybe you've got a CFO but one that doesn't think entrepreneurial, that's the other conflict. We're just saying different things and looking at different things through different lenses, you know, it's interesting even when you talk about the CFO level, if you ask me to describe Cfos a lot of times I'm talking with the leader of the company or we're talking with other people who are excited about the VP of sales and we're excited about this.
And then all of a sudden it's like, well, we have to convince our CFO he controls or she controls the purse strings. And now, you know, we have the momentum and passion, but we don't know if they're going to really get it. And I do like the CFO having the role of skeptic, a good CFO should challenge those plans because entrepreneurs, one of the words we didn't say is sometimes a bit crazy. Like we do things impulsively. We have this idea and let's go. And so a strong when the communication flows and there's the CFO that's like, okay, cool, let me challenge this a bit. And when you can answer all my questions now, we're all going to be comfortable. It's a good call. Great. That's the sober second thought. Not the like, oh, they're just going to say no to everything. There's a fine line there. But I'm actually a huge favor of the skeptic within the organization because like, I mean, entrepreneurs make some pretty impulsive decisions, which aren't always the best. Like, let's also let's also recognize that that is true. That is true.
So you're exactly right Spencer I mean, that's the power of diversity. A lot of times people think that diversity is just different cultures and races, but diversity means anything that's different, right? And you want people who have diverse viewpoints. So you want people who are impulsive and you also want people who are cautious. And then what you're saying is that you got to make sure that we're communicating that we're understanding what the numbers and what the financials mean and you are right. A lot of times entrepreneurs don't really know what it means. They know how much money they've made and how much money they've spent. And that's really about it. And so as you grow and you're making you tend to serve people entrepreneurs who are around that $10 million dollar mark. When you start making more money? Up to 10 million. up to 10 million. Yeah. When you start working with people that are becoming more successful, it becomes more challenging. So we just got to understand and you're going to help us with some tips today. So I'm excited about that. Before we talk about Yeah, before we talk about that you are an active or as you say, a hyperactive member of entrepreneurs organization in Canada and you are currently their finance director, which sounds impressive.
So good job. So what have you learned from being a part of that organization? Yeah. I mean, I've been part of the Oh since 2005 and we're creeping on 2022 at this point, so you don't have to be an accountant to do that math. So it's been a long time and actually I moved into the role of the chair for Canada. So I'm, what would be considered the senior most volunteer leader in the Canadian region, there's 10 regions around the world, so EO is a global organization, I think we have 15,000 members from 80, some odd countries and I would say it's probably the best decision I've made in business is joining you. And really that's a function of being surrounded by like minded entrepreneurs who are struggling with the same things I am and having that place to go, like mentors are amazing. I'm a big fan of mentors, I'm a big fan of coaches and there's something different when you're in a room with eight other entrepreneurs was like, hey, I'm struggling with this and four of them are like, yeah, I was there like two years ago and this is what I did to get out of it and it's really a function of, of course there's learning events and all that stuff is great, but for me it's the pure connections, which really, really changed the dynamic and experience of being an entrepreneur, being an entrepreneur can be super lonely as you well know, and so connecting, having that direct link where we can we have that level of trust and level of Understanding, we've all been through it, we're in the trenches together, I think that's probably the number one and then the other for me as being a member leader, you know, I started my journey in the Vancouver chapter, became the President of Vancouver joined the regional council amount in the chair of the regional council is kind of, each of those roles scared me a little.
It's one thing to be an entrepreneur and have employees and there's lots of challenge and fear around that, but then to have to lead other entrepreneurs who are other volunteers who don't actually have to listen for their paycheck, like you can be a bad leader and people still do what you say, because you're the boss. Well, that's not true. So it really challenged my own, I have to level up my own leadership skills and my own confidence around what does it mean to be a leader? What does it mean to be an entrepreneur? And so those are kind of the two things, just the community and then that the challenging myself and literally every role, I'm like, man, am I good enough for this and have to raise my game to show up and actually do a good job. Yeah, well said, well said so, yeah, napoleon Hill, who wrote the book, think and grow rich, we interviewed back in the day, all the most successful, wealthiest people in the country, and then he wrote his think and grow rich, but he wrote a second book, which hardly anybody knows about most people haven't read that?
