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fin/ally profiled by BeachHead Strategic

Last week, FIN/ALLY was profiled in an interview with Rob Drynan from BeachHead Strategic as part of their Dispatches from the Front Lines series. BeachHead Strategic helps entrepreneurs build great businesses by designing a high-performance operational structure to achieve the next stage of growth. It was an absolute pleasure to sit down with Rob and discuss our firm’s mission to help guide more creative entrepreneurs become financially successful.

Dispatches from the Front Lines: an Interview with Heather Purcell, Principal at Finally

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Tell us more about Finally. 

We believe that having access to good financial management is not a luxury, but rather necessary for businesses to be successful. Over 50% of small businesses fail in the first five years and we want to improve that statistic. We’ve packaged a solution that leverages advances in accounting technology to bring a complete solution to small firms in a way that is financially accessible. Think of us as part-time CFO, part analysts, and part general accountants, all for one monthly fee. Almost all of our professional experience is in creative firms and that’s why they’re our target client base. It’s an area we know really well and where we can provide the most value for our clients. Our clients really appreciate that we understand their industry and their unique needs.

What does an engagement with Finally look like?

We have two types of engagements with clients: a fully outsourced accounting department, or for firms with an accounting team in place, part-time CFO services.

Our fully outsourced accounting engagements kick off with the planning piece. We work with our clients to understand their current position and their financial goals. From there, we work with them to develop a realistic financial plan. Usually, we’re also working in parallel to onboard the accounting work at the same time.  A lot of this work is done on-site in our clients’ offices. Once a client is onboarded and we’re aligned on the annual plan, most of the work transitions to a remote solution. We have tools to electronically share documents, pay suppliers and employees, and we’re in regular contact with our clients throughout the month. Our reporting is delivered monthly and our clients are very aware of how they are performing against the plan we built together. Beyond that we’re only a phone call away when they need help with higher-level projects like developing a pricing model for a new client, designing a reward plan for a new senior employee or revisiting their annual plan when there is a material change to their business. Ultimately our goal is to provide the most impactful financial solution at about the price of an entry-level accountant.

Our part-time CFO services are mostly done on-site in clients offices.  In these engagements, we really operate as an extension of the clients’ leadership team, only on a part-time basis.  Clients benefit from our public and private company expertise. We know what good looks like from a finance POV and we work with the existing team to elevate their financial product and to provide the coaching and mentoring that their non-financial supervisors can’t.

How did you get started doing this kind of work?

In my last role, I had the opportunity to relocate to Madrid. It was an opportunity that I took, but for many reasons, it didn’t work out and I had to figure out what I was going to do next. I knew that I did my best and most impactful work when I was working alongside entrepreneurs and I decided the time was right to leave my job and strike out on my own doing the work that I love. My last full-time job was in an e-commerce business. It was my first exposure to businesses that were designed to scale. I started to think about how I could apply some of those scaling principles to my own work. Once I did some research, I realized pretty quickly that there were several accounting firms already providing remote bookkeeping solutions. As an idea, it wasn’t something new, but it gave me comfort that the proof of concept was already out there. I also bumped into lots of people who were offering fractional-CFO services to smaller businesses but I didn’t see any examples of people bundling the two services together. None of the companies that I researched was emphasizing the financial planning and analysis piece—it was either thought-leadership at the CFO-level or bookkeeping, but nothing in-between. Most firms that I bumped into, particularly on the accounting side, were founded by people who had worked in public accounting rather than people that had worked in industry. I felt that my experience working inside of businesses was something that would be really valuable to my clients.

For me, this seemed like a real opportunity and that’s how Finally CPA came to be. I spent last summer researching technologies and learned new tools so I could choose a tech stack that made the most sense for my client base. Because most of our work will be done remotely, it’s really important that the technology works quite well. I’m used to working with enterprise-level technologies, but small businesses often can’t afford it and don’t really need it. It was a big learning curve for me to identify what new technologies I could combine to deliver a product for clients in a way that was affordable. Beyond that, I relied on my generous network to help bootstrap me to launch in September 2019. I was really lucky to have their help. Since then, every day has been a hustle. I’ve had to really push myself with the things that don’t come naturally to me—particularly on the sales and marketing side—but I really do love helping creative entrepreneurs and I feel quite lucky that I have the opportunity to do that now.

