She Built It - Why Hiring a Fractional CFO is Important - with Kathy Svetina

Transcript 

​Melanie (host):

Hi, I'm Melanie Barr. Welcome to the She Built It Experience with Melanie. You are here because you want to experience the life and business that you crave. Join me as I talk to women who have successfully built it, a career and business that they love. We dive into the topic of how they built it and talk about everything from having the courage to make career leaps, to the details of how to lead effectively, create successful teams, implement strategies for growth and infuse tech innovation.

​Melanie (host):

Magic happens when we focus on the part of ourselves and our business that brings us joy. Let's dive in. Kathy Svetina is the founder of NewCastle Finance, a company offering fractional CFO services to women-owned businesses. During her 14 years as a senior level financial planner and analyst for Fortune 500 companies, she saw firsthand how large companies used financial information to drive their companies forward.

​Melanie (host):

Kathy started NewCastle Finance because she wanted to offer that same powerful financial insight to women-owned businesses. She helps business owners as a financial puzzle-solver to get clear on their financial strategies so that they can feel confident to make decisions that drive results and create a thriving business. I am so thrilled to welcome you, Kathy.

Kathy (guest):

I'm so glad to be here, Melanie.

​Melanie (host):

Please tell us about your time as a financial planner and the successes that you saw Fortune 500 companies experience.

Kathy (guest):

Financial planning for businesses is very different than financial planning for individuals. When people hear financial planning, the first thing that comes to mind is 401(k)s, investments and stocks, right? That is very different in the business sphere because financial planning in the business is looking at the company's resources, their cash, their human resources, their equipment.

Kathy (guest):

You're planning for the future. You're taking all of the resources that the company has and you're looking at the industry, you're looking at the economy, you're looking at the trends. You're trying to make sure that the resources that the company has available are being used wisely in the future. I was in the billion-dollar companies and doing financial planning and strategy for them for 14 years and I was in different industries.

Kathy (guest):

One of the things that I've noticed is that they do a lot of decision based on the data, so they do need a lot of people to support that, as you can imagine. One project that comes to mind where we really like using the data is that one company that I was with before actually did a lot of transactional manual work. We were trying to figure out, how do we get away from that?

Kathy (guest):

Because when you do a lot of manual and transactional piece work, you have to have a lot of resources. You have to have a lot of people. We were trying to figure out how we can get away from that and actually automate it and use the people that we have to not do so much of the manual work, but to actually do value-provided work.

Kathy (guest):

With looking at the processes that they were doing, looking at it holistically, we were actually able to reduce the cost of people by 50%. We were deploying them into different organizations because it was a conglomerate company and the savings were just through the roof. When you're looking at the big companies like this, this is not unusual for them.

Kathy (guest):

That's what they do on a daily basis. They look at their processes, they look at their financials and they look at their resources, how they can deploy them better. When you come to the smaller businesses, no one's really doing that. It's really disheartening for me to see that and to look at that. That's where I decided, "You know what? I really want to help small businesses get a better handle on this."

​Melanie (host):

I love that you take such a holistic approach. Can you share with us who an ideal client would be and what that might look like for you?

Kathy (guest):

Yeah. An ideal client for me is a business that's between a million dollars in sales to 10 million, because those are the ones that already achieved a lot of traction in their sales. They have the clients and they have the customers, but they're starting to be more complex, when you think about a business that is three, five million in sales versus a business that's doing 500, 200,000.

Kathy (guest):

There's a lot more that needs to go in to looking at the business. Not just from a financial perspective, but also from a holistic perspective of, how are you bringing all the sales, all the marketing into it? How does it reflect the finances? The businesses that I work with are between a million and 10 in revenue, because those are the ones that really need the help to get them and to propel them in their growth forward so that they can grow if they want to.

Kathy (guest):

Or, if they don't want to do that, and that's okay because some don't, that they're actually healthy and sustainable. I'm very much in the healthy and sustainable business. The clients that I want to work with, are those really keeping that in mind and really have that as a goal, is a healthy and sustainable business.

​Melanie (host):

It also seems like you have a passion for supporting women and women-owned and led and operated businesses.