Yeah. And in the second book He talked about the one thing that all those people had in common and there was only one you think that maybe you know all these captains of industry would have a lot in common, but he said there wasn't anything in particular that they had in common that made them successful. Except one thing, they were part of a mastermind group. They were part of a collection of entrepreneurs who get together, who understand the pressures who support each other, where you can get ideas from where people are wanting to help and willing to help. So entrepreneur organization is a great organization to be a part of if you're an entrepreneur and you raised it, you mentioned his second book but you didn't say the name of the book. You remember that often because I never remember it. I think if you google napoleon Hill will find it pretty quick. But so I think that's why It is such a great foundational book as well just to like challenge your own thought process. It's a little bit different than before I went into reading it. I thought it was gonna be more tactical, but it's actually quite anybody's listening that hasn't read it, it's obviously worth 30.
Yeah, I mean it talks so it's a lot about personal development. So yeah, so your first book, you're an author as well. Your first book is entitled entrepreneur Numbers, which I thought was great, which provides readers with the skills to diagnose their financial information. So can you give us a couple of tips from for reading our financials better? Yeah, sure. It's something I'm super passionate about. Obviously it's kind of my why is to help entrepreneurs through their financial blind spot. So I think about the easiest way to kind of think about the content of the book. There's a section on kind of why we get stuck in the first place, which I'll park for now. But in terms of like the three ways out of it, I think it's number one using data visualization charts, graphs, pictures, You will know this for sure is our brains process images way faster than we process letters and numbers. Our brains I believe. And I'm not an expert in this, but I think it's something like 90% of the information that goes through our brains is in picture format. So financial statements are letters and numbers yet we're not, I'm shocked at how few companies actually use data visualization to create stories using charts.
Like if you think about, I don't know what's a simple example, like a stock chart, right? Like you and your favorite stock and you're trying to track it over time and like let's say you enter the day and trading price At the end of you just do this religiously an excel sheet and three years later, you've got 1000 lines of data? Well, if you just look at a chart, we've all seen a stock chart. You look at that, you know, instantly as the stock going up or going down, you don't have to do anything but glance at it. Same thing with your financial information. If you select the right data to put into data visualized format, Can I routinely do this in a case study with what I'm doing speaking is I'll take somebody who will self rate themselves a three or four in terms of financial empowerment. I'll go through a set of financials only using data visualization, not even letting them seeing the financials and there'll be a nine or 10 after 15 minutes. It's turning those things into pictures. So that's one data visualization. I just want to check in if you have any questions on that before I go into number. It's very clever. You know, our language is imagery guided imagery.
We see our mother's face and that means food. You know, And so yeah, so you're exactly right. Being able to look at a graph and understand what it means would be incredibly helpful. So that's a good thing. For example, I like on the income statement for any of the key line items you've got this year, Last year, budget is three line items on a chart month to date year to date. So each month is an independent. So in those two charts with a glance, how am I trending, how am I doing compared to last year, how am I doing to budget? Right? There's other ways to analyze financials, of course, but that just gives you that boom. So that's number one. And the thing I always go away with, because there's a bunch of like, if you go to entrepreneurs dot com, there's some samples of a reporting package, lots of examples of data visualization, it's all free download stuff. I always say don't get hung up on the types of charts. It's not like it has to be a liner has to be a bar if you can look at it and just intuitively understand what's going on, that's what you want. So if the line doesn't work for you want to bar do a bar, if you don't like bars, you like pies, do a pie, whatever kind of chart just makes it simple and intuitive.
