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A CFO’s Playbook for Serious Business Owners — with Mark Molin
Introduction
Doug Thorpe: Well, hello again, everyone. This is Doug Thorpe, and you’re listening to leadership Powered by Common Sense. Today, I’ve got a gentleman who’s, fascinating. I had a chance of meeting him by virtue of sitting in as a guest on his podcast. But today we’ve turned the tables. He’s going to guest here for me. His name is Mark Molin. Mark, welcome to the show.
Mark Molin: Well, thank you for having me. It’s a real pleasure.
Doug Thorpe: Give everybody just kind of your own elevator pitch, if you will. What? What is it you do for businesses?
Mark Molin: Okay, so as a CFO, I partner with tech, AI and marketers to deliver ten x profit in three years. 100% performance base, no results, no pay.
Why Performance-Based Pricing Is So Rare
Doug Thorpe: Nice. You know, that’s a that’s that’s a rare arrangement. I, I get pinged every day on LinkedIn. People want to sell me services, and they always want these big upfront fees.
Doug Thorpe: And they want this setup charge. And then they want a monthly after that. And when I tell them, you sound like you know what you’re doing, how about we do it performance based. They all go, oh no, I you know, I can’t do that. I’m not willing to do it that way. And so it, that’s an interesting, combination there. How long have you been doing that, Mark?
Mark Molin: I’ve been doing it for 18 years. I started off as a junior bookkeeper. I went to bookkeeper, controller, CFO, and the space I really liked to be in is a ten x, CFO, because that means that it tests every aspect of my skills. And actually we’re working towards something that’s, that’s a real accomplishment. When I wake up from business, I want to wake up and win, you know? So if we’re playing football, I want to win. If you’re playing hockey, I want to win. Otherwise, what’s the point of just passing the puck around? Or in football, just throwing the football around it.
The Force Multiplier Philosophy
Mark Molin: So I got to the point in business that I only wanted to work with the clients that are at that level of seriousness with their business. But with that being said, that doesn’t mean that you have to be the wolf of Wall Street. It doesn’t mean you have to be an insane financial person. It just means that you have to be a serious business owner where your company has a good company culture, because actually, I’m a force multiplier, but I need a force to Multiply. So we all need to work together, but there’s a lot to see if. If you pull a CFO out of a company, then you’re really in danger. You’re doomed to fail. You’re really. You’re really doomed to fail. You’re doomed to fail. So within within my banner, there’s there’s different perspectives that you can go. And they’re all true. So I, I’m a CFO that partners with tech, AI and marketers. All of those have a very high upside and have a very high downside with a CFO working with them.
Mark Molin: I’m there picking out the ones that I can have a high upside, rather than a landscaping company who is like a flat plane, then that they’re not worried about profit. They’re going to be in business for 30 years. If you mentioned profit, you could go crazy and they take a paycheck and they run the show. It. But it’s not the place where I want to be. I want to work with serious people, and I want to generate ten X profits. And the reason it says ten x profit in three years is the way I look at it is our first year is our Thomas Edison. Yeah, that’s our discovery. We have to discover our highest net margins after taxes. That’s pure profit. That’s real money. Everything else. You owe it to somebody else. So vanity, financial vanity metrics doesn’t do anybody any good. So you have to all have to pull together mentally to figure this challenge out. Because as a CFO, I’m in charge of the financial structure of a business. There are many ways that I can make companies money just by myself, but with my, information framework that I share with sales and marketing and service and admin, I’m sharing with them so we can collaborate to find out where we can be successful.
The CFO as Detective: Numbers Plus Narrative
Mark Molin: What are the companies saying? What are the customers saying? What do the customers want? And I’m almost a detective. Your success isn’t in a spreadsheet. A spreadsheet measures the past. So you did the past. We measured it. We’re here now. What is the market telling us and where do we need to go? So I almost have to record a narrative that goes with the numbers to keep it. and then you would have you hit the first year if you can hit your net margins after taxes, your highest net margins after taxes, then you have two years of harvesting. And then the reason why I like three years. I like three years because it’s a focus then. And technology is. It has a very high upside, but it’s got a very high downside. And one of the downsides in three years you can be irrelevant. So leaving a business that’s irrelevant because the technology’s changes. Maybe you might not been able we haven’t been able to switch gears because like AI we don’t know what’s coming next around the corner.