Kathy (guest):

Yes. That comes again from my corporate time as well, because I was in finance, and that is such a male-dominated world. I noticed the higher you go into the ranks in the companies, when it comes to leadership, majority of it is men. It really bothered me too, because I mean, women have so much to offer and we're like really 50% of the population. Why are we not included in these conversations? Right?

I said, "You know what? How about we actually start making our own businesses and get into the leadership positions by ourselves?" The way to do that is to actually grow through the finances and be really financially savvy. That's when I said, "I can really contribute that for women to get into those leadership positions by being financially savvy."

​Melanie (host):

I love that and love that you're supporting women in that way. What gave you the courage to say, "I'm going to make this leap in my career and my life, and I'm going to start NewCastle Finance."

Kathy (guest):

I would lie if I would say that it was easy because it was not, especially when you're in corporate for so long, you get embedded into this view of, "I want to climb the corporate ladder. I want to go further." When I left my previous job, I was thinking, "What is it that really feeds my soul? What is it that I really want to be doing?" Because I can always get another job at the corporate level, and I come from a family of entrepreneurs.

Kathy (guest):

Unfortunately, a lot of them actually had failed businesses. The reason why they had failed businesses is because they really weren't financially savvy. That planted in the back of my head, "Maybe I want to try the entrepreneurship route by myself."

Kathy (guest):

When I left my previous job, that's where that idea sparked again, this is something that you should be looking at, and not only from my own perspective, like I said, but also for helping other businesses so that they don't have to struggle what my family had to struggle through with these failed businesses because there was wrong pricing, people were stealing from them. I mean, there were a lot of issues. I really, really wanted to help people to not have to go through it.

​Melanie (host):

The financial side of it is everything. You have to have the sales, you have to manage the finances for the business going forward in order to scale and in order to grow. What do you enjoy most about what you do now?

Kathy (guest):

I think the thing that's really enjoyable to me is being my own boss and actually working with people that I really love working with, is that I get to be a part of other people's businesses. It's such a privilege to be able to be a part of it, to see how they're operating, to actually have them ... It's almost like you're helping them raise a child in a way.

​Melanie (host):

You have to have that intimate knowledge. They have to trust you in order to share those aspects of their business with you.

Kathy (guest):

Yeah. Exactly. There has to be a lot of trust there because I am there. I am essentially holding their hand and guiding them through this. That's what I really like too. I get to be a part of someone else's business. I get to help them and you have that relationship with the business owner because they trust you. It's like on a human level, it's a really good feeling as well, but it's such a privilege to be able to do that.

​Melanie (host):

You're on their team, and every entrepreneur, great to have people on your team that's helping you scale and helping you move forward, and thinking about those innovative ways to help you get to the next level. Is there a memorable story that you can share with us about how you helped a client grow their business and reach their goals?

Kathy (guest):

When businesses come to me, they really struggle. Like I said, they've grown already. Some actually have grown really fast, especially during COVID. I mean, some businesses are growing exponentially. They're seeing that their sales are growing, but the expenses are also growing with it as well. They're at the point where things are starting to spin a little bit out of control and they really don't know what to do. They go to their accountants, they go to their bookkeepers and they're asking all these management questions.

Kathy (guest):

The problem is that accountants and bookkeepers don't do that. They actually do the transactional pieces. They'll help them manage the books in a way that everything is recorded, that the taxes are done properly, but when it comes to planning and figuring out all the management decisions, that's what they don't do. Luckily, some have actually referred them to me to help them with it.

Kathy (guest):

It's amazing just how much a business can actually transform with putting just basic foundational stuff. Like putting the budgets together, actually understanding what the levers are in business, looking at the profitability reports, looking at what type of clients and project they're bringing on, or even for the payment structure. Are you on a net 30, net 45? I mean, all of these things.

Kathy (guest):

When you start putting and implementing these things together, you can see the business exponentially grow in a healthy and sustainable way, of course, or you can see the cash flow and the cash reserves are just getting bigger. This is really satisfying to watch too, because it's almost like a light bulb comes up and everything just falls into place, right? It's like the puzzle pieces coming together.

