Mastering Financial Wellness and Cash Flow with Josh Greenbaum, CFO Minded.

The following interview is a transcript excerpt from the Heallist podcast episode. Listen to the full audio version below and subscribe to get notified of new episodes here.

In this episode we dive deep into the world of business scaling, financial wellness, and cash flow management with the insightful Josh Greenbaum. As the founder of CFO Minded, Josh has made it his mission to empower creative and conscious entrepreneurs on their journey to business growth. His journey began in the corporate world, working for a Big Four accounting firm, but a personal awakening led him to channel his expertise towards supporting small businesses with the financial sophistication typically reserved for larger enterprises.

As a Certified Management Accountant, Josh has become a trusted advisor to numerous small businesses, celebrities, and consultants, helping them achieve their goals through strategic planning, meticulous accounting, and effective financial management. During the challenging times of the pandemic, he authored his first book, Numbers Scare Me & Other Excuses: A Business Owner’s Guide to Lead like a CFO,  offering practical advice to even the most numbers-averse leaders. We're thrilled to have Josh Greenbaum as our guest, sharing his wisdom and insights to boost financial confidence among our audience of holistic medicine practitioners and healers. In a world where numbers and financial models ground our visionary aspirations, Josh's expertise is a beacon of light, helping us manifest our dreams in reality.

The definition of financial wellness.

Josh Greenbaum: Financial wellness is truly having a healthy relationship with money and numbers, and again, from the book title, not being scared of it. Because in being able to provide wellness, there's a very complimentary side to the whole thing of generating enough money so you can continue to provide wellness. If you don't have one, you can't have the other. To be able to continue to thrive, to sustain your practice, you also need money to support that.

Yuli Ziv: What do people in this space often overlook, or have blocks with?

Josh Greenbaum: From a very fundamental standpoint, there's a blockage around pricing, understanding what is the value or the dollar amount that you are asking of people who are receiving your service or your product or whatever it is that you're putting out to the world. Secondarily is the desire to help. The things that feel in conflict are that desire to help people when those people can perhaps afford what you're offering, and to find a healthy business model around that so that you yourself as a provider aren't financially suffering for the sake of giving.

Yuli Ziv: What are some of the ways that you think practitioners could help ground their vision and create a better financial foundation for their businesses and for themselves personally?

Josh Greenbaum:  No different than any other service provider, whatever your skill was, services that you're giving to the world, you'd have to really get clear on what is that service? And what is that time that you're giving. And not just that time or session, maybe it's an hour set with somebody. It's also the 45 minutes of prep before and the 15 Minute follow up after, and truly just thinking about how much time am I giving to this? And what are my financial goals around my own personal life and what I want to achieve, and what are my goals, and it could be the opportunity to travel, it could be purchasing a home, or it could be as simple as having a simple life, you have to be very clear on what that is. So that not only are you bringing in financially, what you need to sustain those dreams. But also, to understand the ebb and flow of business - if you may have slow months, you may have busier months, you may have times when you do big workshops and bring in large amounts of money, you might have times around the holidays, where you want to check out for a few weeks. And you truly have to think about all of that in your financial modeling and projections. How do you want to craft that vision for yourself, and therefore ensure that you're, you're succeeding financially in a way that affords that.

Business cash flow and scenario planning.

Yuli Ziv: Can you just tell us a little bit about that? Maybe start with even the basics? What is cash flow?

Josh Greenbaum: The simplest way to think about cash flow is truly thinking about timing, very chronological. Let's just say that you want to put together a retreat, and you're going to book this beautiful facility out in Joshua Tree in the desert, and create this incredible experience for your tribe, and 10 people are going to come. That's them requiring this cash outlay to reserve the spot, maybe to put down a deposit for catering to ensure that all the services that you're going to bring in are going to happen. The thing about that is you haven't perhaps started selling tickets yet or maybe people are only putting down 50%.

Therefore, that timing of cash flow and ensuring that everything is prepared for it all, and you're not putting yourself in a potentially low cash flow moment that becomes detrimental to you as the service provider, and cost stress to your own life. There's these ebbs and flows that happen with business timing wise, and you have to be aware of that from a cash standpoint.

Yuli Ziv: What is the easiest way to plan for that if you're absolutely a financial newbie? Let's say we're talking about an event that's going to be happening a year from now or six months from now. What's the easiest way to plan for that?

