Show notes
During this episode of Quiet Light, we talk to the former Controller of Priceline about TACOS and the three pillars of e-commerce. Tune in to hear on discussion on these topics and more. Topics: How working in accounting led Matthew to where he is today. The three pillars of ecommerce: Inventory management. Website management. Advertising Assessing your sales. Managing the core elements of your business. Tracking customers. Keeping an eye on the value of your inventory. Why commingling expenses is harmful. Transcription: Mark: Joe, we've been kicking out these podcasts on a weekly basis. We talk about a lot of different things on these podcasts; everything from inventory management to how to work with suppliers to SaaS metrics that you should be looking at. And this week, you talked to the former controller of Priceline; a very smart guy, worked a long time at KPMG as well and you guys talked about TACoS. Joe: Yeah, it's total advertising costs for those… Mark: It's not the crunchy tacos? Joe: Not crunchy. No. We might have mentioned that, but not in detail, yes. Mark: Okay. All right, so you talked about TACoS, but you guys were specifically talking about three pillars of e-commerce. Now, we love pillars here at Quiet Light Brokerage. We have the four pillars of value, which we talk about quite a bit, a simple mechanism to understand what influences the value of an online business; risk, growth, transferability, and documentation. He has the three pillars of an e-commerce business, which are three areas that you should really be focusing on that build up an e-commerce business. You guys went into detail on it, which included tacos, but not the yummy kind. Joe: Right. Yeah, so these are his pillars. He came up with them. I asked him, what do you look at first when you work with a new client? What Matthew does now is CFO advisory services. So he's a fractional CFO if you will. We met at a local mentoring facility here in Davidson, North Carolina; it's part of Davidson College. And I introduced him to a client of ours, somebody that I'm not going to mention his name because of the details and we chose not to mention the name in the podcast, but somebody that sold the business for 7,000 and then his next one was 20, his next one was 220, his next one was just under 9 million, and his next goal is to sell a business for a hundred million. So when I met Matthew I saw him do a presentation on fractional CFO services; a very referral based business that he had done on a website and I thought, you know what, he should talk to this particular individual. The individual liked him so much that he ended up flipping from a paid per service to a piece of the pie for the eventual sale of his business. He wrote to me, hey, buddy, I can't thank you enough for the intro to Matt. It's so great to work with him and he really became one of the most important people at my company. Without him, I would be lost. No joke. So Matthew went through these three pillars and what he talks about. And it's not just a total number-crunching geek type of thing. It's looking at number analysis across your business; across your e-commerce business. And it was really interesting to see, especially from a guy that comes from Priceline, which is obviously an e-commerce business, but not where you've got a physical product. It's more affiliate digital. So it's fascinating and hopefully, the people that listen to this that get all the way through to the end are going to start to understand the importance of some of the things that you and I talk about all the time. But it's not for us this time. It's from somebody that was a vice president controller at a company as well-known as Priceline. Joe: Hey folks, Joe Valley here from Quiet Light Brokerage. Thanks for listening to the Quiet Light Podcast. Today I've got a pretty impressive guy on the podcast with me. His name is Matthew De Wald. Matthew, welcome, how are you? Matthew: I'm very good. Thanks for having me, Joe. Joe: A local here in Davidson, North Carolina; we met through a local mentoring group at the Hub at Davidson. And you've recently worked with a client of mine who basically called you a finance rock star. And that client's been on the Quiet Light Podcast. We've talked about him. I'm not going to give too much details, but he loved you so much that he said, look, in lieu of paying why don't I just give you a piece of my company which goes to how damn valuable you are. Well, let's get to all of that in a minute. Who are you? What do you do? What's your background? What's your history? Why don't you tell the folks listening a little bit about yourself? Matthew: Sure. I'd like to just think that I kind of come from humble beginnings. I'm one of nine kids, actually. Joe: Wow. You and Mark have a lot in common; Mark has got seven. Mark is my business partner. All right [inaudible 00:05:20.3] nine kids. Matthew: Yeah, so I grew up with… Joe: What number in the sequence? Not that it's relevant in any way, but what number? Matthew: I'm number two. Joe: Oh, okay. All right. Matthew: Number one if you ask me but number two in lineage. Joe: Fair enough. Matthew: And I love my brothers and sisters. So I grew up with a brood of us and I think my father is interesting. He's a very brilliant guy but he isn't necessarily business