Walk Away With the Money
Mark Molin: I want to make sure that you leave with all your money after taxes, paying vendors. Oh, I want you to leave with a pile of money. So let’s say you leave with 3 million or 5 million. This is the way I look at it. That money on a simple 10%. If you don’t spend it, then you’re making, 5 million. Making $500,000 a year. You’re not leaving your house, but the fact that you got serious and that you accomplish that, that’s a very good place to be. If you don’t have a CFO and five years, you walk away with nothing or bankruptcy. Just because you didn’t reach out to a CFO. Does that make any sense?
The Shiny Object Problem
Doug Thorpe: Yeah, absolutely. And part of what I’m thinking and and you packed a lot in there. number one that came to my mind is the, the owner founder that is constantly chasing bright, shiny things. They they got their core business up and running. And even if they got past the startup phase and now they’re in kind of either a grow up or scale up phase.
Doug Thorpe: And when I talk about those with owners, the grow up phase is when you’re getting serious about putting in some kind of process and practice that’s repeatable and reliable. And when you’ve got that done, you’re ready for scale up. You can, you know, really turn on the marketing engine and sales engine and all those things to really leverage what you’ve done. But the problem I see frequently is that owner founder does some of that work, and they might need a CFO or a coach to help them figure that out. But they’re perpetually chasing bright, shiny things. It’s like, oh, let’s do this. Oh, let’s go do that. Oh, let me buy this. Let me buy that and that. I’ve watched it drive teams nuts, number one, because they they thought they understood the job they’re supposed to be doing. And now there’s a new, you know, trick de jour for something different. And, inevitably, there there is no sustainability there when a owner is doing something like that.
Mark Molin: Yeah. Yeah. Absolutely true. And I, I, I found the same thing in more blue blue collar companies. I found it in white collar companies, but it’s definitely embedded in blue collar companies. I had many of them, white collar companies. That still happens, like you say, for very, very different reasons. They don’t they don’t understand money. What I do is really intense for me to be able to say no results, no pay. I mean, I have a very structured financial back office and I can’t go into it now because we take up all our time. But I know how to make everybody else better and keep people away from that and keep people. All my analytics is based. If you were to take, you know, to enter. It’s an interesting show because I’m not that type of person to run trucks and move gravel and do this. And then then the engine breaks down and they they pull the engine out and they fix what it is and they put it in and it’s a show called Gold Rush.
The Gold Rush Metaphor
Mark Molin: Oh yeah. It’s a very good metaphor for business because you look at all the activity that’s going on, they have to they have to, obtain a lease for the property. You look at all the equipment they have to invest. The only thing that matters is not the hard work. It’s not the trucks. It’s not the that. How much gold when they weigh it in that pan. Are they going to have everything else is a waste of time.
Doug Thorpe: Yeah.
Mark Molin: Everything else of someone. Shiny objects. You’re not going to be able to take your shiny objects and buy a house in Turks and Caicos. You’re not going to be able to do that. You’re not going to be able to have a really nice retirement at an early age where the interest throws off. That totally takes the pressure off your whole life. You you had this business, you maximized it. We all left with the money. Now you have enough money off of interest to run your life. That seems to be very attractive to me.
Mark Molin: That’s a shiny. That’s not a shiny object. That’s a very solid object. So if I woke up this morning, that 500 grand, 5 million in the bank and have a 500 grand paycheck. I think I could live pretty nicely on that. Right? And I drew. And that’s what I keep companies from doing when they hit that point. I keep them from I safeguard that money so that money doesn’t go down back down the chute and you finish with your business with nothing. I. I know I’m rambling now, but I’m on a roll. I and you could say this, Doug, I see the one thing I’ve seen. I’ve had over 50 companies in 30 different industries. I what really drives me is to tell companies, hire me. Listen to me. Let me do what I do and it will impact everybody in the whole company. I can definitely impact the whole would happen of the whole company. But if you look at that, all that activity that’s being done. If we were to use Gold Rush as an example, all the moving of the dirt, all the fixing the trucks, all the fixing every machinery that breaks down, I don’t know how they fix this stuff.
