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Alan Chaffee – Why Finance Talent Is So Scarce

Alan Chaffee is the Founder and CEO of Turning Point Strategic Advisors, a premier financial and strategic consultancy serving business clients throughout Seattle, Bellevue, and the Northwest. Turning Point delivers outstanding results in CFO and M&A advisory, revenue acceleration, and restructuring. In his role, Alan has performed CFO duties for over 100 middle market companies with revenues ranging from $2M to $150M annually.

He has 25 years of extensive experience in financial accounting, business consulting, company valuations, and corporate restructuring. He’s focused his last two decades helping companies use financial information to drive operational improvements, manage cash flow, and increase profitability. Before founding Turning Point, Alan held senior executive roles for 15 years, including chief financial officer, chief operating officer, and president.

Intro  0:04 

Welcome to The Future Is Borderless podcast with David Nilssen. We feature top entrepreneurs and thought leaders from around the world, those who bring a global mindset and a unique perspective to their life and business. Now, let’s get started with the show.

David Nilssen  0:23 

Hey, David Nilssen here I am the host of this podcast. I started The Future Is Borderless as a way to connect with business leaders from around the world who I believe embrace a borderless mindset where we can exchange ideas, cast new light on innovations and share best practices, not just in business, but also in a personal sense, ultimately helping us to lead to grow in a rapidly evolving world. Now, this episode is brought to you by Doxa Talent. Doxa helps businesses to source full time highly skilled, dedicated workers from around the world. As a result, companies can scale faster, increase margin and improve culture. To learn more about how Doxa can help you leverage borderless talent, go to All right. Well, today is going to be a really interesting episode. I have Alan Chaffee, the CEO and founder of Turning Point coming on. He has 25 years of experience in financial accounting, business consulting, company valuations, even corporate restructuring. He’s focused his last two decades helping companies use financial information to drive operational improvements, manage cash flow and increase profitability. And as the CEO of Turning Point, Alan has performed CFO duties for over 100 middle market companies with revenue scaling as high as 150 million annually. Now, before that, he held senior executive roles as a chief financial officer, a chief operating officer and President. And then I’ll just note that away from those endeavors, he runs marathons, reads voraciously, and is busy raising three kids. So Alan, welcome to The Future Is Borderless.

Alan Chaffee  1:58 

Thank you, David. Glad to be here.

David Nilssen  2:00 

All right, well, let’s just jump straight in, in reviewing your site, it looks like the team at Turning Point is really focused on three core services. And you guys name them as capital advisory, financial advisory, or CFO services, and then talent acquisition, just to give our listeners a baseline for what it is that you guys are actually doing. Can you just share a little bit about each one of those and the outcomes that you’re really trying to help each client achieve through each?

Alan Chaffee  2:24 

Yeah, let’s start with the CFO advisory, we are outsource controllers and outsource CFOs focus on a solution. So we’re not a body shop. You engage us when you got something in your business, like you want to prove your cashflow, prove your profitability, improve your systems, we come in and do that. The other capital advisory is really our restructuring group, over 50% of our business comes to us from lenders who have bank lines or debt that’s in default, and we help them work that debt out. And the other one is in both those situations, we often find ourselves with a turned-around business that we want to get out of and let them go back to running it themselves. And we help place controllers and CFOs and other executive-level roles in those businesses once we’re done.

David Nilssen  3:08 

Got it? Okay, cool. And in the case where a bank is actually sending you a referral, somebody that needs their support, who are you representing in that particular case? Are you representing the bank? Are you representing the client?

Alan Chaffee  3:21 

99% of the time we’re representing clients. So the bank calls us and said XYZ client trip companies last three quarters are struggling to make payroll, the financials that make sense, would you go talk to them, and then the bank tells the client, you need to hire somebody like Turning Point or Turning Point or a Turning Point. And so then the client says we’re gradually okay, I guess we’re gonna hire a Turning Point. And the first thing we do is you try and punch the bank in the nose, and they know it’s coming in, they get a towel ready to catch the bloody nose, and we punch for the nose to stand down, let us assess the situation. And then we go to work.

David Nilssen  3:52 

Got it. So you’re actually giving them a little bit of relief along the way so you can kind of do your job.

