Embarc Advisors provides strategic finance and advisory services designed to help business owners improve financial visibility, prepare for growth, address operational challenges, and position their companies for future transactions. Its Strategic Finance practice works with clients on forecasting, financial analysis, performance management, and fractional CFO support. Pulse 2.0 interviewed Embarc Advisors Senior Director and Head of Strategic Finance Lance Geda to learn more about his background, how fractional CFO services work, and why growing companies often need more than traditional bookkeeping and tax support.
Lance Geda’s Background
When asked about his background, Geda shared:
My education is in finance, with a bachelor’s degree from Michigan State and an MBA from Villanova.
My career spans a range of executive finance positions, from Chief Financial Officer to VP and Director of Financial Planning & Analysis, for media conglomerates and life sciences companies at both the public and private company level.
I joined Embarc Advisors nearly four years ago to lead a newly launched service line focused on Strategic Finance.
In Embarc’s early work, they helped founders and business owners sell their companies. Soon they realized that many of these companies were underprepared for what a sophisticated buyer would expect from an accounting and a financial forecasting perspective.
The Strategic Finance arm of Embarc was born, and I am responsible for helping our clients in that space.
How His Experience Shapes Fractional CFO Work
When asked how more than two decades of finance leadership across startups and large conglomerates influences his approach to fractional CFO work, Geda explained:
It really depends.
We have a proven strategic finance process that we use for nearly all of our clients.
It starts with giving owners financial visibility into their businesses.
Many times, small business owners measure how well they are doing based on what their business cash balance does.
We give a view into what their business is doing across their lines of revenue, what their cost of goods sold or cost of sales is, what their gross margins by product look like, and how much they are spending on selling, general, and administrative expenses, or SG&A.
But that’s just the start.
We then show them how they can use that information to anticipate what the next 30, 90, and 365 days look like, where they potentially have issues, and how they can solve those issues.
And then, we help get buy-in from their executive teams and make sure what each says they will do actually gets done.
Ultimately, we are building the foundation and structure required for them to take the next step, whether that is growing organically, acquiring other businesses, or selling their business.
Do Most Clients Plan To Sell?
When asked whether most of Embarc’s clients are preparing to sell their businesses, Geda said:
Not necessarily.
Some clients find themselves in a situation where they are not growing or they are seeing their margins decline and they don’t know what to do next.
We help turn their financial performance into a story that helps to show them where the issues lie, then we help them figure out how to address those issues going forward so they can grow.
For example, a client might be losing customers faster than they should.
When we look at their cost of sales, their margins are well above the industry average, which sounds like good news.
But when we dig in, we find their teams don’t have the capacity to properly service the clients they have.
The healthy margins are coming from underservicing, and that’s why clients leave.
In that case, our recommendation could be to hire additional folks to service accounts, and find ways to streamline processes and procedures to make servicing easier.
In another case, we could find that they have been using the same PEO for the past five years and now they have grown sufficiently and the rate structure for those services no longer makes sense.
We might realize they can save substantial amounts of money by renegotiating their rates or changing to a PEO that specializes in companies their size.
Or it could be that certain lines of business have had material costs that have increased substantially and they need to pass on some of those costs to their customers.
Our approach is to meet each client where they currently are and help them get to that next level.
Geda also highlighted how strategic finance discipline can affect a future sale:
We recently had a fireside chat with a client whose business we had helped sell.
We asked them what they would have done differently, if anything, with the transaction.
What they stated was that the new owners set very concrete goals for revenue, gross margin, and EBITDA, and needed them to hit those goals, which they did.
Their regret was that they hadn’t done those things that they now knew had been possible before they sold.
Finding $50,000 in additional EBITDA before you sell typically means six to 10 times that amount when you sell.
We help them develop that rigor before they are even considering selling.
Common Financial Blind Spots
When asked about the most common financial blind spots growing companies overlook before bringing in strategic finance support, Geda said:
The most common thing I hear is, “We have a finance function; our bookkeeper is great.” Or, “We have a finance function; our CPA does a great job with our taxes.”
This isn’t finance!
While these functions are vitally important, the bookkeeper and the CPA are not going to be the business partner that will take your company to the next level.
You need someone who is not only keeping score but also helping you figure out what comes next.
What A Fractional CFO Does
When asked how he would define the role of a fractional CFO for founders unfamiliar with the model, Geda explained:
A lot of small- to mid-sized companies cannot afford a full-time, experienced CFO.
Also, many small- to mid-sized businesses are just not complex enough to warrant that type of full-time resource.
All companies can use help interpreting where they have been and what it means going forward.
All companies can use an experienced CFO to help them look at strategic problems through a finance lens.
Fractional CFOs make access to an experienced CFO or finance leader affordable.
A Fractional CFO Engagement In Practice
When asked to describe a situation where bringing in a fractional CFO made a measurable difference, Geda shared:
Sure. We had a client that had just lost their CFO.
They were cash-strapped and needed someone with deep experience handling cash flow week to week.
I had worked for a cash-strapped company and was very familiar with what was needed to handle that type of situation.
Within a week, we were up to speed and managing their A/R and A/P and had a good understanding of what their cash inflows and outflows looked like.
They had been mandated to not ask their corporate owners for additional cash for the rest of the year and we helped them live up to that mandate.
It gave the management team a level of credibility and freed them up to concentrate on the areas that would get them out of that tenuous cash position.
Sometimes the biggest asset we bring to the table is the ability to take over finance functions with very little explanation or oversight so that the rest of the management team can focus on what they are good at.
Advisory Firm Versus Freelance Fractional CFO
When asked what separates a fractional CFO working through an advisory firm such as Embarc from a freelance fractional CFO, Geda explained:
At Embarc, you are not hiring an individual.
You are hiring a team of individuals who all bring different expertise to the table.
I may not be well-versed in inventory management at a manufacturing firm, but my colleague is, and I can bring her in so the client gets the right expertise.
Also, we staff all engagements with a director and an associate, so each part of the engagement is handled by the person best suited to it.
Would you rather have someone 20 years out of college, who has spent their career leading teams and driving strategy, build your financial model in Excel? Or someone five years out of college who learned modeling at a public company or PE firm and has been doing it every day since?
With Embarc, you don’t have to choose.
The director leads the strategy, and the associate builds the model.
