Welcome to Built by Margin, the podcast where strategy meets the spreadsheet. I'm your host, Laurie Chen, fractional CFO and tax strategist, here to help you make smarter financial decisions, build a profitable business, and keep more of what you earn. Let's dive into the numbers that actually move the needle. All right, welcome to Built by Margin, the show where finance meets founder stories. I'm Laurie Chen, a fractional CFO and CPA helping entrepreneurs turn numbers into strategy. Today, I'm talking with Alex Mair a revenue operations startup leader at Fabrikant Ops about the real world journey of launching and growing a new business and the financial lessons learned along the way. Thank you for joining us, Alex.

Laurie Chen

Thanks for having me, Laurie . I'm very excited about our time together.

Alex Mair

Yeah, let's start at the beginning. What inspired you to start your business?

Laurie Chen

Yeah, it's a it's a great question. For the past, we'll call it eight years, I've been building revenue operations teams in early stage startups. And it's a pattern that I noticed was persistent is most startups need the same things. And most startups get those things wrong. So when you have those two things combined, it's a great thing to templatize and ship out to folks so that we can relieve a little bit of pain for leaders that come in at a later stage. And I've been talking to a good friend of mine who's also operating in startups since the beginning of last year of 2024. And we'd sketched his business plan out and life gets in the way. And I decided, OK, Now is the time to go ahead and see if I can execute upon this. I gave myself a six month, no revenue grace period. So from February 1st of this year, I said, if six months in, I have no revenue, they'll move on up until then I'll work my butt off at it. And it's gone really nicely since then.

Alex Mair

Okay, awesome. So you gave yourself a little runway. You had that calculated in your head.

Yeah, yeah. I can either be the worst seller in the world or the best seller in the world, depending on my mood that day. It's definitely not something that always comes naturally to me. So I knew that that was going to be a challenge that I hadn't done in quite a number of years and wanted to give myself the space to have a good block of time To just try it out, and if it didn't work after half a year, the likelihood that it's going to work in a services business after that, I could justify winding it down.

Okay, got it. What problem are you solving and what makes your approach unique?

Yeah. We're solving the issue that most operations, so revenue operations as a whole, I think of it as the connective tissue between go-to-market teams. That's starting at marketing at the top with leads and how those flow through the marketing funnel, how they're passed on to sales, what the sales cycle looks like, and then how they're daisy-chained over into customer success. and all the processes that happen over there until that customer is ready to renew. It's a large problem set, and it involves a ton of interconnected processes and technologies that are really difficult to get right the first time you do it. I certainly didn't get it right the first time I did it. I don't even think I got it right the second time I did it. But most founders are going to be spinning up companies for the first or second time, and their proficiencies are generally not in that nitty gritty operational zone. So the problem that we solve is we say, we've done this before. We've built this out for a number of companies. They've all still existing. We did a pretty good job. Instead of focusing on that, you go be the force multiplier with your superpower and let us take care of the boring stuff in the background. And the advantage that we have in doing that, as opposed to other folks, is that we've actually gone as W-2s inside companies and built those programs out. None of it's theoretical for us. Everything that we implement in our customers is based on real world experiences.

Got it. So let's talk about the numbers behind the dream, because you have this idea to start, but then you've got to make it work from a financial standpoint. And you mentioned having that six-month runway if you're going to get to revenue or not. Do you remember your first major financial decision as a founder?

Yeah. Do I go get a job that actually pays me or do I say that I'll probably go broke if I don't do this and then I'll find a job with a couple months of runway left. I think that's the one that sticks out most to me. The second one was, do I need an LLC that feels like a couple of hundred bucks? Because I was in this headspace, which is so silly looking back on it, of any spend is really bad spend because I have no income coming in. So if I'm spending on something, it feels like more putting chips down at the casino. I've since solved that kind of misery attitude. But those are the first two that come in mind that the decision to actually move forward with this knowing that there might not be results for a significant period of time. Being still young in my career and in my life, that would have eaten away at a good portion of my cash reserves. And the second silly one is just. I had to put money on the table to legally start this business and ingest cash. And that felt like a big mental barrier for me at the time. It's really funny. I think it was like 500 bucks that I had to spend.

I see. So you're a bootstrap founder then. You didn't take any money from investors or family and friends. It was all purely your cash.