Mark Molin: And then at the end you come out with no gold and you tell me that you you get fool’s gold, you don’t get real gold. I don’t know why you put the effort. I wouldn’t even start in the beginning if that wasn’t my. It’s one thing about having objective of not reaching it. It’s another thing of not having an objective, you know? Yeah. Go ahead.
A Solution for a Problem That Didn’t Exist
Doug Thorpe: Let me let me interject on that. I, I can tell you one thing from personal experience. You know, one of the blessings of those who are wired to be entrepreneurs is casting a vision. You know, they’ve got an idea. They’ve got an opportunity that they create, and maybe it’s a solution to a big problem, or maybe it’s just a better mousetrap kind of approach. But they’re they’re inspirational in that regard. But there’s one big caveat to that. When you’ve when you’re back at that early stage of thinking about opening a business, there is a process in the creation, product creation process to think about the market.
Doug Thorpe: Does the market really want what you’re doing? And the quick some of where I’m going with this, I had an experience back around 2000. There were there was a lot of talk. I was involved in the mortgage banking industry and everybody came up. A bunch of people came up with the idea to outsource the back office. There’s a lot of paper pushing in mortgage And without getting into all the details, if you’re a mortgage banking organization, your real money comes in originating those loans, not in the fees you collect, but in the ability to sell those notes in the secondary market to and you sell them based on future cash flows, so that that’s a commodity thing that happens. And but at the end of the day, there was a lot of paper that made that happen. And we got a bunch of us got the idea to outsource that process, become very specialized in doing that work. And I created a company. I invested in the development of some technology, and we thought we had the perfect mousetrap.
Doug Thorpe: And when we went to market, it landed flatter than a pancake, because what ultimately got revealed is the owners of those mortgage banking organizations. They knew that was a choke point, but they didn’t want to lose control of that choke point. They didn’t care how good you thought you were or what you could show you’ve done for other people. There was a real deep buried psychology about giving up control of that aspect of the deal, and there were about five companies that ended up emerging in that mark, creating a competition among the five of us. And I got to know all the other owners. And, you know, we were had we had this friendly competition going on to try to conquer the market, but none of it worked. And then the big financial crash of zero eight happened, and mortgage finance was ground zero for that crash. So all of our five companies went under. And I was actually at a conference, and I ran into those guys and we had a lunch together, and we started commiserating on what happened.
Doug Thorpe: And we all came to the fundamental conclusion. We all had created a solution for a problem that didn’t exist.
Mark Molin: Really.
Doug Thorpe: And, try as we all did, to really dominate that market and for, for for the few companies that used us, I know in my case, I ended up with 200 different mortgage banking organizations using my service, and we cut the success time of selling those loans from 45 days to five days. Now that’s a huge liquidity event. And you’re a CFO if if you funded a $400,000 mortgage loan for somebody, and you took 45 days to get your money back from the investor that’s going to buy it, but you cut it down to five days. Look at the velocity there on how many more you can do in a year.
Cash Flow Velocity and Receivables
Mark Molin: Yeah, you have velocity. And another thing that happens if you, if you have to get your money quicker, makes business a lot easier because you have bills to pay.
Doug Thorpe: Right.
Mark Molin: Right. So when you you can be a company. One of the challenges I take is you can have companies that would mean your receivables in essence was 45 days out okay.
Mark Molin: Right. You have to bridge your company 45 days with your money to get to that time. Well, we we can do that bridge. But companies that don’t know how to get out of that cycle constantly have a great receivables list and a very cash poor. So to get it, not only I would tell you in five days is phenomenal. That’s that’s what I try and do. But you did it, you know. And I’ve done it too. I get people, I get them paid on the first. But that’s a huge advantage. Also, it gives you leverage in the market because you’re not poor. You can make your payroll, you can pay your bills, you can do all of those things. So psychologically you’re not stressed out that 40 days is is the difference between success and not success.
