Julie (host):  

Every minute, every moment counts. Hello, I’m Julie Hyde and I understand what it takes to make these moments count for leadership, business, and your life. This podcast will deliver insights and game-changing leadership moments that will allow you to level off and shine a light on those around you. Let’s get into today’s episode. 

Julie (host): 

With me today is Kathy Svetina and she is the Founder of NewCastle Finance, a company offering Fractional CFO services to women-owned small businesses. For nearly 14 years, she did senior-level financial planning and analysis for Fortune 500 companies. So she saw firsthand how big companies use financial information to drive their companies forward. And Kathy started NewCastle Finance because she wanted to offer that same powerful financial insight to women-owned businesses. Now, she helps business owners as a financial puzzle solver, which I love, to get clear on their numbers and their financial strategies. So they feel confident that they are making good decisions that will result in a thriving business. 

Julie (host): 

Welcome, Kathy.

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Kathy (guest):  

Thanks so much for having me. Julie, I’m super excited to talk to you.

Julie (host):  

Oh, me too. And I just love what you do. And I think we all need you in our businesses. But you also have a fantastic podcast called Help! My Business is Growing, which I was also a guest on. And I really encourage people to tune into that as well, because it Kathy shares really awesome insights on her podcast. But let’s get started, Kathy. This podcast is called Making It Count. And I would love to know how you make it count in your world.

Kathy (guest):  

I love this question. And I think the answer for that would be for me is by being curious. And that has served me really well not just in terms of me personally, but also the businesses that I worked for, and the businesses that I support. So you know, ever since I was a little I was always in libraries. I remember as a teenager, I spent a lot of Saturday nights looking at the old Microsoft Windows and Encarta Encyclopedia and just learning about different random things that I had no idea whether they were going to be useful or not. And this has really served me well, because now I feel like I’m a good resource for people in terms of what types of tools, and knowledge, connecting them to different people. 

Kathy (guest):  

So I’m really being curious also about the businesses that I support. And it’s fun for me, but it also helps other people because all the knowledge that I’ve been able to collect and all the resources that I’ve come across, I’m able to pass that on and really help them in their journey and the journey of their business.

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Julie (host):  

Yeah, that curiosity. It certainly makes a huge difference. I can see you being really curious as a kid actually, like just getting into everything. So now what led do to be a Fractional CFO, which is often referred to here as a virtual CFO, just so people can understand what that means? What was it that made you think, “Yep, okay, this is a gap in the market that I need to fill? And I have the skills to do that.”

Kathy (guest):  

Yeah. So like you said, in the introduction, I was in a corporate finance for 15, 14 years. And one of the things that always bothered me, and especially coming from a family of entrepreneurs, is that you know, companies, large companies have all these people- they have the Treasury Department, they have the tax department that have people that do their financial planning. They have like a lot of people that takes care of their finances. 

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Kathy (guest):  

But when you go into the small business arena, they maybe have an accountant and a bookkeeper. But no one’s really helping them like to plan the future of their business and finances are complex. There’s just no two ways about it. So having someone to really help you with the future of the business and figuring out, “Should I hire people? Am I pricing it correctly? Like how do we grow in a healthy and sustainable way?” That is something that I thought there’s really a niche in the market for that. 

Kathy (guest):  

It’s not a new thing, being a fractional person, but what I really wanted to do was offer that to women-owned businesses. And the reason for that is because, again, coming from the finance arena, like I was sitting at the table, and I was the only woman there. I think it’s really important for women to have another woman to help them with finances so that you don’t for the lack of a better word. You don’t get a man’s plane, which sometimes we do, unfortunately, but you have someone who can actually relate to you, and be that guide for you in these, like sometimes difficult financial decisions.

Julie (host):  

Yes, I love that. It’s a very cost-effective way to get some really solid advice. And Kathy, I’m assuming that you working with the business owner because what I see is so many people are stuck in the business. They’re doing a lot of the doing, and sometimes that strategic time and decisions aren’t quite there. And then some decisions have to be made on the fly, which really isn’t great for the business. So you working or partnering with the business owner, would enable them to make some really intelligent decisions.

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Kathy (guest):  

What we do we make decisions based on data. So data-driven decision. So that’s one pillar. And the other pillar is the businesses that I’ve worked with the business owners, the women that I work with, they know their business. So we marry that intuition and gut with data. And that’s where you get this really powerful combination because now you really are able to figure out, what do I do. And a lot of times, they just need a sounding board. 