So that's number one. Number two. And this, to me is a real game changer for a lot of entrepreneurs, it's understanding what the key levers of business are. The key levers within financial statements. So it doesn't matter what business you're in, what industry you're in, it doesn't matter how big or small your businesses, every income statement has five sections, that's it. Sales cost of good sales minus your cost goes equals your gross contribution minus your expenses equals profit. Okay, so no matter how big and complex financial part comes down to those five and there's only three things we can do to actually increase the profit of our business, we can increase our sales throughput or price, we can decrease our cost of goods or hold those flat while sales grow, so it becomes smaller as a percentage of sales or we can decrease our expenses. Those are the only three ways we have to increase profit. And so when a lot of entrepreneurs are looking at their financials and they're confused and they're big and they're sub schedules and multiple pages, it's like which lever do we need to pull now? Because depending on where your business is in the flow, maybe you're ready for growth, But if your cost of goods are out of whack, it doesn't matter how much you grow because you'll never make money until you get on top of your cost of goods.
If your expenses are out of control, we can do that. So the lever, what you need to pull changes depending on which lever you need to, what lever is out of whack at the time. So that's the same thing on the balance sheet, a little more complicated. But in terms of actually generating cash for the business. When you pull levers on the income statement, you're improving profit. When you pull levers on the balance sheet, you're improving cash so we can collect faster, we can pay slower without hurting our suppliers are getting in trouble. We can turn our inventory faster if you have inventory? The silent killer of retail and manufacturing businesses around the world capital, your equipment as a lever. Although it's a bit slower and harder to pull and some people argue Detzel ever, if you want to get in that argument, call me offline. But I say there's seven levers that you need to focus on as an entrepreneur sales, cost of goods, expenses A. R A. P inventory and your equipment. If you focus on those seven things, that's how you're going to drive the most profit or cash in the business by picking the right one, wow.
Way simpler. Way simpler. Yeah. That leads to number three. And let me do number three. And then you can I'll let you jump in because they're so related. Is it then selecting the data to review on a monthly basis, how to know which data to select. So we start with the lovers. So we all, every lever needs a chart. How is this lever doing? How is this lever doing? How is this lever doing? Every lever gets it hurt? And then the ones that are the most out of whack. That's where we go do the deep dive. And that's what our accountant should be doing for us. We shouldn't be having to look at financials to figure this stuff out. It should be like, okay, cost of goods is our problem. Oh here are the sub analysis that help us understand within cost of goods. What's going wrong is that our materials out of lack is our labor out of control. Are there some other things like warehousing costs are shipping that's causing us problems And now we can understand high level levers and then we dig and dig and dig in until we understand exactly what we need to do. That to me is what the financial review is not looking at everything. I'm a big fan of exception reporting.
What are the biggest problems in the business? And where are we succeeding the most in the business? The rest of it? As long as it's going if the sales lever, everything's good, They're great sales team keep going. I don't need to spend time on it. I need to focus on the areas that I can pull the lever to have the most impact your marketing materials. You say that you provide ridiculously simple ideas and strategies for understanding your financials and you just demonstrated that I mean you made it seem so simple. I mean these are complex and you made it seem so simple and so easy to be able to do. And I know it takes some energy and effort to put all the numbers together and record everything and get everything into your program, your accounting program. However, those tips were really, really good. Yeah. So here's the mindset shift that I offer entrepreneurs so there's like getting it right. That's the hygiene. That's the stuff that we all, we have to get it right. It's your books like you just, you gotta get your taxes right if you ever want to sell or borrow money, it's all got to be right. But the reality is that's not for the entrepreneur, that's for people like me and bankers and that kind of thing.
Mhm. The insights that's for you. So yes, there's a lot of effort to get hygiene rate, but that's not your effort. As the entrepreneur, your effort is the entrepreneur is to make sure your accounting team is getting the hygiene rate and then presenting the information in a way that makes sense. That's not your job. My job is the entrepreneur. I can't point at myself because I'm both, but that's not your job is the entrepreneur. Your job isn't to go in and make sure it's right. Your job is to go on to make sure you have the right people doing the right things for you. Making sure the hygiene, right? Then presenting you a package that uses data visualization that focuses on the levers and select the right data to dive deeper. To answer the question of which lever we need to pull because the other thing we've really started using in our marketing a little bit newer as accounting doesn't have to suck. Like accounting sucks, but it doesn't have to. And so the entrepreneur is often stuck not knowing what to tell the accountant right. Like they're off in the corner doing their accounting thing, we don't know what to ask, we're stuck, we're embarrassed, were frustrated and we don't know how to get what we mean.