Why Founders Miss the Fundamentals
Doug Thorpe: Absolutely. And, you know, for so many businesses that I’ve worked with the owners, and this is more common with founders that I believe than it is potential buyers that are coming in offering to buy the business, because the the buyer side tends to be a little more focused on those kind of strategies.
Doug Thorpe: But the founder is often a person that never went to business. School doesn’t understand a lot of these things. They just know that they’re going to go out and do some work, and they want to get paid for it at a certain rate. And, you know, they they look at their bank account and if they’ve got a certain amount in the bank, they think they’re good, but they don’t understand net margin and they don’t understand cash flow. And all of a sudden you got to make payroll and the landlord’s knocking at your door, and there is no money in the bank to do all that. Or you pay all those people and vendors and you don’t have any money for yourself.
Mark Molin: You don’t have any money for yourself and the real. So I say, from what you handle on the psychology point, when you’re a CFO, everything is really logical to you. That’s just the way the, the, the mind is built. It’s hard. It’s hard for me to, to, handle the illogic or what does it make sense at all? So that becomes difficult.
Behavioral Economics and Business Psychology
Mark Molin: But I’m that is the case. And I can only work with people. I mean, the direction is right there on my banner. I part as a CFO. I partner with tech AI marketers to deliver ten x profit in three years, 100% performance base, no results, no pay Sometimes what’s not. People don’t realize that the structure of it is that I’m taking my money if I generate money. So that’s that’s an advantage right there. If I was to take my CFO salary, it could be anywhere between 400,000 or 750,000 over three years. Okay, now that becomes like venture capital because it’s not money added to the top line, but it’s not money deducted as an expense further down the PNL. So $15,000 a month or $20,000 a month or 25,000, whatever number you want to put, $10,000 you want to put on a CFO. That extra cash flow that allows us to work towards What works for your company. I’m a major studying. I’m very financial, and I understand the behavioral economics, the intangible dynamics and business psychology.
Mark Molin: So that’s really what I measure. And I interact with people in the business to be able to discern and get information, track it, tie it to numbers. But what I’m really tracking is, is the psychology working is the what’s what’s going to unlock this. You’re almost like a detective. You can be picking up all different. I always said it doesn’t make sense. I’ve watched Perot do it, and I can’t figure it out at the end. I watched the the show fully three times over. I my mind doesn’t work that way, but he’ll see a piece of ribbon on a, on a bush and then you collect the ribbon. Then he sees a footprint. But how come only one foot, you know, and you’re collecting these kind of details too? They make sense to your finding who killed the person. Or in this place, who is your customer. And when you find your customer, when you find that person and what you deliver to them, then they’re willing to pay more money for it because you found your customer for what you you did.
Finding Your Client: The PayPal Lesson
Mark Molin: You’re not. I’m I’m not measuring for the aggregate. The aggregate doesn’t do me any good. I’m working to find your like in PayPal. I know I’m rambling now, but I know in PayPal they he said the fintech market is $10 trillion. Every piece of the fintech market, all you need is 20 million Or a million? 100 million or 10 million to find your client. Why? They think you’re clever. And when you find that client, like PayPal had a certain avatar of a person, it wasn’t me. I forget what it is. Then they were able to explode because they got everybody who fancies who fancies that. And that’s right up their alley. And I mean, that’s basically what I’m trying to do. And it wouldn’t be fair to me if I didn’t get on marketers case, you said something. We could be here to midnight now. and I’m sorry for just, you know, just rambling straight through. I have the same interesting thing with marketers. My question to you is, you’re not in a service business.
