Fractional CFO for affiliates with Rowan Ellis

when you the founder or the person running the business you need a challenge you need someone to be challenging you not challenging how you're doing things but almost challenging your business model as well which is quite strategic from a fractional CFO perspective that's one of the things you deliver you can look at us I can look at a set of numbers and see something quite different to you I'll immediately focus in on the different types of revenue streams the gross margins on each stream I'll look

at things from a trend perspective whether things are profitable or not it's amazing and not really in the affiliate space but in how many Industries where businesses are big they're actually running a stream of business that's loss making so big run so quickly one of the if you narrowed out and called out a p&l for that particular vertical of their business it's loss making and if you don't set your numbers out up to see that you'll carry on doing it and putting money in the wrong

place I'm John Wright and you're listening to affiliate bi the business intelligence and affiliate marketing podcast brought to you by [Music] [Music] sta welcome to the affiliate bi podcast today we're chatting with Rowan Ellis who is the co-founder of xaru and it does fractional CFO focused on business transformation through m&a back office transformation risk management and I think Rowan can share a couple more things he does as well Rowan welcome to the show thanks so much John good to see you always great chat chatting with

you we' had quite a few chats over the last few months I feel like I'm being drived over to your side of the business where as a startup who's got investors they're like we want clean books clean everything and so I think that's how we started the chatting it is yeah it is John hard do you want me to just give you a little bit of or give a bit of background on on us and Exar and yeah what we do please share that no problem

so we are a really small con consultancy we set up a few years ago we saw a gap in the market whereby you have small startups probably businesses that don't have the biggest cash flows and they're looking to put processes in place raise money do the right thing but they can't afford big consultancies and big consultancy costs so we looked at really what the problem statement was and we found that it was resource it was process and to to a certain extent it was it was

timing and cost and we looked at that problem statement put it all together and popped up popped out a consultancy that offers a number of those services in various models and then just to go a little bit deeper into it like something that I've only experienced in the past one or two years is this concept of fractional CFO and I was like oh there's fractional CMOS and it's like this concept of fractional SE to just exploded postco where a lot of people said hey I can

become a consultant and you're actually delivering really good value without having to like you said have to hire a CFO full-time so do you think Affiliates could benefit from just basically saying okay we need to organize our books we can't afford full-time we don't need fulltime what does that look like absolutely I think we you you you're right it's it's it's it's a reasonably new term some geographies have been doing it for longer than others and I think you just need to get your head around

it a bit that it's definitely beneficial both for for the person delivering the service the CFO potentially and the client now when CFOs are expensive they hit cash so if you've got a stter you want to do the right thing but you're also really conscious on your free cash your cash flow and keeping your business going and that coughless processes always get ignored right people are chasing the money as you should you want to keep your business going you can't lose sight of what you need

to get in place because if you try and unpick things you've done wrong earlier it's really hard but fractional CFO it's not just come about it's not just a term that that's used for startups or or early early earlier companies with the advancement of Technology as well look I'm not saying technology takes away the need for accountants absolutely not but good accounting systems good Finance systems and things like that now the staff internally educates the staff and gives them the tools to actually do a lot

of the work themselves so technology plus early stage there's absolutely a place for fractional CFOs and I actually think slightly going more pce here but it's actually fractional accounting support without trying to sound like a Salesman but us in xvar we have various levels of fractional support and often you talk about bookkeeping a lot but there's a huge value in a good bookkeeper right bookkeeping with everything but you can get fractional controllers fractional Financial Planning and Analysis people fractional CFOs so often the model that works

best is potentially some companies Outsource their bookkeeping to a service provider not saying that is the best but often do that and then they get a fractional CFO to help them with the real strategic work setting up legal entities in the right place thinking about m&a transactions putting in a new accounting system and you definitely don't want to pay those guys loads and loads of money when you only need them for one day a week or maybe a day a week and a week a month

around your close period or annually when you do your statutary accounts but what you cannot ignore is the need for accounting processes it is there and it's there to stay got to get it right and I'm trying to make a comparison we're in the SEO space for people that do search engine optimization Consulting I'm wondering if this is the same thing because by you offering fractional services or fractional accounting my assumption right now is that you get to work with a lot of different companies you