Then that's what entrepreneurs is designed to do is be like, hey accountant do this. Like I've talked to lots of people that said, I gave this book to my accountant, told them to do it and it's changed how we operate in our business. So that's the intention is about empowerment. It's a never about you entrepreneur learning how to be an accountant, That's where we failed you. We forced you to learn how to be an accountant. Uh no more. We're empowering you now to hold your accounting teams accountable for delivering information. That's quick, Simple and intuitive, that's what I want is an entrepreneur. Yeah, I'm going to send my account in that book because your book because for a lot of entrepreneurs, especially when you're first starting out, you really only talk to your accountant maybe twice a year, you need something from them if someone asks you for a document or something or to get your taxes filed and there's really not a lot of communication otherwise, No, and here's the thing and I meant to actually answer this when you were talking about the communication problem is part of this when I hear people say, you know, I ask my accountant that usually means external account, right?
People usually say bookkeeper controller when they're talking about their internal, so remember, an external accountants job is typically to perform, whether it's an audit or if you're doing a review engagement or a notice to reader or kind of the three levels of your end or do your taxes or that type of thing. That's what they're trained to do. And there's as many types of accountants as there are types of doctors. So when you go to, you're not going to go to an ophthalmologist when your knee hurts, we also shouldn't go to our year and account necessarily for advice. Yes, they see a lot of financials and there's often there's going to be some things they can do, but their focus is getting a set of financials with their logo on top of your financials and getting it out and meeting all of the huge number of requirements that happen by different regulatory bodies to make sure your financials are right, That's their expertise. Their expertise may not be a business analyst, that's a super different skill set. So when we go to our external accountant, especially, as you say, the smaller businesses who only talk to them once or twice a year, like your end every account.
And I know they're working their tail off, trying to get all the year ends out or all the taxes done and it's like you go to the hospital, you see a doctor for six minutes, you're like, okay, did I really get what I needed there And I got six minutes of the doctor's time. I feel like I needed more so and maybe you're at the wrong doctor. So that is really interesting. That distinction because yeah, I think that that's where a lot of entrepreneurs would get frustrated. Like we talked about in the middle that are entrepreneur isn't doing enough, but that's not really their expertise. So how do you find somebody where that is their expertise? Yeah. So I have a couple of things. So on the website again, there's, this is more of an internal function, but I'll offer some ideas for the external as well. There's a house. My bookkeeper 10 questions you can ask your bookkeeper or you can ask your controller and even if you don't understand the answer, that's okay. Their reaction is going to say everything like we have clients that come to us that haven't done a bankrupt for two years. We're like, what? Wait, what? So it's just some basic stuff and there's like a little key on sort of how to answer that.
We also actually have a tool called how's my bookkeeper? If you go to house my bookkeeper dot com, it's the first time it's a free use. If you're on quickbooks online, you can connect and there's a 20 metrics that will auto analyze for you and give you a score on how good your bookkeeper is doing to know like that's on the hygiene side, wow when it comes to the advice side, what I always suggest is show me an example of a reporting package that you've delivered to somebody else and if they proudly hand you a set of financial statements saying these are perfect, I say run the other way because they're thinking like a typical accountant that my job is to get you the hygiene done right. Whereas if you have somebody that's got data visualization that's being able to point to the levers, that's able to kind of say here's the analysis that happened because I saw this, this and this and as long as you're able to understand it and it's quick, simple and intuitive. I've got somebody good but I also wouldn't rely on my external accountant for that. Most external accountants are focused like I said getting your ins and then excuse me getting taxes done, that's their game.