Alan Chaffee  3:56 

The bank, they don’t want the business to default and fail, but they want a resolution to the nonperforming debt. And so they know this is a high risk, they’re gonna have to pause and wait. But we’ve been doing this for 20 years, I have a relationship with us, we say okay, if Turning Point comes in, and we’re going to get the truth, if it’s good news or bad news, we’re going to get the truth. That’s what they often feel like they don’t get from a client who’s scrambling?

David Nilssen  4:18 

Yeah. Is there a common scenario that you see like where you go in and you look at these financials and working with these companies and you see, are there common buckets where you see challenges or common mistakes or opportunities?

Alan Chaffee  4:29 

Yeah, the number one common thing that we see when we go into clients that are struggling with cash flow, profitability, and their debt is a lack of accurate and timely financials. So the CEO or entrepreneur or hired CEO is driving 100 miles an hour blind. And so the first thing we do is to put in daily and weekly reporting Look, your financials are important, but really the only person who needs them is your bank if you’re getting accurate daily and weekly information. So we start there, we progress to accurate and timely financials. And from there we begin the workout plan.

David Nilssen  4:35 

Ain’t that amazing like, I mean, that seems like such an obvious answer. But it’s so true. I mean, I’ve been working with startups for 20-plus years through company I started years ago. And then, of course, now with the Doxa Talent, but my gut says that most people don’t invest in that part of their business until it’s too late. So not surprised to hear that, I guess.

Alan Chaffee  5:24 

Yeah, it’d be a lot of entrepreneurs in the early stages of business. And depending on what your business’s revenue stage can be zero and 10 million or 50, if you got one customer, Microsoft, you actually can go a lot longer without good systems. So they run it by their gut feel they know what revenue is, know what cash is, I know what costs are, they kind of know if projects or programs or products are profitable. But when they outgrow that gut feel, and they keep going, that’s when the trouble happens.

David Nilssen  5:49 

Yeah, and I can appreciate that. I would consider myself more of an intuitive individual than a data-oriented individual. And there’s a limit to how far that will scale. So I remember, even as a young entrepreneur, I made all the decisions by my gut, and eventually, you have to set up dashboards and have metrics and timely financials otherwise, you just can’t make good decisions.

Alan Chaffee  6:07 

And your gut gets wrong information. Right. And so then you’re validating wrong information and make an even further decisions that you probably should have had more information for he made.

David Nilssen  6:17 

Yeah, fair point. Let’s talk about Strategic Finance, also known as sort of the CFO, my gut is that most people don’t invest in that early enough, right, they don’t believe they’re going to get the value upfront, and then by the time they realize they need it, it’s tough to maximize it, because they’re so behind on that, no timely financials that you’re talking about. Help me understand, like, when is the right time for someone to start to think about investing in Strategic Finance? I’m not talking about accounting, just like the CFO type?

Alan Chaffee  6:52 

My answer is from the beginning, but you want to buy slivers of it? Right? So we need an accurate strategic plan, lets say we’re launching our business or buying a business. On day one, I need a well-thought-through driver-based financial model tied to operational initiatives that break down into metrics so I can measure on a weekly basis, are we doing what we said we’re gonna do? So I’d say on day one, now, most businesses don’t do that, right. The entrepreneur is whatever their specialty is revenue, engineering, sales, sales, engineering, whatever their specialty is software development. And they don’t do that. But if I was advising a group of early-stage entrepreneurs, or at a university, I’d say, start buying slivers of it in the beginning, right? Buy what you need. And outside of that advice, I’d say when strategic planning becomes a critical part of your business, it’s when you need to hire those people, or if you need a bank line, right? Because banks aren’t strategic. And so knowing how to navigate that is usually the first entry point. Startup companies for us is when they’re talking to their lender, and lender says, I can understand these financials. And how much do you need? And it’s stuff like that,  asking question about personal guarantees and bank covenants, foreign language to a lot of entrepreneurs. So that’d be the entry point.

David Nilssen  8:14 

Yeah, Help me Help me understand that when you say buying slivers? Like, what are some of the options that people have to buy a sliver of a CFO?

