Unlocking Financial Transparency for Entrepreneurs with Sarah Webb

Tim Melanson: [00:00:00] Hello and welcome to today’s episode of the Work at Home Rockstar podcast. I’m excited for today’s guest. We are talking to the owner of Web CFO. And what she does is she brings financial transparency to people’s businesses. Which is something that I think eludes a lot of people. So I’m excited to hear more about that a little bit later, but first, are you ready to rock Sarah?

Sarah Webb: Yes, I’m ready.

Tim Melanson: Awesome. So we always start off here at a good note. So tell me a story of success in your business that we can be inspired by.

Sarah Webb: Yeah, I think, you know, I left corporate America in 2018, and I think my success is really just managing my business on a day to day basis, but also having a life. I have two children, one husband, and three pets, and so everybody’s got a schedule and, you know, I get to live life to the fullest. And, you know, sometimes that means waking up early or staying up late, but I try not to miss events and things that we really want to do as a family.

Tim Melanson: Awesome. Yeah, that’s, and that is a huge success. That’s one of the reasons why. I want to run this podcast in the first place is to tell people that you can actually design a life and [00:01:00] make your work fit into that. Right.

Sarah Webb: Yeah, absolutely.

Tim Melanson: Awesome. So now it, it isn’t all, you know, sunshine rainbows though. So some things don’t go as planned.

I’m wondering if you could share with us something that doesn’t work out or didn’t work out and, uh, you know, how you recovered.

Sarah Webb: Yeah, so I actually had left corporate America in 2018 or 2015 late that year and started another business in 2016 that ultimately wasn’t successful. And so I had to close that business down. I sold off a part of it in 2019. and I just felt like. So sad, so devastated, like, Oh, I thought, you know, I could make it.

Um, and that business was really focused on marketing and I had to be really great at sales and cold call people and pump my product. And I think ultimately all of those lessons that I learned through something that was outside of my comfort zone, right? I’m a CPA, like I can work a spreadsheet all day long.

Um, But going out and selling and promoting something was definitely outside of my [00:02:00] zone of genius. But I think that experience helped me promote my accounting practice, right? Like I am an expert in accounting and there are certain skills that I have and being able to talk about them and market them is that’s how you grow your business.

And so even though that ultimately wasn’t like, Bad note slash, you know, not the ending ending, but definitely would have preferred that it be more successful than it was. I definitely use that experience to really lift up my business and focus on sales really from the beginning of when I started my accounting practice.

Tim Melanson: Yeah, awesome. That’s a great story. And I mean, I think one of the things that people don’t necessarily want to hear, especially when they’re starting a business, is that you kind of have to have at least a little bit of sales comfort, I guess, when you’re going to start your business, especially if you’re going to be self employed, because you know, no one else can do it for you.

You’ve got to, you’ve got to get [00:03:00] out there and do something with it. Right. And I think that that’s one of those things that I think people Bail should be like in a basic curriculum of every school matter, but there, there should be something that we can do. So I’m glad that you were able to like kind of pull some of the lessons that you learned out of there and to help you grow your other business.

Right?

Sarah Webb: Absolutely.

Tim Melanson: So let’s talk a little bit about keeping the hat full on this. I think this kind of comes right down your alley, right? We’re talking about numbers. So how do you make sure that your cash flow is positive?

Sarah Webb: So, so I’m looking at my numbers every day and I, I know that that may give fear to some people. Um, but I’m also a profit first professional. And so what that does is that’s a methodology on cashflow. And once we work with a business and I’ve done this for my own business, I did this for my husband’s business.

Um, it’s a methodology of every single dollar that comes in, goes into a certain type of bucket. And that’s ensuring that I have enough cashflow. To pay my team members [00:04:00] enter, pay myself enough to run my operations. Um, I got to relieved. My husband’s an attorney, he’s self employed and I just got angry with him being partly being a spouse and partly being a CPA.

It was like at the end of the month, it was like, where did all your money go? And he’s a bright person and I’m a bright person. Like we should be able to figure this out. And when we implemented the cashflow methodology of profit first into his business he’s That he never slept better. He never, he always knew where his money was going and what it should be doing.

And it just gave him such peace of mind as a business owner. And so after I saw kind of the transformation of me, not having to be an angry spouse over, you’re not making enough money or you’re, you’re always reinvesting and not bringing money home, all those kinds of conversations stopped. And I, I started implementing it for myself and for my clients.

Um, and so really it’s just a percentage allocation and it kind of depends on what your business goals are. And you kind of have an assessment to begin with. And I guess if you’ve [00:05:00] ever, if you ever had the tax scaries of like, you made money and now you have to pay the money and you don’t know where that money is coming from or where you’re going to scrounge up that money, this really alleviates a lot of that.

