#awinewith Michelle Kvello
MEET Michelle
Michelle is the Founder of Lantern Partners, You can find them here:
Transcript
Danielle Lewis (00:07):
Michelle, welcome to Spark tv.
Michelle Kvello (00:11):
So lovely to be here.
Danielle Lewis (00:13):
It is an honor to have you. I'm very excited to have this conversation, so thank you for making the time for us.
Michelle Kvello (00:19):
So welcome. Looking forward to chatting.
Danielle Lewis (00:21):
Absolutely. So who are you and what do you do? It's always my first question. Who are you?
Michelle Kvello (00:30):
My name's Michelle Keo and I'm the founder of Lanin Partners. So we're a CFO advisory firm and we work with founder CEOs of startups and scale ups.
Danielle Lewis (00:42):
Very cool. I love it. And that's very cool because as a female founder of a startup, well I don't know if you can call it that after 10 years scale, let's go scale up.
(00:56):
Yeah, that's right. I love this because a lot of founders tend to be more on the creative side, skillset side when they start a business and numbers or finances aren't always, no, I'm overgeneralizing here, but they aren't always their strong point. So I actually love that we're having this conversation because I know in my last 10 year journey, some of the most stressful moments I've had have been around money and finances and making wrong decisions and all those things. So I think I'm so on board with getting help and making sure that you have someone in your corner that is your champion and understands what you do. So why is it important to you? So obviously I'm spruiking it because just because of my experience, I'm like, why did you get into this? Why was it important for you to support startups and scale ups?
Michelle Kvello (01:58):
So how I got into it is I just hate seeing people stuck. And what I was seeing a lot of was founders getting to a certain point and then just getting stuck in their growth journey. Because I think when business owners and founders think about finance and what they should be looking at from a finance perspective, they're very much thinking about what I consider the health and hygiene aspects of finance, which are critically important to get right from the early days. And what I mean by that is around tax and getting the right bookkeeping so you can actually see your numbers. What we do is when I talk about CFO advisory, we are doing the commercial and strategic finance advice and I call that the so what of the numbers? If we get in there and the numbers aren't clean and we can't really see clearly to provide that value, that's the first thing we'll go and fix is like, can you clearly see what the numbers are within your business?
(03:04):
But quite often I saw founders get to that and then it stopped. It was all very historical looking backwards, looking often fine founders who didn't really see their numbers until it got to their quarterly BS filings and things like that. And that would be the first time they had any contact from their accountant. And so what we do is we work with founders to actually extract the story from their numbers and work out what to do with that story. Did they like the story that was being told with their numbers or did they need to change the story or was it not the story that they thought they wanted to tell with their business? And that's where we get involved and I'm really get really excited about unlocking that value in that data and just getting people unstuck and where they want to go. We are often helping founders through what I call their awkward adolescence because the awkward adolescence of their business, I don't work with children.
(04:03):
And you've got that startup when it's all kind of really exciting and really new and things that you can be nimble enough with decisions and nothing's too hard and nothing's too broken yet. But if you start putting those structures and processes around things you get to, whether that's the five year mark, the 10 year mark things, it's feeling a bit hard and you're not where you wanted to be and you're not quite sure why you're not where you wanted to be. And that's where we really help founders kind of see through that to the next step.
Danielle Lewis (04:39):
And I think it's really interesting because, so my other business Scrunch, which is an influencer marketing agency and software, the agency side of the business is typically super low margin. So if you are not really, really careful, staying on top of things, making decisions in the business is really difficult. But I must admit it wasn't until we kind of had that aha moment of why have we been working our ass off seeing these high revenue numbers and we don't seem to be able to have enough money to do the fun fancy cool things that we want to do. So I totally agree with you that first things first actually have everything in order so you can look at it, but having someone like you that can actually having a bit of an objective look as well and not have the emotion that's connected to being the owner of a business that can tell more of a story and start to I guess give some ideas on what's possible as well.