​Melanie (host):

You bring up such a good point, because you look at a business and you think, "Wow, they've grown so much during COVID. That's so great." With growth comes additional challenges. You have to add more structure to the teams and to your business for that growth. I think people don't always think about that when they see a business start to thrive.

Kathy (guest):

Yeah. That's the piece that often gets forgotten because it's like growing is this Holy Grail, but I always ask, "Why are you growing? How are you growing?" A lot of the businesses they wanted to grow, but there was not a real good reason for it. It was almost like it was outside pressure of growing, because everyone else is growing, I have to grow too.

Kathy (guest):

I always ask, "Why are you doing this? Are you supporting a certain lifestyle? Do you want to grow a business because you want to sell it down the road? Do you want to have the IPO, the initial public offering? Do you want to be a million, billion-dollar business down the road?" I mean, all of this is possible, right? But you have to have a definition of why you're doing what you're doing, otherwise it's like any path will get you there.

Kathy (guest):

If you don't have a plan for growth, you don't have a plan for the expenses and everything you need to support that growth. On the other hand, also, it can really damage your reputation because if you're not able to deliver those services to the customers and to the clients, that can really take a toll on your brand. Thinking in that terms, you really have to look at it holistically, not just in terms of, "Oh, I want to get to 10X of my sales."

​Melanie (host):

You're so right, because how can you grow if you don't know where you want to go. When you start a business, it's always interesting to think about, "Okay. How do I want this to end? Right? Because my children might not want to take it over if I grow it to ..." It's so great that you ask those really important questions as far as growing a business and helping someone find and live their joy, because ultimately that's really what it's all about.

​Melanie (host):

It's so smart to say, "Do you want to grow?" Because maybe someone is just growing, to your point, because they feel like they have to because everybody else is, but maybe they're happy in their own sphere of growth and how they're scaling at that time.

Kathy (guest):

Yeah. There's nothing wrong if you want to stay at a million dollars or even less than that and just be a solo provider or just have an employee or two. There's absolutely nothing wrong with that. You don't have to be pressured into, "I have to grow into a 10, 20, 50, a hundred million dollar company." There's really no reason for it if it doesn't support you.

​Melanie (host):

I love that you approach the whole aspect that way. How has your previous experience as a financial planner helped you in building your business and in what you do today?

Kathy (guest):

A lot of the finance is actually not just in numbers. It's also in the psychology behind it as well. In looking at the business holistically, it's almost like connecting all the different points, connecting the different puzzles. To be able to see all these different puzzles, you have to have a lot of curiosity and you have to be really good with problem-solving.

Kathy (guest):

I think those are the two things that have really helped me, not only with delivering services to my clients, but also in my business as well. Not everything that I've done at the beginning of my business, especially in terms of marketing was a good decision, so having that curiosity of, "What is it that I can do better?" Or, "This is not working, what can I do?"

Kathy (guest):

Having that research and actually looking for it, like I said, holistically, even with my own business, I'm looking at it from a holistic point of view, and having that mindset, it's really helped me in my own business, but also in how I approach the client's business and how I work with them. Curiosity and troubleshooting for sure.

​Melanie (host):

That's really great because we're not all good at everything. Figuring out the things that we're not good at and bringing in someone like you, if we don't necessarily want to focus on the finances. You have such a unique perspective, because you don't seem to look at just the analytics. You look at the business as a whole. You see the entire picture.

​Melanie (host):

What is your strategy for management, for staying on task to accomplish what you set out to do as well as motivating your clients and your teams and people around you?

Kathy (guest):

I operate from ... What is that quote? Give a man a fish and he'll eat for a day and teach him how to fish and he'll eat forever for the rest of his life?

​Melanie (host):

Yes. Yes.

Kathy (guest):

The way I look at this is, how do I take that investment upfront to have good processes and systems and the way people think and support them so that they can make decisions on their own and instill [inaudible 00:15:16] that they feel confident in what they're doing. That actually comes as I see it as guiding, as this coaching more than actually telling people, "This is what you need to do. This is what you need to do." Because if you just tell them what to do, they're always just going to wait for your input.