And so we’re still continuing to do it in both of our businesses today.

Tim Melanson: Well, that, that tax thing has happened to me twice in the last 15 years since I’ve been, so what do you think I learned the first time, right? But

Sarah Webb: Well, sometimes the lesson has to be super painful for you to learn. But, you know, I think kind of talking about sales in curriculum. I mean, I don’t know why we don’t prepare at least a basic tax return, a 1040 or, you know, just understanding my kids are 13 and 15. And so we’ve just went over FICA.

I’m like, okay, like, you’re going to get start getting your first job, but that doesn’t mean you’re getting that 10 an hour. You know, there’s taxes after that.

Tim Melanson: yeah, well, and, and, uh, and both times for me that I got into that trouble was actually in a really good year, really good [00:06:00] years really hurt me. Yeah, because all of a sudden you’ve got all this money coming in and I ended up just not really accounting for the extra tax they take on those on that new bracket, right?

But, uh, but you’re like, you’re right. I think, I think there should be more, more about that taught. I mean, you don’t really get into taxes at all, actually, unless you are self employed. Uh, then all of a sudden you’re forced into it, right?

Sarah Webb: Right. Yeah. And it is sometimes the years where you’re most successful that hurt the most because you’re, you’re celebrating, you’re like, man, I’ve knocked it out of the park. Like I’m going to go do X or I’m going to buy this thing that I’ve wanted. And then you’re like, Oh, surprise, you know, to me, the managing the surprises is, you know, that it’s just, it’s, it is painful.

And it, I just, you got to learn the lesson. I wish, I wish there was a better way. Um, so I guess if you’re, if you’re a new business owner, um, read profit first by Mike Malawatski. Always say it wrong. [00:07:00] Um, it’s just a primer on kind of how to do those buckets and it’s, it’s, it’s changed, it’s taken a lot of the frustration out of two people who run their own business.

And we don’t have to fight about taxes anymore.

Tim Melanson: I’d have to check that out too. I mean, I’ve, I do sort of like a bucket thing too. Mine came from, man, like came from, what was it from the millionaire mind secrets of the millionaire mind was the book that I read a long, long, long time ago. And that’s where the buckets come from. Process that I use with my spreadsheets, but uh, this is,

Sarah Webb: It’s probably similar. It’s similar. Yes.

Tim Melanson: Okay, cool. Yeah.

I, I agree with those buckets. Actually, I’ve got my, my son actually was just asking about budget stuff and I’ve got him using envelopes right now. Like, I just think it, it really does work well when you’ve got sort of like this allotted amount of money that when it’s gone, it’s gone.

Right. Um,

Sarah Webb: Well, and I’ve created an extra bucket. I call it the vault because it’s like, I need to put it in a different bank and make it a little unaccessible to my, like, I really need to [00:08:00] tap into that money. Um, not just, you know, have it be an easy transfer.

Tim Melanson: yeah, yeah, yeah. I do that as well. Actually, now I do it with my financial advisor. So

basically, it goes over to him. I technically, I can get it back, but I have to call him and convince him that I need it.

Sarah Webb: yeah, if it requires a few more steps, you always kind of pause and like, do I really need to, you know, spend on that? And I think that’s a lot when you’re thinking about cashflow, um, kind of depending on where you are in the stage of your business, you know, what, what are your goals? Um, Where are you wanting to invest in marketing, or do you need to bring on another person and kind of building little mini savings accounts to help you invest in that at the right time?

Tim Melanson: Yeah. Awesome. Love it. Okay. We could talk about that forever, but let’s go to the next topic is about the band. And I mean, we’ve kind of been touching on that. Like, so who are the people that you have around you in your business?

Sarah Webb: Yeah, so we are a team of 8, including myself. When I first started the practice, I was definitely using [00:09:00] subcontractors and just. Due to the nature of their work and just needing more people, everyone has been converted to an employee. That’s a real hot spot right now for the IRS. And so all of our team members are full time employees.

So we’re running payroll and kind of doing all of that. But, you know, we have an operations manager. That was a really big investment in last year of taking 1 of our great bookkeepers and delegating a portion of her hours to just helping us be organized. And so I don’t. I don’t know, as a business owner and end of the CPA, I’m really thrifty.

