Some money lessons don’t happen by baby steps.
They are trials by fire.
This is one of those stories.
I was ridiculously excited to work with a CFO.
A few weeks ago, I hired a CFO for the first time, ever. And fired him. In three weeks flat. This is that story -- and the surprising lessons it taught me about myself, my money, my boundaries and ethics, and the future of my work.
See, I had just survived a HUGE money koan: being audited by the IRS.
I know, how ironic: I’m a financial therapist, being audited for the two years I spent writing and promoting my book on money!
I haven’t shared a ton about this yet, but trust me: to be audited as a business owner is a Very Big Deal. (I share some of this in my recent keynote, which you can watch here.)
Wait. Rewind. 17 years ago, I was audited as a simple sole-proprietor. I showed up at the Santa Rosa office with my perfect files and receipts. Within a few hours of adding up some of my business expense categories, the audit was over. I didn’t have to pay a cent over my original tax filing.
That was a cute little audit. The one this year? Not so cute.
My business has grown immensely since that first little audit, 17 years ago. The numbers are bigger. I have a team. And this audit was for everything: our LLC, C-Corp, and personal finances. It took way more than an afternoon.
For five solid and very stressful months, my husband and I had to send outrageous amounts of documents and reports and receipts and statements. I drew on every money practice and tool I had, especially Body Check-Ins. I felt the gamut of my feelings (including anger) and had to keep finding my calm in the storm. At times, it felt endless.
I emerged from my audit victorious -- AND a little hopeless.
The main thing the IRS was looking for was whether we under-reported our income or over-reported our expenses. In the end, all of our income and expenses were accepted as we’d originally reported them -- which was a huge victory.
But, the auditor needed to find something to ding us on. So they went after our self-employment tax as an LLC. This is a gray area where accountants and auditors don’t always agree. In the end, we had to pay an extra amount of additional self-employment tax.
Compared to what could’ve happened? This is a huge success. Them accepting all of our income and expenses means I’m doing a helluva job with my team and all of our financial systems and tracking.
But having to pay a big chunk of additional self-employment tax really stings. I felt like we’d already paid so much money in taxes!
With the audit coming to a close, I was finally able to take a full breath and reflect on the stage of life-and-business I’m at. I felt a little hopeless -- something I hadn’t felt for years, as an entrepreneur.
I could feel it: I had hit a ceiling.
I wasn’t just hitting an income ceiling. I was hitting an everything ceiling.
This was a business and income and next steps in life ceiling.
How could I comfortably pay these taxes moving forward -- and save and live well? What was the next level of my business and work, that felt so right around the corner but still unknown? I kept hearing and repeating the words, “stepping into my legacy.” What could this look like, in my work and money and business model?
In a flash, I realized: I needed a new member of my financial support team. I already had a bookkeeper, an accountant, and a financial planner. But I needed someone new, to help me vision and strategize and leap to the next level in my business model. I needed a CFO (Chief Financial Officer) for the first time, ever.
CFO’s usually work with businesses larger than mine, so I wasn’t quite sure what this would look like, for me. But I knew a great CFO could come in, review all of my numbers and cashflow patterns, and help me vision and strategize the next level.
I reached out to my friends and colleagues for recommendations and very quickly found the CFO I wanted to work with.
My new CFO had worked with many businesses: mostly online and mostly women-owned. He’d helped entrepreneurs at my level move up to multiple six figures and even million dollar businesses.
One of my colleagues who’d worked with him swore he was solid, steady, amazing, and the best thing that had ever happened to her business. I did some additional due diligence, reached out to two more colleagues, and they both echoed similar experiences and sentiments about working with this CFO.
My new CFO and I were off to the races!
We had a few initial sessions together and he began compiling all of my financial numbers into his forecasting software and we began forecasting the rest of 2018.
I loved the questions he challenged me with. He asked if I’d rather raise the price of The Art of Money (my year-long program) or create an additional new offering. It felt good to articulate very clearly that I still don’t want to raise the price of The Art of Money (I haven’t raised the price since I started offering it, six years ago). And I was looking forward to strategizing with him about my potential upcoming second book.