Michelle Kvello (05:42):
And it's also keeping an eye on what are the metrics that matter kind of business that you are talking about. It's all about people and margins and the utilization of those people. And I was actually speaking to a prospective new client this morning and exactly what you just said, revenue's going great, they're hiring, they've got great clients, but they've managed to get themselves in a bit of a pickle with compliance payments and they're behind with the A TO and they've hired these great people, but they're not getting enough billable revenue out of them. And
Danielle Lewis (06:21):
So
Michelle Kvello (06:22):
What are we actually, and there's a point at which a business is small enough for a founder to kind of have a good feel for whether it's working or not, but when it starts growing beyond that, it's without some sort of framework in place to actually look at. It's really, really hard to just feel your way quite often as you start to grow. The things which were true and felt intuitive when you were small are no longer true, but it becomes part of the corporate mythology almost. Yes, we know that this is the case, you're like, really, but when's the last time you actually looked at it? So yeah, it's a lot of that kind of work.
Danielle Lewis (07:03):
Yeah, I love that. And even just having somebody to help have those conversations with as a business owner, you can't always have those conversations with your staff
Michelle Kvello (07:16):
And it's really true. I heard described as CEO Valium the other day. Yeah,
(07:25):
It's kind of a serious part of what we do because said as a founder can't talk to your employees about God, I don't know what to do right now or should I do, should I do that? Because that makes everybody nervous within the organization. And it's not about being transparent, it's about what's the appropriate forum to have that conversation. And then with founders that are looking to, some of our clients have got investment or they've got shareholders that they need to report to, you can't also be completely transparent with your board. So you kind of almost need this sort of safe space to talk to kind of go, what do I do? What am my options? What happens if I do this? What happens if I do that? And that's very much something that we do as part of the service we offer, even though we don't necessarily talk about that straight out the gate. But it is a really important part of what we do and we prepare a lot of businesses for eventual sale as well. And when businesses are going through a transaction process, it is really emotional and it's very unsettling and it's your baby. You are hawking out to the universe and there can be some really difficult and confronting conversations as part of that. So having someone you trust and someone who's objective that you can have an open conversation with is really important.
Danielle Lewis (08:53):
Yeah, that's really interesting. I hadn't thought of that as well as kind of down and up I guess as a business owner. Yes, there's some obvious conversations that you don't want to have with employees as much as everyone says that they want to know all of the whats and all. But I didn't think about that from a board point of view as well. I mean, we have a board at Scrunch and you do want to feel like you do always want to speak confidently what you're doing and things are okay. And as much as people say, I'm there to help you ask me anything, I think it's shareholders as well. You want to put your best foot forward and make everybody feel super comfortable. They've made a great investment, the business is doing really well and a lot of times it's not that it's not doing well, but you're unsure how to take the next step, what to change, what to optimize. So I think that's just so valuable having somebody in your corner that you can kind of, I don't want to say ask the dumb questions, but kind of have that moment of, actually I'm not sure what to do here. Can we hash it out a little?
Michelle Kvello (09:59):
Yeah, yeah, absolutely. And with the board conversations as well, and I think it's important to note, it is really important to be, I sit on a couple of boards in a formal capacity informally we are at a lot of board meetings, just the nature of what we do, but formally as a board member and I have the same conversations and it is really important that you are able to have open conversations with your board, but they're at a less granular level often than the conversations they're having with us in A CFO advisory capacity. So it's not about hiding things or only presenting the really shiny glow parts of the business, but just those really kind of detailed conversations. It can be helpful again, having that objective point of view and objective sounding board for that.
