Manny Skevofilax – How to Scale Your Business Without Losing Profit or Control

Intro: Broadcasting live from the Business RadioX studios in Houston, Texas. It’s time for Houston Business Radio. Now, here’s your host.

Trisha Stetzel: Hello, Houston. Trisha Stetzel here bringing you another episode of Business Houston Business Radio. My guest today is Manny. Right.

Manny Skevofilax : Right.

Trisha Stetzel: Yeah. I see I’m getting really good at this. Manny. He is the principal of portal CFO consulting. Since 2003, Manny has been helping business owners maximize their profits, overcome growth challenges, and achieve financial freedom. An expert in strategic planning, financial statement analysis and business operations, he brings a clear, practical approach to scaling businesses the smart way. He’s also a speaker and author who shares insights on everything from bootstrapping versus finding investors to growing with less debt, not more. Manny’s mission is simple help business leaders build growth that’s both profitable and sustainable. Manny, welcome to the show.

Manny Skevofilax : Tricia, thank you for having me.

Trisha Stetzel: I’m so excited that you’re here today. I know it’s been a while since we had our last conversation, so I can’t wait to dive into this. First, you have to tell us a little bit more about Manny.

Manny Skevofilax : Sure. Um, you know, my parents were born in Greece, so they immigrated here after World War two and found their way into the restaurant business. So my siblings and I grew up in the in the restaurant business, and it was a great training ground. And I really didn’t have any, um, desire to do anything else. I figured that was it, but I ended up changing my mind. I made a career change, um, based on the advice of one of my advisors at school, and I worked as a corporate banker for ten years, learned how to lend money, including five years in beautiful Dallas, Texas. And then, um, I decided I wanted to do something on my own. So I moved back to Baltimore, where I’m from, and I hung a shingle out as a outsourced chief financial officer. And I’ve been helping business owners for the last 22 years.

Trisha Stetzel: Okay, so let’s talk about that outsourced CFO. So thank you for telling us it is Chief Financial Officer. So what exactly is outsourced? Cfo.

Manny Skevofilax : So there’s been a trend, let’s say, over the past 20 plus years of, um, retaining professionals, but only for the amount of time you need them as opposed to having a full time hire. So in my case, um, I work as a chief financial officer. So I’m focused on the finance, um, and business side of things. There’s also outsourced marketing people. So if you can’t afford to hire a full time, uh, CFO, you would be able to hire one part time so that that brought in this industry. Um, these days, they, they refer to it as like, fractional executives. Although I’m not a big fan of the word, you know, to each his own. I prefer outsourced, so.

Trisha Stetzel: Okay. Gotcha. I like that. And, you know, being able to bring this big business knowledge to smaller businesses because you’re able to split your time between these entrepreneurs and still do the work that you do. So tell us more about what a CFO actually does. So there may be some listeners, Manny, that don’t really understand the difference between a bookkeeper, a CPA, and someone who does CFO work.

Manny Skevofilax : Okay, well, let’s start with that. So one of my clients many years ago came up with this. What I’m about to say, he said that a your bookkeeper is looking at the rear view, looking at the back of the car. So everybody’s in the car. So the bookkeeper is looking in the back of the car, the controller is trying to drive the car, and then the CFO is looking out the windshield to navigate where you’re going. Which I thought was a really interesting and kind of nice and simple way to explain it, because I like to do things simply. So your bookkeeper is in charge of making sure that your accounting books are clean. Um, your controller is more advanced. Um, and then your CFO has a completely different skill set. We were taught to analyze financial statements, which is called financial statement analysis. And that’s what I learned in school. And then practically in the bank. And it’s always fascinated me, Tricia, because the financial statement itself is the same for everybody income statement, balance sheet, statement of cash flows. But it tells a different story for each business. It’s the most amazing thing. So my job is not to do the books so I stay in my lane. My job is to analyze the performance of your business, which in my case, I prioritize margins. You know, your gross profit margin and your net as you’re growing. And I help to provide you with timely and accurate information to help you in your decision making. Okay.

Trisha Stetzel: And providing a lot of strategy like looking forward, right. And helping your clients really know where they’re going. Are they on the right path and how are they going to get there? And I love that. Um, I know you do. A lot of you have done a lot of work, um, in this financial space. So when we I know that entrepreneurs really wrestle with the decision to bootstrap, like, I’m just going to strap on my boots, I’m going to go figure it out. I’m going to take the $10 that I have in the bank and go open this business. Right. Uh, or they may seek outside advisors. So how does an entrepreneur decide from your perspective which path might be right for them?