savvy. He's very smart. He can put things together but he just doesn't do the business environment. So I didn't grow up really with a business background or business family or anything like that but I was like; my older brother, who is like the complete opposite of me likes to call me a miser growing up and it's; that was always counting the money that I had and where I was going to go and trying to think about the future and that kind of stuck with me from high school into college and then beyond. So heading into college, I got an accounting degree from Pace University, and from Pace, I joined KPMG as an auditor. And most people can't cut that out for more than a few years and I can't blame them but somehow I was able to do it for 15. Joe: Wow. Matthew: And after 15 years of it, I realized it at about 13 and a half years, I didn't feel like I was learning anymore so it's time for something new. So I landed a job at Priceline.com that actually some of the partners at KPMG helped me to get. And at Priceline, which is a subsidiary now of Booking Holdings, at Priceline I was the vice president of finance and controller there. And that's where I went from, really kind of looking at an organization from an outside point of view as an auditor at KPMG looking at really kind of macro issues to really diving into operations. And what I realized is that from an operations standpoint, especially in a place like Priceline, where you're dealing with literally hundreds of thousands of transactions in a day you really need to have a solid IT infrastructure and systems and really a mechanism of keeping control of all that. And so that was kind of a really important career point for me. And I spent four years doing that. And actually, the job I had at Priceline was like really the dream job but one day I kind of woke up and said, I want something else and I don't know what that is. And so I reached out to a community people and I was telling them what I was looking to do and really what I was looking to do was leave and not have anything on the other side. I'd say about half the people who I spoke to, maybe three quarters were very supportive and the other quarter were like, what are you doing? You're making a ton of money. You're doing great. All you got to do is continue grinding through all that and that was it. I didn't want to grind anymore. So what I actually did is I got on a motorcycle and traveled across the US going back and forth two and a half times over the course of seven months and worked part-time at Priceline to transition my load, my client, my responsibilities to my successor. And then after that, I took all of 2018 off from work and then kind of fumbled around and said, well, what do I want to do next? And in doing that, I networked a lot with the Charlotte Community and realized that the startup community here really needed a lot of support and help from a financial perspective. And going back and tying in that Priceline piece is what I realized is that it's helping cost companies to scale and figuring out what does their finance operations need to look like in order to go from where they are now to 10 or 100x than they currently are. And it was that experience of Priceline that really made that difference. And since then, I've kind of created a little business doing fraction CFO work and it's been thriving and prosperous and probably more so than I even want it to be. Joe: Yeah, you got a good problem. People actually want your services. I would imagine, though, early on, they don't realize the strong need for it. But you get business through referrals and friends and clients and being on podcasts like this. It's similar in the way that we broker. Clients don't realize how badly they need someone to review their business and do a valuation and set them on a path towards achieving their goals. This is something that I preach all the time. First and foremost people probably are sick of me hearing about get your numbers in order, get a good bookkeeper, and your CPA is not a bookkeeper; there's a distinct difference between the two. But for actual CFO services are completely a step above. Our friend in common now that you're working with, what do you do; what problems do you see for an e-commerce company that you go in and you work with? And there are lots of them that are listening right now, people that are buying businesses anywhere from a quarter of a million to 20 million dollars and people that are running them, that are doing anywhere from half a million to 20 million dollars in revenue. What is it that you look for when you go in as a fractional CFO to help them improve, understand where they are, and help them get to where they need to be or want to be? Matthew: Yeah. You know the way I look at business is; I guess this is a skill I have, I don't know. But I like to look at businesses and transactions and events in their purest and most simplest form. I think that it's too easy to get bogged down with complexity. And I think the greatest mantra I live by is that the shortest distance between two points is a straight line and I'm always looking for that straight line. So the case of an e-commerce company is a perfect example is that I say it really comes down to three things and you got to do all three of them really, really well. And if you don't do