Do you have any partners? 

I do. I started the business alone but I knew right away that there was one person I wanted to join me. I’m happy to say that, as of December, I’ve taken the leap and brought Cecillia Long on as my business partner. Cecillia and I have worked together for many years and our strengths are very complementary. While we have a shared vision around quality and client service, she’s really strong on the technology side and technology is going to be a real enabler for us in order to scale. 

How do you guys divide duties?

It’s very early days—I’m only a few months into this venture and Cecillia is even newer—so, at this phase of our lifecycle, I’m going to be responsible for the sales and marketing and the part-time CFO work across our portfolio of clients while Cecillia is going to be responsible for delivery and implementing good processes for our clients—both internally and externally, testing and learning new technologies, building meaningful management reports, and hiring and training our team of accountants. We have a shared vision for what good looks like and she’s continuing to build the infrastructure for us to grow in 2020. 

Tell us what your ideal customer looks like?

Our ideal customers are growth-oriented creative entrepreneurs. We’re probably not the best solution for “slow and steady wins the race” types of businesses. We’re looking for businesses who have a little bit of traction and are now ready to see 20-40% growth year over year. Our customers have generally traded in good jobs for entrepreneurship early in their careers, so this is a really important investment for them. Generally, they’ve had a bookkeeping solution and they’re starting to outgrow that. They’re starting to have questions that maybe they’re not equipped to answer or their bookkeeper isn’t equipped to answer. Often they come from larger businesses so they have an idea of what a finance department looks like in bigger companies and while they might have seen that as a blocker at the time, they’re now realizing that finance can be an enabler of growth for them. 

Our clients are generally at the stage where they’re looking for someone to help influence their business decisions, to challenge them and not necessarily to be agreeable with them, to improve their financial performance, and to also take care of their bookkeeping needs. They love that we come from a similar background and that there’s no time wasted getting us up to speed on their industry, how they price, the titles they use, their salaries etc. We’re already really familiar with all of that and our clients see that as quite valuable.

You’re dealing with creative entrepreneurs—is it fair to say that, for a lot of them, this is their first time having to deal with the financial aspect of running a business?

It’s true in the sense that it’s the first time they’re personally liable and responsible for the success or failure of the business. In almost every instance, they have a good awareness of the financial aspects of running a business—they were either running a department or were accountable to a team and they had numbers that they needed to meet—but they didn’t have to worry about cash flow, they’d never signed paycheques, they’ve never put their name on a five-year lease to a landlord, they’ve never backed their investment with their own private residence. Those are all things that are new and exciting, but also very frightening. A lot of the time, as a client’s business becomes more successful, their risk also increases. That’s when clients find they need another set of eyes from someone who does this for a living. They need impartial judgment on whether something is good or bad. On whether it’s normal to have clients who haven’t paid them for 90 days or if it’s ok to ask the client for 50% upfront.  They’re looking for help from someone with that level of experience.

Do companies ever outgrow you?

We haven’t experienced that yet because it is early days, but I feel like that would be a really successful outcome for us. Our target customer is between 5 and 20 employees and up to around $3 million dollars, but it would be really great if we could get them to $5 million and a stage where they need their own in-house finance team.

As a new entrepreneur, what’s the most powerful lesson you’ve learned so far?

I love Steve Jobs’ quote that says, “if you look really closely, most overnight successes took a long time.” I’m not someone who is patient on a good day, so I have to keep reminding myself that this is a marathon, not a sprint. We need to stay confident in our strategy, continue to execute well, and remain focused on delivering a great product and the success will follow. So I guess the biggest lesson for me has been to be patient.

Tell us a little bit more about the challenges your business faces.

