SPEAKER_01: 0:00

This is the Empowering Healthy Business Podcast. And I'm your host, Cal Wilder. Each episode we'll dive into topics of work to folks who want to run businesses that are both nicely profitable, sustainable, and scalable, and who want to achieve balance in their lives and realize their potential inside and outside of work. The show is sponsored by Sparkbooks, provider of bookkeeping and accounting for businesses. Let's get started. Welcome, listeners. So in this podcast, as you know, we're all about figuring out ways to empower healthy business and grow businesses and have success as small business owners. And there comes a certain point in time where small businesses become mid-sized businesses. And there's this category small and mid-sized business or SMB or what's the difference between the small business and the mid-market? And today we're going to explore that and what goes into kind of graduating from being a quote unquote small business to being quote unquote part of the mid-market. And so in my mind, you know, most of our clients at SmartBooks, they're small enough, they have fractional aka, part-time accounting, and finance staffing, which is part of what we provide. But we see that once clients, depending on their industry, depending on their business model, maybe they get the 10 or 20 million dollars or more in revenue and they start to kind of graduate and their needs evolve and they become more of a mid-size business. So joining me today to explore this topic and how to navigate that process is Priya Ksandaraj of uh Fin Team, who uh I got to know um as he was coming off uh a year being president of the Boston Chapter of Financial Executives International. So welcome to the show.

SPEAKER_00: 1:54

Hi, thank you, Cal. Uh, I really appreciate um you giving me the opportunity to be on your show. And I think um uh I mean just a quick background. I think you gave a great introduction, so thank you. And we started uh FinTeam about two years ago and really to cater to companies that need more professionalization gap, I would say, where uh they do have something going, where smart books kind of fills the gap in terms of when they are trying to start up, when they're really in the survival mode, to slightly scaling, I would say, but not really um there yet, when in the sense that they're scaling out of that and really looking into a next set, like um, like you say, graduating to mid-market, I think, um, is where they really need to re-evaluate the entire um uh you know, skills gap in terms of you know, early employees, can they scale? Are they there, aligned with the growth of the organization? And I think that's where you know what we're gonna talk about today is gonna be very, you know, will be very relevant.

SPEAKER_01: 3:03

So you worked at some big big companies in the past. I did a year and a half at Staples. Uh my one and only experience working for a Fortune 500 company, and uh Staples is great. Um, but um I like small businesses. Um but maybe you can give a little bit of a background on your experience at these larger companies that you're now able to bring to bear on small to mid-sized businesses.

SPEAKER_00: 3:30

Sure. Um, I think really it was it's a great opportunity to be explored to larger companies because I think we take small things for granted, to be honest. Um, I think that from uh resources, when you think of resources, it's like a vast opportunity of talent. Um, I think we have other resources, whether it's budget or programs and experience. And um, we do have that in larger companies, right? Like they you have the opportunities, so both exposure and experience, it's easy for you to get for large companies. But I feel in smaller companies, they're in such survival mode, they don't think about all these things, and I think it's harder. So I think that's one. So I think working in a very structured environment, you worked on really focused areas. If you're doing certain aspects of a business, then you're only doing that. Like if you do project finance, you're only focused on your project finance, you don't worry about anything else. So I feel like that's what it allows you to do. So you become an expert being in a certain area, whereas in a smaller organization, you gotta be nimble, you gotta keep trying, you're you're gonna be scrappy in terms of learning all aspects of the business and trying to figure out what makes sense for them and what adds value at that time that's crucial for them to be able to go to the next level.

SPEAKER_01: 4:54

Right?

SPEAKER_00: 4:55

It's really yeah.

SPEAKER_01: 4:56

So when you were working at the big companies, what was your focus area?