Kathy (guest):

A lot of it is just asking the right questions and having that consultative approach of, "This is not working. What do you think is the path that we should go down?" The same thing with my clients too, they are the expert in their business, but my job is to ask the right questions and to guide. The same thing with my employees and the people that work for me, and my contractors. Provide the expectations, but then actually guide them so that they're able to make good decisions and help with the business.

​Melanie (host):

That's great, because everybody's business is different. I like that you said you look into how someone thinks so that you can guide them to confidently make those decisions on their own. Someone might not look that deep. They might just say, "Here's the facts, go do this." It's so important to dive deeper instead of just following the steps and the normal path.

Kathy (guest):

Yeah. I have a saying that I say, cookie-cutter approaches are for cookies only.

​Melanie (host):

I love it. That's great. How has your business shifted over the last year? What obstacles have you been able to overcome and what successes have you had?

Kathy (guest):

The biggest obstacle for me has been face-to-face events. I used to do a lot of that and I used to do presentations face to face. That has been all wiped out. Interestingly enough, it has actually been almost like a boom to my business because now when I do events online, I get to talk to people across the country. I'm able to talk to them via LinkedIn, email. I mean, they find me on Google and through podcasts.

Kathy (guest):

It's interesting how my reach has actually expanded during COVID. The way how I do work hasn't changed because I've been virtual and I've been doing it from home. I've also seen that a lot of people are really looking for that financial plan support now too, because they have to plan more in advance. They're seeing that there's a lot of value in being proactive versus reactive. There's a lot of demand.

​Melanie (host):

Yeah. I think COVID forced us all to slow down and look into ourselves and also our processes for our business, how we're going about things. COVID, like you mentioned, pushed us all to be a little bit more virtual. Maybe we wanted to go in a virtual direction, we were thinking about it, but didn't really make that leap quite yet. I agree with you. That part's been really fun.

Kathy (guest):

Yeah. You get to talk and have conversations with people that you normally just would not.

​Melanie (host):

Yes. Magic happens when we focus on the part of ourselves and our business that brings us joy. What is one tip that you can leave with us today about how you find and live your joy?

Kathy (guest):

Finances are often deemed to be dry and boring.

​Melanie (host):

You take that approach so much further to where a business owner listening to you is going to say, "Wow. I want someone like you on my side." Because you're not just going to look at the numbers, you're going to look deeper than that.

Kathy (guest):

My goal is to make finances as fun as possible. Definitely make them approachable. Because what brings me joy is when someone actually starts looking forward to looking at their finances and actually having meetings with me and their accountants, because they're really getting it. They're getting excited. They're seeing the plan laid out for the business. They understand what it means.

Kathy (guest):

For someone who's been in finance for so long ... And I've wanted to be in finance since I was 12 years old. Being able to share that joy, it's a privilege because it helps other people and it makes finance approachable.

​Melanie (host):

It's so great that you knew what you wanted to do at such a young age.

Kathy (guest):

I did want to go into investment banking, but that did not happen so I went into corporate finance instead, but it worked out beautifully. It worked out really well.

​Melanie (host):

It's so great that you take that approach to make finance enjoyable because I can see anybody running a business wanting to work with you or someone that would put it in that light.

Kathy (guest):

It's such a joy for me because now they're able to look at finance in a completely different light, something that's useful and hopefully brings them a little bit joy.

​Melanie (host):

Thank you so much for joining me today. Can you please tell us how and where we can find you?

Kathy (guest):

You can find me on LinkedIn under Kathy Svetina, or you can go on my website, newcastlefinance.us.

​Melanie (host):

If you are new to She Built It, we'd love for you to join us. We offer community memberships, masterminds, innovative virtual events, and meaningful connections to entrepreneurs and corporate leaders. Please also check out our She Built It Shop, curated products from women-owned businesses who put their heart and soul into their beautiful and innovative products. We offer She Built It business consulting and the She Built It blog.

​Melanie (host):

Thank you to everyone around the world who joined today. Thank you to my editor, Rich Stroffolino. Please download and subscribe wherever you get your podcasts. Until next time, together, let's let nothing stop us from experiencing the life that we crave.