Danielle Lewis (10:53):
Yeah, and interesting, I love talking about the exit as well. I feel like a lot of people don't think about the exit until they want to exit, and there is a lot of planning and strategy that kind of needs to go into the years before so that it's less stressful that you do kind of have your ducks in a row, so you do look great to a potential acquirer or even investment. I think it's the same with raising capital. There's so many things. So we've raised capital three times now and got better at it each time, but the prep work was, there's so much prep work and I didn't realize that at the beginning, but just that discipline of keeping things in order, but having somebody on your team that can go, these are the things that are important. These are the things that investors are going to ask for or that a potential acquirer will ask for. These are the things that you need to make sure. Even contracts, we work in a space where it's very campaign by campaign investors, acquirers longer term contracts. So as you're leading in just rethinking how you do things, but if you don't have that person around you in your ear giving you those little insights, just flying blind a little,
Michelle Kvello (12:10):
Yeah, it always takes much longer than people think to actually get ready for that sale process as well. I'm generally telling clients, Hey, it's probably going to take you a couple of years from absolute kind of standing start zero to being ready for that kind of process,
(12:29):
Which always kind of surprises them because often the businesses are in good shape. It's not like they don't have any figures, they don't have any filing systems or anything like that. Partly it's the health and hygiene, but I kind of talk about three pillars when I'm talking to founders. So there's the health and hygiene stuff. Do you have all your contracts signed? Do you have all your returns filed? Can you pull out all your tax returns, bas returns, employee contracts, all that kind of thing. When you're asked for them, you will be asked for them. But the second one is around, is your business ready for sale? And that's more of the commercial strategic conversations around are you the sole decision maker within the business because your value goes up if it is a real business engine that's being sold as opposed to being really founder reliant. So are there other people within the business that are making those decisions and things that you don't necessarily think about. It might be great to have those massive blue chip clients, but you've only got, which with a smaller agency is very typical. If you've only got two or three of those, that's a risk to someone acquiring the business because a lot of those kind of key clients will be around the personal relationships and if you lose one, what does your business actually look like? And so that's a lot of the prep as well.
Danielle Lewis (14:05):
Yeah, it is really, oh, sorry. Keep going. Keep going. No,
Michelle Kvello (14:09):
No, just for completeness, because I just realized I said three of them around the mental preparation of the founder for the process. But yeah, what your point just touched on was really that kind of point to which is getting the business operationally ready.
Danielle Lewis (14:27):
Are there any kind of common errors that you see? So if we're prepping for an exit, if someone's doing a bit of a look back post-mortem on the way they've run things, are there any common mistakes that you see founders make that kind of have to be cleaned up as you're preparing for an investment or sale?
Michelle Kvello (14:49):
I'd say the biggest one is it being very founder reliant. And as a startup there's often not very much documentation of processes of how things get done because well, that's
Danielle Lewis (15:04):
No fun. That's why
Michelle Kvello (15:06):
You can't wing it if it's all written down. No,
Danielle Lewis (15:08):
Exactly. If I have to follow steps,
Michelle Kvello (15:11):
I should mention I'm the world's worst culprit of that. We spend so much time advising other businesses on how to do it, but it's kind of hard to do it to your own business sometimes. And so that's why again, even if you know the stuff, it's to have someone helping you through that process because it is tricky. So yeah, being very found reliant is a big one. Not having that health and hygiene kind of documentation tied up is also one that take some work. Often you've got files in emails, you've got contracts that were signed, but actually when you look at them, you've only got the signature from one party or the other party. It was never actually countersigned by, even if it's kind of by yourself for example, or we scanned this document, but actually it's only the odd numbers scanned when we actually looked back at it.
(16:04):
All of those kinds of things, which are silly and irritating points, but it's actually really important to get prepared. And then from an operational perspective, and this does differ slightly with different businesses, but I think what's really important is if you are getting a business ready for sale, you really need to think about it with acquirer's eyes, but what are they buying? Who are the key people within the business? How do you make it as unreliant on key people as possible or key suppliers or key clients because those are the things that can destabilize a business when it gets acquired by another party.