Yeah, yeah. I had a couple of people when I was discussing the idea. I'm very grateful to have a decent network and people that really believe in seeing what I've done ask for to see if they could fund me in some menial way. I don't mean that in a disparaging way, but just in a pure funding based dollars amount and decided to forego any sort of funding. And, you know, I'm a first time entrepreneur. Honestly, I wasn't even sure if I was gonna be able to get a single customer. I would have felt terrible if I had taken somebody else's money, burned it all, and then had nothing to show for it. So I decided to go the self-funded route, and I was in a fortunate position that I could do that for a period of time.

Yeah, that's awesome. So how are you currently tracking your finances? Are you using a spreadsheet software, just winging it?

I just pretend every month. We have a program called WAVE that we use for our accounting. It does invoices for us and we can also track inflow and outflow of cash, expense management through there. And then we have Mercury, which has some nice features added onto it. It's kind of duplicative to Wave, but we got down a path with Wave and kind of went, eh, we'll let somebody else move this over when the time comes. And then I'm tracking more of my company metrics on Spreadsheet. So nothing fancy on that side.

Okay, got it. Yeah, I'm familiar with both Wave. And what is the other one you mentioned?

Mercury.

Mercury, Mercury Bank. Yeah. So yes, a lot of early stage startup leaders utilize that bank. So yeah, better than Silicon Valley Bank.

Fingers crossed. I keep a very low amount of actual cash in there. I distribute it through a couple accounts. I'm trying to mitigate risk on that side because I'm a little freaked out by e-banks.

Yeah. So you mentioned that you had to deal with the decision of whether or not to open an LLC. Is that something that you ended up going with? And is that something that you would recommend for other entrepreneurs that are starting their business?

Yeah, I did decide that I was going to do it. A lot of my customers are, it's B2B, so they'll be asking for that EIN. So it's just one of those things that I needed to do. And I wanted the protections that were afforded for me as minimal as they are with an LLC versus running it alone. And then, of course, I can always convert it into an S-corp later down the road and get some of those employment tax advantages that I don't get right now, which I just discovered because I'm coming up on my first quarter of tax payments.

Yeah, so quick aside, I do recommend that most business owners start out with an S-corp as soon as possible. As soon as they're making revenue, making bank, it's definitely gonna help you save on your self-employment taxes. And I believe at the level that you're currently at, which is amazing for how many months you've gone into this, I do think the S-corp will give you advantages right away.

Yeah, I need to do that conversion because I was doing my quarterly tags. I was like, I do this every quarter. It's something I did not know going into it. I'm glad I got a semi-spammy email. I guess it's not spam if it's useful. Advertising services, I went, I should probably know about that.

OK, well, excellent. I think you just answered my next question, which is what do you wish someone had told you about money management, tax management before you started? And this that you would you just answer that question.

Yeah, for sure. The you have to pay taxes every quarter kind of deal. I don't know. Luckily I have a, just a, like a general position that I, of course I need to take a wage, but I have just a very flat percentage of a top line that I give myself. And it's like super minimal. Um, so that the cash position wasn't the worry. It's just a pain in the butt that I have to go in and now I got to do this too. So, um, I had no idea. I wish I had known that, but more broadly, I wish there was a very, just like easy starter pack of like, Hey, you're going to do an LLC. Here's the 10 things that you got to do if you do this. I don't know if that exists out there or if I was just too impatient to read it, but I'm sure there's other things that I have no freaking clue about that I am required to do that somebody will tell me in a letter that I needed to do.

Yeah, actually, you just gave me a great idea for content. Something I could teach entrepreneurs and clients that I work with. That would be a great piece to put out there for free.

Please get that fired up, Laurie , and make me the first person on the email. Now you got me worried.

Yeah, so let's talk growth and strategy. What key metrics are you focusing on right now? Whether that be revenue, customer acquisition, churn?

Yeah, I'm trying to keep things really, really simple right now. As a, you can call it a one person shop with a couple of contractors. It's kind of all on me to figure out. So I don't want to get too, too in the weeds here. So I really care about top line. Once I figure out my expenses for this corridor, what my net profit actually was, including everything else, my average spend per customer, and then what my compounding monthly growth rate is. And if I can figure those things out, I think I'm in a decent place without getting too nitty gritty on the metrics. I can show myself I'm making money. I know how many customers I have, what each of those on average spends with me and how I'm growing month over month. So I set myself a really simple goal of just saying, if I can get one customer every six weeks, I can have a very substantial business within the next 12 months. So that's kind of the top level goal I go after is one every six weeks. If I get my one, I'm a very happy person. I add it to the spreadsheet and I move on. I don't stress too much about it.