get to see the good the bad the ugly and I'm assuming that the more clients you work with you're also you're gaining more skills and experience so would you say that's probably a slight advantage of going I can't have the fulltime over here because we don't have the budget for it the more experience you gain it's it's the same thing for the SEO consultant that has years of experience and they're like look I've seen and done everything everything everything absolutely and you also it gives you

an opportunity to grow with the company and actually grow that relationship which helps because often what works with fractional CFO type work is you go in there they're different things there's businesses usual support and then there's projects like Acquisitions like fundraising like things like that where they actually are quite focused you need a person in there to do that thing for you and then they move on but with what I found is so I work in the gaming space and others but we talk gaming for

a bit you've got operators you've got Affiliates you've got media you Publishers whatever else different terminology but definitely you see good The Good the Bad and the Ugly and you definitely see best practice and every now and again you got to move your accounting hat to the side and put a little bit of Industry n on there and maybe a little bit of commerciality on there and then look at what the best is for the organizations but just in the affiliate space different Affiliates do different

things well and different things badly very seldom you get someone doing it doing doing everything right problem is that again it's that it's a chicken and EG egg situation you start a business you've got a concept that starts doing quite well you focus on the business your client relationships suppliers etc etc and suddenly one day when you're big you go we should have done the accounting and you got to think and then you need to go I can unpick that so I think that most Affiliates

most startups in any industry can get their fractional Finance support in at quite a low cost get a relationship going with that consultant so to speak and if you need more of their time or their business's time you can organize it right but they learn your business they learn your industry they learn your people I personally personally my best for me would be to have five clients that come back over and over again maybe 10 at a push but no more than that right from a

fractional perspective and some need more of my time some need less and like I've behind me I've got a whole bunch of books that I'm always reading and one book that comes to mind is called the slight Edge I forget who the author is but the concept is that you're compounding wins over time they don't have to be big wins but you're moving the needle every day and I'm wondering if if media Affiliates don't do enough the accounting work as a small startup but I'm wondering

if that would move the needle for them if they actually had an eye like an eye on the pulse of their business because I think when you don't have a QuickBooks or a zero setup or any setup really I'm just wondering imagine being an investor and I think you've been on this side where you've got m&a transactions over here the bigger company wants to acquire the smaller company the bigger company has really solid books all the time and they're looking for Best Practices yeah no you're

right and and and when you the founder or the person running the business you need a challenge you need someone to be challenging you not challenging how you're doing things but almost challenging your business model as well which is quite strategic from a fractional CFO perspective that's one of the things you deliver you can look at a I can look at a set of numbers and see something quite different to you John I'll immediately focus in on the different types of revenue streams the gross margins

on each stream I'll look at things from a trend perspective where things are profitable or not it's amazing and not really in the affiliate space but in how many Industries where businesses are big they actually running a stream of business that's loss making so big run so quickly one of the if you narrowed out and carved out a p&l for that particular vertical of their business it's loss making and if you don't set your numbers out up to see that you'll carry on doing it and

putting money in the wrong place I I actually wonder I I don't know if I can find the data but I did a quick survey on LinkedIn to ask Affiliates or just people in general it's like what accounting systems are you using is it QuickBooks is it zero is it something else or nothing at all and the answers are all pretty much evenly spit split like 20 to 30% each so it makes me wonder like I'm going to make an assumption that most Affiliates that are

making let's say under 10 grand a month don't really do proper accounting they basically just ship off everything to their accountant unless they love doing accounting and do it M themselves but I'm assuming it's just basically here's the mess and I to be honest I've done that for a long time I just said here's all my stuff I don't care what this looks like I just want it done absolutely that happens we all do it accountants do it with their own Affairs right I'm not squeaky

ke either I think so so so looking at it holistically I was about to go and start some great business that was that was going to take off and flly the first thing I'll do is mat of a matchers i' Implement zero after you open a bank account you get zero you join them and you at least start getting a recording of your transactions once you've got all of that done you've at least got something to look at on a regular basis on a monthly basis