Our agreement (which he offered and I accepted) was: for three months, he’d work very closely with me, doing an intensive review of all of my numbers, marketing, strategies, and beyond (for $1200 per month). Then, we’d move to maintenance mode for another six months (at $600 per month).
Then, out of the blue he changed everything.
Three weeks into our work together, I hopped on Zoom for our session and he announced he was doing a complete business pivot.
From now on, he would be charging $3,000 per month (instead of the $1200 - $600 per month we’d agreed upon).
Mr. CFO gave the the option of staying at $1200 for the first three months, but after that, I would have to move to $3,000 per month (instead of our agreed-upon $600). Or, I could get a refund. But the full pricing agreement he’d offered me just three weeks before was now off the table.
I was stunned. I tried to stay engaged and ask some questions so I could get some value out of our time, but I was blindsided.
How could he think it was OK to multiply his rate by five times? How could he change our agreement a mere three weeks into our working relationship? I’d been looking forward to a long-term relationship with a trusted advisor -- so would I get good value out of a mere three months? Plus, did I really want to work with someone who’d gone about a money move in a way that felt cold and unethical, to me?
I sat with all of this for a couple of days.
I’ve learned the importance of being with confusing situations like this, instead of reacting too fast (or crumpling into passivity). This was a money koan, for sure.
Two days later, I wrote him a letter sharing how blindsided I was by his pivot, and how I felt some of our trust had been broken. I didn’t even have my team edit it (which they usually do with my content). I sent it off a little raw.
Here’s the whole letter, typos and all. (Don’t worry if you don’t want to read the whole thing: I’ll sum it up for you just below.)
Dear {CFO},
I am looking forward to our next session on Tuesday but wanted to share this with you before we meet again.
It’s taken me a few days to sit with what happened during our call on Friday. And, I’m going to be direct, even though I’m still confused by it.
I’m really shocked and surprised by how you delivered the new pivot in your business.
In retrospect, I think you really could have prepared more on your side and had more of your ducks in a row before sharing that with me. It felt half-baked or quarterly baked. And, I’m still confused as to why you chose to share it with me this early-on in our business relationship.
I can appreciate a heads-up but we really just began our work 3 weeks prior and you had just started to review all my business numbers and data. I can make up all sorts of stories of the timing but I know better than to do this. And, yes, it feels vulnerable to have you review all my numbers, then have you tell me that you are not going to be honoring our original agreement and that you are going to be raising your fees significantly.
It doesn’t feel good to be offered one thing and then be told that you are changing what you offered. It feels like a bait and switch. And, part of my trust for you has been broken. And, this sucks because I have been so deeply excited for our work together.
We initially spoke on June 21st. When we discussed your fees, you were very clear and never mentioned that you were potentially in the middle of a pivot. You offered me a clear service and I said, YES.
Now only 3 weeks later, on July 13th, you are telling me that your fees are increasing significantly, that you are removing the second part of what you offered and that this will probably remove my ongoing support.
This really goes against my sense of you, how you operate, and your overall business ethics.
I can’t explain how excited I have been to find you and have you start as my CFO. I don’t often reach out for support like this and I have been feeling so hopeful.
This precipice that I am sitting on has not had next clear steps. And, it’s a sensitive thing to share all of my numbers and data with someone new. But I felt a clear trust from the beginning with you and I also got solid feedback on your character and the work you do from few of your clients.
So, what you shared in our last meeting was really confusing for me.
I understand raising fees, but there is usually a much better protocol of when and how it’s delivered. For example, existing clients would get the same rates until, let’s say the end of the year and this would include someone you quoted your fees to and signed up. And, we just started 3 weeks ago, so the timing is really off for me.
When I used to offer my private work for 6 month periods, I would stick with that amount. Even when I realized that it wasn’t sustainable any longer and that I would be raising my fees, I didn’t tell my current clients or ask them to potentially pay more than our original agreement. My husband, who has been a freelancer/consultant for years has also always kept the same policy as I have.