Danielle Lewis (16:51):
Yeah, that's really interesting. I've always had the contracts and the processes and things in my head, but it's a really interesting point about the team. You are, especially in the early days, the founder is be all and end all. And even as you are bringing new recruits into the team, it does take a while for it to get to the point where it runs without the founder.
Michelle Kvello (17:18):
Yeah, yeah, totally. And we're talking about a process here for sale, but that's also a really important process to go through if you want to scale your business because it cannot scale if you as the founder are in charge of all the decisions, you have to put this new framework in place. Even if you don't want to sell the business, you need to do it to scale. You need to do it if you want to go and just take a holiday for a decent amount of time. The amount of founders that we talk to by the time we talk to them, they're just so spent because every waking moment spent thinking about this business, which is really important in the early days, and nothing can replace that. You can't take the approach I'm talking about from day one, otherwise you don't have a business. You need that passion and that fire and that adrenaline and that horribly overused word hustle at the beginning. You can't keep doing that forever. And that's really, really important that knowledge as a founder, because if you break your business will break.
Danielle Lewis (18:26):
I think that's a really nice distinction as well because I know we're all a little adverse to saying the word hustle now, but I think you have to in the beginning especially I think it is so important to no one in the life of your business will ever be as excited as you about your business. So if you can't hustle and make it happen, then nobody else is going to. But I think that's where we've kind of said no to hustle, but I think it's actually kind of how you framed it is it's actually the change is when you need to scale. If you need to have a holiday, if you want the business to grow in a more exponential fashion, not just incrementally, you do need to have it run without you.
Michelle Kvello (19:13):
Yeah, and I'll also add to that though, even if you don't want your business to scale, if you want to run, there's nothing wrong with having a small business for the rest of your life that doesn't do the, we also get very tied up, I think, and social media is awful for this kind of going, yay, my business did this and we did that. Or if that's not what you want for your business, totally fine, but you also need to put these structures in place because you can't keep going as a one man band forever. You need to take those breaks and you need to replenish your energy and you need to be able to keep going for that period of time. So I think it's, it's a really important thing to do for yourself and for your business in a number of different scenarios.
Danielle Lewis (20:05):
I love that. I just wrote down holiday on my post-it notes,
Michelle Kvello (20:09):
Note to self, note
Danielle Lewis (20:11):
To self, get yourself out of your business. I love it. So let's switch gears for a little bit. Obviously we've spoken a lot about how important CFO advisory services are to a startup or scale up, but let's talk about you as a business owner. So did you have a career before you started this business?
Michelle Kvello (20:37):
Yeah, so I worked in corporates for, gosh, 15 years before I started my business. So I worked in an area of finance called commercial, and that's where the business partnering happens. I wasn't so much on the transactional side financial control or certainly not a tax accountant. My role within businesses was working with the business to achieve their outcomes, whether that was budgets, forecast, business cases for new investments or ventures. And I also did, now I help businesses sell. When I was on the inside, I was part of the process, which was buying businesses into a larger business, which is why I've seen things from both sides. But honestly, I had got to the point where I was toast. I was absolutely toast with in corporate. I was working 50, 60 hours a week as standard.
(21:39):
I was shockingly poor at putting boundaries around what was being asked of me and recovering people pleaser. So I was always sounds like a female thing. But yeah, I exited, gosh, I kind of fell in a heap on the pavement pretty much from my last corporate job have I knew I wanted to run my own business. I knew I wanted to be self-employed. That had always been something that was at the back of my head for a really long time, but I didn't actually know what that could be at that point really it was an idea, but I am not sure I actually really believed it when I left my last corporate job that this could actually be a thing that small business owners startup scale-ups would need. They just see, I want a tax accountant or I want someone to actually do my books. Would they actually get what this other thing I was offering was? But in the end, I really didn't have a choice. I couldn't stay in corporate anymore. It was not the right place for me. And I could see senior, this was pre-kids, I have two kids now, seven and nine, and I've been running the business for coming up to 12 years now.