you've got your bank statements that are itemized your items that are um aligned to the right things they're feeding into the right jail code just getting that in it doesn't cost a lot that is something that doesn't cost a lot you can get that done quite quickly and if you got the right kind of people in your organization you know they can actually run run zero pretty easily and they might need a bit of accounting help for certain aspects of it but you can do that

and just getting that in place just gives you control immediately you got to do it right but you will have an elemented control immediately zero tells you when you've got vet returns and tax and you've got to submit accounts and all of that but you just need to get something in place spreadsheets are not the answer okay so very quick question QuickBooks zero or fresh books which one would you not recommend or is zero at the top of your your your list so atex we use

zero a lot we we work with others we get slightly bigger companies like Oracle netsuite which is great we use zero a lot we use Dynamics Microsoft so we use Microsoft products and I think John without getting too technical I think all of them they're competitors of each other so they all do very similar things I think the key to any Erp or general ledger implementation is getting that chart of accounts right because if I said to you how do you run your business job you

would say I like to see this this and this you need to make sure that you set your chart of accounts up right then when you start producing your reports automated reports you can see exactly what you need to see I wouldn't say one's better than the other I mean I'm better at zero and I can do I can put it in more quickly so that would be my default we've got I'm working with a client that that's been going for a while and it's making

millions and got nothing so we what we doing there is they they've got a number of legal entities dotted all over the globe some have got something others have got nothing but what we're having to do using zero and various other systems is do a consolidation on top of those systems well I think they all decent To Be Honest John just get something in cool I'll stick with QuickBooks then I'm glad I don't I don't have to move no so you talked about a couple things

earlier and I just wanted to know what do Affiliates need to do for good bookkeeping because we talked about p&l balance sheets and documenting their assets and work in that situation now where we technically have p&l but we have companies saying hey we'd like cleaner p&l reports we're working on that and then when it comes to balance sheets and assets this is where I'm like what does this look like and when should affiliates start zeroing in on this yeah really good question so if you were

doing things the ideal state which is not hard to get to is that you have a financial model right your financial model sounds complicated is your financial statements that you will need you've got a p&l you've got a balance sheet and you've got a cash flow which and they're all integrated right now balance sheet is a different stories you'll have an annual audit and Auditors will come in and they'll they'll either prepare prepare your balance sheet or audit your balance sheet or different parties will do

different things I think you get your pnl right and then as a tech company you cons continually investing in Tech your you're you've got intangibles and you've B tangibles but your balance sheets obviously a large chunk of your balance sheet sheet sheet is going to be the value of your technology the thing that makes you a business and to get that you've obviously got to do valuation but the thing that you've got to understand and this is where we go and go we haven't done it

wrong but you haven't done it exactly to benefit yourself the thing I think from a balance sheet perspective in a tech company is what to capitalize and what not to so you spend some cash on a piece of tech do you just expense it or do you say hey it's actually adding to the value of the asset so we're going to capitalize this amount and that the asset value is is is going to increase so that's really important and it's worth getting some advice on that

really important and then Affiliates that are are seen it happen time and time again there was a little bit of a affiliate acquisition spree a a few years ago with the US opening up so big Affiliates were buying smaller smaller Affiliates and bloggers and things like that and they're paying the low big sums of money for them and when you buy a business you got to do your purchase price accounting you're basically doing a valuation of that business and then when you own the business and

it's not performing as well as it should be performing you get a thing called an impairment which I'm sure you've heard about but that's when you write down the value of the asset and the the double entry it hits the p&l and investors hate that because that's a surprise so you need to inake particularly affiliate websites apps things like that you need to really look at the performance of those assets from an impairment perspective because it is not pretty when you get hit with one also

it's not good to fight against impairment if it should be impaired because then you just get yourself tied in a not as well sounds like a lot of fun but that is something yeah it's bit of a nightmare yeah oh one other thing John I don't know if it fits in now but I think it can I'd love to hear other people's views but from my perspective so I've done interim and fractional CFO rols of big affiliat so being there and done there it's hard work