one of them well, you're going to have sell up results. Number one; and these are, again, all of equal importance but number one is inventory management. You really need to know where's your inventory, how much do you have, what does it cost in order to bring that inventory in, and what are lead times? So a lot of e-commerce companies nowadays are procuring inventory from China, for instance, which might take six to 10 weeks of lead time. Well, you need to be building that and planning for that in advance. So forgetting about the numbers, you just need to have it in stock so that way, if a customer comes to your site, you're able to sell it. Which brings me to the second point is what I'll call website management. You need to understand and know where your website is and your content and be able to have an avenue that has as few clicks as possible in order to get a customer who sees a product, is interested in it, and gets you to closing the deal, the transaction. So the second is that website management and then the third component is the advertising. It's how do you drive traffic to your website and so how are you spending your marketing dollars, how are you evaluating the efficiency and the return on investment of those marketing dollars and you have to do that well. So, again, if you mess up any one of those three pillars, you're going to have problems or certainly, you'll have sell up results. Now, what I found consistently with e-commerce companies is that the problem they struggle with the most is inventory management. I've seen a number who are very good at the management of the website; they're very good maybe at marketing, such as our friend who you're talking about, who is very good at marketing but the inventory management is a problem. And so the solutions I try to come up with or what I search for are low cost, cloud-based services that connect into your accounting systems, such as QuickBooks to maybe your third party logistics companies, your 3PLs or Amazon, and connects that all onto data that then turns the lights on to make it very obvious as to what you need and what you've got. Joe: It's fascinating that this is from a fractional CFO chief financial officer that you're looking at these three different components. Let's break them down a little bit. Inventory management, why is inventory management important? At the end of the day people that are listening, I would guarantee you the vast majority of them are just using an Excel spreadsheet. They know their SKUs and they order when they feel they need to, giving them enough lead time so that A. they get it on time, B. they can pay for it, and then they continue to run that cycle. And sometimes growth goes off the charts and they find themselves doing a little catch-up and maybe doing air shipments instead of sea shipments and things of that nature. But really to the bottom line why is inventory management so critical? Matthew: Well, you named one of the key elements to that and the number one thing is scale. I always think of any company I go in to is let's say all right, here's where we are now. We're at x. If we want to get to 10x or 100x, what's it going to take? And a lot of the solutions that can help you go from 1x to 2x to 3x are the same ones that might be able to get you to 10x. So the idea is you not need something that you can scale into and in general, again, because there are a lot of this on out base theory and expense so you can afford it while you're at your current stage and then grow into it. So number one is scale and then the second thing, and this is the thing it gets over; oh, it can really get over what I've seen clients do this because they might be really successful from a financial perspective or they might be very savvy in terms of how they operate but what they miss out on is the fact that if you've got too much or too little of an inventory item you can either not be able to sell to customers or have found yourself wasting money on inventory that isn't going to turn over. And so in an e-commerce business probably would run a lot of them from home or certainly a small office so you're dealing with low fixed cost. And it's the cost of that inventory that if you get it wrong that you can really miss out on again, sales or overinvesting in things that don't turn. Joe: So if they're over-investing in things that take a longer period of turning what's the drawback to that? Matthew: Well, it's use of capital, right? So fundamentally; it's funny, I had a client about a year ago in the e-commerce space sourcing from China; all of the standard things that you have that we could talk about and they didn't have an inventory management system. And what they wanted to try to do is try to get their books in order in a way that look like nice gapped financial statements. I said guys you're missing the point here. You're not going to make a half a million-dollar poor decision because of your financial statements, you can make a half a million-dollar poor decision though because of inventory management. And if you think about how real that is, and if your sales are 100,000 and you need to build up inventory in order to sell to continue growing and you get the wrong items, that might be your one shot in order to build up the inventory to get future sales. If you make the