(22:58):
And I could see the senior women, whether they were not in finance or whether they were in finance ahead of me and going, I don't want that. I really don't want that. And so I left corporate with no real plan or idea what I was going to do and kind of built the plane as I was starting to fly it really recommend. And I actually spent a portion of my time now helping people transition out corporate careers into consulting because I think particularly now 12 years ago it was sort of the case, but I think now people's perception of what job security is has really changed. And for some people it's absolutely the right choice to be working in a corporate life, but I think we need to be realistic about what job security is within that corporate framework. I mean, there's obviously so much news at the moment in terms of layoffs across a number of different industries. I think we've still got a little way to go on that.
(24:15):
There is something very freeing and rewarding about having autonomy over your own career and over your own choices in terms of work and life. I've actually just got back from three weeks in Singapore, which was a blend of work and life school holidays, but I was also working there and kind of catching up with family and that's something that I just never would've been able to do within career. And we talk about a lot about work-life balances. If it's two very separate blocks that one sits over here and one sits over here. But being able to blend those two things in a way that makes sense for you personally I think is something that what makes it a lot of sense for me. But I think more and more people are more open to the idea that is a possibility and that is a thing
Danielle Lewis (25:14):
And I love it. So I mean, I will be the first to say that running your own business you will never work more hours and harder in your life. But I love the fact that if I wake up in the morning and I'm a bit tired, if I don't have any meetings, I don't have to drag myself out of bed to be in the bumming chair at 8:00 AM to impress everybody, or if I don't have any meetings, there is no way I'm getting out of my pajamas and I love that I can go out for lunch, but then if I want to catch up on work in front of the TV at nighttime, I think the word balance for me is right. It's not the separation, everything blends, but it is the balance of I know I've worked and got the results that I wanted for the day. I can actually take a bit of time for me or the family or whatever it might be.
Michelle Kvello (26:13):
Yeah, and it's kind of interesting because when I first did this, I did it for me. I did it because I wanted to create this particular way of working for myself and for about the first half of the business looks very, very different now than it did when I started. And I think that's also really important to talk about because businesses evolve,
(26:37):
They don't stay the same. So now we've got a team of 10, we work with clients nationally and internationally and we're about 80% female staffed. And those women that work within the business, they are now able to work in a way that suits them. They were doing those crazy hours in really successful but not fulfilled and it not ticking all of the life boxes that it needed to. And so everybody business works flexibly both in terms of time and location. And there's one of the things I think I'm proudest of in terms of the business that I've built is this place where the women that work with me are incredible. These incredibly intelligent, ambitious, capable women are found somewhere that works for them that they can do the work that they love doing, but not at the cost of their sanity or personal life or family life, which is fabulous.
Danielle Lewis (27:44):
That's awesome. And I love it because we went completely remote about two years ago, so I did the big fancy office and all of the team and all of the stress that goes along with that and have now vowed and declared that the whole business has to run remotely and flexibly and so totally change things up, but how do you find managing people like that? What's any learning curves you might've experienced over the last decade of hiring, managing a remote flexible team?
Michelle Kvello (28:19):
So my approach to recruitment is kind of what I call always on. So even if I don't have a specific role that I'm recruiting for, I'm always interested in talking to someone that may be interested in working for me. And sometimes I'm having those conversations for a year before an opportunity comes up and the timing's right for both of us to start working together. We've recently started as the team's got bigger, we've recently started doing quarterly offsites for all the team to get together and that's really, really nice. I take that most of the team are based in Sydney and I'm based in Sydney, but we do now have people on the ground in Brisbane and in Melbourne and on their years anniversary we go out for lunch. It's kind of just as a happy work birthday celebration. We're on Slack and I have weekly one-on-ones with all the members of my team. So I think it just takes investment.