Like, I always feel like, oh, if I can do it myself while I’m watching TV, I should just do it. Like, it’s not that hard to make my own flights or it’s not that hard to respond to this email. Um, but at the same time I’m getting drained and it’s, you know, you’re always turning on. And so really having someone who can help me manage.

the management of the practice versus always having to be, you know, doing it at different times of the day or, you know, being delayed. Um, that has helped us, but we have [00:10:00] a really consistent workflow and process. Like what we’re doing is a monthly process every single month. So, you know, we have workflows and those types of things, but we have, um, a few other managers, other bookkeepers, and then the operations manager on our team.

Tim Melanson: Well, yeah, and that’s really, it’s, it’s a good point to make too, because just because you can do it all, it doesn’t necessarily mean that you’re going to be really awesome at it all. And also I think, uh, there’s like a misconception about multitasking. It’s like, you’re not doing two things at once you’re doing one thing, then switching to the other thing and then switching back and forth.

And it takes a little bit of energy to do that. And you know, I know for, you know, in music for Sure.

you sort of get into like a groove, like a, like a, like a vibe or like a role, I don’t know, whatever you want to call it. Right. And things are going great. And then all of a sudden you got to do a different task.

So you got to start all over again and get into that role, like groove. Right. So, you know, when you have somebody on your [00:11:00] team that that’s what they love to do. Well, then why not give it to them and let them be super excited about doing it, right?

Sarah Webb: Oh yeah. Well, and you know, I looked at the cost and I’m like, okay, could this free up this much more of my time? Is that increasing my lifestyle in a way that, you know, is kind of part of my overall goals? Or can I use some of that time to go out and work on my sales and marketing and meet people? And so I.

As an accountant, I kind of default to like, what’s the cost benefit of this? And fine. You know, I did a little bit of that, but I was like, I’m just going to try this. What’s the worst thing that could happen? You know, what’s the, you know, if I get this type of help and support and it doesn’t work out, well, then I’ll just go back to what I’m doing.

So, you know, I, I like to experiment, um, with. Business concepts. And, you know, I don’t want to do anything detrimental and definitely having been with a business that I closed and sold, like, you know, got some tire marks on my back from that, but I think it’s a good, like, I like to experiment and I kind of asked myself, what’s the worst that could happen?

Well, I could [00:12:00] change my mind in 90 days and decide to do something different. It’s not that big a deal.

Tim Melanson: Yeah. Yeah, exactly. And 90 days. Okay. So you give yourself like an allocated amount of time to try it out for.

Sarah Webb: Yeah, I think 30 days for me personally is too short. It takes like you talked about the groove. 90 days is generally 3 months and accounting. That’s like a quarter. Like, that’s like how we work on our financial statements, but even just like the rhythm of life, like I said, my kids are 13 and 15 kind of have like fall semester, spring semester, summer.

And so that kind of takes some time for our family to get into the rhythm of, okay, this is how our life is during this period of time. Yeah.

Tim Melanson: Yeah. I talk about three months all the time as well with momentum. I find that it just in, in my experience, it takes three months to build that momentum. And then it also takes three months to lose it. And so I think that’s probably pretty smart by the time. three months hits. If you’re not just rocking and rolling, well, It probably means it’s not going to. Yeah.

that’s awesome. I love that. So now [00:13:00] let’s talk a little bit about your your jam room So like actually how long have you been working from home? And you know, what’s your space look like?

Sarah Webb: Um, so I’ve been working home since 2018 and I guess 2016 in this business since 2018. And actually, I was thinking, getting ready for this podcast. We just moved 2 years ago. So, my other home in both homes, I’ve had a dedicated office. My other home was in a more rural area. Like, I had 3 acres and, like, I didn’t see my neighbors.

And so it was very quiet. I mean, just a very dedicated space. Like, People didn’t walk in our neighborhood. Amazon packages. They didn’t ring the doorbell. None of that business here. I call it the big city here in the big city. I live in a very walkable neighborhood near a trail. And so people are always walking kind of just exercise walking in front of my house.

And I guess all the Amazon drivers ring the doorbell or people come up to your door. It’s a lot more interruptions in my day that I had experienced before. And so that took definitely some getting used to. [00:14:00] Especially my dogs. I’m going to show you. So this has been a lifesaver. Okay. It it’s pet deterrent spray.

So when we moved to the city, my dogs barked more than ever before. My dog’s never barked before. And so, because they see these people walking or more neighborhood people, they’re barking a lot more. And I thought again, after 90 days, even six months, I was like, they’re going to get used to people walking in the neighborhood.

We’re here at two years and they still are.

Tim Melanson: Yeah That’s

Sarah Webb: about a few months ago, someone mentioned it’s called a pet deterrent spray, and it makes a noise that kind of frightens them. But not like it’s not like a shock collar. Like, it just catches their attention and they stop barking. And I have totally noticed a much.