SPEAKER_00: 5:02

So I worked, I started off with core accounting. I mean, I'm a finance geek, um, and so started with like core accounting, so part of the controllership organization, uh, did internal reporting, external reporting, uh, very involved with the 10K and 10Q in terms of the reporting and how of that all of those things worked. Um, and then I kind of got, I would say, graduated to financial systems, and that's when I it really like, you know, I I was very engaged in working with a lot of the different tools that we used and how data came in. That really I was very intrigued by how um manual some things were, you know, and so siloed that we had to kind of put them together in order for us to make sense of it. Also worked on a lot of FPNA work, uh, worked with project finance teams a lot as well, and also like from an audit and you know, risk control mitigation teams. And I worked with like, you know, we call it, I mean, now you call it transformation, but really at that time it was more on, it was um like an uh a special project that we worked from IT and the CFO office, which was pretty much a business transformation initiative, which really looked at people process technology, and we did insourcing, we did outsourcing, really built centers of excellence across the globe. So that was a very big aspect of what I did. And then um, you know, even though I worked for multiple like Fortune 500 companies, um, my role was pretty much through all of these like various like sectors where I supported the business operations or worked within commercial finance teams to build centers of excellence um in one way or the other.

SPEAKER_01: 6:48

So these companies, just to put it in context, how many total people do you think worked in the accounting and finance function? Oh, I would say about um oh I I'm I mean I'm trying to think like um in AES, like our accounting team was more than um hundreds, like I would say and these are big public companies, so these are with huge these are beyond the mid-market, but let's thought let's I mean we gotta kind of tackle this thing in pieces. So yeah, one of those pieces is staffing, right? And so as the business grows from five million to ten million to twenty million, plus you know, the staffing requirements changed. So what have you observed about um kind of how do you staff the accounting and finance function successfully as a business skills like that?

SPEAKER_00: 7:45

So I think as you start off early on, having a team like yours, I think is great because then you're looking at there's a consistent process. It's not sporotic financial, right? There's a discipline, there's a consistent process. I think where you need to go to the next level is you really need to think about how are you scaling with your financial systems and the people readiness, the teams that you have, and figure out what is the right time to have a fractional CFO model. Where do you need the strategic finance leadership and what's the skill gap you have? Do you need to measure and build your KPIs, right? And what are the key KPIs that you absolutely need that are critical for you? So you can figure out your sales productivity, your margin drain, your, you know, and you can drill down into multiple layers and kind of peel the onion to figure out where do you go, how do you go, and be aligned with the, you know, with the business model itself. And that's why in my mind I think about it more as a professionalization gap versus a system or a people gap because they're all together. So it's like, you know, skills gap to some extent, um, you know, information gap, right? Because you need that as well. Um, and then also some daily operational things. So I think they all kind of put together for you to kind of prepare. And also I think about like putting, like, you know, you may not, you may not require an audit, like as you scale up, but you may want to be prepared to have an audit. Right. So I think you need to ensure that your books are clean, you have accurate controls that are in place. So when you think about the controls, that's when I would say, okay, like think about how are you structuring it, even if you have an outsourced group or an in-source model where um you need to see, okay, when what where is the data residing? How do we review it? Who reviews it? When do they review it?

SPEAKER_01: 9:50

So if I'm a so if I'm a business owner and you know, I've grown, I've got an extra zero at the end of my annual revenue now. I got more money at stake, I'm more at risk. I also have more to gain from success, but I don't know anything about accounting and finance. I like I sell stuff or I engineer stuff for a living. I'm I'm I'm not an accountant. So like maybe when we were smaller, I could kind of eyeball things and have some confidence it was right. But like, how do I how do I get confidence that my books are right when I get to this level of scale?