Alan Chaffee  8:22 

How much equity should be raised? What is the operational plan? And how does that relate to the financial and cash flow plan? When they are re-bankable, so we can then begin to leverage working capital and to finance our the gap between receivables and in paying payroll, collecting for your customers and paying payroll you pay. You collect your customers on average, 38 days, the sales outstanding and you make payroll every two weeks? Well, that gap on a growing business causes a lot of pain. Looking at long-term customer relationships, pricing products or services, those are when you want to begin to bring in somebody who’s forward-looking and has enough experience to connect the dots between operations and finance.

David Nilssen  9:04 

Yeah, yeah. It’s funny, obviously we work with people all the time to help them find talent. And finance is actually one of the big sort of niches that we serve. But I think there’s often a lot of confusion between a CFO and a controller, I think people are using that interchangeably. So could you like, is there a way that you could just break that down distill down, like what is the difference between what a CFO does and a controller does?

Alan Chaffee  9:30 

Primarily the line can be a little blurry in the middle, but primarily, your controller is backward looking through reconciling transactions, and the trial balance and producing financials that tell you what happened. There managing AR AP, maybe payroll to capture the transaction should go to the debits and credits to create the trial balance to create the financials, your CFO is taking those financial statements aligned with the strategy and telling the leadership team here’s what my think’s gonna happen tomorrow financially. And that’s what you need to get in that bridge that finance that gap from high individual contributor CFO, I mean controller reconciling the books and make sure transactions are all in and cut-offs are right and it’s according to the GAAP to looking forward and say, in my crystal ball and says here’s what’s going on micro economically macroeconomically, here’s what’s going on in a business with two key customers, okay, here’s what this means for tomorrow. That’s the CFO, they’re telling you where you’re going, we call that shaping the future at Turning Point. And in your controller is looking backward saying this is where we’ve been.

David Nilssen  10:36 

Have you ever seen a scenario where the controller is able to sort of make that flip from looking backwards and actually starting to step up into the role of CFO and sort of making that shift?

Alan Chaffee  10:49 

We specialize in that, David. At Turning Point our core values is we make great CFOs. But it is so painful to watch that transition, because the value of a really good controller is accuracy, timeliness volume of transactions, you watch them, they’re flying on the keyboard booking entries reconciling Excel, they’re always Excel geniuses. And we say, okay, stop that. Now look at those financials, look at the forecast, look what’s going on in the industry and in our business in particular, and tell me what is going to happen next quarter, and they and they have no sense of value, like, how do I know what’s going to happen, I can tell you what happened. So we watch it all the time. And it takes almost a year of an out-of-body experience for them. And then they never want to go back. They never want to go back to the world in which are buried in transactions to a world which were sitting with the leadership team projecting or shaping the future of the business.

David Nilssen  11:40 

Yeah, it’s interesting. It’s like a total different shift to go from, like, precision to reasonable guesses.

Alan Chaffee  11:47 

Yeah. And a lot of people go into accounting because they like the precision of it. Right? And one thing is about precision, is it safe? Right, I don’t have to worry about being wrong, because I look these democrats add it up. Now, maybe somebody entered it wrong. And somebody in inventory entered 20 instead of two on the floor, but I reconciled to what they entered. It’s right, from my end to I’d say what’s gonna happen tomorrow, and that no matter what I tell you, it’s going to be wrong. Yeah, so feels very unsafe to accountants to project the future.

David Nilssen  12:17 

Yeah, you know, I want to just continue to align with the CFO so that, it’s actually not uncommon that I talked to people who don’t even have a line of credit established, they haven’t really even thought about, I should probably have the ability to access capital, even when I don’t need it. Walk me through sort of when you guys think about helping someone start to wrap their brain around a capital strategist or operating purpose, what are some of the things that they need to be thinking about, or that you guys help them do to get prepared for that time.