Josh Greenbaum: The easiest way to plan for that is really around the idea of scenario planning, the idea of what happens if everything's great, and what happens if things go south. I find that so many entrepreneurs, business owners, and people in particular in the creative space are aiming for the stars. They see it all, they see everyone there, and it's going to be a great success. Ideas coming around manifesting and bringing that positive energy is so important. If you're creating this retreat for 10 people, what happens if eight people sign up? What happens if six people sign up? Are you still okay? What does that financially do to this entire endeavor?

The beginning of scenario planning is thinking about what are the financial ramifications of different scenarios that could play out and when you have to pull the plug and say, “Unfortunately, we didn't get enough signups. I need to refund your money.” To be prepared for those scenarios, I think is the most important.

Budgeting strategies and tools.

Yuli Ziv: There are some amazing great tools that you can use to help in that process that are really eye-opening in terms of looking at your real expenses. I find it's the little charges that you don't notice, that's what ends up adding up. I use something called Mint, which aggregates access to all of your bank accounts, credit cards, and all your bills, and it even categorizes it for you over time. Then you can literally just go in once a month and check your spending for the past months. 

Josh Greenbaum: To add to it, there's so much shame around numbers and spending and whatnot. I think the most important thing with an exercise like that is to just take it as is. Whatever you're spending, if you're going out a lot, whatever you're doing, just know that that's what you're doing to enjoy your life. Don't think about cutting. This isn't an exercise in how do I save money? This is an exercise in: what is my life? What do I do to enjoy my life? And then how do I continue to build to support that life and grow that life? Don't think of it as a way of bare bones and minimalism.

Yuli Ziv: It's so easy to get into that shame mode when you do those number exercises.. But I love your idea of just taking it as it is; this is just data we're looking for. We're more on this observer mode that we all talk about.

Josh Greenbaum: What's so special about your audience and the community around you is there's such an importance on having that life and creating that life, because you're giving so much of yourself and so much energetically. Do those things that make you happy. Make sure you get a massage every month; make sure you go out for that dinner that you like, or whatever it is, add abundance, do what it is that you need to do to take care of yourself. Also, to touch back on what we were saying earlier, ensure that you're building this whole thing in a way that again, financially supports you and me. Don't build it in a way that you have to work 10 hours a day, 12 hours a day. Just think about it and think about that life that you want all the way through.

Yuli Ziv: We've touched a lot on the subject of maintaining a healthy business, but a lot of people in this space are also ambitious entrepreneurs who would like to scale their businesses. They love where they are, but they also can see how they could be helping more people. Sometimes it's expanding and franchising or even opening multiple locations for their practice. There's so many ways to expand. I know you work with a lot of entrepreneurs on the scaling of their businesses. Can you touch on that next?

Josh Greenbaum: The core scaling really centers around core competencies. This is another moment of reflection. We're all holding up the mirror to ourselves. The conversation is around, what am I good at? What am I not good at? What attracts people to me as a business owner, to my studio? How do I even start to replicate that? How do we take the operations aspect off of your plate? How do we take the financial aspects off of your plate?

The reframe from a solo practitioner, the scaling is taking on that CEO mindset. Separating from a title and a corporate-feeling title, the CEO mindset really becomes looking at these different elements of your business: marketing, finance, operations. How do we do things? Starting to get people to report to you, starting to understand what are the things that need to happen on a regular basis to be successful without you. That way, when you go to location number two, number three, number four, you don't want that to turn into you running around to all those locations to make sure things happen. It's setting up that infrastructure in an appropriate way. Most importantly, people are reporting back to you so that you have that information to continue running the business.

The difference between accounting and finance.

Josh Greenbaum: The biggest starting point in this topic is truly understanding the difference between accounting and finance. Accounting takes today and looks backwards. Finance is today looking forward—the strategy, the vision, and the goals, and financially, how do we pull that all together.

The great thing about being in the service of a fractional CFO is that we can do little projects. We can spend an hour and a half together at the onset of your business or a year into your business, whatever the timing is. What are your goals as the owner, for yourself, personally, for your vision, and your goals for the business?

A lot of bookkeepers are doing data entry and working to put numbers in to get you to a tax return, which is also very important. Sometimes there's a gap between that objective and the objective of functional financial data, which truly tells the story of what's going on financially with your business. There's a whole lot of nuance in that, which I talk a lot about in my book.