SPEAKER_00: 10:56

I think that's when you you think about recruiting somebody like us where we can help while you're still figuring out what is the right model for you? Do you want to get a full-time person? Because it is a heavy lift for you to budget in a full-time resource to be able to build out your finance organization. And that's what we are able to support, right? We really look at it more on a solution focus and say, okay, what do you really need? Are you gonna exit in the next three years? Are you thinking of exiting? And always being ready, right? Like being investor grade ready, like all the time, requires a lot of like discipline and practice, and it's not gonna happen overnight. Like you need to think about it in the next like two years, like where are we going to be and how are we going to be, right? And I think that's where um, you know, companies like you and me can, you know, we we do a great job in terms of really providing that support that organization needs, where they don't need to worry about all these things, right? Like we are there to worry for them on behalf of them all the time to make sure that they can do what they need to do to start scaling the business. And also thinking about exit readiness. I think that's one. But however, like there are, like you said, I think there's always people thinking about okay, how do I look at my finances? What do I do? And I finance is one key aspect, right? Which, like I always say the numbers never lie. And really looking at, okay, if you want to like like think about your manufacturing facility, you want to do a multi-site as an example, how are you evaluating that, right? When you were just one site and you could go and get another site, you were like, okay, I can I could do this. But then now you're trying to go into a different state. There is compliance issues, there are legal issues that you need to deal with. And I think that's where a team of experts will be supporting you. Or you incur the additional one-time cost and then ongoing cost thereafter if you recruit like a full-time, like, you know, resources in-house. So that's what you kind of have to think about, right? And say, when is it time that, you know, as a leader and the risk associated with it, I have to evaluate when do I go in and get the key experts in various areas where I figure out at the right time that I need them, right? So as long as you feel comfortable you're getting everything, you're fine. It's just like selling, right? When you know, okay, I could do this, I could do this, and then you know, okay, I can't handle all these, and none of my clients are going to be successful. I need to get a salesperson. It's literally the same logic you do for finance as well. I was doing okay so so far, maybe very scrappy. I was looking, I wasn't looking at like books, I only looked at revenue, I didn't care about anything else. And then you're like, okay, now I need to worry about all of these things because I need to get the people in place so I can come up for hair, you know.

SPEAKER_01: 13:55

Right, right.

SPEAKER_00: 13:56

And I kind of have to, you know, think about that. So I think that's like really a great way for you to think about.

SPEAKER_01: 14:04

Yeah, maybe you go from eyeballing the uh profit and loss to actually looking at the balance sheet and actually looking at the cash flow statement and kind of get your arms around more comprehensively what the finances of the business were doing. Um well, you know, I'm a big fan in general of 8020 type solutions where we get 80% of the benefit for 20% of the work, and in the small business space, that works great, but then you do reach that point where you start to need, you know, 90, 95%, 98% good accounting, right? 100%'s kind of unrealistic most of the time, but you know, you start to inks up there and you need to get the accounting done, quote unquote, properly. Um, and so what guidelines do you offer clients as they try to evaluate because there's a trade-off. Like you can have great books, but then you spend more money on accounting and less money on other things that arguably drive value for the business or drive value to shareholders. So, how do you help business owners think about when they need to upgrade the level of their accounting?

SPEAKER_00: 15:14

Um, I would actually change your mindset to think about instead of just accounting, every time you say accounting, I feel like it's like an aftermath. I think it's more truly operational, like finance operational support. To me, then you're you're partnering with the business to support the business in their objectives, right? It's like, okay, I I mean, I'm gonna take real examples. For example, if you think of pricing, how are you pricing things? Are you losing money or you are are you're not? Is your gross margin a certain number where you can in the end, like you know, you know, profit is making, you know, and is your cash flow there? Are you really looking at your cash flow and driving that? I think are you cash positive? You know, is that an aim that you have, like being cash positive and making sure you're always profitable no matter what? Even if you sell less services, but you're you know cash positive, you're always in a greater, you know, profitability mode. I think these are all the things that you have to think about because um to me, I think that's where finance plays a super key role in being that partner with you. Because I mean, as you know, uh Carl, like I'm not gonna, you know, say this because there's a lot of today, a lot of CFO roles are merged with COO roles. It's really thinking modern finance because a CFO is very aligned with all the operational aspects of the business. And the and if you see statistically, the number of CFOs who become CEOs is so much greater, I think it's 70%, um, because they have a great view of the overall, you know, business and what are the key metrics to measure and scale them. Right? So to your point, I think when you just say accounting, I would say, I don't think like we've done a, I mean, to be honest, I think from a finance uh group and a profession, we've done a really bad job of saying it should be 5% of your top line, it should be 10% of your top line. I wish we did a better job, to be honest. Um but I would say like if you think of like across different organizations and as technology enables us a lot more, with like a lot of these platforms being, you know, uh making it more efficient for us. Um, I would say anywhere between three to five percent of your top line for a good finance and accounting department is a is a I think is a realistic number. And the goal is to kind of reduce it as you become, as they become more integrated with your business. When I say integrated, that means they're working with the commercial finance team, they're part of the pricing model and so on and so forth.