Also, I never would have signed up if I knew your fees were $3,000 a month. It sounds like your new branding/services will be focusing on million dollar businesses, which I am not. You keep saying that I am not different or not that different to a million dollar business. But to me, a multiple six figure business is very different than a million dollar business. And, I clearly don’t know how to get there, yet. This is part of why I reached out to work with you and have been so excited to work with you.
I hear that you have gotten other businesses from multiple six figures to one million, but even with that, I would not sign up for a $3,000 a month service to get me there. I could see doing the $1200 per month for a few months to see the results and once some new income has been generated with clear results, then I could see continuing on with that monthly fee.
But you offered me $1,200 for 3 months and then $600.00 for maintenance and ongoing support. This is such a vastly different offer, then what you are moving into, that I am left really perplexed.
I understand you have suddenly realized this is not sustainable for you but it would have been great if you honored what you offered me and all your new clients were offered the new rates.
If you want to be working with million up businesses and moving towards $3,000 per month, I get understand that. But I would hope that you would honor the clients you had before and honor their fee structure for a while longer and give them time to transition better.
When I signed up I was also so excited to start with someone that I could work with longer term and incrementally build a relationship with, as it can take time. This is what you presented to me in our first meeting, which was so exciting for me. Now I am left with the realization that we only have 3 months together.
I do really want to work together for the full 3 months, and as you said, I would love you to show up fully for our work together. I am not sure how we will proceed after that. But I don’t want to just stop the beginning work we have done.
All the projections/forecasting for the 2018 data I know really well. I work with the numbers often. I have gotten even more clarity that I was doing so much of this in my head and with the QB’s and IS reports. Your quick forecasting, though, is making me even more familiar with my business and the expenses, which I am grateful for.
What I’m super excited about, though, is what is next and what income possibilities are on the horizon that I cannot see. I have loved all of your questions so far, ie: if given the choice, would you raise the fees of AOM or create something new? I feel we are just entering into the new territory for me, the horizon that I haven’t been able to clarify yet.
I really hope we can do our full 3 months together. I know I have my blind spots. And, I’ve been so excited to get your support and experience. I’m not sure what will come after that given the new direction you are going but I would still love to honor the first 3 months.
I’m also not sure how me sharing my experience will impact you. But I hope it will give you some food for thought as you continue to map out your new branding and new offerings. And, I’m open to discussing any of this further.
Please know, I love paying people well and I love having a team that does amazing work. I also honor pivots but this one feels drastic compared to what you offered me less than a month ago.
It’s so important to me that there is clear communication about money and agreements upfront, especially with the roles that you and I hold for our clients. This is essential to my work and I imagined it was essential to your work as well.
With confusion but hope,
Bari
I shared with him how, while I certainly understand the importance of raising our rates, the way he went about it felt unethical and confusing to me: he could have honored existing rates until the end of the year or another three months, for example. I reiterated my excitement about working with him, and some of the things I was hoping he could help me with. I told him I was confused, but still hoped we could show up fully for the next three months together.
He responded:
Thanks for your thoughtful email. I of course agree with you that it's very jarring, and I'm sorry for the confusion and disappointment. I do plan to make it a great three months. We can discuss in more detail on tomorrow's call.
I psyched myself up for the session. Could we come to an agreement?
I sat upright. I put on my Financial Therapist hat. I was reminded of verbally sparring with my belated father. I wasn’t contentious, but I was asking directly for clarity. I don’t love this sort of interaction, but when called into this arena, I can do it.
He apologized for causing me pain, and I said, “While I appreciate the apology, that’s not what I’m looking for.” I told him I wanted to understand his reasoning and why he did what he did.
What he said next made everything clear for me.
“I understand that this change is upsetting a lot of people, a lot of my clients,” he said. “And if I had it to do over again, I would do it the same way.”
That was all I needed to hear to fire him.
He was willing to make a drastic change in his business model -- including not honoring original agreements -- if it meant stepping into a new, higher-end business model. Some of his clients are coming with him, but many are not.
I would never do that.
Again: I understand shifting business models and raising prices. But there are ethical ways to do this. Ways that honor agreements and boundaries and don’t feel like betraying clients and promises.
