In this coherent episode, Stewart Ervin, President of Bracket Management, shares strategies to streamline your business growth. If you face chaos or doubt about scaling, you won’t want to miss it.
You will discover:
– How to embrace processes without losing your vision
– How to align sales and operations for smoother growth
– Why a 12-month forecast guides better decisions
Episode Transcript
Scott Ritzheimer
Hello, hello and welcome. Welcome once again to the start, scale and succeed podcast, the only podcast that grows with you through all seven stages of your journey as a founder, and you might be sitting there having one of those days, or, if we’re honest, like one of those weeks, or even years, where you wonder if growing your business is even worth it, sure you could bring in more revenue, but the work that it would take, the frustration that you would have, the problems that seem to pop up all over the place, and just the exhaustion of doing all this doesn’t feel like it’s worth it. If so, you’re not alone. It’s actually a problem that every successful founder faces, and it’s also one that you don’t have to face alone, and that’s what brings us to our guest today, whose name is Stewart Ervin, and he’s here with us to help us understand the true nature of these problems and how we can turn it all around. Now Stewart is the driving force behind bracket management, a premier fractional CFO company, and as a proven Finance and Operations executive. He brings structure, process improvement and people development to make an impact. Stewart is a seasoned expert in the manufacturing industry with an impressive track record of helping businesses optimize their financial performance and strategic planning. Stewart’s unique approach blends proven corporate results with a deep understanding of the challenges faced by many small businesses. He’s here with us today, Stewart, you guys have a really unique way of bringing structure to growing businesses. And there’s some founders who are listening today, who are wondering if that growth is even worth it. So before we even get into like, how you would grow your business, what some of these problems are. What would you say to someone who’s in that moment right now, just struggling to wonder if this is all worth it?
Stewart Ervin
Yeah, it is totally worth it. You know, I deal with clients. Most of my clients that I have today have somewhat hit the proverbial ceiling, per se, and this actually is something that they ask all the time. I just don’t know that it’s worth it. And, you know, I’ve seen many, many times how thankful people are when they kind of make it over that, over that heel, over that hurt. Yeah, I would just had a client yesterday, and he was like, I just don’t know, you know, he’s, he’s, uh, he’s got a great culture. He’s got great people, but he’s starting to realize that the people he has are not the individuals who’s gonna take him there. And he’s like, Man, I just don’t know if it’s worth it. And I just keep telling you, know you were gifted this be a good steward of what was given to you, and trust the process that when you get to the other side, you’re gonna be like, holy smokes. This is so worth it. The flip side of that is, it seems painful, but if you if it’s done methodically and correctly, is such a smooth transition that it’s really not incredibly disruptive. And also, you’re going to look up and go, Man, we really are not doing anything like we used to do. Or, you know, a year later, we are so much better than we were. Yeah, it’s, you know, again, it looks daunting from this side of the situation, but again, one day, you’ll look up and go, Man, that’s crazy. We’re nothing like we were.
Scott Ritzheimer
It’s really wild, because it creates this interesting communication challenge that when I meet someone in this stage, it’s like, I can’t actually tell you what it’s going to be like a year from now, not because I don’t see it, but because you won’t believe it. You’ll think I’m a liar, that’s right. So it really can be so much better. And one of the things that happens is that financially, we run into challenges that we’re just not used to experiencing right. Profitability just seems to be so much harder, and when it doesn’t move the way that we want, it’s so much harder to change, or at least it feels like it is. That’s right, and and you have these people problems coming up, and one of the main challenges is that there’s not a main challenge, there’s, like, 1000 of them. So when you start working with someone again who’s feeling this way, but has the faith to know that it can be better. What? How do you help them to really start to understand what needs to be fixed and in what order?
Stewart Ervin
Yeah, so we kind of enter into a business, and we want to first understand, are we going to come in in a triage, like, is this company in really big trouble, and they don’t realize it, or is this company healthy? And they just kind of need to put systems in place. And based off of that approach, it would vary in regards to what we’re going to do. So we do a variety of assessments. And one of our assessments we analyze the financials, we analyze the strategy and the operational execution of the business. It’s a it’s about 100 question assessment, and it will 100% point pinpoint, hey, there’s a problem here. We need to focus in on that. So if it’s a triage, it’s a recovery mode, it’s all hands on date. Let’s make this thing happen. If it’s not a recovery situation, then there’s a variety of assessments we go through. Of which one, I have a Lean Six Sigma Black Belt. And so one thing we do is we’ll map out their core processes and. Normally takes about a day and a half, and in that their eyes are just open, because traditionally, the biggest driver of their frustration will stand right out on paper, and that’ll be our jumping off points. Okay, this is the biggest heartache you’re having right now, so let’s focus in on that. 99 times out of 100 it’s a system issue. Let’s just start working towards putting a system in place. And a lot of times you’ll fix one of the most major issues of the company, and everything else starts to fall into place. And so again, it varies. So if the company’s in triage mode and we get it recovered, then the very next thing we do is, okay, this map these core processes and figure out what is the number one driver of all the chaos in your business, and we just methodically work our way through it.