SPEAKER_01: 17:58

Okay. Um and so what are some of the pitfalls you've seen as businesses have tried to scale their accountingslash finance operations? Um, where do people get stuck?

SPEAKER_00: 18:15

I think they'll they usually think we it's like a bookkeeper's job. We'll just send it off to the finance team and they can fix everything.

SPEAKER_01: 18:24

So you you seem to have this aversion to how I refer to accounting. I have a similar aversion when people say bookkeeping. Like bookkeeping is really important, but most people think it's this menial thing that gets done in the back room that isn't very much. Yeah, exactly.

SPEAKER_00: 18:38

Yeah, and it's an aftermath, right? Yeah, so I think that's the first thing. And I feel like I mean, I worked in really large organizations, and I'm telling you, like the upfront process issues are the pain point for month-end issues to do reporting, right? So I think really thinking about what do we want, how do we get that from the very start, I think is really important. And I think people underestimate how that impacts finance as a whole, right? I think that's one. Um, and then I think specific examples is people need to really think about, you know, what do they need to prepare for their first audit if they want to go that route. Um, they will realize that they don't have enough internal controls like set up in place, you know, even basic things like how are they ensuring things are getting done, there's no issues, who's doing what, I think is important. And also it's going to be more important in the whole IT infrastructure, data, privacy, like you know, cybersecurity, like that area, because I think that's really important. Uh, you it uh it's gonna be more prevalent, we're gonna hear more things in that area for sure. And I also think I don't think people understand the cross-functional gaps that you're gonna have between finance that are integrated with either IT or HR. And um, that's really a risk spot, I think, today, because even though people think we are not AI like, you know, ready or you know, or whatever, uh, it's it's being used everywhere. It's being used everywhere, we whether we know it or we don't, right? So I think it's really being aware of that. And um I also think talent is a big aspect. So cultural as alignment with the organization and being aware of it, and including finance being part of that is as a core, I think is very important.

SPEAKER_01: 20:36

So yeah, so you're building a finance department, we're not hiring a bookkeeper, right? It becomes a core part of the business, yes.

SPEAKER_00: 20:46

Yeah, yeah. I I and I think that's really important. Making sure that they are a core part of the business is super critical because then that's what makes them understand every aspect of the business. And so they become your hands and legs for operational aspects as well, and being able to take that information and provide um concrete issues to the team, whether it's investors requiring or whether it's KPI or board asking for it. I think there's a lot of things that um the finance team gets involved in and pulled into different directions as well.

SPEAKER_01: 21:25

Yeah, I agree. I think there's two things that start to be asked of the mid-sized business. One of them is predict the future, right? When you're small, you can report the past. If you're good, you've got some scorecard metrics. Maybe the CEO is driving sales and that works for a while. But you get to a point, you gotta start being able to predict the future. And that requires very different skills than reporting the past, right? And then the other thing, like you said, you've got a board, you've got investors, you get lenders who lent the money a lot of, lent the company a lot of money, you got people who expect a certain level of uh rigor and analysis and explanation of the financial statements, not just here are the financial statements, but here's why they are the way they are, right? So that analysis function, I think that forecasting function become increasingly important.

SPEAKER_00: 22:20

Yeah. And I think two things. I think thinking about budgeting for predicting like I think really going through like a budgeting exercise within the entire organization. I would say, yeah, um FBA function, I think the forecasting, like you mentioned, I think forecasting, I think is a key aspect. Controllership, they already got, I think. Now really thinking about like the forecasting and the operation alignment with different groups, I think is super important, which means they'll have a budget cycle. They'll have to go through that and understand every aspect of how they do that. I think that's also uh to be in uh do not underestimate the amount of time and involvement that it requires from people.