wrong purchases you can destroy your business overnight. Joe: So it's the availability of capital to invest in the right things, which might be that new SKU that launched and it's taken off and buying more of it, it's paying yourself too. I would imagine these businesses that are growing like crazy, Matthew when someone sells it the vast majority of time the majority of money they make actually comes the day they sell the business not as they're operating it and running it, even though they might be doing 10 million in revenue when they sell the business. I just sold one in January and we went through the numbers and it aired two or three weeks ago at the time that we're airing this podcast, and I think they did like 250 in revenue in year one, 1.3 in revenue in year two, five million in year three, and then sold it. And the vast majority; well over 50% of the money they put in their bank account came the day they sold because they were scaling so fast; just trying to keep up with that inventory management they just complain that the wires get bigger and bigger and bigger going to China. All right, so inventory management for a number of reasons. So we won't get into software at this point unless you've got some favorite software. Matthew: No, I think my key piece of advice there is that each company is unique and you need to view yourself as being unique. So the practice that I go into and the discipline I think is absolutely important is to spend the time as an organization documenting what your current processes are as it relates to systems and other things that are going to interface with your inventory management. So document that in a memo; in a written document and make sure everyone's on board with what are the requirements of your future system, what are the things you'd like to have, and then share that with possible vendors. And the idea there is you want to make sure there is absolutely no confusion about how things operate. What's important to you and making sure that your vendors; I mean to me getting rid of a bad IT system is harder than getting rid of a bad employee so you really need to make sure you got the right system and invest that time to make sure you know specifically what you want and there is no ambiguity about what it is that you're expecting. Joe: Why are you sharing it with a vendor if a vendor is a manufacturer? Matthew: I'm sorry not the vendor but like an inventory management vendor. Joe: Oh, okay. Yeah, they're going to sell you hard no matter what. So it's interesting, though, as a fractional CFO advisor that you are now at step number two or the second point here is website management. Matthew: Yeah. Joe: Why and how do you jump into the website and getting from that first visitor to it's in my cart and they're giving you a credit card in as few clicks as possible? Matthew: You know, in general, I don't find myself spending a lot of time there, but it's emphasizing the importance of that. Again, it's stripping down the business to its core elements and making sure that the founders know what that is. Because if they're not managing that and they think that they're managing inventory perhaps perfectly and they're even and they're managing their advertising cost perfectly, but then customers are coming to the website and it's showing stock that doesn't exist or is complex or hard to get through the closeout checkout process if there is an efficient management of that and again one of your pillars is just failing and now you're going to have suboptimal results for your organization. So it's just making sure that the organizations honing in on that. And I may not necessarily be the one doing that or managing it, but making sure that issue is front and center for them. Joe: Okay, front and center that they're focused on it and addressed it as one of the pillars. Matthew: Yeah. Joe: The third is driving traffic and I assume we're talking about the average cost to acquire a customer here. Is that something that you focus on? Matthew: It is. Some businesses are easier than others where it becomes very obvious that they're spending a thousand dollars and they're as a result generating 2,000 dollars' worth of sales and things are going well. So I look to make sure that it's being managed again and I can help with making the nuances and making sure that they're thinking about it right in terms of what are the inputs into that calculation. So one of the things I've seen in the past; in my past is that I've seen that companies might overburden the cost structure of what they think a new customer brings. So, for instance, maybe the sales price is $100, the cost of that sale is $50, which means your gross profit is 50 and then companies might start tacking on all these other costs. So interchange costs and credit cards and maybe stocking fees and all these other things. And then they may say, well, we don't really have a gross profit of 50 we may have a gross profit of 30. Well, if you're spending advertising dollars to go chase after $30 of what you think is gross profit, what you end up doing is really shortening and hurting the long term scaling of that business because you're underspending on your advertising dollars. So I can help with that philosophy and making sure that you're identifying the right costs that you're burdening