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Emerging Business CFO helps startups have full-time financial focus

Dan Schmidt, CEO of The Emerging Business CFO (EBCFO), thinks accountants can do better work for their clients. "I look around and I see a hole in services provided to entrepreneurs and small business owners. You can get great bookkeeping and tax work done, and there are talented people in the industry, then it stops,"

Photo from Emerging Business CFO

Photo from Emerging Business CFO

Dan Schmidt, CEO of Kansas City-based Emerging Business CFO (EBCFO), thinks accountants can do better work for their clients.

“I look around and I see a hole in services provided to entrepreneurs and small-business owners,” Schmidt told SPN. “You can get great bookkeeping and tax work done, and there are talented people in the industry, then it stops. It’s basically numbers on a sheet of paper and then a small-business owner says thanks, shoves it in a drawer, never looks at it again and it doesn’t help anyone.

“It needs to be more than numbers on a page. People need someone willing to sit down with them, to do the work, but also tell them what it all means.”

Schmidt’s goal is to explain that piece of paper, and become a right-hand person to help entrepreneurs understand their financial position in order to move forward and make sound business decisions.Photo from LinkedIn

“Accounting is in my blood,” Schmidt (right) said. “My parents were entrepreneurs, so were my grandparents. I grew up with those examples, so I mowed lawns in high school and managed a company in college, and even though after graduation I focused on getting my credentials, I always wanted to come back to this kind of work.”

Schmidt spent seven years in public accounting and then another five years in the consulting world with Fortune 1000 companies, but always had a sweet spot for entrepreneurship. EBCFO, which launched as a full-time business in January 2014, initially began as a side project, bootstrapped from the ground up.

“I was working with a few clients using the traditional accounting model, but I knew that something needed to be different,” he said. “I had some ideas, but I didn’t know how to put them into practice in real life, so I started observing technology and how it could be applied more effectively to my work. Then I had coffee with a lot of business owners and asked questions about their pain points related to finance and accounting.

“I also went to a lot of local meetings, like 1 Million Cups and Silicon Prairie News events, and I realized that there were marketing people there, developers and attorneys, but never accountants. I couldn’t figure out why that was. I kept telling people about my side business and then they asked for my card or said ‘I wish I had known about you before!’

“People know if they’re not comfortable with what their accounting looks like, or sometimes they have the numbers on the page, but they don’t understand the information and they don’t know what to do about it.”

That’s when Schmidt started to realize that EBCFO met a real need for entrepreneurs and small-business owners. Today, the company serves as the outsourced CFO-in-full for a half-dozen companies, oversees the payroll and accounting operations for many more and continues to scale rapidly. Over the past six months, Schmidt’s company also has helped more than a dozen companies get operations up and running.

Services at EBCFO are unique for clients in two key ways: the company operates on 100 percent cloud-based systems and has no hourly billing. Schmidt thinks cloud services are crucial for collaboration and real-time information sharing, particularly since the company has clients across the U.S. and around the world.

“If I’m talking to someone across the globe, we can be looking at the same information at the same time,” he said. “That’s really important. Our services are a platform, not a product.”

And by offering flat-rate retainers instead of hourly billing, Schmidt and the two other employees at EBCFO can focus on the client’s needs rather than the volume of transactions.

“I don’t want someone to sit there and think, ‘Is my question a $50 question?’ And then not ask it,” Schmidt said. “I want that person to think, ‘Okay, I already paid for these services and now I can call with any of my questions.’ That’s much more valuable.

“We know it can be intimidating and stressful to ask questions about your company’s financial situation, but knowledge is power. We like to get to a granular level of detail with our clients and form a close relationship, so that they know what’s going on with their money and then they can better, more informed decisions for their company.”

The motto at EBCFO mentions “freeing” entrepreneurs from their daily operational grind, a mentality Schmidt holds dear. One client even told Schmidt that he hired EBCFO so he could sleep better at night and not worry about the IRS.

“I always ask people, ‘Do you want to do the accounting work or focus on what you’re passionate about and spend energy on your dream?’ My dream is finance and accounting and maybe that makes me weird, but I’m okay with that,” Schmidt said. “If your finances feel like an 800-pound gorilla on your back, then I like that we can take that stress away through the work that we do.”

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