So I would just ask for like show me some analysis you did and they'll have to redact the data and protect any privacy of any financials of course. But yeah, I want to see something that I look at and I'm like, oh I get this, this makes sense. I know what to do. If you don't have that you're probably dealing with the wrong person, you've got to keep looking. So for the external accountant who is just turning in your year end taxes. Where do entrepreneurs go to find someone who can actually do more of what you're talking about. Should they just get your books. Yeah, that's a great question. So like some of those externals will have advisory services and I think to me it's just recognizing that the accounting stack, like when I talked about the construction, I pointed like this because the house next door was under construction for three years when I talked about the construction stack of contractor sub trades bookkeeper, sorry labor or same thing in accounting CFO controller bookkeeper, you really need that stack. So one of the things is outsourcing provides that opportunity now because most small business, like if you're a four or $5 million business that has a full time bookkeeper, the reality is you probably don't need a full time bookkeeper, you need a part time bookkeeper to do the transactions and if you're using technology properly like that that is coming down in terms of what's required for day to day stuff, a part time controller and a little slice of the CFO to do the type of stuff I was talking about.
So I think what you need to do is go looking for that solution. Some sort of fractional solution, whether it's like an outsource provider like what we do or sometimes some people can get to find a good fractional CFO but challenge them the same way with everything I've been talking about. So I think a fractional way to go. Like I do a little bit of coaching directly. I don't take a lot of clients. I have like a few select clients that are a little bit bigger than our typical client who just, they just had a merger and they're really struggling to understand the numbers or they're struggling with the strategy, they don't know what the composition of their accounting department looks like. That's kind of a little bit of coaching work that I'll do on occasion for that type of thing. So I think it's just going out and just like any other position in your company, like think about hiring a salesperson and how much diligence you do on that salesperson before you hire them because that's a bit of a make or break for the business, a good salesperson versus not a good one. Same thing with accounting. We often just hire somebody because that's our friends buddy, right? Not good enough. You wouldn't hire a salesperson because it's your friends buddy, you wouldn't hire your director of operations because it's a friend's buddy, this is a key cornerstone, one of the legs of the stool to make the business successful.
So it's about keep interviewing, finding people, finding fractional people, finding solutions. Ask I obviously I'm happy to have a look at anything. Any of your listeners need to bounce, what's going on in their business. What do they need, what does it look like? I'm happy to have that conversation as well, awesome. Outstanding. Outstanding. So you're currently writing a second book titled entrepreneur nutcases, entrepreneur cases, entrepreneur yeah, I can't say it on cases you're pretty close, you got Nutcases Yes, yes, probably because I am one and so in which you're profiling entrepreneurs who nearly gave up but managed to grow their companies to 10 million plus in revenue, why'd you chose to focus on entrepreneurs who almost didn't make it? Yeah, I mean, I don't know any entrepreneurs that almost didn't make it, you know, all of us, all of us have had those moments, I've had more than a few moments where it's like this, like it's over and I, so my first book, honestly, it was a bit of a bit of a bt book, a bit of a credibility but building a bit of a, getting my vision, what I think is a little bit different, that's out there in the world, this book is more of a passion project and I just think I've heard a lot of these stories in the, oh, I've heard a lot of these entrepreneurs organization for a lot of these stories outside of the oh where somebody just has this story, that's like you did what one of my favorites, the first call I made was to a guy I heard this story like Right after I joined the Oh, so this is like 17 years ago or whatever and he bought a driving school and it was consisted of one truck and two Honda civics and most of the revenue was the truck and he was young, he had no idea what he was doing.
They screwed up their due diligence, they every time they turned around the bank account was empty because they didn't realize this chart like they were just young, they were super naive, they just had no idea and the truck was on a driving test because then they would use the truck for getting licensed and the truck something like wrong and it literally exploded and engine was sitting on the concrete with a big hole in the side of the truck and you know, these were two young guys, him and his partner and they're like, they looked at each other like what's it like we're done like we cannot afford the $15,000 to fix this truck like were matched on credit cards, no bank will talk to us like it's just, we tried, it's over, they ended up borrowing money from their employees moms to get the truck fixed and they turned that into six locations with over 100 employees today and it's all based on the foundation that they're a family and they take care of each other and I don't have it all on top of mind.