for how you view your spending. Joe: Merchant processing is a legitimate cost that it's going to be 2% or 3% of every order, isn't that something that you want to definitely work into your numbers and analysis, whether or not you're going to spend $50 to acquire a customer or $100 to acquire a customer, especially if it's a onetime order. Matthew: Yeah, so there's other factors to think about though, right? You may have customers who obviously love your product so much that they tell their friends, so referral, and there's ways of tracking this. Joe: The halo effect, yeah. Matthew: Right, exactly. Or there might be more lifetime value of that customer either its add-on services or other things that you're selling. And so the goal is to not be so narrow-focused on the single transaction that you're closing with but thinking more holistically. And again, I'm looking to; sounds ironic coming from a miser accountant, but I'm looking to help companies expand their advertising dollars not necessarily shrink them. Especially if there's a longer-term play to that profitability scheme. Joe: All right, so we're talking in this situation the acronym folks is it's either ACoS or maybe it should be pronounced TACoS but it's more TACoS, right? It's total cost to acquire a new customer. And it's taken account into account all orders, those that came in organically versus those that can be tracked specifically to an ad spend and making sure that you're not just focused on the ad spend and then cut the cost you're going to see your total orders put out as well. So as a CFO, as somebody that comes from the pedigree that you come from, which is really stuff that makes most people's eyes bleed just focusing on these numbers when you're hired what is the first thing that you do when you go in and begin your services at an e-commerce company? Matthew: Yeah, the first thing I'll do is I do a couple of things. One is I ask the client, well, what is it that you; you brought me here for a reason, what are those reasons and making sure I understand them. The second thing I'll do is analyze the company; so talk to other key reports; for instance to the CEO or the leader of the organization, look to see what their current systems are, see how long it takes them to close the books, get a gauge of the accuracy, the financial information. And then also what I'll do is I'll kind of take all that information and then come up with a priority list. Generally, not more than one to five items and identify okay, here's what I think is the roadmap of where we need to go and what we need to do to get there. Joe: That's with the CEO of the company saying what their goal is in terms of revenue or exit or something like that obviously [inaudible[00:25:21.1]. Matthew: Yeah. Joe: Let me just pipe in there in terms of the accuracy of the financial information. I find six to seven times out of 10 that it's not accurate on the initial call. People are not even doing accrual accounting. They're doing just cash. How often do you run into that and when you hit that hurdle, how do you get over it around it and fix it? Matthew: Yeah, I've encountered that... Joe: And why? Let me just the question, you know a lot of folks feel like they've got a pretty good handle on their numbers. They may be doing cash accounting. They may not or they may reconcile every month, but they've got a pretty good idea and they just do some back of the napkin calculations. What's wrong with that if they feel like they're seeing top-line revenue growth; what's the problem there? Matthew: There's a couple of things in it and it depends on the company for certain. And it depends on the stage that they're at and things like that. But in general, I think if you're going to scale, you need to really understand what's the unit cost of your inventory; so what are you purchasing it for, how much does it cost to move it into your warehouse, and understand what those parameters and dynamics are to really kind of get a good gauge of your gross margins. And I think that when you're doing that, it's understanding again; it's tying in that inventory well with what your inventory records are saying from a financial perspective and understanding what was sitting on the shelf and what's the value of what's sitting on the shelf. Again, if you're focusing on; if you got 10 product lines and five of them are selling like hotcakes and you've got two or three laggards, well those two or three laggards are really they're taking away from your ability to reinvest back to the five that are doing well so it's understanding what that is. And I'd say that from a; the challenge I have coming into a lot of companies, the first thing I see is that, like you said, a lot of them are in cash basis of accounting and the number one thing that they're missing out on is those inventory accounts and the values to really come up with a good snapshot from a financial perspective. Joe: Can't they just use an Excel spreadsheet for that? Matthew: Well that might get you accounts if you have historical numbers at month ends and then we've got to figure out pricing. So speaking of our friend that was exactly what I had to do is I was going back through and rolling back inventory counts from a point in time and going back to month ends and trying to get good financial information