Okay, great. Have you landed on a pricing strategy with your customers or is that still evolving?

evolving, I've landed on one that I think is working pretty well. It's shown to be at least palatable, more easily understood. So I basically do tranches of hours, right? So it combines, I do a minimum of 40, and then the main package is 80 on a monthly basis. And then the top package is 120. I don't break out the hourly dollar, the dollar rate per hour in the package itself, but it's very easily derived. And then I've named the packages. So naming it helps frame it as a product. Simple, one, two, or three, the Goldilocks number. Most people go for the middle one anyway. That's great. But I don't know if that's long-term where we're going to end up. Because, you know, when I look a lot of competitors, they're doing things like one single package with, you know, asterisks and you can add additional things, but they offer that one package as this is our base. So I might have overcomplicated in that way. The other way I could go is just purely not even pre-buying hours. We'll see how many we accumulate. Maybe that creates a lower barrier of entry for me so that they're not committing to many thousands of dollars upfront and we can just work towards different project goals and charge more of a lawyer style fee with a retainer and then a drawdown on that. I don't know. So I think where we're at is basically like a fractional recurring revenue piece, but as to like my openness for changing that along the way, whatever is the most easily palatable and understandable pricing model, i.e. the most effective pricing model for my customers is really where I'd like to be. I don't think I have enough data points on it yet to tell you what that is.

Yeah, so you're still evolving your pricing strategy then?

Yeah, without a doubt. Yeah. Trying to evolve and trying to listen to the market where they're, they'll give me feedback on it.

I wonder, are there revenue operations specific groups that you can work with to understand pricing as a whole, like for the market? Because I know as an accounting fractional CFO, firm owner, you know, there's other groups, masterminds that we can join. Is there one specifically for your industry and niche?

Yeah, there's a ton of great communities out there. And it's kind of where I sifted through to figure out where my pricing could be incredibly competitive while still giving me a good quality of life. So there are definitely those groups. And then a lot of firms seem to be pretty open about just publishing their website on their server or their prices on their website. So that's another resource that I've been able to find.

So as a CEO and new startup owner, you have to wear a lot of hats, right? You're doing service delivery, you're doing the finance, you're doing tax, you're doing bookkeeping. What about marketing? Marketing, is that something that you're really investing your time in as well?

I just feel a little bit called out here, Laurie . You know, I'm not doing any marketing because we follow each other on LinkedIn. And we talked about this before. No, not right now. I'm not. I was very, as I said earlier, I was lucky to have a pretty decent network that I can tap into for my initial customer base. But now I've kind of reached the edges of that. And I'm sure that will reap many more fruitful referrals in the future. But now I am at the precipice of the marketing cliff. I'm a revops person. I know I got to do it. So my primary channel that I'm going to be doing, I'm just going to pick one and I'm going to focus on it and do it consistently. And again, I'm going to kind of give myself another revenue runway where I say, OK, I'm going to do this for six months. I'm going to post four times a week. I don't care, come hell or high water, I'm gonna do it. And then I'm gonna make the decision after I've invested that period of time. And if it hasn't gotten me anything, that's okay, we can move on to somewhere else. So that's my first plan is to start LinkedIn content posting. I've been putting it off, candidly.

Well, you can always hire someone to do it.

Yeah, that's that's a totally fair point. I kind of want to get through the because for me, it's a little bit fear based. Right. I don't use social media in any other regard. I don't post pictures of myself online. So I think primarily it's like this feels weird for me. I know it's a useful thing and I think it'll be more authentic if it comes from my voice rather than somebody else's. And I'd like to, you know, kind of challenge myself to to go out and be a brave guy and post on LinkedIn consistently. But if it doesn't work out and I'm too scared, then you start see me start posting in like nine months. I probably hired somebody.

Got it. OK, yeah, I'll be looking out for your posts on LinkedIn. All right, so yeah, let's talk about some of the tough spots. You've mentioned some of the challenges already and the lessons you've learned. Let's go a little bit deeper into that. How has your definition of success changed since you launched your business?