Manny Skevofilax : That’s a great question. You know, it’s different for everybody. Everybody that’s starting out as an entrepreneur, in my experience, some people might have more savings than others or more access to capital. In my case, I didn’t because my parents came here from a foreign country. And, you know, we come from modest means, so we it was very difficult to survive, you know, to pay your, you know, your rent and your food and stuff like that and save money. Right. We’re all under the same constraint. So some people have maybe they have more savings. It might be a little bit easier for them. But over time, what I found was bootstrapping was really the way to go. Because if you’re not careful, it’s in America. It’s easy to take on debt, right? We have this system that does not exist in other countries. Something else that I was taught. And you got to be really careful. And when you’re in the early stages of your business, if you take on too much debt, you might cause yourself to go out of business. Whereas you have less of a likelihood of doing that if you’re just retaining some of the profit and using that as your capital to grow. Okay.

Trisha Stetzel: So let’s dive into that a little bit more. Um, profit being profitable or growing your profit isn’t just about sales volume. What are the three aspects of sales you emphasize when you’re teaching owners how to grow profitably?

Manny Skevofilax : Yeah. So this is something that that has been subject to a great deal of spirited debates, you know, in my life. I first of all, you got to have sales, right? You have to have a solid sales function, and you’ve got to be bringing in the right sales, which the right sales mean they’re at a certain gross profit margin, which we will calculate. Trisha’s business might need a sale to be at a 60% gross profit margin. Manny’s business might require 30%. But what I found was there’s only three ways to grow your sales. So one of them would be more active customers actually buying your goods and services so more customers. The second way would be those active customers. Instead of buying from Tricia once a year, they buy from you more frequently, maybe 2 or 3 times a year. And then the third one was those active customers spending more in each transaction. So that’s what I found. And everything else, in my experience, is just a subset of those three things, right.

Trisha Stetzel: I, I love how you can break things down. So simply, Manny, uh, I find that many business owners, particularly those that are entrepreneurs, they got into business because they’re really good at something or they really enjoy or love something, are afraid of the numbers. They bury their head in the sand. They don’t want to know. As long as there’s money in the bank, they feel okay. So talk to me about the importance of really having somebody like you in their corner who can help them strategize, really, really dig in and know that their business is healthy and strategize on building a bigger business.

Manny Skevofilax : So so I’m I’m your navigator. I’m looking out the window and you’re the captain. So you’ve got all kinds of things going on, right? Um, sales. You’re probably the, you know, the most important sales person in your business. You’ve got to worry about employees. You’ve got to worry about overhead. Uh, how can you possibly focus on everything? And then, as you said, you’re just kind of like glancing at the bank account, going, hey, we got enough money, you know, to make payroll. We’re good. So I help you try to see the future, which is funny because I tell my clients, are you going to force me to get my crystal ball out? And what do you think I see when I look in my crystal ball and they’re like, what? I’m like, I see the reflection of my face looking back at me because I don’t. I don’t know any any better than you. What’s going to happen in the future? All I can do is prepare you. So I’m saying, okay, Tricia, you’re trying to grow 10% this year, which is going to be X amount of money. You’re going to need some more employees, which is going to cost this much. You’re going to need some computers. And I’m doing all this these calculations sharing them with you so you understand what you’re getting into, making sure you have enough money to support this growth. And then I monitor it as we go. And then every month we have a review meeting where we review the financial results together for an hour. Because I like to do everything very simply. And that gives you an opportunity for you and me to ask questions, you know. Hey, you had a great month. Your margin was better than the last month. Why? Or maybe it wasn’t as good. We want to know why didn’t we hit the margin target? Did we not communicate something correctly to our salespeople? Or you know what? Our expenses are ticking up this month. Why? And we just go through that exercise, and you therefore leave with the confidence that you’re on track to hit your goals.

Trisha Stetzel: And how nice is it to have an accountability partner like Manny to say, all right, every month we’re going to make sure that we’re looking at these things and what our plan is moving forward. Love that. So, Manny, I know that there are people already curious to learn more or want to connect with you. What is the best way to connect with you?

Manny Skevofilax : Sure, it would be my website, Tricia, which is portal CFO. I’ll spell it out real quick. It’s p o r a l c o.

Trisha Stetzel: Okay, perfect. And if you guys are looking for Manny, it’s m a n n y. His last name is s k e v o f I l a x. And it’s said just like it’s spelled, which I love. Manny. It’s not hard. All right, so back to, um, let’s take a circle back to profit, because I know that’s something that you talk a lot about and being profitable. And how are you actually profitable? I know there’s three mistakes, uh, often that are, um, business owners are making when we’re talking about profit. So what are these three growth mistakes that our business owners are making, and how can they avoid falling into these traps?