because that person is looking for an exit ultimately and to get there all this helps to put together a good, solid book of records that reflects your financials and your results that are important for future investors or future buyers. Joe: But my CPA does that at the end of every year. Why do I have to track inventory on a monthly basis? They just [inaudible 00:28:26.1] my tax returns. Matthew: Yeah, so let me address that. I see where you're going. Joe: I'm having fun with this, by the way. Matthew: Oh yeah, this is good. So, I think there's certainly a large misconception about what accountants do. And I'll put accountants in three different buckets and I think this is where you're heading with your comments. Number one is I'll call them the bookkeepers, they're the ones who are keeping track of your day to day transactions and making sure that things are going in for amounts that need to be paid to vendors and cash receipts coming from customers and keeping track of your book; your QuickBooks and your Xero account, bring them in. So that's number one. Number two is your tax guy and that is tax compliance whether it's sales tax or income taxes or personal income taxes. They're the ones doing all that stuff. And then you'll look at me and you're like, well, I'll tell you, I don't do it either of those. What I do is help to oversee the strategic part of the business and the growth of the business and the forecasting; where are we going with this, where is the future, and then also overseeing and tying in the pieces between that bookkeeper and the tax provider. So I'm like the guy who helps glue all those pieces together to make sure that they're all talking to each other, that the tax guy when he comes in and he doesn't have a whole bunch of problems with the numbers because they don't make sense. And I'm helping to tell the story of those numbers and what has happened so the owner doesn't have to do that. Joe: The path that I see a lot of folks go down is they just have their CPA do the bookkeeping as well. And I find that that's normally done wrong and they make annual adjustments and things of that nature. Do you see that those three different people; you CFO advisory services, gluing the pieces together needs to be in place, a bookkeeper for just the accuracy of the data entry, pulling or importing the information and setting books up on an accrual basis reconcile every single month so that you have "accuracy of financial information" and then the CPA really just does tax planning advisory services in that regard and files your taxes anyway. So don't have the CPA do the bookkeeping essentially. Matthew: That's right. Joe: Okay. Matthew: I am a CPA but yes, you need a CFO person who is helping with, again, keeping the accuracy of the financial information to make the life of the tax provider that much easier. Joe: There are lots of bookkeeping firms that are started by CPAs but they don't focus on filing your taxes or tax planning. They focus on making sure that your financial information is accurate so that you can make solid decisions like focusing on inventory management, looking at TACoS and ACoS; those types of things. So without the accuracy of financial information and when you go into a company and you go okay, first hurdle, accuracy of financial information, this is not right. What do you do? Matthew: Well, two-fold, one is what wasn't right and fix it and then number two is find out why it wasn't right and try to prevent it from happening again. And so there's certainly a continuous learning loop that you want to have to make sure that whether it's insourced or outsourced [inaudible 00:31:52.3] bookkeeping perspective is that they're understanding what it was, what happened, and learning about it and improving for the future. Joe: I got you. We've got a list of bookkeepers that are very good at what they do. Folks, if you are listening and like yeah maybe I should stop having my CPA do the bookkeeping or my mom or my uncle or whoever is doing it for you or if you're doing you really are not doing it well. Hire a professional bookkeeper. Shoot me an e-mail, [email protected] and I'll shoot you an email with the referral list. We don't get paid for referrals. We just want your books to be done right so that when you come to us with seeking an opinion on the value of your business that we can help you. If you've got a financial goal, we can tell you where you are today so you can get down that path. But if your books are wrong it doesn't really help much at all. Especially if you've got a just out of college bookkeeper that does everything a CPA tells him or her to do. That's even worse because the CPA, again, as Matthew just said, is managing towards taxes. I have a question for you with your pedigree; Priceline, KPMG, you're a CPA, the two accounting software that I continually see are QuickBooks Online or Xero, they're both pretty good in their own right but is there a third that you would recommend or should people just be looking at these two? Matthew: I'd say it depends on their size. Joe: Sub 20 million. Matthew: Sub 20 million I think QuickBooks will get you most of what you need. Now, what you may end up doing is, again, inventory management as an example is QuickBooks does a terrible job of managing inventory. Joe: Right. Matthew: So what you'll want to do is find an inventory management system. There are dozens that are out there that has the functionality that you're looking for which, again, is going to be well-documented because you're going to describe what it is you want to do. And that hooks into QuickBooks so that way you're automating your interface between that inventory management system and QuickBooks or Xero. Joe: That's complicated and painful. Matthew: No, none of the above. In general, I'd say you need two to three weeks of really documenting and understanding what it is you want and where you're going. And then usually a lot of these systems, you're looking at four to eight weeks perhaps of implementation time. And a lot of that can be parsed out to the inventory management system company itself. A lot of them will bring in consultants and people who will help make sure your interfaces are working right. And then you'll want to have a testing scheme to make sure it's done correctly. Joe: Okay, so we are nearing the end of our time and I want to say to anybody still listening good for you because this is critical information and too many people tune out when it gets to the numbers. Odds are that your business is your most valuable asset and you spend less time focused on the financials and the numbers than you do mowing your lawn every month or whatever your hobby is and you need to spend more time on this. Your business is worth more than your retirement fund, your car, your house; whatever it is savings you've got, it's probably worth more. And that's true in most of the cases that I see. And again, you're going to earn more money on the eventual exit of your business than you are when you run it on a daily basis. Services like Mathew's and fractional CFO services are critical to getting your most valuable asset on track to an eventual exit. And we all exit our businesses at some point, someday; surprise, someday I will not be an owner of Quiet Light Brokerage, right? I'm going to move on someday but maybe to the grave and I may be around that long but you never know. There are other members of the team that may step into certain roles that I play. And I've got to do everything I can along with my business partner Mark, to make sure that our financials are in great shape. You should do the same because it's the right thing to do. It doesn't matter if your business is doing half a million in revenue or five million or 25 million. Our friend in common, his first business that he sold was $7,000. He became an exitpreneur at that point. You guys have heard me talk about the book that I'm writing; Exitpreneur's Playbook. His next business was 20,000. He learned from both of those exits and then exited one at just over 200,000. His next exit was around just nine million. His goal now with Mathew's help is a hundred million dollar exit. He may get to 50, he may get to 75, but he sets his goals pretty high and he's tracking towards them. But you can't do that without knowing where you are today. And you can't do that without accurate financial information. So that's me pitching online on paying attention to the numbers. Matthew: If I can expand on that for a minute… Joe: Please do. Matthew: One of the services I provide is financial due diligence for the acquirer or I'll represent the acquirer acquiring a business. And in fact, I've got like three or four of them going on right now. And I've had instances where I've gone in, done financial due diligence, looked at their books and records and seen comingling. This is one of the most terrible mistakes, commingling of personal and business expenses together or transactions that are being purchased on a personal credit card or personal expenses that are being paid out of a business bank account. All these types of things fundamentally hurt the value of the business because of the quality of the information that a prospective buyer is looking at. It makes it harder to trust the person they're buying from if they have to start digging into personal credit cards and very invasive in a different way. And there have been instances where I've made recommendations to clients to step away from a transaction because the books and records were not clean enough and the value of what they were hoping to get as the purchaser of that company afterwards was not to going to be that. So all of that discipline is really important to have it in place I'm going to say for at least a good two years before you expect to sell. And if you're not there; and even if you're able to sell, I can guarantee you you're losing money because you didn't spend the money on making sure you have the right financial information. Joe: Music to my ears from the former controller of Priceline, folks. Matthew, thanks so much. How do people find you in terms of the fractional CFO services or what you just mentioned which is due diligence services for an acquirer of a business; LinkedIn the best approach, reaching out? Matthew: LinkedIn is the best approach absolutely. Joe: All right and we've got Matthew De Wald. That's D-E-W-A-L-D; Matthew De Wald. We'll also click to his LinkedIn profile account in the show notes. Matthew, thanks for your time today. I greatly appreciate it. Matthew: Thank you. I appreciate the time, Joe. Resources: Quiet Light [email protected]