Alan Chaffee  12:46 

We look at the working capital shortfall due to growth, or if it’s a seasonal business planning for fourth quarter, a lot of retail style businesses have a busy fourth quarter, and they spend first three quarters, ramping up to 75% of the revenue. So we look at that working capital gap. And then we look at collateral. So collateral is what the bank will use to underwrite the loan, an example would be 80%, of what’s called a good accounts receivable, accounts receivable under 60 days, that don’t have more than 25% outstanding, over 60 days. So inventory, maybe 25%, or 50%, of inventory up to a cap. So we look at what’s available for collateral. What the working capital gap is, do I need a million or 2 million or 500,000? And do I have the cash flow to repay that? Are the banks calculation? It’s called fixed charge coverage. And so we map those, okay, you’re very profitable. So your fixed charge coverage is good. You have a million dollars in AR and you have no inventory service business, we can then get $800,000 in a line of credit for you, how much do you need, because if it’s not enough, then we have to get more creative. If you only need 500,000, then what’s borrow 500? Because banks charge unused line fee often. So if you can get a what you need five, you’re going to pay for that three 1000 You don’t need so let’s not do that. Right. So that’s how we map that.

David Nilssen  14:20 

Fascinating to me. So there’s one use case makes total sense. Growing up my father actually owned a large fresh Christmas tree company, they had international distribution actually. And so I remember like, they basically use their line of credit to survive for three quarters. And then Christmas would come and they’d sell a ton of Christmas trees pay that back and basically earn all of their money for that year. So that use case is super simple. One that I can clearly identify. The thing I’ve always found interesting about the collateral is that if you’re really efficient at collecting from your customers, you don’t really have a lot of AR that can actually hurt you when it comes to getting a bank loan, have you seen people overcome that?

Alan Chaffee  15:09 

Yeah, so let’s two scenarios I can share with you. If you’re making payable every two weeks, and your customers pay you on the dime, 30 days, then you still got a 14-day or 15-day gap. So you should look to bankroll that I’ve heard entrepreneur say, why don’t like banks, I don’t want to borrow. I’ll just take it out on my cash flow. My answer is no, you should leverage your assets, it’s a better way to grow your business. And we can talk about that. The second one is this is a big one for e-commerce companies, they get paid on a credit card, the minute the orders taken. We have a $60 million e-commerce company does home goods, they have no AR banking them, and they have lots of inventory $10 million in inventory. Banks don’t like inventory, because they’re not in the process of selling product. They don’t want to do that. And in a liquidation product often goes for 30 cents on the dollar. So very hard to bank them. They’re very profitable, their 60 million in sales are growing 25% a year. They have great customer base good traffic on their site, hard to bank them, because banks there’s no AR what do we do? Now we’re able to find it there is a growing group of lenders at one is called Republic, who will lean into inventory, but it’s still not 80%. It might be.

David Nilssen  16:24 

Yeah, yeah, I’ve known this to be a real challenge. But it’s nice to see that there’s some other alternatives starting to spring up.

Alan Chaffee  16:30 

And that’s where your CFO can say, okay, we need to go out and raise capital, or find some other alternative financing means to bridge that gap from 50% to 80%. If we had, we’re creating sales on AR Now, normally, we think collecting cash today versus 30 days now, it’d be better. But it’s hard to leverage that into a bank line.

David Nilssen  16:48 

Yeah, yeah, it makes total sense. It’s funny, we talked about this a little bit of that our my business Doxa helps people fill positions, from software engineers to sales, development, even marketing automation. But what’s funny is that when we started this business, I didn’t anticipate this, but finance, meaning accounting, bookkeeping, CPAs AR those types of roles have become our biggest demand channel, basically. I was a little bit surprised by that. So I guess my question is, why is there such a shortage? Or at least such an acute need for that type of talent for these different companies? Why is it so hard to find people that do that?