Lower barking. Um, so I’m an, I’m a fan. It’s on Amazon. I think it’s 19. I mean, again, it’s experimenting. I was like, well, I’ve lost 19 on other [00:15:00] things like, you know, by stupid stuff all the time. So, so far so good, but my office space, I have a dedicated space. I have doors. I try to close them kind of like shut down my day.

Um, yeah, it’s, it’s a, it’s a Cozy space I have a stand up desk and I try to stand up for a few hours when I’m taking meetings and so I’m not sitting all the time.

Tim Melanson: I’ve got a dog too. I’ve got a little toy poodle and he’s So I’m gonna check that out for sure Cuz there’s a lot of benefits to having to having pets and you know when you work from home You know There is also the disadvantage of them, you know, disrupting your, your role and your groove. right.

Sarah Webb: right. Yes.

Tim Melanson: So that’s cool that you’ve found that.

Okay. Definitely check that out. Sounds a little more humane than the shot caller too.

Sarah Webb: Sure,

Tim Melanson: Right on. So, okay. It’s time for your guest solo. So tell me what’s exciting in your business.

Sarah Webb: you know, we are just growing so much. I think more people are interested in getting their financial life in order [00:16:00] kind of as we’ve kind of shifted over the last few years of kind of had some. Oh, wow. Moments on getting organized. And so, you know, we’re primarily helping small business owners really have that financial transparency and that.

Goes to maybe, Tim, you run around and you have your debit card and your credit card and you’re running around charging all these things and we’ll reconcile your books at the end of the month to we’re working in your account every single day. Maybe you’re a really large business that sends out invoices or things like that.

And I think what makes us different is we’re not just delivering. We’re not just like, oh, Tim, here’s your financial reports. Good luck. You know, I’m, I’m having those accountability conversations of like, hey, you told me this was your goal this year. You know, you’re off track or you’re spending more in this area or tell me what’s happening here and having a conversation and a business partner, um, to really brainstorm with you on what that is.

And we work with a variety of businesses. We actually have a music school that we’ve worked with for quite a bit and, you know, worked on their contracting with their [00:17:00] clients and moving people to auto payment, you know, and how that helped their cashflow. And so, you know, it, Financial transparency isn’t just for some one type of business.

Um, you’re really wanting, you’re wanting your business and your life’s work to benefit you and your family and help you reach your goals.

Tim Melanson: Yeah, So, okay, like I would think that you might have some people that would struggle to, uh, they’re, they’re feeling that they’re not in control of their finances and they don’t have a whole lot of money, but now they’re going to go and hire somebody to do stuff. So they’re going to spend money doing it.

How do you sort of get through that conversation? If they’re thinking that I don’t even have money right now, how can I hire somebody to handle my money?

Sarah Webb: Yeah, I think the first step is you need to probably have someone else do your tax return. So if you’re not at that phase yet, that’s really your first advisor. And kind of, if you’re having those difficult tax conversations, um, you know, getting behind that and getting in front of those tax payments will be helpful.

But I [00:18:00] guess the flip side of that is what if you don’t like, what if you’re continually in this state of chaos and you’re not building the business that you want for your dreams. Um, and for some of our clients, we You know, we do what was called a profit assessment. That’s kind of our first 90 days. And it’s like, Hey, this is like your big goals.

These are the things that you’re telling us that you want to work on. Here’s some of the things that you need to do. And sometimes, uh, clients are like, perfect. I’m going to take this plan and I’ll call you back in six months and we’ll have another conversation. Or sometimes you look at it and you’re like, I don’t want any part of that.

And if you can help me make money to at least pay for yourself through some of these tweaks and ideas, then I’m all for it. So we really kind of work on kind of. What where the client needs that to be, but I think, you know, you’ve got to have your books in order for taxes and you need to make that as seamless as possible.

There’s lots of great advisors and team members out there. Not everyone needs a CFO level person. Maybe you just need a regular bookkeeper to deliver your financials each month.

Tim Melanson: Well, and [00:19:00] that was the next question. So what, what do you work with? Like, well, who will be the ideal person that would get the most out of working with you?

Sarah Webb: Yeah. So, because we have a team, a lot of our. You know, our bookkeepers are doing that day to day and our managers are doing that. Some of that front lining where I, as the CFO, I’m adding the most value is if you’re needing to create a budget or a forecast, or maybe you’re considering taking out a loan with the small business administration or a bank for some type of investment, any type of future forward looking kind of transaction.