Manny Skevofilax : Sure. So, you know, in my experience, Tricia. The number one mistake is trying to grow too fast. So you have to ask yourself, what is a reasonable rate of growth for my business? So for Manny, it might be 10%, but for Tricia’s business, it might be 30% in a year we’re talking about. So a lot of times, business owners place unreasonable growth goals on themselves, and they don’t fully understand the stress that it’s going to put on not only them, but also in their team members. Right. And the stress that it’s going to put on your cash flow if you don’t have enough cash to support that, trying to double the size of my company in a year, that would be number one. The second one, which is one of my favorites. I’m getting better at it, but I still suffer from it. It’s shiny. New toy syndrome. Alright, so we just sat down, you and I, we did some planning for your business for the quarter. You’re like, okay, because I like to chop it up right in quarters. It’s a year. Let’s see what we’re going to do this quarter. So we just get finished. You’re feeling good, Tricia. You’re. Leave the meeting. You’re on your way. 45 days in. Everything’s going swimmingly. And then something happens to just cross your field of view, and you’re like, wow.

Manny Skevofilax : And it’s a shiny new toy, and it distracts you. And it takes your focus away from the plan that you just spent all this time working on and that you’re halfway through executing. So like I said, I’m not I’m still suffering from it, although I have improved over the years. Okay. And I like to throw a caveat if you if you made a plan for the quarter. And it’s not working. If it’s leading you to lose money, then by all means, change it. You know, don’t get stuck on it. Okay, so that would be number two. And then number three I think would be not checking in on the on the on the goals like I shared with you that I meet every month which with each one of my clients to do a financial review just the same way your banker does or your investor. It’s the same thing. And I learned that in the bank and business owners are so busy, they they don’t they don’t have time to stop. They usually don’t want to anyway. And by not stopping for an hour once a month to review your performance, you know it could lead to some negative trends building. And before you know it, it might lead to a cash crunch. So those would be the big three in my experience.

Trisha Stetzel: Okay. Well, and again, I love how simply put or how you’re able to take this complicated financial language and bring it down to the level of those of us who don’t speak financial language.

Manny Skevofilax : I’ve worked.

Trisha Stetzel: Hard. All right. Yeah, exactly. So you’re the translator, Manny, I love that. Um, I’d like to, if it’s okay. Just talk about Manny for a minute so I know that you’re an author. Would you like to talk about the book that you authored, please?

Manny Skevofilax : I got lucky. You know, I, I always wanted to write a book about all the lessons that I’ve learned in business because I’ve had a lot of great teachers and mentors, and I was fully prepared to self publish. But, you know, my mentor told me to submit to some publishers and I’ll be darned if they didn’t accept it. So I was able to write ultimate profit management, maximizing profitability as you grow your business. It is not a textbook. It’s a fun read because I didn’t want to do anything boring. Finance is boring enough, right? So I, I wrote in there, Tricia. What what I learned, you know, when when should I hire? When can I get more office space? How should I do these things? Because I found that the tortoise kept on winning the race in business. Why does this one business that’s going slow and steady remain successful, able to take care of its employees? You know, the owners are taking care of their family. They’re making charitable donations to their community. And then why is the fast growth one taking all this debt on, growing fast and then ultimately failing? So that’s what really the prompt was to share with with the world that, by the way, bootstrapping is like the number one way to grow a business, especially in America. So I share all the nuggets that I was taught are put in this book in a fun way.

Trisha Stetzel: Beautiful. So, Manny, if people are interested in grabbing your book, where might they find it?

Manny Skevofilax : Yeah, they can find it at Amazon. Ultimate profit management. Type that in or link is on my website.

Trisha Stetzel: Perfect. And by the way you guys, as usual, I will have all of the links for everything that Manny and I have talked about today in the show notes. So you can just point and click and get exactly where you want to go. Can’t wait to see that book. Manny, thank you for sharing that. Um, you talked about. Bootstrapping. We talked about outside. Outside. Money’s right if we want to go and, um, get our money from a bank. And the difference between that and bootstrapping is the direction that you would head, especially if you had the means to do that. Um, when business owners are really wanting to grow as fast as possible, I just got into business. They want to grow it from here to there in the first 18 to 24 months. How do you help them balance this ambition of growing quickly, but also health? Healthy, financially healthy, uh, and sustainably?

Manny Skevofilax : That’s a great question, Tricia. It’s difficult because entrepreneurs are ambitious people, right? That’s why they got into it. So interestingly enough, if you are in some kind of technology business Where you’re growing your business by signing up what we call eyeballs people on the internet, you might be able to really grow your business fast over 18 months or two years, as you stated, because it is a lot easier to find these potential clients and a lot easier to onboard them, as opposed to if you had a professional services business or manufacturing business. So I always want to throw that in there. If you if you have technology, you know, some kind of software as a service business, you probably have a good shot. And also the barriers the cost barriers are lower right. Barriers to entry. And you may your employees can work remotely. Right. So that there’s savings there. You might not need an office. But for everybody else. You have to be really careful because you have to analyze, like, what does it cost me? Let’s let’s take a contract or I love to use the contractor example. So the contractors, the plumbers, the HVAC folks, the electricians, they know exactly how much it costs to have one truck on the road. They’ve already done the math. You know, I need two electricians, a helper. I need this truck. It’s got to have this amount of inventory on it. They already know that. So intuitively, they know what it would take to get the second one on there on the road. So what is that? Is it 100 grand? Is it 200 grand? Do you have it in the bank? You know, how do we bridge the gap? Could you finance the truck and then maybe get a line of credit from a bank? If you’re under two years old, you’re probably not going to be able to get the line of credit from a bank because they want you to be at least a two year old business.