It's in the chapter of the book on that entrepreneur but all the things they do to support their employees because they really think of it as a family. So for me it's just those fun inspired stories which also the entrepreneurs having an impact in the world. I don't, it's great we can make money as entrepreneurs, but it's about the impact, it's about the, wow you really did that or you made a difference here. So I just find as an entrepreneur when you're going through a tough time hearing those stories is really helpful I think for families of entrepreneurs understanding kind of what they go through maybe through a different lens for employees, For aspiring entrepreneurs, it's just an insight. So it's going to be a series that I think about 40 stories that are 4-6 pages. Where do you come from? How did you become an entrepreneur? What happened? And were you now? It's it's not a how to book, that's not the intention is just designed to be fun inspired kind of exciting stories to share like that. Yeah, very good. Spencer, I love it. I want to read it, I get it, I get so jazz doing it. Oh yeah, yeah, I mean it's just such good stuff.
I mean I was interviewing someone actually real quick in new Zealand last week and every time I interviewed someone like this is my new favorite interview and he grew the vitamin business a supplement business to a quite substantial number and they actually just exited a significant amount to a private equity firm with the intention of growing it even further and he's still staying on in an advisory capacity. But I was talking to me said until six months ago we had two mortgages on the house. Like the entire journey. We were always short casts were always pinching. We're always looking for ways to make the next payroll and the exit was very significant. I don't push too hard on the numbers, but I have no doubt it was in the tens of millions. So like yet until literally they exited two mortgages on their personal house just to keep the business going like, wow, yeah, yeah. The amount of uncertainty that you deal with as a leader, but especially as an entrepreneur, the amount of certainty can be crushing and you just keep trying because you know that you're not really employable and you want them to have an impact and you know that you just believe in your heart that somehow in some way you will figure it out.
So you just keep going for it and going for it. And I've interviewed the most successful personal development people in the world and many are my friends now and I've had many conversations with them and found that there really is no secret to success except to just keep going. I will persist until I succeed. I will just keep finding a way and then eventually view those who persist. They find out they hit it and even if they don't, they still would have picked the same life at least it will of adventure. I had to learn, I had to become the person that I am today, I'm so resourceful, you can throw me in the air and I will like a cat, I'll always land on my feet, right? And that's the power of entrepreneurs, entrepreneurs change the world. So, and interesting one of the things I'm about halfway through the interviews at this point and not quite halfway through the writing, one of the things I've noticed is exactly what you talked about. There's also the mindset behind it. I've noticed there are those that like they actually rise up in the face of challenge.
Sometimes it's like you get once you get beat enough times, sometimes it's just that it's that give up versus the persistence, the persistence for a lot of entrepreneurs comes from, I actually love the fact that this didn't work and now I've got to go figure out a new way. It's not seen as a setback, it's seen as part of the journey. I've noticed that there's very different mindsets around that, so, and I know you get into a ton of that stuff so we could probably do like ours, how we could, we could go on for hours on that, but you're right, there is no failure. There's just feedback, you know, we're going to take this feedback and correct on the fly and then, so it doesn't matter if it's about success or failure or winning or losing it's about feedback and momentum And do we feel like we're making progress and having impact. So very good. So you provide entrepreneur strategic advice as you've been doing the whole time. That's incredibly valuable. At least I believe it is and I know that so many others do as well, which is why out of all the people that are cps in the world you are on the show. So can you offer a few quick tips for our listeners for how to prove their financial situation?
You've kind of already done that. So do you have any other ideas for what else we could do? Yeah, I mean I'm going to refer back to the levers because that's such a critical one. I'm going to tell a story of coaching client I mentioned, I only take a few coaching clients, they tend to be a little bit bigger than our normal like our business shift. Like we do outsource accounting up to about 10 million. Right? So we handle the accounting department. I take on a few coaching clients that are probably in the 10-25 million. I take on like only two or three at a time and just a quick story on one of those. So really good business. They were doing their run rate was about 18 million and they did a survey for construction, that type of thing and he was really frustrated. Like we're fully maxed on our line. The line was I think between two and and 2.5 million because I just had to cut a check to the business for 250 K. And I don't get it because I feel like we're doing really well and so we dug into his financials and we found a few things number one, He was two months behind and getting his financials out. So I was like, okay, well it's really hard for me to know what's going on because where we were in november now, I'm looking at july or august statements, it's really hard for me to kind of do that.