Alan Chaffee  17:26 

Accounting is you have to learn it? And it takes a long time, right? I don’t know very few people who took accounting in college and said, well, that was intuitive, isn’t the gap is not intuitive, for the most part. So there’s one that is that it’s hard to take somebody off the street, and put them in a 60-day program and have them be accountants, that’s not impossible, but it’s hard. I’ve had people ace the QuickBooks, 90-day training program and still can’t book a journal entry. Right? They don’t know what that is. So the second, the bigger issue, and then we talked a little bit about as the accounting world hasn’t done itself any favors, that first thing they did, and I don’t know, maybe 20 years ago, they added a fifth-year requirement to become a CPA. And the CPA is that is the standard route to go from auditor to controller to CFO. And so they added a fifth year, which is really ridiculous, because it’s not an MBA, and it does nothing for you, right? So it’s very frustrating to go to school for another whole year. And I get nothing more than a master’s in accounting, which doesn’t mean anything, right. That’s my opinion, sorry, some people may think it means a lot if they did it. But it’s hard, they should have left it as a fight for your program or move it to an MBA program, right? Because then it’s worth the extra effort. This next thing they do, they follow that shortly by breaking the CPA exam into four sections. So it used to be when I took the exam, I studied for a year, and then I took a week off before the exam. And then I went for three days in a row and I took all the tests, and I’m done. You walk out sick your stomach and dizzy, but you did it. And I think they had it below 50% pass rate first pass, but then you can go back and take whatever section again, that you failed that in six months. So they now broken into where you take one section at a time. And you have to take them all within a year or you start over. Oh, wow. So I got to go to school for five years. And now I have to and by way in that fifth year, there’s no new information. It’s the same program to spread out further. Now I have to study for a year to take all these tests and I take them one at a time and either and then you can take them like almost every month so it’s not like they were before it was twice a year. They’ve got them in proctoring stations. And so now I got to spend a year doing taking these tests and if I gets sick or I went to get vacation, I missed that. I got to start over if I don’t get them done in a year, right? So or at least the first one drops off, and it’s how it works. And then accounting firms have always because it’s two years work to get your CPA done indentured, the big firms indentured servitude, right, you don’t make much and you work, insane amount of hours, ticking time source documents to transactions, and they don’t pay a lot. So now it’s 2015, I’m out of school, I’m coming up on my school, and I look another year. And I’ve got my degree in finance, and Amazon is going to offer me you know, 1.2, excellent delights can offer me I have to go to school for another four years. And then I have to sit that test. And I don’t really want to be an auditor my whole life, I really want to go into business. The choices are predominantly the best and the brightest are moving to Amazon, Microsoft, even smaller middle market companies who are paying more in offering a direct path to leadership, versus two years indentured servitude, and add the year school a year attesting to years of indentured servitude, and then I can start my career. So it hasn’t done a good job of bringing the best and brightest to it. Now, they’re still brilliant people in finance and accounting, for sure. But it’s just not enough of them.

David Nilssen  21:13 

Yeah, there definitely seems to be a shortage. And I think some of the changes you talked about there certainly makes sense why we’re starting to see that shift. I remember years ago reading that there were more CPAs that were retiring than actually being certified. Right. And so the five-year shift makes a lot of sense. Alright, Alan, I want to just shift for a second talk a little bit about the macro-economic climate and sort of what you’re advising your clients on, because there’s this sort of, I don’t know if it’s a real trend, and I guess it’s purely anecdotal, which means it’s not a trend, because I’m an intuitive guy, I’m just going to say it is. Most of my conversations with entrepreneurs these days seem to sort of have this same sort of thread, which is, during the pandemic, I did really, really well. But now that it’s over, I’m struggling, and it feels like we are heading into a recession, some believe we’re already there. But what are you seeing? And what are you advising on your clients, or advise your clients on I should say, sort of anticipation of what I would call for lack of a better metaphor, a colder winter, like what are you telling people to do today?

Alan Chaffee  22:18 

The biggest thing that we’re a firm believer in and we’re I’m a firm believer in re-forecasting your forecast every quarter. So everyone does an annual budget planning process is an important process, it should connect the divisions of your business to each other to the CEOs plan for expansion or growth. And then everyone breaks it into actions, the break that into budgets, and then those budgets become the plan for the next year. But whatever we do in October, November, December, the prior year, by March, April, May is no longer true. By fact, right? It’s going to be different. I don’t know 20 years ago, when I was doing budgeting for a living. I don’t know if that was true, then is now we live in such a more dynamic world that we’re in things are changing all the time so rapidly. So what one is every quarter, I re-forecast on doesn’t have to be a deeper dive as your annual budget, but I re-forecast, and then constantly be looking, you know, there’s a book out there, The Lean Startup, cause always been thinking lean, and tying where you’re spending money to the strategic initiatives of the company. Now, again, that suit makes like a little curse. That’s just common sense. But I How many people’s like, well, last year marketing was 1.2 million. So we’re gonna make it 1.3 this year? And my answer is, wait, wait, wait, what are you spending on marketing? And why? And what are the issues? And what do you achieve? What do you hope to get out of that? Right? Is it click-throughs, or new customers or whatever it might be. But really start starting almost like the old school zero-based budgeting, which is out the window now. But I think about it like that, like we’re not going to spend $1 million next year because we spent it this year, what are we going to spend it on? Is it the right amount? And doing that almost every quarter and coming back to what we were supposed to achieve in that quarter, non-financial goals and did we get there.