Manny Skevofilax : But you could probably Finance the the vehicle. So you have to do that calculation and say, what is it going to take me to get to the next truck on the road? And we we do that calculation very simply and come up with the number, and then we figure out how to finance it and if it’s doable, because that’s going to be your your biggest single constraint to meeting what you said that fast 18 to 2424 months growth. Yeah. On top of that we don’t want to lose money. So we’ve got bootstrapping. And then we have investors. Bootstrapping means you’re doing it all by yourself. And eventually you’re going to get to the point where you’re bankable because you do want to go to the bank because it’s your cheapest source of funding. Now, investor wise is a whole different story. You know where you got an idea and you want to take it. To some investors, that is difficult because you’re asking strangers to come into your house and people don’t sound sexy, but people don’t fully understand. The strangers are coming in and they want to be in control. And you’re probably not ready to give up control of your business yet. So it needs a little bit of careful evaluation. Okay.

Trisha Stetzel: And you need somebody like Manny on your side who can help you navigate all of these things. You know, you were talking about outside investors, and I got this, this feeling over me. Like they’re going to come in your house and ask you hard questions. It’s going to be really hard. Um, Manny, this has been such a great conversation. I have one last thing for you. As we’re starting to wrap up today, if you could leave the listeners with one piece of advice about growing their business profitably. And we’ve talked a little bit about this, but digging just a little bit deeper into a profitable business with less debt, what would it be?

Manny Skevofilax : Consistency and perseverance. Okay, those are the two biggest things. And then do not rush out to try to borrow money unless there’s a good reason for it. You know, try to be frugal. You know, use that sparingly early on if you need to buy a machine or a vehicle, it’s a little bit of a different story. But, you know, be consistent and show up every day and use the profits. Use a portion of the profits that you’re generating in your company. Don’t take it all out of the company and take it home and spend it. Leave a piece in there. Maybe if you can leave a third of your profits, you’re creating your own capital, funding your own growth, not owing anybody anything.

Trisha Stetzel: I love that, that’s amazing. All right, one last question. Tell us one lesson that really stands out from you in the book that you wrote. What’s one lesson you want to share?

Manny Skevofilax : Oh, gosh. This one is a tough one. But you know, in my opinion, hiring somebody that is not a good fit for the job and then leaving them there, and you don’t really know that you have crushed your culture and irritated everybody. So the higher slow and fire fast is you don’t know the negative impact that you create amongst the rest of your employees when you make a bad hire. You know, and you’re like, well, why is the finance guy, you know, talking to me about the quality of my hires? Because we can’t accomplish anything if we don’t have the human capital right to do it. That means the employees have to feel valued and appreciated, and we got to be really careful of the dynamic that we create or we’re not growing anything.

Trisha Stetzel: Mhm. And it costs you a lot of money and time to have the wrong people on your team for sure.

Manny Skevofilax : Well said, well said.

Trisha Stetzel: Yeah. Manny, thank you so much for joining me today. This has been so much fun. I love when I get to interact with financial people who are fun. And I think you’re fun, Manny.

Manny Skevofilax : I’m very flattered. Thank you. Tricia.

Trisha Stetzel: Thank you. So tell us one more time. What is the best way to connect with you, Manny?

Manny Skevofilax : Sure. On my website it is portal com, and there’s a bunch of blogs there. I’ve been blogging for a long time, so go in there. I got the web guys to put a search function in there. So search whatever topic you want, you know you want to learn about, and a few of them will pop up for you.

Trisha Stetzel: Beautiful. Thank you Manny. So many resources. Great conversation. You guys go out and grab his book as well. If you can’t remember the name of the book, you can just Google him as the author point and click. It’ll take you straight to where you can find his book on Amazon. Again, it has been my pleasure to host you.

Manny Skevofilax : My pleasure Tricia, I enjoyed it. Thank you very much for having me on your show.

Trisha Stetzel: All right, guys, that’s all the time we have for today. If you found value in this conversation, share it with a fellow entrepreneur, veteran or Houston leader ready to grow. And be sure to follow, rate, and review the show. It helps us reach more bold business minds just like yours and your business. Your leadership and your legacy are built one intentional step at a time. So stay inspired, stay focused, and keep building the business and the life you deserve.