I slept on it one more night and then wrote this letter to him, with total clarity:
Dear Mr. CFO,
I have thought about everything further and I have decided I would like a refund for the $1,200.00 and would like to cancel our further engagement.
I do appreciate some of the little time we had together.
And, I wish you the best with your next business model adventures.
I took him up on his offer for a refund and wished him well.
He sent my refund the very next day.
Best of all? I emerged from this experience with some immense clarity.
The “goldmine” I’m sitting on.
“The Art of Money is a really elegant business,” Mr. CFO told me when we began working together. “You’re sitting on a goldmine. But there’s so much you won’t do, unless it feels really right to you. You’re not the kind of person who would add an offer or pivot really quickly if it’ll upset your community.”
This was perceptive of him. There’s a long list of marketing tactics I could engage with but never will. I refuse to do high-pressure sales and insist on luxuriously long marketing windows, so people have the time to make great money decisions about working with me. My design elements and team members and guest teachers and systems all have to feel good and right to me. I won’t do affiliate programs or telesummits, am very choosy about my collaborations.
AND I won’t pivot my business in a way that will hurt my clients or community. Mr. CFO saw this … and my reaction to his pivot proved how important this is to me. I’ll never sacrifice my integrity or goodwill to reach some “next level.”
My team and I rallied … and emerged more clear and powerful than ever.
This experience with Mr. CFO sparked fabulous conversations with Forest (my dear husband and savvy businessman) and my team. We rallied, visioned, and got crystal clear:
1. I know my numbers even better than I thought.
Mr. CFO mentioned a number of times that his clients are usually in awe of his financial forecasting tools and skills. But I already knew my financial forecast for 2018. I regularly review my QuickBooks and Infusionsoft reports. Even though I don’t do my own bookkeeping anymore, my years of doing it and my willingness to stay engaged with my numbers have helped me stay very clear on the financial health of my business.
2. I am very clear I do not want to raise the price of my year-long program.
I have kept The Art of Money at the same price since we originally offered this program six years ago -- and I will keep it the same price when we open our doors to our seventh year in a few months.
Raising the price of AOM is the first and most obvious move people suggest to me. But I’ve worked hard to make my signature program as financially accessible to as many people as possible. My pricing feels good to me and it’s staying put.
3. I don’t want to create a new program. I want to grow The Art of Money.
I’ve looked into creating a Financial Therapist certification program because so many people have asked for this. If I do this, I’m going to do it right, and that will require a ton of time and energy. But right now, I have other priorities.
I can feel myself moving into a new business model. It’s around the corner and I can’t quite see it. But it feels like legacy work, to me. And the Art of Money year-long program and book are integral to it!
Each year, I grow my team and TA’s and add content to help support everyone. This year, we’ve worked hard on giving the monthly content a fabulous update and overhauling the Library. Plus, my beloved Money Memoir series was added to the program (including the original 45 interviews from 2014).
The Art of Money grows by about 15% each year. I want to continue growing and would love to grow by even 20-25% this year, which may mean bringing on more TA’s.
4. I am writing a Second Book!**
Originally, I said no, thank you to a second book deal. The timing wasn’t right for me and I didn’t feel great about the book idea. Although, in the beginning of 2019, something shifted. My publisher presented a new idea to me, "How about creating a journal that would accompany the first book with gentle prompts, questions and quotes? It would be more accessible to folks who love journaling and need to start with something simpler that a 300-page book?!" OK. YES, I love this idea!
**You can read about my 2nd book which will be published in Fall 2021 as well as an audiobook deal for my first book, The Art of Money, which will publish on August 18th, 2020, right here. **This was updated since the original post was created in 2018.
Ah, sweet clarity.
I took my time to get to clarity around firing my CFO, but I didn’t need to agonize over this decision. I didn’t need to stay in the relationship longer than necessary or worry about needing him to like me. Clarity -- and done.
I’m grateful for this experience and the insights it’s sparked for me. And I’m excited to keep working on things that feel like my legacy -- in ways that feel true and good.
Thank you so much for reading this long story. I hope it has served you and your money relationship with a few gems.
And thank you so much for being a part of the Art of Money community.
It is my honor to support you.