but when we looked at Finance technology and looked at which was the best Erp and every vendor was telling us that their product would fit perfectly and whatever the biggest issue we ever had was the billing so a lot of er providers tell you that the E will deal with your billing but it actually won't often you've got these billing engines that sit outside inside the Erp and they've got to integrate with the Erp and if you don't get your billing right then it's just manually

intensive you've just got to get people all over that um so when you choose an Erp just think about your building Cycles yeah it's a little ironic there it sounds like uh the billing and the accounting side of affiliate marketing is actually becoming a paino as you work with 10 affiliate programs that's in theory easy but once you're getting let's say 50 different payments coming in per month then they're all varying amounts and they don't pay on time and then there's fees that are taken and

they're not even documented and then they come from observe companies like World pay which is just a payment Gateway we're talking to a lot of Affiliates and going how do we try to solve this so we make their lives easier I think there are solutions but I don't think there's stuff out of the box and there's no also the your payment providers and bench are extremely important in this business if you don't have good relationships with them you really struggle well pay I to work for

work for worldpay but that's obviously massive was FIS not worldpay again but even you just in the gaming space you almost payment providers and and affiliate in gaming they just go together and I don't think that there's a perfect solution out there just yet but there's some that are more Optimum than others absolutely right payments are payments are I've seen affilates seen affilates where fet business has got also for paying out they've got hundreds of credit cards in the business and they do KS on credit

cards exactly there's all kinds of things where people are chasing the revenue and they'll do anything put any bad process in place just to make it happen it sounds like we need to build some sort of auditing software it's plug and play your system and let's see how good or bad you are and give your give yourself a score because when you say those things about like people having mess credit cards I know the last couple years we cleaned up our credit card so it's like

company credit card things are more aligned and we're already thinking two steps ahead about going what are the advantages of having multiple cards if we segment data where we can say all payments that go through here are X all revenue that comes through this account is something else perfect it line up perfectly and when you do it though you have to think we've got to think big right you say there's a solution that works for us today work for us in five years time if we

hit our growth targets and I think a lot of people get it wrong then as well you do you put in a real tatical solution which is just not scalable right so hansard's great isn't it but they these problems for business owners all right so another challenging uh question that's on the same theme uh kind of like valuations is what are the ways you can get evaluation of your company I think you said one where it's let's go through your balance sheet and kind of document

your intellectual property and I think on the other side of it is the company wants to buy you should you maybe maybe this is not ethical but you could actually fish and go what would someone pay and basically John okay particularly in this industry I've I've I've seen different deals that just contradict each other like I've moved away from saying let's do a discounted cash flow for cost let's do this let's do that I think you can do all of those things and the numbers can

tell you what you want to hear but benchmarking this industry is so volatile and there's so many Peaks and troughs and it's so season season season and States open up and people get excited and blah blah blah that there's really a lot of inflated valuations that you see out there and and big companies paying that kind of money don't really care so it's a hard one but I think everyone's always going to look at eadar and a multiple of eadar saying that I've just done two

Acquisitions for loss making companies so evll was nothing right I still went for some decent money but I think bench walking bench walking is a good one go and find a computer out there who's just been solved see what it is work it out I think that's one I think getting an evaluation done of your Tech stack at a point in time is probably a good idea I think that companies will also look at uh synergies if you think about it you sorry let me just

go back a bit but again gain right place at the right time I'm sitting in a house in a really small village of 350 people it's a massive house and I think it's worth a million say but the chances of me getting a million are tiny unless there a person with a huge family who actually wants a big house in a small village but if that person drives in tomorrow it'll be solved next week and it's like that as well as you say so yeah so

my my I don't have one approach to this someone will say to me how much do you think I can get for this and there'll be a number of things that cross my mind and a lot of them aren't formal I do always like to for my own purposes do a discounted cash flow forecast where you look at the projections but that is just based on what the seller tells me exactly but would you say it's interesting I know in my situation where we've talked to