Scott Ritzheimer
Yeah, yeah. One of the things that I really appreciated about your approach as I was researching this episode, and you even mentioned it in your answer here, is this, this combination of the financial aspect, the strategy aspect and the operations aspect, because typically, folks in our profession will really come at that with one, maybe two at the most. And so you’ll have folks and it’s, you know, to a hammer, everything’s a nail. To a lot of CFOs, every problem is a financial problem, right? But oftentimes, at this stage, sure, there are some things that they should be doing from a financial perspective, but, but, like you’re saying, so many times, it’s, it’s structural, it’s a process change that needs to happen. Absolutely. How was it that you came to that revelation, and what, what challenges do we run into when we try and treat those as three separate functions?
Stewart Ervin
Yeah, so the biggest thing you have to recognize is they’re all interrelated. So on the finance side, it’s just the result of the activities that’s occurred. I mean, you’re it’s the end result. You can look and say, Yes, we won, we lost, so on and so forth. So the it’s the result of what happens on the operation side, right? If your operations is out of control, or, you know, off in the ditch, your financial results are not going to work, like as well as if your operations are out of control and not working, you’re not focused on strategy, because all you’re worried about is, how can I execute today? So I’ve recognized enough to know that there’s going to be a point where your operations is working, and then you’ll be like, Oh crap, I’ve got to go grow this thing. And if you haven’t focused on strategy now, you’re going to be in even more trouble than you were. So it’s all interrelated, and for me, how it’s worked. I was blessed to start at the very bottom of my family business at a very young age. I worked my way all the way through the top, and I mean, to the top, and I just I learned the system, I learned the playbook, and I saw how everything was interrelated. Fast Forward, you know, 15 years, I was put into a position where I was in supply chain role, working on business turnaround for, you know, working these companies that weren’t, weren’t supporting our programs, I just continued to learn and grow that. And then I really started to recognize how everything was interrelated. And so then I got the opportunity to turn a company. And at this point I was, you know, I had started in operations, had, I have an MBA in finance, and so I started putting all the pieces together. Learned all the accountant functions over the last 20 years, and just started to see how it would work. And so in one of the business turnarounds, I was over both finance and ops, and I started seeing how, okay, if you do this, that’s that impact. And just started putting the pieces together. And then we just built a formula, and just started really recognize that if you do A, B happens, if you tweak this, turn that knob, that happens. And then we just put the entire system in place.
Scott Ritzheimer
Yeah? And it’s the interrelatedness that’s so important. It’s actually getting them in sync that I think is the root problem. Because you can, you can say, Yeah, we’re focused on operations. But if you don’t have your financials in order, you don’t have your report card, you can’t tell if it’s actually working or not, and you certainly can’t diagnose it. So I love that bringing together of those two realities You’ve mentioned a couple times on here and and I think particularly for those who founders, who are out there and they’re listening and they’re learning and they’re, you know, they listen to podcasts like this, most of them would say, yes, we need processes, right? But that doesn’t actually mean anything. Go do processes. You know? What does that mean? So I’m wondering if you could help us figure out what are some of the most common processes that you see businesses missing at this stage.
Stewart Ervin
So the most common process gaps that I see is really the connection between sales and operations. So it’s a feast or famine in many, many cases. So you somewhat hit on it right out of the box, right? So first thing we do is we make sure their financials are accurate, so we understand our baseline and we understand our need. Secondly, we do a 12 month forecast. It could be very rough that we need some guiding path, some something to shoot towards. Once that that forecast is created, then we look and say, Okay, where’s the business at today? What’s the gaps, and how do we need to drive our sales team? And we immediately implement a Sales and Operations Plan to say. Okay, I’m gonna go sell this. Can you support it? Because for so in so many cases, either operations chaos is pulling down the sales or the lack of sales is slowing down operations. And so to try to get those two to work in sync is critical. And we do all that again from the basis of what does a financial forecast and financial plan tell us? And it’s really a lot of times it’s a breakdown of communication. So we put communication plans in place and make sure we’re all on check. There’s checks and balances. Sales isn’t overselling that with the ops guys can’t produce, you know, and so on and so forth. And so it’s just, it’s putting those initially, just some type of a guideline or a path forward on financials, and then sitting down, just having conversations to try to ease, you know, the the ebbs and flows, or the, really the peaks and valleys that you see a lot of times these small businesses struggle with and just trying to get into an operating rhythm, it’s the number one thing. I’d say, You got to get a business into rhythm. And if you’re dealing with the peaks and valleys and something’s broken, 99 times out of 10, I mean, out of 100 it’s the communication side of things, and so it’s really important to get your sales and ops teams together and come up with a plan that both agree upon.