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Kathy (guest): 

Just you know, owning a business, it’s a pretty lonely experience, especially when you have people under you when you’re starting to hire, you’re starting to grow, you have a lot more people that rely on you for the livelihood. So it can be pretty scary to have that on your shoulder. So having someone who’s going to be a sounding board, and in a lot of times when I come into the business as well, it’s almost sometimes I’m a part, you know, their coach and psychologist, because we have to go and talk about these things. It’s not just the finances, but also the behavioral part. And that’s something that I really enjoy as well.

Julie (host):  

Yeah, absolutely. Why the focus on women because I can see that you could cast your net really, really wide. And of course, capture men as well, because of the power of your services. Why have you chosen to focus on women?

Kathy (guest):  

Yeah, and you know, some people always say, “Well, this seems a little bit sexist to me. Why are you only focusing on women, not men.” And it’s obviously, you know, having a woman-owned business, the finances are no different than men. 

Kathy (guest): 

The focus comes from my mission, the mission of NewCastle Finance, I would really like for women in general in the world, to own companies, to actually be in the C-suite, to have that seat at the higher table that we have right now. Fortunately, we have been just miss underrepresented in those types of levels of business. So getting to that you have to understand your finances so that you can grow your business in a healthy, sustainable way. So finances are a big, big part of that, and that’s why I’m focusing on women because I want women to have that seat at the bigger table.

Julie (host):  

Yeah, absolutely. And we so need much more of that. We need those women around the table to increase to multiply at a rapid level, not only for women and confidence but also for business. Research proves that having women at the table makes a significant positive impact to business.

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Kathy (guest):  

Yeah, it does. It really does.

Julie (host):  

We are all leaders, but you cannot be a leader of others unless you are a leader of yourself first. Over the past two decades, I’ve empowered hundreds of leaders to deliver positive impact to the business they’re representing, resulting in extraordinary sales growth, and high staff retention rates. I’m often asked the question, “How can I work with you, Julie? Here’s how.” I present one-hour keynotes to corporations providing practical tools and strategies for leaders and their teams to take control of busy to be intentional with their actions and achieve the high-performance results that they’re looking for. I also work one on one with a select few ambitious and courageous leaders who understand the key to creating their success starts with them. So if you’d like to connect, you can find me at juliehyde.com.au. 

Julie (host):

Now, I’m really keen to dive into what the title of this podcast is because I love this. Tell me why you say that increasing your sales might make us less successful. I’m really curious about these.

Kathy (guest):  

Oh my goodness, this is such a loaded topic. We could have a whole like two-hour show based on that. But you know to give you the gist of it. I’ve never seen this with businesses. They’re really focusing on sale, I got a sale more, I got to get that revenue up. There’s especially when you’re in the beginning stages of the business. It’s like I gotta go $2 million, $5 million $10 million. And the businesses that I’ve worked with they’re usually between a million dollar sales and $10 million. And that’s when things get a little bit hairy. 

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Kathy (guest): 

Because people oftentimes forget that driving sales comes with increased cost, you’re going to have to support that particular sale or revenue that you’re bringing in. So it could be that you’re going to be hiring more people. It could be that you need to revamp your technology.  Probably, you’re going to have to figure out your taxes as well. So it’s not everything’s going to go in your pocket. You can have a business that’s making $5 million dollars in sales, when it comes to actual profit and cash take home, you can make the same as the business that’s doing 1 million in sales if they’re not careful. 

Kathy (guest): 

And that is all because people don’t understand the difference between revenue sales, profit, and between cash. So those are definitely three different things. And if there’s anything that I would encourage people to understand in terms of finances. If there’s nothing else, if everything else is Greek, just please understand that revenue sales, profit, and cash are three different things. 

Kathy (guest): 

So revenue is the sales that you bring into the business. Profit is what is left after you deduct all the expenses, and you know, figure out your taxes. So what’s essentially what’s left, and cash is essentially hardcore cash in your bank account. I always tell to my clients, “We can always play with profit the way how we figure out your accounting and how we do depreciation, especially if you have any physical assets in your business. But cash, it’s very black and white, you either have it or you don’t.” Making sure that you understand the differences. It’s really going to propel your business and help you figure out you know, “Am I doing well, or am I not?”