companies and they're like our like from our personal situation we're approaching profitability but we've had one person wanted to talk m&a and they said but you're profitable yet and we said no but that was important to them but we're like look if you care about that like you just told me that you about two deals that are companies that weren't profitable but it's they had something else intangible and we think we're the same so do you think that there's just people out there that have like

maybe an old school mentality of going there's nothing wrong with saying hey I I only want cash flow positive businesses there's people ask their thesis but I'm wanting missing out on opportunity definitely I'm I think I think it's all about I think to a large extent it's also about financial resources available to the buyer buyer because you know massive companies in putting some bridging Finance can buy business that's going to be lost making for five years they want the tech they don't really care but if

generally generally speaking if an acquirer doesn't actually want to they don't have the the cash if the company needs funding over a period of time and they don't have the resources to fund that company month after month then what they're going to have to do is they're going to have to borrow some cash they're going to go and get a facility or do whatever and when you start putting that back into the p&l they want to make sure that they understand exactly understand exactly when the

company they want to acquire is going to start generating free cash flow otherwise it impacts their funding so I think to a large extent there is a bit of that and even if they are interested in non-profitable company they'll definitely want to know when it becomes profitable and how accurate your projections are and if you've got 24 months of loss but the loss keeps getting smaller and it's going in the right direction that's quite powerful as well true yeah okay then maybe another question I have

has to do with boring money so we're talking about m&a and then there's what is a startup or an affiliate can they do they can raise money for investment but I think there's a lot of people that don't really talk about a part of the business which is Raising debt to go when can you take out a loan to accelerate your business when we look at the big players better Collective and gambling.com in in the news like in the press release that they've taken out loans

because they don't really need to sell more debt they've already got do you need to be in that cash flow position to be able to consider debt or is it more of a situation where you'll just be able to pay off the debt so it's more strategic to say I'm going to keep the equity and I'm just going to say look I'll pay the interest when it when time is due yeah yeah depending on who you talk to you'll get a different answer so my opinion

but if you believe in your company which I hope most people do tugs at the heartstrings to give away Equity right because you've been there you've been in the trenches you built this thing up you had sleepless nights you worked with your co-founders and now someone and someone comes in and says I'll give you 5 million for 20% of your company it's a tough one to swallow but on the flip side that is a bit of a nightmare as well because a lot of these particularly

in the space you you've got quite a few spoke there's a risk appetite associated with the affiliate marketing space in gaming and gaming in general so generally the bog standard debt providers are going to be quite different they won't be bog standard they're going to be providers that have got a different kind of risk appetite and having a diff different kind of risk appetite means that the terms and conditions are going to be quite tough so what they'll do is they'll put in some warrants and

but says if you default we take some of your company anyway so things like that and and then a lot of providers have quite tough covenants dist ratios that you have to hit otherwise you're in trouble and then there's obviously there are payments that are quite tough you have a bad month you've got to have money in the bank to actually pay them but I'm just thinking back to to some de providers A lot of them you can go and take a loan which is debt

and then you can take out a facility which you only use if you need it which is quite a nice thing to have a lot of companies raise funds or go to dat when they want to acquire they want to do a whole lot of Acquisitions but they don't have the money so then they go in and they they go for debt and then that the penants are just tough and you get this money and I've seen cases where they've got access to massive facility and

then you read the small print and it says the facility is yours but you can't use it for m&a so like there You' just got to be really careful with de and you've just got to model those model the debt quite well so you understand exactly where you're going to be I no I get that it's yeah just thinking about it from like the m&a point of view it's interesting but pivoting slightly different in the SAS space there's actually a bunch of lending agencies that have

come about and they're interesting programs so what they do is they basically their SAS product that you plug in your stripe data your QuickBooks your bank and then they basically say here's your entire dashboards here's your um here's where you're losing customers here's your projected revenue and then what they'll do is they'll be basically go we'll lend you money based on your actual data so we're seeing more this more in the SAS space and this product was created because SAS companies were like look we're SAS