Why Marketers Need Shared Risk
Mark Molin: You’re in a performance business. And that’s why I added marketers to there, because I can build into a financial model for marketers that actually they can market to their customers so their clients would have more financial comfort in engaging with them. But if you want to stick to I get paid everything upfront and we’re not sure if you get nothing on the other end. I don’t know any business who works that way. I don’t know how they can justify it. I take. I take meetings on LinkedIn just to go around these circles with them, just for the fun of going around these circles.
Multiple Speakers: Yeah.
Mark Molin: So you market is out there. I need I figure this I, I, I added marketing I understand business, I understand marketing, I understand the business of marketing. But I need a few marketers that are willing to go along with me, that I can build in a financial structure that would give the client guarantees because they think they’re clever by getting all their money up front, and that doesn’t cost them anything.
Mark Molin: No, it costs them a lot of costs. The long term value, tremendous long term value. So then you have this constant churn getting customers not being successful, losing that customer, getting another customer. I have a model where you can hold on to that client and you have to give. You have to give to get you have to have a shared risk. Why don’t you have it? There’s no risk for them. Why don’t you have a shared risk so I can build a financial model, a real one with shared risk that that market, that marketer. If he hired me as CFO, he would dominate because I would use all the people who want all their money up front, and my clients would say, no, we don’t do that. So I can use them as a foil, you know, and say, yeah, go call so-and-so. See? See what they’re going to give you. And then after they come up with buckets, then they’ll then they’ll come to my, my marketing company because we have a better friendly financial structure and guarantees for you.
AI as Part of Your Talent Stack
Doug Thorpe: Well, let’s talk a little bit about the AI aspect of this. And let me start by saying.
Multiple Speakers: Oh.
Doug Thorpe: I have started. Number one, I’m an early adopter of technologies. I’m using AI myself and my own business and love it. I’ve I’ve figured out practical use that is reliable and and workable for me. But when I do think about deploying that in a you mentioned, for instance, a blue collar company. You know, the the question becomes, what can they really do with it? And the the first thing I start when I talk to people about AI. Number one, I think people need to look at AI differently than they traditionally will. They’re everybody is inclined to say AI is the next big wave of technology. Well, I know at its root that’s true. But from a business standpoint, AI, I believe, should be considered as part of your talent stack. It’s another potential member of your team when you use it well and use it properly. So Yes, it’s driven by technology, but it needs to be thought about as a another hand on the team.
Doug Thorpe: Another hand on the or, you know, to grow the business and get it going in the right direction. What what do you typically tell people when it comes when the subject of AI comes up?
Mark Molin: Okay. Two things as a user and as for a client. So I just go through a client real, real fast. I have an A, I’ve an AI client. You can come in. You can evaluate a company. You can build all the AI in. I believe in it too. I believe in it just the way you said it. It’s not automation. It’s it’s it’s like employee production. There’s there’s that side of it and I, me I’m going to get myself deep into it, because I, I, I, you know, that’s the way I want. I want to use it. And it’s capable to do a lot of things as if I was a CFO and a company. Really, what I want to know is how much money are you leveraging for the company that you’re working for? So if you set it up correctly, so instead of you getting a service fee, I think you deserve some kind of portion of actual value that you created.
Mark Molin: That’s that’s an AI company. That would be a smart thing to do. Hey, I’ll come in. You don’t have to do anything. You’ll see. We’ll create this value for you, and then the company will receive a retainer plus some of that value. Now, how was I think it as a CFO? I think this thing is great, and I can’t wait to get my hands in it. And just for the same reasons that you said, because I’m putting out a lot of podcasts and putting out a lot of content, that I’m putting out a lot. And, I signed up for Magnus AI Academy, and I want to build out these different workers that can do things for me. So just like any technology, anything everybody gets scared of technology or AI is going to take over the world. No, that’s not the case. The people who know how to use AI are going to leverage it the correct way, and they’re going to be the winners. The other people who look at AI and have blank stares are going to be the losers.
Mark Molin: And it’s not taking over the world. Not that I could say, but it could be a great advantage for your company in finance wise and employee wise. You know, I, I think it’s great. your voice went out.