SPEAKER_01: 23:02

So if I'm a CEO and and I'm, you know, I got my business to 10 or 20 million dollars, but I'm looking to double or triple or quadruple it over the next few years or decade or whatever. Um like how do I think about managing my finance function through that transistor? Because in my mind, there's a a world of difference between running the books for a five or ten million dollar company and running the books for a$50 or$100 million plus kind of company. So, like, how do you get your arms around like and you probably don't know what you don't know, right? So, what what advice or pointers would you give that ownerslash CEO who's who's trying to scale their business like that?

SPEAKER_00: 23:46

Yeah, I think like I can give you like three things that you need to think about. I think one is ensure whatever you you have today is implemented in a scalable financial systems and you know manner, and you have the right people doing it. It doesn't matter if it's your own people, it's fractional, it's you know, uh whatever model you have, how you know it's it is there is a system and it's scalable. Right? I think that's super important. And the key thing is you have visibility and control. Right? So you get visibility of all of this at any stage, at any level, so you can scale it up as much as you want, as quickly as you want. So I think that's super key. Then I always also would say the next item is think about building the strategy of the company aligned with the budget and forecast that are linked together. If they are not linked together, uh you can have whatever strategy I want to scale to 100 million, and it makes no sense.

SPEAKER_01: 24:49

Yeah, what what level of investment is gonna be required, and how do you make sure you get an ROI?

SPEAKER_00: 24:54

You know, is it capital operational or whatever? So I think that's important as well. And then I think the third thing I'm thinking about is more compliance and risk exposure that you have at these levels as you're like, you know, scaling up to make sure whether it's insurance, whether it's infrastructure, whether it's, you know, um uh maybe you're a healthcare device company. So you may need to do uh you know regulatory approvals. So all of these to me are required in terms of you know risk exposure and your compliance. And you kind of have to think about those areas depending on the industry you're in and and um your operations. And then I think the last thing is I really would think about um what how am I diversifying my revenue? Like what is the in order for me to scale up, how am I thinking about it? And what are the key data drivers that I need to monitor all the time aggressively, and I get visibility to them in order for me to reach that goal, right? To me, I think that's super critical because then I can I can say, okay, this product, this item makes sense, or this does not make sense. I I need the insights, and in order for you to give the insights, what does what needs to happen? That means the sales team needs to align with the sales operations, and the sales operations need to work with the uh finance group, and the finance group works with the P ⁇ A team. And I think you know, all of them work together in order for you to be able to get the information you need. So I would say it's that progression. I would uh I would highly recommend to for people to think about as CEOs.

SPEAKER_01: 26:38

Right. And that point, you have enough money, you can upgrade, you can afford to upgrade. Um so like I think you're right. The key question is like, what what data do I need? And can my team get me that data? And if my team cannot get me that data, maybe I need to hire somebody else.

SPEAKER_00: 26:54

Uh I yes, somebody else, but also do I have the right you know, financial systems for me to scale up? Like, let's say you're in QuickBooks, for example, and maybe you need a different tool because that's not able to scale with you as a business, right? Then you want to look at, okay, what is the next level tool? I need to go to a a different, you know, a mid-market tool. Maybe I do uh a NetSuite or a Sage or you know, where do I go? Do I have to jump into Oracle? Like I I'm not saying you need to, but I think you need to be consciously evaluating where you are as an organization. What is the information gap you have, and how do you need to get there with the goals you have aligned with the organization?

SPEAKER_01: 27:37

So sometimes uh business owners will ask me, or they say, I think I need a CFO or I think I need a controller, or who sort of hire, so to hire a CFO or a controller, you know, like and maybe the fractional is an option, but do you how do you answer that question? If somebody asks you, so to hire a controller or a CFO, and is it a full-time or part-time job? How do you how do you go about answering that question?