Most importantly, understanding the unit economics of business. What are the transactions? When you sell x, how much do you make for yourself so that when you try to sell three, four, or five, you just know from the onset, that this is a healthy business model? You don't want to put yourself in a position where you thought you were selling an hour-long service to somebody but in reality, you sell three hours between prepping and follow-up. Maybe you just price yourself in a way that is not profitable.

Analyzing your business from a longer term perspective.

Yuli Ziv: That's a very important process to do, that analysis. A lot of times as a business owner, it might be just chasing that today, this week, this month. Someone coming in and looking at your business from a longer-term perspective, maybe analyzing the entire year and the seasonality: “Did you know that every August your service's revenue drops, but the product revenue actually rises.” You can be more informed and plan for better. It's really hard to sometimes analyze it from the inside. That external eye coming in and looking at your business holistically is just priceless to me.

Josh Greenbaum: Definitely. It's a real opportunity to just step back from your business because it's so easy to be in that detail and get lost in that day-to-day. Sometimes I find it helpful to remove yourself physically or change up the environment. Get out of that day-to-day a little bit and just start thinking bigger. Not bigger in that you can't have a nice small business, but bigger in the larger vision of what you want.

Yuli Ziv: It's a great point. That dream vision, that dream business becomes a burden, a financial burden, a burden that you just can't control. There's always unpredictability. Another piece of a solid foundation financially is knowing what happens when there's a low season or a pandemic hits. Our world is just becoming so unpredictable, so we’re building that resilience. Do you have any tools for that?

Josh Greenbaum: This might be the most counterintuitive thing that I say today. In this exercise of dreaming and planning, what becomes the most important is forgetting about how much money you have in the bank. Not forgetting, but just ignoring it all. The reason for that is it's important to craft this vision: “I want to expand from one location to three locations.” How much will the rent be? What's the capacity?

Just start putting that puzzle together. Because in crafting that vision, outside of the literal dollars in your bank today, again, it allows you to dream big, and then go into this CFO perspective that allows you to decide what do you want to do from that, do you perhaps want to bring in an investor, do you want to take out a loan, do you want to do something like a Kickstarter, where you're pre-selling something, and that pre-sale will fund this?

To me, that exercise is having that larger vision, and you work backward from there. If the money isn't there, if the resources aren't there, that's okay too. But to start with exactly what you want it to be, exactly what you see it being, is the greatest benefit you can do for yourself.

What makes a healthy business setup?

Josh Greenbaum: Success is not being graded. Success is utilizing the resources around you. By no means am I saying you need to become a financial expert. You're an expert in whatever element of wellness that you're providing to others. Educate yourself a little bit, find a tool online, or ask a friend for input. You're just adding to your own toolbox.

Yuli Ziv: What does the average practitioner need to have in their toolbox? What kind of resources? What's the perfect setup or the recommended setup? What are the absolute basics that you think make a healthy business setup?

Josh Greenbaum: My indirect answer is whatever can provide reporting to you and provide information to you. Perhaps, if you're using software for people to book sessions, and from that, you can dive in and get sales reports. That's great. Because that's putting information in front of you, where you can run a report month by month by month. 

As you build that team of a bookkeeper, perhaps engaging a CFO, those things will dial in and perfect those numbers; those will bring people with a financial lens. A bookkeeper may not have the experience or the confidence to do strategy-type work with you and really look into the future. Therefore, engaging with a CFO for an hour and a half might be beneficial to do once, and you're good. Maybe you want to check in once a quarter or twice a year, whatever it is. It's really building those pieces in a way that puts good information in front of you and has that grasp of that business.

Yuli Ziv: What are the do's and don'ts that you're seeing from your perspective that holistic practitioners should be doing, not doing, or the opposite?

Josh Greenbaum: The thing that I will offer from my perspective is that many of the people who I get to work with, the ones who are most successful, don't turn a blind eye. They are actively engaged; they know how to log into their bank and check if a charge came through or didn't come through. They have a relationship with a bank or whatever it may be.

The ones who are struggling, and perhaps because of shame around money, maybe the business is in a downturn, and there's embarrassment, once they disengage and walk away, and they're like, "Josh, you just handle this," that is just a recipe for things spiraling down. Above everything, this business is your baby; it's yours to learn and grow and teach and evolve and all those things. Just always actively stay engaged. Don't become a passive business owner.

I think my last words are to build a business that you love and that's financially successful is what will allow you to keep on going and keep providing to the world. If you have hang-ups around money, if you're uncomfortable around money, know that it is your vehicle to keep going and let it be that role in your life.

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