David Nilssen  24:11 

Yeah, I love that. I think that’s really great. In fact, we’ll put this in the show notes. I love the re-forecast every quarter follow the trends, those turn into actions, those build budgets like that to me is actually really insightful. Because as we go into a recession, the trends change what we’ve seen for the last 10 or 11 years, we’ve been in a bull market cycle, and of course, the pandemic shifted that but people keep saying I can’t wait till we go back to the norm. I don’t know if that even exists anymore. So re-budgeting gives us a chance to sort of learn the business over again.

Alan Chaffee  24:39 

Right gets everyone to go back and look at start with non-financial metrics connected to the financial metrics. Then look at the financial metrics, are they the right ones. We had 70 billion clients last month, about 25% are e-commerce. All of them did great during COVID. And so what did they do? Most of We’re into new warehouses on an opposite coasts where they’re at. They fill them full of product, they couldn’t get products from just in time to just in case, and all of them are down 40, 50, 60% right now then over 2021 at the same timeframe. And that’s example where like Amazon did it too. Amazon’s retracting targets dumping inventory, Walmart’s dumping inventory. Some of the best logistic companies in the world did the same thing a lot of our customers did. But if they were doing this in q1, they would have seen the fall off instead of being optimistic, right. But most of them didn’t want to spend more marketing dollars was getting more customers. Let’s get more eyeballs, just get more click-throughs. And it didn’t work because people left their houses, they left their laptop behind.

David Nilssen  25:43 

Yeah, that’s awesome. I mean, it’s funny. I do I know a lot of people that upgraded their office space spent more on equipment like I love the just in time to just in case. I did see that a lot. I mean, I talked about the anecdotal trends that I’m hearing as I’m talking to entrepreneurs, but given that your capital advisory is a big part of your business, are you seeing that impact in your own, like number of referrals coming from lenders or makers, rising interest rates means that the cost of caring of debt is going higher? Are you seeing the same sort of trend from a financial perspective?

Alan Chaffee  26:15 

Yes, we’ve gotten more weekly referrals right now, two or three a week from lenders, that hasn’t been this busy since 2014. 2010 to 2014, the phone just rang and rang and rang, right? All the last year agreements with all the banks that were failing, all the bad debt was out there. You know, our phone just rang we got to stop answering, right? We didn’t have to find us at the coffee shop and want to take their project. And now it’s starting again. During the COVID banks had they didn’t have to treat debts that we’re whisk risk rate risk means they’re in default, it’s some level some minor default can be big default. They have to risk rate them and then work out the recovery plan. That’s part of it. FDIC has rules right? During 1231 2020 and 1231 2021, up until then, they didn’t have to do anything. They wanted you to look at them as a lender, they want you to risk rate them, but they didn’t require you to do a TDR a total debt restructuring, which is what they’re supposed to do. So a lot of in the course, nobody really had any issues because they got PPP one, PPP two ERC, Mainstreet EIDL, EIDL went from 250, to 250, to 500, to 2 million, right. And so they just flushed with cash, but that cash is gone. Banks can’t pass anymore, and so that they’re all right now scrubbing their balance sheets, looking at their blend borrowers and wondering how we worked ourselves out of this.

David Nilssen  27:41 

Yeah, I think that’s right. I think so much stimulus was available that it sort of buried a lot of operational sort of inefficiencies and even risk at that time.

Alan Chaffee  27:52 

The guy made up, and I don’t know that it’s factual, but I generally think about 30% of businesses aren’t fiscally sound, it’s just my experience with 25 years ago, and restructure work. And so that didn’t change during the pandemic, it’s got mask over all of this cash flow. So the cash was all back out to see those companies are still there. And there’s no more money for them.