SPEAKER_00: 28:05

Uh that's such an interesting question. I have people ask me that all the time, especially since I started my own. And I would say really, it's not about who you hire. It's like when you hire what you want them to do. Um, and I always say you can hire a a fractional CFO, but then it may be just a controllership role. It's the role that you look at. Like, what is the value you're getting from that group from that person, right? Like if they are only fixing your day-to-day accounting operations and making sure your controls are in place, I would say that's when you look at the controllership role, right? So they are ensuring that everything in your organization is functioning as it should and it reflects on your financials accurately. That's the controllership role. When you do need the next level in terms of taking it, going to a board readiness, looking, talking to bankers, talking to investors, talking, you know, being prepared to do compliance and evaluating risk, looking at other aspects of the business in a more strategical manner, that's when I would say you need a C-level executive that is aligned with the operations of the business, and you need a CFO. Right? To me, that's what I always distinguish. I mean, a CFO can absolutely do controllership roles, but I think a controllership role to get to a CFO, that there is an exposure and experience gap that you need to kind of bridge. And that and obviously their network, I would say, plays a key role because that's what makes them, you know, a value add immediately instead of it taking a longer duration. So I don't know if I that uh you know is aligned with your um Yeah, I think we look at it similarly.

SPEAKER_01: 29:55

I mean, I think when I answer that question, the majority of the time, I say hire a good controller because there's a lot of tactical work that needs to get done. You need somebody who can manage all that stuff. You you've kind of outgrown the point about sourcing all your accounting, so you need a controller. Um, but you can get pretty far with a fractional CFO. Um, because I mean you've got to have a lot going on to have you know 30 or 40 hours a week of CFO level work to be done. It's it's not that hard to come up with 30 hours of controller work at a certain size because there's just stuff that comes up that has to get done and managed. Um, but for real CFO level work, it's hard to come up with 30 plus hours a week of real CFO work. And I mean, look, I'm I'm kind of a CFO finance guy by background, and if you put me in charge of an accounting department, like I'd do my best, but it wouldn't be that exciting because I'm more on the FPA side than the app audit accounting side of things. So uh frankly, if you have a really good CFO, they might not really want to do controller work or they might actually not be good at it.

SPEAKER_00: 31:04

Yeah. I think, and also like I think the CFOs are extremely good leaders, and I think they put the teams together, and I think that's really where um I'm gonna say modern finance is going. I think it's about leadership instead of being the actual controllership. But having said that, I think any CFO would want to have a great organization from a controllership perspective because that's the foundation to have for any organization, right? Like to me, I think that's absolutely critical.

SPEAKER_01: 31:39

Yeah.

unknown: 31:40

Cool.

SPEAKER_01: 31:40

So tell me more about um your firm. You started a couple of years ago. Um, what kind of clients do you work with and how do you help them?

SPEAKER_00: 31:50

Yeah, so I um initially started with thinking I would work with like the startup, the early scaling companies. Um, and I think it's it's great, but I did realize the value I bring coming from larger organizations and the um the skill set that I bring is really to uh companies that are you know mid-market because they can definitely leverage from challenges they have, whether it's um, you know, um pain points in terms of cross-functional gaps, you know, like I said, professionalization gap. When I say that it's like the skill gap, maybe audit readiness, audit issues, maybe when there are like delays in funding, um, and also ensuring that they have a good reporting package. So, like what do they need? Sometimes they don't even know what they need. And I feel like that's where we can come in and say, okay, based on your ecosystem of tools and technologies and structure, so people, process, and systems, um, I feel we are able to come in and really look at that and provide a good solution for you where it's not just today, based on your vision, you can also scale with it, right? I think that's where we are able to support them. So we really think about um a fine like revolutionizing finance and more a model like finance as a service. So it's really going to be that model where we operationalize organizations where they they have a consistent approach to finance as well, just like anything else. Like they do IT, HR, and other functions. And we feel like, you know, we could do the same same for finance. And so my clientele has been uh a really, you know, um mid-market to Fortune 500 to uh small companies, but I think that's really helped us to understand the ecosystem better and support each one of them in a very unique manner where they are able to take advantage of and you know, um not having a bookkeeper, but they actually get a team of experts instead, right? On various functions. So typically what we do is, I mean, you've you've definitely heard fractional CFO, but then what we do is we go into a client, understand the ecosystem that they have, and build a team around them again in a fractional manner. Maybe they need a fractional controller, maybe they need a fractional CFO, and maybe they just need a fractional controller and the CFO supports them, right? So we really look at that and provide the right structure for them to scale and grow.