Scott Ritzheimer
Yeah, I love the language around that, this idea of a 12 month forecast, because many times folks will come in and say, you need a budget. And I found a couple of things to be true of budgets. One is that there’s a lot of shame around not having one right, and it can feel kind of overwhelming, and it’s a skill that needs to be developed over time, right? Your first budget is guaranteed to be wrong. It was just hands down. Now, if you bring in somebody who can help, it can be a lot better. And so bringing in some fractional CFO help, something like that is a great idea at this point. But you use the word forecast, a 12 month forecast, and I’m interested in and why you chose that word, and what makes a great 12 month forecast?
Stewart Ervin
Yeah, so forecast for us, what I normally try to say is, listen, we need in the next 30 days. We need a 90% certainty as to what our revenue is going to be. I need a 75% certainty what the next 60 days are going to look like, and a roughly 50% certainty what the next 90 days are going to look like. Again, that just gives us a guide. It allows us to make decisions in the short term, so on and so forth. The beauty of a forecast is it’s a guide that when you get to the end of it, you say, how well did I perform to that? And what do I need to do to change it to get better as we go? So it’s not a set, forget it. It’s a living, breathing process again. Now we do develop a 12 month plan that doesn’t change, but the forecast allows us to always compare back to the plan, but we’re making adjustments sometimes daily, but at a minimum every 30 days. We’re adjusting based off of what actually happened to our plan, against our plan, and against our forecast. And again, it gives you grace, because to your point, the first time you do a forecast, it’s going to be wrong. The first time you do a plan, is going to be wrong. The kicker is making sure you look at what actually happened and then take actionable results, I mean actionable changes, to make sure your results come more in line in the future.
Scott Ritzheimer
Yeah, yeah. It’s, it’s so good. I love that point on it being a living document, because if you try and do one at the beginning of the year and come back and check it out the end of the year, it’s, not all that helpful. It’s actually very frustrating. Yeah, I want to talk about what could kind of be the elephant in the room here, and that is, many times our financial problems are decision making problems, right? We’re focused on too many things. We’re focused on the wrong things. You know, we’re running all over the place, and that can bring us to a really hard reality, that one of the biggest problems at this stage is the is happening between the ears of the founder, right? And and so one of the things that I’ll see, and you know, my clients will laugh at this, because it’s true. They’ll see, they’ll bring someone in like you. They’ll say, yes, we need systems and processes. I’m 100 100% in support of that. But what they mean by that is, everyone else needs systems and processes. Don’t put those on me. So how have you seen founders who aren’t generally the most system and process oriented people? How have you found them effectively embrace that without losing themselves in the process?
Stewart Ervin
Yeah, that’s so I would just, again, say some of the the guy I spoke with yesterday, we were having the same type of conversation. He was like, I think I’m just going to hire somebody to run this business for me. And, you know, I’m just, I think they would do a better job. I’m like, Yeah, but you would lose the control that, oh, I want to go buy this, or I want to go do this. I was like, you turn your reins over to someone. You’re gonna you’re gonna hate life even more than you do today today. So I really normally try to combat that with education and training, right? So a big part of what I do today is really trying to train the business owner to think like a business owner, and not, you know, again, they had to make decisions. This gonna be a lifestyle business, or am I gonna try to take this to the next level? If they’re truly gonna take this to the next level, then this is an education that has to happen. In many cases, the guys I work with, they’ve never seen anything beyond where they are today. They’ve only worked in their own business. So every dollar over whatever revenue dollar they have today is a new experience for them, and so I paint a lot of pictures. I paint a lot of if you do this, this is what’s going to happen. I do a lot of if you don’t do this, this was going to happen. And just not teach and teach and teach, because they need to understand the why. So I spend so much time doing that so they can understand the why. Because the worst thing they do is they can agree with you just to get you to shut up and move on and then down the road they they’re off in another, you know, another arena. They have no clue where their business is even at. So, yeah, just educate. Educate, educate, educate.
Scott Ritzheimer
Yeah, it’s really powerful that that decision on which way we’re gonna go right because to get out of what you’re feeling right now, you do have to move one way or the other, and I’ve found it’s important to help folks recognize, hey, one’s not inherently better than the other. It’s really a question of which one do you want to do, and then which one are you willing to sacrifice to achieve? Because in either direction, you might be sacrificing extreme growth to have a lifestyle business, you know, not, not one to one, but there’s, there’s different parameters there, or you might be sacrificing your, you know, visionary freak flag, to really scale a business. And I love, I love that you approach that and, and I think for anyone listening who’s feeling that way, a big part of why you might be stuck is because you’re trying to hold both at the same time, and it doesn’t work.