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Julie (host):  

Yeah, that’s right. And like you say, in terms of building a sustainable business. You’re right, because when I read that question, I was like, “Wow, yeah, okay.” I can’t I get that, because we can get so focused on just bringing the business in, like, just get it achieved his targets, you know, obviously, KPIs are set. But of course, you know, sometimes we don’t appreciate the cost that comes with that. And then what that means to the bottom line. So is that what we should be focusing on, instead of which is the bottom line?

Kathy (guest):  

In terms of thinking about business holistically, you should really think about all of the three things because all of them are important. So sales are important because you have to bring in sales. Profit is important because as you are bringing in sales, you’re also going to have costs. So knowing what the cost levels are, knowing what is optimal for your business. 

Kathy (guest): 

And people always ask me, “What should I have as my gross profit margin?” It really depends on the business on the industry that you’re in. What type of life stage your businesses in? If you’re at the beginning, you might not have as much cost or if you’re very, very beginning because you have to set it up, you have to start investing, you have to do your marketing, you have to do figure out your branding, you have to figure out your website, all of these things. You’re going to have a lot more costs associated with that. So your profit might just not be as you know, as good as it would be a couple of years down the line. Understanding where you are, what stage your business is in and what industry is it is in. So that’s one thing. 

Kathy (guest): 

And the other thing that’s really important, especially for people who deal with a lot of corporate clientele with crew sell to a lot of enterprise business is cash. Cash is very, very important. Because sometimes what happens is that when you deal with big, bigger businesses, their payment schedules, the way how they pay you, you’re gonna give them an invoice, but they might pay you 90, 180 days later. And in the meantime, you have all these costs, you have to pay your employees, you have to pay your webmaster, you have to pay your marketing person that you cash is going out, you got the revenue, but the cash coming in hasn’t come in. So understanding that, again, sales revenue, profit, and cash was three different things.

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Julie (host):  

Yes, really awesome insights there. Sorry, Kathy, what would be the one or if you feeling really generous? Three truths that you would like to share with our listeners today. 

Kathy (guest):  

You know, I’m gonna bring it back to when we originally started this conversation to the curiosity and having that curiosity about your financial statements, about your finances, and like really looking at them every single month. So when your accountant or your bookkeeper gives you that information, they’ll probably give you a report. Don’t just look at how did I do in this particular month but look at how are things trending, and how have thing has been going on for the last year. And going forward. 

Kathy (guest):  

Hopefully, you might have some ideas of where you might be. So think about that. So have a curiosity about your finances, about your business. And there’s a couple of really great books out there. And if you don’t know where to start. On my website, I have a resource center, you can go there. But there’s a great book, it’s called Financial Intelligence for Entrepreneurs that have really recommend because it’s going to give you that foundational knowledge about finances. And whether you have an accountant, bookkeeper, or even a Fractional CFO, like myself, you really should feel comfortable about those financial statements, what they mean, how you use them, and so that you can get insights about your business from them.

Julie (host):  

Do you think there is hesitancy with people understanding their finances because they feel really vulnerable? Because maybe they feel that they don’t know what they should. And then they don’t want to reach out and ask and, you know, I suppose it’s a two-prong question. So you’re saying that there’s a lot of vulnerability with people who open up to you and say, “Hey, I need help.” It’s the first question. And the second thing is, because of that, is there a bit of like a mess that you need to clean up, streamline to enable people to then get a really good understanding of key things that they need to focus on understanding the differences that you’ve explained today?

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Kathy (guest):  

Yeah. And you’re right, there is a certain amount of vulnerability there. If people that usually come to me though, already, “They’re like I have grown so far. But I know that I am at the end of my limitations at this point. And I just don’t know what I don’t know.” And this can be a really scary place. 

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Kathy (guest):  

So generally, what I tell them immediately. It’s like you’re definitely not alone. There’s every single business that comes to me is in that place, and it’s great, especially if they come in. The earlier they come in, the more we can actually do to give them that roadmap, that guideline. Even if I cannot help them at that particular moment, because again, they have to pass a certain revenue threshold. Because if they’re under a million, it’s just not something that I’m able to do. And frankly, it’s just not a good way to spend the resources on someone, you don’t really need a Fractional CFO at that point. 

Kathy (guest):  

But having that guideline, at least someone tells you give you some resources, where you can go so that you can be prepared to see what’s coming up the line, especially if you’re going fast. That is important. 