SPEAKER_01: 34:26

Yeah, I mean, I I go into a client and I'm like, oh, you need about one fifteenth of a controller and like an eighth of a bookkeeper, and that's what SmartWorks does, and that's kind of a scale we operate at. You can go in, we'll do like full-time dedicated people if you have to, right?

SPEAKER_00: 34:41

Yes, exactly.

SPEAKER_01: 34:43

Yeah, so you're on a different scale, the mid-market than I am in the small business market.

SPEAKER_00: 34:48

Yeah, and sometimes it's also being more strategic with them, right? And maybe help them with like the fundraising and stuff like that. So it it definitely depends on the client, for sure.

SPEAKER_01: 35:00

Yeah. And how do you manage the technology side of it?

SPEAKER_00: 35:05

So uh we are tech agnostic, and when I say we are technology agnostic, is that we believe that we work with the client's technology, but we definitely have a preferred technology for sure. Um, and we are we do partner with a lot, a lot of like, you know, um, like we have build.com, ramp, we have, you know. Um so with that said, um, I do think that the goal is for us to have our own ingrown like technology where it integrates with all of them. So we get visibility. We use a lot of Power BI stuff internally to manage a client, to be able to showcase to them like the challenges they have in different ways. We we monitor them through our internal KPIs constantly to be able to say, hey, we need to look at this in more detail, or we need to look at this. Um, and that really helps us. So I think and and I'm really proud of saying that to like along with my team, to say, you know, these internal tools that we have built, even though it's homegrown, um, I think it's added a lot of value for our clients. And we've experimented a lot and we keep experimenting with a lot of tools that come out there. One of the things that with Gen AI, I would say is there's web applications that come out like every single day in the finance and the tech world. And uh we are really lucky to be here because we we really look at that ecosystem and constantly update our teams with what's out there and how we can add value to our how we can take advantage of it and add value so our clients don't have to deal with it. You know, because they don't have the bandwidth to go and figure out what's the latest like you know, fintech tool out there that can support them. So we do that, like we're constantly looking at that ecosystem.

SPEAKER_01: 36:47

Right. You know, one other thing you alluded to earlier um was MA. And so I feel like once you get to the mid-market type size, either you're gonna want to be on the buy side looking for opportunistic acquisitions that make sense, or potentially looking uh on the sell side uh to monetize the asset that you've built, right? And so I feel like MA is a bigger deal in the mid-market. You know, sometimes it can be hard to sell a small business if you've got a you know, if you've got a small service business doing a couple million dollars a year, you might be able to sell it, but it could be hard. Um, some businesses just are not saleable for one reason or another. But once you get in in that mid-market, um, they're usually big saleable assets. And so you gotta think about kind of what does that MA process look like? How long does it take? What do you need to do in order to prepare for it? Like I've been through it um a few times, my own businesses and clients that I've worked through the process. Um, but it's definitely a process, like it takes 12 plus months to do if you're lucky. Often it's a lot longer than that, right?