and we know we're growing in the right direction and Banks don't really understand SAS because Banks yeah they're not really encountering SAS so I'm just wondering maybe there's a future product at the market we could be a part of that could be how much time have we got John I want to take all your time we got to get half hour max okay this is interesting no it's really interesting you say that because I've just done a a SAS exit got nothing to do with gaming

got to do with erps but as you say people don't really understand s cuz you m great so you've got the hockey stick approach right where it goes down and if you do you run your business then you get the right results but so much about so well the exited I guess all of them SAS multiples are massive if you compare sass multiple to General bog standard business and Affiliates some something else they are quadruple and I guess that's because so much emphasis is being placed

on that recurring Revenue piece right and customer churn so if your customers aren churning and you're growing at a decent Spa uh pace and you're keeping that recurring Revenue then Life's good then there's a huge amount of confidence in your business so you're right so if banks and lenders are able to be plug into their data data right you're lat guy as powerful it's similar to revenue share like recurring Revenue we've got recurring Revenue share it's almost identical models with it goes back to what you

said earlier there is risk like there's SEO risk there's operators going out of business so you do have churn in affiliate space it just looks a little different yeah no absolutely but there's definitely something there I think fundraising is to debt is a difficult process at the moment to mention interest rates but just the whole debt process is quite tough for for for a business would you think that is like the Last Frontier that people seem to understand the least cuz I'll be honest like here's

my business Journey it's build affiliate sites create a startup and then raise Capital so we're selling equity and now we have this opportunity for debt and it's like at the more I start reading about debt the more I hear that not everyone uses it to their advantage and there's a lot of clever strategies you can use to your advantage like you said go back gambling.com better Collective they're they're using these absolutely and I'm not clever enough to advise on that but you there different products out

there as well and you may find a product that is cost effective in seual business perfectly and it might be an RC for some kind of facility that you don't use all the time you can top up you can repay and that's debt that's there it's on the balance sheet I think the thing to look out for is is really tough biggish loans where the warrants are tough the terms and conditions are tough because then your business isn't going as well as you would like it

to you're almost imprisoned and I think that's quite tough often with raising raising Capital through investment and fundraising and investors often the investors invest in your business understand this industry and if they understand the industry they understand the Peaks and troughs so so that they kind of stories easier and it there's less pressure on man not less pressure on management if you've got investors they on the journey with you yeah and and it goes with saying we're assuming that they're the ones that know the space

inside out and they're the ones that are understanding how can they not just add value but what's the word it's like Arbitrage like for example are an affiliate site and then the first thing you do say I've got a bank load of better deals we're going to do like deal Arbitrage right off the bat I've heard this Affiliates action taking six months to recover their value just absolutely insane totally insane absolutely insane and not very fair either either oh the next question I have is more

to do with tips so like I said I'm going down this uh accounting journey of going what can I do to help Affiliates um use any accounting tips that would help them so the two that I'm giving to Affiliates are one's on the payment and tracking side so for example I ask Affiliates all the time going do you use like one iban or do you have multiples and most common answer is they've got one but they do frequently have payments where they're like I have no

idea who this is we spent days trying to consolidate this so I said if you can isolate your problematic payments then you can give them unique iband that's one tip to basically say okay you're funneling your data through sources source of Truth and then the other one is what my accountant did this years ago like we were doing year end and I had this invoice and it was unpaid and he's what are we doing about this and it was a substantial amount well name the program

but they just went out of business invoice is done so he yeah anytime you have these unpaid invoices which hate to say it it's happening a bit more frequently in affiliate marketing like I think depending on your jurisdiction you can claim this back as a loss for your books yeah yeah absolutely no you you you need to turn a bad situation into something good right yeah if you can no look we've discussed quite a few tips I'm not necessarily for Affiliates or accounting tips tips tips