The Psychology of AI Adoption
Doug Thorpe: Yeah. And, I’ve told people that I, that I believe that one of the challenges with AI that I’m observing in, in people of all walks of life, there’s an extra layer of psychological impact of AI in, in the worker, in the business owner, in the business leader, and in the all of the technological innovations I’ve experienced in my own life. And I’m old enough to I’m the guy that started out with if you had a computer, it was a giant box in a room that was the size of a city block, and you needed air chillers and all kinds of things to run it. And we now have ten times that computing power in our palm of our hand with our iPhones. And, when when the evolution began happening, we went from mainframe to desktop networking to wireless, and then on and on and into handheld interface.
Doug Thorpe: there wasn’t the psychological element of it. There was a learning curve that people struggled with. There was an optimized financial benefit cost benefit analysis that needed to get run on which version of whatever you were going to buy and deploy. But with AI, what I hear people expressing is a deep rooted psychological fear in most cases. In business leaders, there’s generally saying, I’m not sure how to optimize this. It sounds like it could be a benefit, but I don’t understand it enough to to make that decision. Employees at large are afraid of it because jobs are already being repurposed and roles that used to exist are being, eliminated. But guess what? We’ve had that with every other technological rollout. You know, we don’t have punch card operators anymore. You know, those were big jobs. Those were important jobs that paid well once upon a time. We don’t do that anymore, and it is going to continue to evolve. So not to be insensitive, but I tell people, you know, calm the hell down.
Doug Thorpe: Just do your work, do your study and make a decision.
Multiple Speakers: I’ll, I’ll.
Lessons From On the Waterfront
Mark Molin: I’ll stand next to you, behind you. When you tell people to calm down. A it’s a great opportunity. I’m in the middle of it. All I have to know is what? What it can do. That’s what I’m finding out, what it can do. None of the other psychological. If you can do that, I want to figure out this so that can do that. So for me it would be all my content creation putting everything up in the drive. Have an employee that handles a lot of things, that organizes things that, excuse me, organizes my scripts, my content, my that to that I’m building out AI to do that to me. I’m Bill. I’m not. I understand what you’re saying because everybody generally scares each other. Hey, it’s going to take over the world. People don’t know what it is. And then you people have and not interested enough to say, hey, this is going to take away jobs.
Mark Molin: And everybody’s all psyching themselves out and the ones that actually are going to take advantage of it and know what it can do and not psych it out are going to be the winners. And you have a very correct statement. We always have technology. Watch On the Waterfront with Marlon Brando every day. They every day called Shape up. You show up for work. These people had no money at all. They all had a hook. And they and the foreman picked them. And the Mafia guy says, who works? I say, who works and who doesn’t work? Okay, we don’t have hundreds of men’s with hooks working at the docks anymore. You want to see what the docks look like? There were even past the point where we have a forklifts and stuff. Now, there’s big things that roll containers and put them right on the thing, and the container rolls off and goes on the truck. But before that, it was a one man with a hook that made a dollar a day when the forklift came out.
Mark Molin: Yes, it took away jobs, but the forklift driver would make 15 or $20 an hour rather than a dollar a day. So there’s a whole history of technology. This is just another iteration of a boom.
Doug Thorpe: Absolutely.
Mark Molin: Yeah. Those who get it are going to be the winners. Those who would cite themselves out is going to be the losers.
Closing Thoughts
Doug Thorpe: Yeah. Agreed. Well, Mark, I know as we did on your show, we felt like we could go on and on and on, but we are up on time for this episode. So thank you so much for sitting in. Tell people the best way to get in touch with you.
Mark Molin: my email is Molin @ Molin.com. There’s a lot of Mpolins here. It’s a Swedish name.
Doug Thorpe: Perfect. Well, we will have both of those links in the show notes folks, as we always do.
Doug Thorpe: And this is the part of the show I like to remind you. We do have a video version of this over on YouTube channel by the same name. Leadership powered by common sense. Join us over there. Leave us a comment and give us a recommendation for a topic you might like to hear. But for now, I’m going to sign off and say goodbye. Go out there and make it a great day.
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