SPEAKER_00: 37:58

Yeah, yeah. So I think the minute you think, oh, I want to sell, I would say it's a good two to three years for you to plan and get everything right and then be like, you know, prepared. And I think like from when you think about the exit timelines to when you have uh, first of all, an investor grade ready pitch, looking at the you know, reporting package, putting everything together in terms of they're looking at your leadership, they're looking at, you know, what happens if you as a leader go away. Uh, how is everything going to work? How does the finances are they going to whatever returns they thought you they would get, is it going to make it, right? Like they're always evaluating that. So I feel like they they that does definitely require you being your own critique in order to sell something in a specific manner and to get the right returns that you want. I mean, yes, you can sell things that you're not happy with, but that's not the objective here, right? Like you want to be able to sell where it makes sense. So I think there are a lot of things you've got to think about, your industry, how sometimes strategic sales are very easy. Like if you're in like clean tech and you're going to merge to a larger company because you're you need the extensive capital that's required for you to go build out certain projects. Maybe it's a strategic sale to a larger organization. Uh, same thing with biotech. I mean, you see that a lot. Um, but I would say when you are looking at like, you know, an MA opportunity, I think a lot of the criteria you have to think about. But invariably, no matter whether it's a strategic sale or not, I always think the finances play a very key aspect on every part of the of the sale in terms of, you know, what is it, what is their X factor? Is it 1X? Is it 10X? Is it 6X? Like what are they going to get for that? Is it working capital that they're infusing from an investment? You know, is it, you know, do they have debt to be paid out? Like there's so many criteria that people look at in terms of, you know, what is the number? And I think that's important to consider from an MA perspective. So I feel timeline being prepared, um, and and you know, always think about like, you know, what the investors are looking for. If it's a strategic sale versus a non-strategic sale, like how do you think about it? How do you make a non-stratic sale?

SPEAKER_01: 40:24

Maybe you could explain a little bit what um what do you mean when you say strategic versus non-strategic sale?

SPEAKER_00: 40:30

I I would say like sometimes you're just like, for example, like I'll I'll give you a clean a good example. Like when you have uh like pharmaceuticals, for example, they're always looking for a new startup which kind of aligns with their core business. Because then they are not like let's say they're not, they haven't innovated enough or innovated faster. So they allow for smaller companies that are in that space that are doing a lot of those things that can accelerate them going into a market. To me, that's a strategic sale, right?

SPEAKER_01: 41:03

So that's where you can get paid a lot of money because the buyer can take what you have and distribute it much more broadly than maybe you could yourself. Yeah.

SPEAKER_00: 41:13

Yeah. Uh yes, and no, but then if that product requires high investment in capital and the startup, it's harder for you to get that high investment, then you're only going to get a certain X because now the company's taking the responsibility to do their investment and get the return on that, right? But then if it's just um, you know, it let's say there is a great serviceable market and it's easy for them to sell, even if it's not strategic, right? It's just a good business, then uh to me that's not really strategic, but you could still get value because your serviceable market is really high.

SPEAKER_01: 41:52

Well, great. I want to thank you for spending the time on the show here. If if folks listening feel like you could help them, they want to learn more about your firm, your services, what's the best way for them to get in touch with you?

SPEAKER_00: 42:05

Yeah, so definitely look us up on uh LinkedIn as well as uh FinTeam1. So F-I-N-T-E-A-M.o-N-E. Um, and you can always reach us. There is an option there to contact us. And you know, but if you want to reach out directly to me, it's P Chanduraj. So P C H A N D U R A J at finteam.o-ne.

SPEAKER_01: 42:34

So finteam.o-ne, check it out, everybody. Uh I really appreciate your time. Thank you for sharing your history, your experience, your expertise with listeners. Really appreciate it, Priya.

SPEAKER_00: 42:45

Yeah, no, thanks a lot, Cal. Thank you for the opportunity to have me on your show.

SPEAKER_01: 42:50

You're welcome.

SPEAKER_00: 42:52

To have me on your show.

SPEAKER_01: 42:53

Another episode in the book. Thank you so much for tuning in. For show notes and more, visit empoweringhealthy business.com. If you would like to have a one-on-one discussion with me or possibly engage smart books to help with your business, you can visit me at cal C A L at Empowering Healthy Business.com or back to me on LinkedIn where I am easy to find. Until next time, this is Empowering Healthy Business, the podcast for business owners, signing off.