I just being being really well organized I don't just me in the finance space so I've got some clients that is where it is quite strange but I've got some clients as I said that have been operating for a while they're doing quite well and they've got nothing and then I have some new clients with the founders all over it and they asking me what they should do but one but one real thing something that I do really often is when I'm trying to educate someone

about someone about organization I use data room structure to help them get organized because who knows you want to exit one day and the data room structure is there for a reason right that's what investors want to see so I often if I'm starting from scratch we'll say this is what a data room looks like You' got Finance you've got tax you've got commercial you got legal you've got people you got technology any contract documentation invoice set of accounts whatever you've got get it filed in

your data room structure you can call it whatever you want but I use a data room structure because then when numerous reasons you're raising funds you've got the structure you're having an audit you've got the structure you're looking for an exit you've got the structure sometimes acquirers get reverse D reverse due diligence done on them as well you've got the structure if you're an acquirer so my my tip is just they one get that organized when we set up our business we did that we went

we've got nothing we've got no clients but we're going to set it up as if we've got got got loads and we did that so I think that's one I think just putting in a system IM immediately is another one even if you've got two transactions going through your bank account I think that's one and then I think what is really good say if you've got whether it's fractional Finance support or internal Finance support no one knows more about your plans then you the founder the

owner the entrepreneur you've got to educate the finance people about where you want to go with your business and often as a result of that you get a commercial Finance person he CU bog standard accountants right debits and credits we close the books we keep you out of jail we submit your accounts and your tax returns and then we go home and we watch TV or do whatever but constantly to understand more about the business yeah I think it's General best practices just pretend you have

an investor coming along board the cleaner you have the books to right well these guys for card like it's the messy room syndrome it's uh walk into someone's house and you want to see something clean and organized and it shows that there's attention to detail and I'm just starting to learn as my pattern that I think the companies that they have more success they have more organization yeah they're not doing it for it's they're doing it for business reasons some people this might be fun to

them but I think for most people oh I don't want to clean my room absolutely yeah and and and other thing just to remember is that the finance function accountants whether they're internal or external whatever they're a Control Function right they're controlling the business they'll tell you whether you're making a good decision or a bad decision and that's commercial Finance they need to business partner with you to give you that commercial intelligence to help you make the right to set the right decisions so another tip

is for business owners really to treat the finance staff accountants as business partners not just accountants just accountants yeah makes sense and that's how you get the most out of them another unplanned question is I think it's on topic is the concept of boards and advisory boards when you're small affiliate it can be you as a single person it could be two people as a startup you could be five people at some point when would you advise people to start looking at setting up an Advisory

Board I've seen a few Affiliates do this and when I talked to them and said how did that work and the Des said it was a great experience like sometimes s they get someone as an adviser that their expertise is finance sometimes the expertise is uh human resources and it goes on and on yeah look what is an advisor right I've got ex- colleagues friends family members who are skilled in certain things and I ask them for advice and they give me advice and often I

Implement that advice but I think the danger of not having that external influence and Appraisal almost is vast because two business owners two Founders let's say they're two and you go off and you start building your business you get so ingrained and entrenched in in in in the problem or opportunity statement that sometimes there are a lot of things that you miss all around whether it be legal Finance accounting or whatever so I think it's always very good to have advisors maybe they not in the

form of maybe it's one maybe it becomes an Advisory Board always good to have them just as a sounding board now I think when that's early stage but I think then as the business succeeds and grows you need a real board right you need a board and sometimes nonexact directors and boards and that they expect payments sometimes they don't but but I do think then that as you reach that point in your your your maturity board comes with corporate governance and you need that it is

essential and you need the right expertise on that board need a strong chair chairperson but you need Finance person potentially someone who knows the industry etc etc and I think it's a really important I've started as an advisor and then become a board member as the company grows I volunteered as an advisor in the past and then the company successful and then I'm on the board really important John you're actually answered part of my second follow-up question to that which is I think a lot of

people they maybe have a fear that they get the wrong person cuz sometimes you'll get an offer look I want this board position but it comes with equity and they want it locked in immediately when other uh advisers have said this should be vested over time and then it's what should the payment structure be and it could be like you said there's volunteer over here which maybe is possibly rare I don't know there's direct payment and then there is uh payment in the form of equity