David Nilssen  28:16 

Yeah, yeah. Be interesting to see what comes. But I think I love the reef forecast every quarter. And I think what you were saying is to stay away from just in case, but actually go back to just in time right now. Yeah. Let’s talk about you personally. I just curious, how have you evolved as a business person over the last call three to five years? I mean, all of us are trying to learn and grow. But like, how have you sort of shifted your leadership style as the world’s continues to shift?

Alan Chaffee  28:46 

Well, thank you for asking that question, as you know, it’s a leading question. As you know I’ve changed tremendously. And I appreciate the opportunity to talk about that. For 18 years that I ran this business, I ran it as chief consultant to my clients with a handful of really cool people working for me, doing great projects, even though we’re CFOs, we’re almost always restructuring CFOs in that timeframe. And so I got to choose who my clients were and choose the 10 or 11 staff I had around me, and it was a wild ride. And I learned a lot. But I never grew the business. And it was always cash-strapped. Because so much money I took home, I spent that so we needed more. And I had in at the end of 2018, the best staff I’ve ever had, but they have careers. And this is the third time this happened where my staff grew up, they’re really good. But there’s no career path attorney brings me and my hand selected of men, women who did good things. So we decided to grow the business. So I stopped being consultant to my clients started running my own company for the first time. And as David knows, I talked about doing that for like 17 years, 18 years, and I didn’t do it. But I started doing it and it’s been miraculous. We’re at 36 People today. They’re all fantastic. I don’t do any direct client work, I manage my team. I actually have one on ones with them. I do things like CEOs are supposed to do. We actually do our own planning session we never did before, because why bother with a budget is just me. And it’s really worked out well, today we have five owners in the business, I was the only owner for 18 years, and they’re all awesome. And the business is growing. And our reputation is growing. It’s been life-changing for me personally to watch this happen. And I will the last piece of that is I the first year, I didn’t know what to do. Because I love client work. I love it so much. And I couldn’t do it. And I didn’t really know what I supposed to do all these people now we’re hiring. So I didn’t do anything with them either. So I set my office and washed my hands. It’s like, Well, okay, now. But today, I’ll never go back to what we were doing. And it’s been pure, fun and exhilarating to watch the practice grow.

David Nilssen  30:58 

I’m curious, though. So yeah, I’m glad you were able to share that. Because I do know that that’s a transition you’ve made recently. But was there a moment because you said it a minute ago. I’ve thought about this for 17 18 years. And I do think most entrepreneurs, including myself, we’d love working with the clients were really good at it. So we want to hold on to that it’s hard to let go of like, there’s all those sort of moments, but like, what was the moment that you finally said, okay, it’s time like, what happened?

Alan Chaffee  31:25 

I looked at the staff I had, and I knew they’re going to leave. And I didn’t want to do it again. The first time I turned over the staff, and it doesn’t happen on a day. But over two or three years, my best and brightest move on to great jobs, we have like 18 right now, x CFO or x trained white people, or CFOs. In the Seattle market, we’re proud of them. We have little placards for him, right, we celebrate them. So I didn’t want to lose these guys. So I had no choice. And by the way, I think I turned 55 I was kind of tired. And wasn’t learning as much part of the joy of doing the work that I did for all those years is every new client brought a new learning experience. And I still was learning but not at the pace I was before. And so, I think it really was just time to do it. And I and I was so proud of the staff that we had, and I didn’t want to lose them.

David Nilssen  32:17 

Well, necessity is the mother of invention. So, it’s funny I actually was I relate to the story that you had when you’re like staring at your hands. I remember I had hired a coach at one point. And he sort of helped me put a system in place in the business. And I realized that the more authority and autonomy we pushed into the business, the less I was needed for and I remember I sat down one time I said, if I do this, though, like what am I going to do? And he said, Go get a hobby. Go do something with your time that matters for you. And I realized at that moment, yeah, you’re right. I mean, being a good leader doesn’t mean that I have to do it. Do the work all the time. Right. So there was an interesting, interesting moment.