Stewart Ervin
Absolutely, I see a lot of guys, they try to, they teeter on both sides of it, and it’s like you’ve got to make a call. You cannot continue to sit on the fence and say, Yeah, I do want to do this, or I don’t want to do this. You got to make a decision and go. And many times that’s hard. And so particularly, because a lot of times, you know, these businesses may they may be at 10 million, but these individuals and processes that got them to 10 million, it’s not what’s going to take them to 2025 Yep, and there’s a purging that’s got to happen. There’s a behavior change that’s got to happen. But we’re not normally trying to say is, listen, granted, there the people may change, but you’re doing a process today, albeit it’s incorrect. All I’m trying to get you to do is do this process this way that is more correct. You’re it’s still a process. Yeah. And so a lot of times people think, Oh, if you put processes in place, it will make this company too rigid. It’ll strain, like you said, the creativity, oh, that becomes stale and corporate, no, you have a process today. It’s just off centered, and so let’s try to bring it back. So again, it’s, it’s really trying to see to the point of, look, corporate is corporate, but it doesn’t have to be corporate. And then explain the difference. So you’re here this where we’re going to go, and this is the result of doing so. So it’s, it’s just a lot of communication. It’s a lot different. Again, if you’re a w2 guy going in and turning the company around, you’re the guy. You just make it happen. And so when you’re trying to be a coach, it’s so much of an emotional play with the business owner, because at the end of the day it is on them. All I can do is kind of walk them to the you know, walk them through the path here, but at the end of the day he’s got to make the call, yeah. And so there’s a lot of a lot of education discussion that goes online closed doors, just trying to make sure that, again, the business owner really knows that what’s what’s involved in this process,
Scott Ritzheimer
Yeah, and being able to make that decision, I know when I was there, I got stuck in that, that spot, not making that decision for a couple of years, actually. And in the words of my great father, he said, you either need to shit or get off the pond. It’s one or the other. He totally called me out on it, and I couldn’t complain after that, because I realized it was my own fault. But there’s a lot that goes into doing it right afterwards, and I was fortunate to get some of some amazing help during that window, once I made my choice, I think that’s really important. So Stewart, there’s this question that I ask everyone. I’m very interested to see what you would say to it. But the question is this, what is the biggest secret you wish wasn’t a secret at all? What’s that one thing you wish everybody watching or listening today knew?
Stewart Ervin
That there’s options, right? So I’ve spent 15 years, trying to turn businesses around, right? And you walk into these companies, and a lot of times, people have reached their wits in and they’re ready to give up. The beauty about today’s world is there’s fractional executives in nearly every discipline of your business. So if you’re struggling with sales, there’s a fractional sales guy out there. If you’re struggling with ops, fractional coos. And so there are experts who can come in, who are very affordable, who can tailor their options and opportunities for you in your in your state of your business. And so, you know, so many times people just give up too soon, and there’s options out there. And so just know that there’s, there’s always an option, you know, there’s always an option.
Scott Ritzheimer
So good, so good. Yeah, Stewart, there’s some folks listening that. Love to help someone who can pull all these different parts of their company together and help a founder make sense of it. Where can they find out more about you and the work that you guys do?
Stewart Ervin
Yes, you can check out our websites, bracketmgmt.com, that’s bracket management. Short. You can find me on LinkedIn, so I’m probably most active again. Phones on me all the time to reach out via direct message, and I’d love to help anybody who needs some assistance.
Scott Ritzheimer
Brilliant. Stewart, thank you so much for being on for anyone listening, we’ll put those links in the show notes for you so you can get right to them. But yeah, it was just a privilege and honor having you here today. Great conversation. Ton of truth in there. Yeah, it was fantastic stuff. And for those of you watching and listening, you know your time and attention mean the world to us. I hope you got as much out of this conversation as I know I did, and I cannot wait to see you next time. Take care.
Contact Stewart Ervin
Stewart Ervin is the driving force behind Bracket Management, a premier Fractional CFO company. As a proven finance and operations executive, he brings structure, process improvement, and people development to make an impact. Stewart is a seasoned expert in the manufacturing industry with an impressive track record of helping businesses optimize their financial performance and strategic planning. Stewart’s unique approach blends proven corporate results with a deep understanding of the challenges faced by many small businesses.
Want to learn more about Stewart Ervin’s work at Bracket Management? Check out his website at https://www.bracketmgmt.com/ or connect with him on LinkedIn https://www.linkedin.com/in/stewartervin/