As I’ve already mentioned, we’re still in the very early days but we’re pretty proud of the fact that we’ve added several notable clients already. The challenge that we’re going to have to face much earlier than we expected is going to be around capacity. As we scale, particularly on the bookkeeping end, there’s a greater volume that we need to push through the funnel. It’s quite important to Cecillia and I that we have the right client accountants, not just any client accountants. Getting that capacity built-up on our bench quickly is going to be a priority for Q1. 

The one thing that’s really important to Cecillia and I is that we never want clients to feel like they’re working for us. A lot of these cloud-based accounting solutions tend to be very rules-based so the client must do everything in a certain way or in a certain order or no work gets done. Or worse, the work gets done but clients are left with more questions than answers. Cecillia and I work quite hard to ensure the clients don’t feel like they’re working for us but that we’re working for them. We will always try to ensure that they’re using the right technology for their needs, but we never want that to get in the way of us being able to work together. 

If you could remove one task or responsibility from your day-to-day what would it be?

When I first launched, I was a business of one and I needed to do everything. It was good to provide me visibility into how the work gets done both from our firm’s perspective and from the perspective of our clients, but I’m pretty thrilled that Cecillia oversees the technology and delivery piece now.  By doing so, I’m able to spend more time working directly with existing clients on higher-level issues and growing our business.

When it comes to your own operations, what are some of the more specific pain points?

Our operational pain points right now are infrastructure-related—how do we standardize our processes in a way that maximizes efficiency but doesn’t make things so rigid that it impacts our clients’ experience of working with us? How do we manage communication across many clients? Often, our clients want us to be able to communicate with their clients as if we’re part of their team. That requires us to have email accounts across many businesses so we have to figure out a way to scale that process and make it seamless. It’s an important part of our value proposition to operate as an extension of our clients’ teams so it’s a question of ensuring that their clients see us as part of their team as well. 

The other big issue for us right now is workflow. A lot of the work that we do is very date-driven, there is a hard deadline for things and they can’t be late. But those deadlines are not necessarily the same for each client. One client might do payroll every two weeks, the next client might be on the 15th and 30th of each month, and the next client might be on once a month. Someone could have a quarterly HST return versus an annual HST return versus a monthly HST return and making a mistake on these things could be quite punitive for clients. We really need to find a workflow management solution now. The more established firms are managing hundreds of clients so while we’re not worried about finding tools to manage these issues, we just need to solve them much sooner than we thought.

What is the best part of being an entrepreneur?

I feel like I get to do the work that I’m best at with the people that I want to work with. I’m lucky that I get to take all of my years of experience working for others and apply it in a way that makes me feel proud of the work that we do. I truly do love helping other entrepreneurs be financially successful so that part of it is quite rewarding for me. And from a personal point of view, there’s a certain amount of flexibility that comes with entrepreneurship. I have a young family and I’ve found that the additional flexibility really makes our life work.

What are some of the tools you use to inspire you or to make your life easier?

This year has been mostly about professional development and the one surprising source of professional development for me was amongst the accounting community. I’ve spent a lot of time in workshops and going to meet-ups. The one really great investment of both my money and my time this year was going to a workshop hosted by a company called Thriveal. It’s an organization started by accounting firm founders to teach other entrepreneurial-minded accountants how to start their own businesses. None of this was new to me—I come from a business background—but it certainly was a good reminder and it enabled me to prioritize the steps I needed to take to go from idea to launch. There were around 16 people in attendance so it also provided me with a community of other owner-operators that I can trade notes with. 

The accounting platform that we’re using is called Xero and they’ve also been very helpful in connecting me with like-minded accounting entrepreneurs who have been extremely generous with their time and know-how.

I’m really lucky that my parents were always self-employed, I have a few siblings that are self-employed, and at this age, a lot of my friends are also self-employed. In terms of my career, other than my first and my last job, everything in-between was within owner-operated businesses so I feel like I’ve gotten good exposure to the realities of owning your own business. Because of that, I’ve gone into this venture with my eyes wide open. 

What’s next for Finally? 

For 2020 we need to just continue to execute well and if we could double our client base we would feel like that’s a win. After that, maybe we consider extending our offering to other project-based businesses, for example, the construction industry or engineering firms—other verticals that have similar business models for growth.