Alan Chaffee  32:59 

It is a journey, I let go of everything. And I ask open-ended questions versus I built my life telling people what to do. Right? It doesn’t work. You don’t empower people doing that and I coach CEOs, so empower their people. But I didn’t follow the reasoning myself. Just this week, we had a big restructuring project come up in Anaheim, California. And I jumped into old school load, and I grabbed a staff here and I grabbed a staff there and I booked their airfare and we’re going to Disneyland to do this big steel restructure. And then I forgot there’s a director of restructuring, I should have been doing that. Right. And so it’s still a journey, but I had to go, I had to go apologize. And I was happy to do that. Both because I didn’t like to apologize. And I had to learn my lesson. But I felt bad for slipping backwards even after doing this since 2019.

David Nilssen  33:45 

I think we’re all guilty that I think anybody who has an entrepreneur that’s listening to this will say, like we love solving problems. And when you see these new juicy ones, it’s hard not to jump into that.

Alan Chaffee  33:56 

Cool job, and I want to be a part of it. And here we go again. And then I’m like, oh, wait a minute, that’s not my job anymore.

David Nilssen  34:02 

Yeah, totally. I want to talk just for a second about actually Turning Point. You announced about a half a year ago, you guys took on a significant investment. And after being in business for so long, it’s not super common that someone would then raise capital, right? So just curious, like why was right now the right time for you to make or to take on an investment.

Alan Chaffee  34:24 

Here’s what happened, we were growing. And so I’d hire six staff, and in our world, we’re pretty controlling on how you there might be lots of ways to do a certain type of project, but I know our way it works. And so we have all these training videos, we have to watch and we have quality control, we have tests and so it goes all the way from how do we build our work papers to closing a set of financials to how do we build a forecast so how do we manage the lenders and how do we tell the CEO entrepreneur how what’s going on their business? So it takes a while for they’re fully billable. As you can imagine, art AR was like 32 days pretty good. But I’m making payroll. These are five and seven year accountants so they’re expensive. I’d hire six and I pause and get them billable and get cash flow going again, higher six pause. I hated that I want to go. So the primary reason we got an unsolicited call from east coast from a large national consulting firm, wanted to buy us they gave us a LOI, I was like, what are you going to do? Okay. And I shared it with a local family office here, looking for advice. And I’d like oh, we’ll be that will do it. And we’ll give you a couple million, $2 million in growth capital, low interest rate line of credit, no questions asked. And so that’s what drove it. It was simply kind of opportunistic on our part. And two, it solves the cashflow problem. So we just spent now I don’t worry about it. What I worry about is finding the exact right people to get on the bus, like, oh, that’s a really good person, but I can’t hire them until three months from now.

David Nilssen  36:02 

Now you just hire the right people. Super cool. Well, I know we’re getting towards the end of the show here. I guess last question for you is really just what are you most excited about today? Like, what’s driving you, at this point?

Alan Chaffee  36:19 

Actually playing real CEO, after coaching CEOs for 20 years get to do it myself, I’m super excited every day. I just released a newsletter out, but I used to when we come in to restructuring companies, here’s what I would do. Like, we would see a situation. And somebody say to me, well, we have this, we have this great culture here. And I would swear like use four letter words, who cares about culture, when you can’t make payroll, slip their next, pitch them out the window, let’s go, we got to cut costs. We got to we got to find new customers, we got to punch the bank in the nose, we got to do all these things right. And I couldn’t have been more wrong. When we go into restriction now what a first thing I say is don’t forget about culture. Let’s make sure that the people are in that company have a common set of aligned core values before we start to go in there and do our track or craft or practice our craft, right, whatever that might be. And so today, running Turning Point and having this great culture that we have is the number one thing that gets me up every day.

David Nilssen  37:21 

Love it. Well, let’s leave it there. We’ve been talking to Alan Chaffee, the CEO of Turning Point Strategic Advisors. Alan, where can people learn more about what you do?

Alan Chaffee  37:34

David Nilssen  37:36 We’ll put that in the show notes. Alan, thanks for being on the show.

Alan Chaffee  37:41 

David, thank you for having me. It was great fun. Talk to you soon.

Outro  37:46 

Thank you for listening to The Future Is Borderless podcast with David Nilssen. Be sure to click subscribe to future episodes so you can hear from more top entrepreneurs and thought leaders and we’ll see you again next time.

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