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Kathy (guest):  

And the other question is I believe you were asking, you know, if there’s a mess when I come in, sometimes it is, and it’s not because it was intentional, it’s just because no one really took a look of their finances in a broader scale. Usually, when you’re growing, you’re kind of putting things together and it becomes like a mishmash of things. Like let’s just get this going. You put some band-aids on, and it works. It’s good. But the more you do that, the messier it gets. 

Kathy (guest):

And especially when I started working with a business, we have to start at the beginning. The foundation of any single thing that you do in the business is data that you’re getting in having good data, because good data and good data in the accounting system, you’re going to be able to figure out what’s happening in the business financially, you’re going to be able to rely on those numbers, not figure out, “Oh, these numbers don’t look right.” It’s because they haven’t been updated, or maybe something got put in wrong, or you know, there could be a million things that could happen. But they’re also foundational, because when you have that historical information that it’s accurate and correct. Now you can figure out, “Okay, now I can start predicting the future.” So it’s not just, you know, throwing something against the wall and seeing what sticks. But you actually are able to figure out intelligently what is happening, and how I have the path forward.

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Julie (host):  

And so much power in those intelligent decisions that are made, because you have the data in front of you. I really encourage people to be thinking like that, even when making decisions with people, it’s like giving yourself the space to really think and consider your options, understand consequence, or what contingencies need to be in place, and then make your decision knowing everything. Gather all the information, because I’m pretty confident it’ll be the same for you in America right now. But, you know, there’s a massive salary squeeze here, people wanting increases. And you know, it’s really difficult to get new team members on board, new staff on board. The salary increase is real. And that’s really hard for business owners to make that call because bringing another team member into the business is a big decision, but then maybe offering them or having to pay them more than what they first thought they would. That’s another decision again, that can have huge ramifications on the business.

Kathy (guest):  

Again, you’re increasing your costs, you have to understand I am going to be able to support that. I get really excited when people have CRM, the customer relationship management system, because the data that you get there, you can track your leads, you can track the confidence level, you can track the minimum maximum of deals. It depends on the business that you’re in. But that type of data is absolute gold when it comes to financial forecasting, especially as accurate as it can be, because that gives you intel on, “Hey, maybe this deal is actually going to pass in six months, and I need people on-boarded before that.” And maybe right now I can be, “Okay, for the next four months and four months in, I’m going to hire this person onboard them for two months, pay them the salary, and then they’re going to be working on this project.” So that’s when you start to play around with, “Okay, when do I need them? How much is it going to cost me? And how much money is this going to bring?” 

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Julie (host):  

Again, it’s just saying that spread out in front of you and making that intelligent decision once again, because it’s understanding then what you do if that project doesn’t come in? Or if that business doesn’t come in, then what does that mean? You need to be comfortable with that. You mentioned before that you’ve got a lot of resources on your website, which you absolutely do. And I’ll share the links for that with the show notes. Is there anything in particular that you would point people to?

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Kathy (guest):  

Yeah, if you go on the website, newcastlefinance.us. And you click on the resources, it’s going to give you the books that I recommend, there’s some blog posts on how to actually manage the finances, and it also gives you information on the podcast. If you have a growing business, and you have a lot of questions about how do I manage people the leadership so as Julie, you’ve mentioned in the beginning, I have a podcast, Help! My Business is Growing. We’re not just talking about finances, we talk about other aspects of the business as well. And the reason for that is because I always say that anything and everything that you do in your business will always come back to your finances. So make sure that the decisions you’re making are good and sound. 

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Julie (host):  

Yes! Awesome. So people need to jump on your website and tune into your podcast. Kathy, are there any further words of wisdom that you would like to leave our listeners today before we wrap up?

Kathy (guest):  

Yes. Remember to have fun and your business. I know it’s hard and things can get hairy sometimes, but you started this business for a purpose. Remember that purpose.

Julie (host):  

Oh, I love that. That’s such a fantastic note to end on. So Kathy, thank you so much your passion shines through when you are talking about what you do, and you’re clearly so clued on. So anyone who has partnered with you in their business is on a winner there. Kathy, thank you so much for your insights and for your guidance. And thank you for making it count for so many. 

Kathy (guest):  

Thank you so much, Julie. 

Julie (host):  

Thank you for listening to today’s episode no trust that you enjoyed leaning into one of the precious moments shared. I invite you to leave your thoughts as a review in support of the show. You can also share with your network and even rate and review it. I would appreciate that feedback and connection. I’d love to connect on LinkedIn or Instagram via my handle Julie Hyde. Until next time! Live and lead intentionally and make it count.