(29:34):
It's almost easier I think if you are completely remote or you are completely on site. I think where a lot of businesses had more challenges is in that hybrid environment. One tip that I love from a client I worked with way pre Covid actually, but so they were using Zoom before, was it Zoom or Google? Hang on. I can't remember one of the two. And so you had some people based in the head office, but then you had people based all over the country. And I always used to find it really strange that when we jumped on those video calls with the team, even the people in the office would disappear off to other spots within the office and wouldn't all congregate together to have the call that to dial other people in. And it always felt really weird to me until post covid when so many people were trying to manage that and you cannot have a cohesive meeting if you have some people on a boardroom table very sitting at the end. You can't really see the expressions on their faces versus everybody being on the screen and you can see everyone and you can talk to everyone. And I was just like, oh, damn it. That was such a good idea and you guys were doing this way before everybody else was trying to wrap their head around it. It's
Danielle Lewis (30:54):
So true. In the early days of Scrunch, we had a couple of engineers based in the US and when we would have our team meetings, the whole team would get in the room and then we'd have the guys up on the video screen. But some meetings by the end of the meeting they're like, oh shit, we had someone on the call. They've not said two words, no one's asked them anything, and we've kind of forgotten that there's a virtual element to this meeting. So that is a clever idea, even if you are all in the one place.
Michelle Kvello (31:24):
Yeah, and I do it now with one of the boards that I sit on. Again, probably about half the board is based in Sydney and various locations, but the rest are based in different states, kind of Tasmania, Victoria, and post Covid. We decided to keep the purely online board meetings because it was too hard otherwise.
Danielle Lewis (31:48):
Yeah. Yeah.
Michelle Kvello (31:50):
I properly get the conversation and engagement for exactly the reasons that you were talking about.
Danielle Lewis (31:55):
I love it. Okay, we could talk all day, however, I better wrap things up. So I would love to hear after 12 plus years in business, if you were talking to a woman in business today who was just starting out in her journey, any words of wisdom that have helped you along the way?
Michelle Kvello (32:22):
The biggest one for me has always been find your support network for being a business owner. I think gross generalization, but women are good at building community. I think that most women would say, no, no, I've got a solid support network. But the support network you need when you are building a business, particularly if you're building it for the first time, is of other business owners. It's the perspectives that you'll get from that kind of support group will be different from your friendship group, from your family, from your work colleagues, whatever that support group is. I think it's really important to find a community of business owners that are at the same stage as you, or even ideally a couple of steps ahead of you. So many learnings, so many, and I have this phrase that I probably overuse, which is don't ask the advice of someone who hasn't been where you want to go.
Danielle Lewis (33:31):
Oh my God, that is the best piece of advice ever
Michelle Kvello (33:34):
And ever. Honestly as well, the amount I use it, it might as well my ball because it was one that I heard actually from a client at the time and I was like, damn, that is the best advice because not all advice is created equal. You asked the advice of a friend that's been working in corporate for the last 20 years and this isn't what they want to do. They're going to have a viewpoint on it that isn't actually helpful to you. So finding that right support network would be my best piece of advice I think.
Danielle Lewis (34:13):
I love it. You just made me think if you were going to run a marathon, there is a certain type of person you would go and ask advice for someone that had run a marathon before. So it's so hilarious that in business we go and ask people who have no care to be in a business or have never run a business before or aren't at the stage of business we want to be at. I think maybe sometimes it's a bit safer. We won't get the answer that we want, but I love that finding your support network and making sure that you're leaning on experts who've done what you are trying to do.
Michelle Kvello (34:48):
Yeah, invaluable,
Danielle Lewis (34:50):
Incredible. Michelle, thank you so much for sharing your time and wisdom with the Spark community. You are incredible and so appreciative to have you on here.
Michelle Kvello (35:00):
Oh, thank you. It's been lovely chatting. I could go on for hours.
Danielle Lewis (35:05):
We'll do it. Part two,
Michelle Kvello (35:07):
Exactly.
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