So obviously that was problem number one, so he had a hygiene problem problem number two though the reason it was so slow is because they had a real hard time calculating their work in progress to work in progress can be a complex weird thing. They made it more complex than it needed to be, but they took them that long to figure out the whip and you can't close a month until you figure out your web, right? So there's this lag and then here's the kind of the aha moment and this really took about one or two calls to figure out that they couldn't start invoicing the next month until that whip calculation was complete. So you know, you finish a job at the beginning of September, you're not finishing until November. Now your invoicing in November and not collecting till December for a job you did on September one and you're doing about a one point or $18 million 1.5 million a month. Well you've got three months that you haven't collected because you have an invoice for two months. So they went in the course of 3.5 months from 2.5 million on the line plus a quarter million dollars deposited two.
I think they were last time I chatted with them, they were less than a half a million on the line. I think they'll be completely out of it very soon. And the entrepreneur got paid back. So that's because we focused on the lever and that lever problem was a balance sheet problem of accounts receivable was wildly out of control and then the analysis was okay, we've got an invoice process problem, solve that boom. Because we looked at, it's like, yeah, he has a couple of months where he lost money but generally he was making between 50 and 100 K a month. But his cash was dropping like a stone. So that's like just a reinforcement of the levers. If you understand which lever is the problem, then you can it. The strategies around fixing the lever are usually pretty obvious. Once you know what's the problem the lever is then you can apply pressure. Okay, well let's just get our invoices out, We actually had to hire a couple of part time people, I think even one additional full time people for a period of 2-3 months to deal with the backlog.
Yeah. There was a cost associated with that. There was a $10,000 costs associated with bringing our cash better by $2.5 million. Okay, all they make that decision every day. Right. Right. Spencer. I love your stories. They're so good. They're so good because they're entertaining and yet they're so valuable because people do, I mean I do that. I'm not up to date. Sometimes I'll go six months before I log in all this stuff terrible. We're going to talk offline. I get my hygiene in order. So I have some choice words for you, which I'm not going to say on your, on your podcast. So of course it is different when you, it is quite different when you're scaling a larger business that is 30, 40, 50, 100 employees. There's cash flow, there's deferred revenue. There's work in progress. Like the more complex the business, the more critical it is to be current. I suspect you're actually more on top of things than you're letting out. Yeah, I've always been an army of between one and five, you know, people, my entire 26 year career as an entrepreneur.
And so yeah, so it's different than if I had 100 employees for sure. Although I've worked with many companies who have had that and taking a look at it and so it's two different fields and it's amazing how you're able to navigate into either one of them. It's very impressive. So where can people learn more about you and shift financial? Sure. I mean the easiest of course a shift financial dot co, not dot com, somebody's looked at is holding it for ransom and I refuse to play that game Chef Financial dot Co. We are the outsourced accounting department for businesses between about one in 10 million. There's no hard and fast but that just generally feels right. Professional service firms, trade organizations, those type of thing. And by that I mean like h HVAC plumbing, electrical, all of those things are right up our alley. I do a little bit of coaching myself for businesses between 10 and 25. Typically with entrepreneurs who are super frustrated that they're not getting what they need to make the decisions. Those are kind of our two main offerings. We've got house my bookkeeper dot com which is, you can go in like I said, connect your quickbooks online and you'll get an instant well process in the background, get an email with an audit of how your books look how your hygiene looks.
Yeah, those are the best ways you can follow me on, linkedin. Follow me on facebook instagram. We do all the social. So I'm the only Spencer Shannon around so I'm not hard to find. Well Spencer you have been absolutely mesmerizing. I love this is my new favorite interview. So thank you so much for being on today and sharing all the wonderful information and thanks. I appreciate it. That was amazing cocktail soon. Hey, it's tim you ever wonder why so many talented, hardworking entrepreneurs and business owners struggle with inconsistent self believe for high stress or procrastination or self sabotage? Well, the answer may surprise you and the solution is already inside of you. I've been searching for the answers to this for decades and I found them and I put it into a new program called the power of your unconscious mind. Mental secrets for accelerating success. And because you're a listener, I want to give you a free V. I. P copy, Head over to power mindset program dot com. That's power mindset program dot com and grab your copy today.