and then I think where where we've been concerned is what if we join with someone and then we're like it's not working out and we've been in those situations where after three months we're like we're definitely not the right fit and we need everyone on the same page which is why getting an having an Advisory Board to start is quite good because maybe they there're certain Diamonds In The Advisory board that when you become formal they're there and they're there with you yeah I'm not an

expert on that John in terms of payment structures and things I'm a bit old school really where I think if I put in the time and effort somehow be rewarded I generally work for people or assist people that I have a good relationship with it it it generally works out but that can get quite complicated in terms of remuneration how well the business does I've seen it go horribly wrong and I've seen it I've seen many relationships get ruined as a result yeah it's not easy

to do that and for me fortunately I'm lucky to have a business partner that he's the one that stays on top of that and says this is how we should do it and just to be patient I think a lot of people have lose patience going oh I need this and then I think there's a part of the business where it's advisory boards to look more professional and then it's let's take out investors to look more professional to make it look like we've made it and

yeah I think there's yeah that's a yeah F readed that happens all the time yeah and then last question to wrap this all up is what do you see of the future of um affiliate marketing as it intersects with business intelligence yeah so you should be answering this I think as I said I think that everything's just going to be affiliate marketing is already tough right if you look at some of the companies 10 12 15 years ago when things were new margins were huge you

could operate in most geographies compliance wasn't as tough as it is today blah blah blah and I think over the years Affiliates have had to be more Innovative they've had to diversify revenue streams look elsewhere look at Partnerships look at different things I think with business intelligence and Ai and just data access to data I think the smarts will get smarter they'll be able to do more with the data I think it's going to be so much more much more much more competitive because you can

access things that you fingertip that previously you couldn't so it's going to be a lot more competitive and I think what you'll have what what you'll find is if you haven't got specialists in that field researching looking mining doing what they need to do those Affiliates will fall by the wayside yeah I think it's all about data right it's scary scary scary actually but but it's true it's scary in a good way you could argue in a bad way but I look at I gaming in

particular as saying it's not very data driven as much as it could be so my my personal take in the next couple years is that I think the industry could double over in a short amount of time just by using more data products and people just getting better I was talking to an affiliate customer the other day and they basically said one of the problems in I gaming is that it's it's just the cash like all the money that's in the business gets in the way

of people actually getting better but uh where's the pressure and I think the pressure is going to come in the form of these companies that are getting bigger getting stronger doing m&a in the right way and then going wait a minute it's do you want to compete or are you going to be under them it's all about working harder yeah absolutely and by the way what I didn't say I think one more minute but when I was talk about data room setups and all of that

I kid you not a deal that takes six months could take three months and three months could take a month and a half you can save so much time and money on legal fees and on accountings and things like that if you just get really well organized from a set of perspective that's another good my and you wouldn't need people like me right you wouldn't need exit support because you could do it all yourself my whole selling pitch is I will save you money by Leading

your exit or acquisition because it just runs a mark right I I would agree definitely on the legal fees been there done that and going oh we need to do all of this and if you're the seller and your Affairs aren't organized and the per the acquirer puts puts it on hold and says I'll come back to you in 3 weeks that's 3 weeks of legal fees and your cash is not going the right way yeah exactly you got to get those processes efficient unbelievable Rolan

thank you so much for doing this I know accounting might not be everyone's favorite topic but I do think there's a lot of people that care about doing business the right way and I think this is a a topic that I think is going to get more attention as the years go by so I want to pass it back to you and ask how can people get a hold of you people LinkedIn so this is on are you is this on LinkedIn if it is it

will get hold of me on LinkedIn and I've got a website not the most awesome but I think it's good enough and there's some contact links on there or they can ask you John well either or you ask me I'll do a DM intro but aside from that yeah and the show enough no and we've got we've really got a number of models we look to at the clients hybrids fractionals call it what you want once or anything awesome thank you so much for doing this

no problem Che John bye thank you for tuning in to the affiliate bi podcast I'd like to take this time to ask for a small favor to leave a Reading and Review wherever you listen to your podcast that helps us expand our reach to rank higher in podcast directories and reach more listeners