That’s where a CFO type person can help you more than an accountant. An accountant is very rear view mirror, like This has already happened. And all, and all that has to, that has to be accurate and right. But the CFO piece is the forward looking piece. So we’ve helped clients through acquisitions, or maybe they’ve sold their business, or, you know, they’re looking at some type of big expansion of adding people or capital.

We’re, we’re able to help them with that forward looking piece. That’s a little bit different [00:20:00] than a bookkeeper accountant.

Tim Melanson: Yeah. And interestingly enough, you probably would be in a situation that you’d be able to help them figure out a way to afford you.

Sarah Webb: Yeah,

Tim Melanson: You know, because, uh, you know, have you ever been in a CI circumstance where you’re like, okay, you just can’t afford me because you’re right in there, you’re seeing it, right?

Mm-Hmm,

Sarah Webb: there are. And we have great partners that we are like, okay, when you get a little bit bigger, this type of partner is great for you. Call us back when you’re ready for that big transaction. We’ve also helped clients on the other way of like, you’ve outgrown us. Like we’re helping you every single day and you could just pay someone and we’ll help find and screen a person.

Cause you’re ready for a full time person, right? Sometimes people get so big. So yeah, we’re definitely in that space. I think we add most of our clients. in getting organized, making sure you’re hitting the right ratios of your payroll. If you have a big team, um, like for interior designers, we’ve helped them redraft their contracts to collect more money up front.

Sometimes it’s just [00:21:00] having that business partner. That’s not really accounting or finance, but it’s just having that partner that understands your business. It’s like, Hey, have you thought about this? Or. You know, I work with several different industries. Let’s, let’s bring something over from one of these other industries that I saw into your business like that worked for them.

You know, I could see how this could apply here. So, um, I think it’s kind of our vast experience in different places. That make us just a little bit more than accounting,

Tim Melanson: Right on. Yeah. And I would think that that would be super valuable because yeah, like you say, you are, you, you’re, you’re kind of like tapping into all these different industries and seeing what works and then able to bring them back and forth. That’s really cool. Right on. So now, uh, is there like a sort of like a minimum level that somebody has to be at in order to work with you?

Sarah Webb: there’s not a minimum level where we’re just looking to see if it’s a good fit. And we’re looking at their overall budget. And there are times where, like, this isn’t a good fit, but here’s a great partner that we would refer you to. Um, and so we’ve kind of have those [00:22:00] conversations of, you know, what, what are you wanting to spend?

But what are you wanting to do? Like, if you’re just in a steady state and you’re, you’re just rocking it, how you are. You’re probably not a good fit for us, but we can say, oh, you know, this guy in town or this person that we are connected with would be great. We’re really focused on, you know, someone who’s wanting to grow, buy, sell, really accelerate their piece because that’s where we’re adding the most value is that forward looking piece.

Tim Melanson: Nice. Okay. And so is there, is this like a, like a free consultation? Like how do we, how do people find out more about this?

Sarah Webb: Yeah, well, so what we do 1st is a, it’s called a profit assessment and that’s really a report card of where you are today. And then from that, we’ll say, you know, this is the monthly, like, if you want to work with on a monthly basis, this is what it could look like. If you wanted to implement some of this on your own, go off and then come back.

Um, we work with clients in a variety of ways. We do have some packages, but most of the stuff we do is hourly. Um, just because our businesses are [00:23:00] growing and changing. I have, I have one client. He, I feel like he adds one new legal entity a year. He’s, he’s a mega entrepreneur. He’s always full of ideas of how to grow and expand.

And so we’re, we’re happy to take those calls.

Tim Melanson: So you can work sort of like as a consultant that, uh, you know, helps someone do it themselves, you know, and, and just checks in regularly and all the way up to someone who actually is right in your business and you’re helping them that way.

Sarah Webb: Absolutely.

Tim Melanson: So how do we find out more?

Sarah Webb: Well, our website is their easiest way. Web CFO. Um, and that’s where all of our things are on there. You can learn a little bit more about our individual team members. We’re on all the socials, um, accountants. We, we don’t have a lot of pictures of us just working behind, you know, computers. We do have, uh, other things that we enjoy.

But yeah, find us, uh, Web CFO. That’s where we are in all the places.

Tim Melanson: That’s a W E B B two Bs.

Sarah Webb: Two Bs. Yes.

Tim Melanson: Awesome. Well, thank you so much for rocking out with me today, Sarah. This has been really [00:24:00] cool.

Sarah Webb: Yes. Great learning more about your business and, you know, great listeners of all different types of, you know, bringing different information. I think it’s great for everybody.

Tim Melanson: Love it. And to the listeners, make sure you subscribe, rate, and comment. We’ll see you next time on the work at home rockstar podcast.