That's a really good question. I think it's kind of always evolving. I think, you know, primarily when I think of success, I'm American, so I think of financial things, right? I think of, you know, reaching that million dollars of recurring revenue a year. That would put me in the business in a really special category. Doing it at 10 puts it in a very different category and so on and so forth. So initially, I think that I would have Answer that is as a financial goal, but I think as I get a little bit deeper into this, that financial goal still stays there, or else you can have a lot more less stress and a lot more freedom, honestly, just doing a job. But I think that there's a huge amount of gratification that comes from seeing projects successfully delivered to clients and seeing it impact their day-to-day and being able to have this really cool feedback cycle of seeing multiple startups in multiple different lights and then using that combined knowledge to make them all better in some way, shape or form. So I think I would change my definition of success from financial to like kind of more emotional definition of success, say like at the end of the year, you know, 95% of my clients, 99% of my clients are really incredibly happy and see value in the service. Whether that's me making a million dollars in top line a year or 250, if I'm eating and I'm eating well, I think I would still count that as a success.

Yeah, absolutely. A million ARR, you know, that's what that's all we're looking for and targeting as entrepreneurs. That's that's your first big milestone.

Yeah, that's that's the one word. I don't know if it gets more stressful or less stressful, but I'm certain something changes or maybe nothing changes. And you get to the other side, you go, wow, this feels a lot like nine hundred eighty K. Yeah.

Have you do you feel like you've experienced any financial mistakes along the way?

I think I'm too early on, thankfully, to have a big financial mistake as of yet. I'm trying to think of one. I accidentally charged a personal charge to my business debit card once. That was not the right thing to do. I had to reimburse the business for that, obviously. But besides that, no, I'm a little bit too early on to have made any of those woes. I almost made a financial mistake by not filing freaking quarterly taxes. But now we'll get that taken care of.

Yes, awesome. That's good to hear. Yeah. And we've mentioned this several times is, you know, paying quarterly estimated taxes is a huge burden on new business owners. That's something that they didn't have the luxury of on their W-2 job, right? Like, because in your W-2 job, you have a payroll service that's remitting the taxes for you. But when you're a new business owner, you get revenue and you get top line revenue in, you get cash in the door and you have to remit that, a portion of that to the IRS or else you face penalties and interest, right? So that's something, I think that's something that most new business owners, entrepreneurs undermine in terms of how much time they need to put into estimating their revenue and actually remitting the taxes.

Yeah, and. It's not like the government website makes it incredibly clear, and it's just a, you know, like a TurboTax click-through document, and this is how we do it, and there we go. So I've got that as a project for myself tonight. We'll see how it goes. But yeah, I think that's a really good point. It's like, I never thought about that, especially if you're making the transition from a W-2 into a business owner, into a sole proprietor. There's a lot more burden, that administrative burden. It's all on you. It can be a little bit stressful, but I'm choosing to see this as just a bit of fun. Who doesn't love filing taxes?

Yeah, exactly. So let's talk about financial support systems. So as a RevOps leader, you're very systematic. You have a lot of processes. You know how to put processes that are successful for companies. Now, if we're thinking about financial systems in your own company, at what point do you feel like it would make sense to work with a fractional CFO, an accountant, or a bookkeeper?

Yeah, candidly, as soon as possible. It's just one of those things that, and I guess I'm a little bit biased because my work is fractional too, but one of the core beliefs that I have about fractional employees, especially competent fractional employees, is that, yes, they take a little bit of that pure hour work away from you, but they also take the mental load of those things that you just don't know how to do. Like the reality is we'll take the estimated taxes quarterly filing for me. The reality is it might take a couple hours, but those are also a couple hours that I'm not working for my clients or not in my business. And it's a little bit more burdensome in my head than just those couple hours. Because then after I'll be wondering, shoot, did I do that right? And I'm talking about it now. I haven't even begun the process of it. So there's like two sides to the equation, which is pure hours. Then it's those ancillary hours. Maybe you're not actually doing it, but you're thinking about it and it's causing you to be distracted. So for me, as soon as I bring on one more client, I'm going to be engaging in a fractional accountant. It's just simply not, in my opinion, a great use of my time to learn those systems ins and outs. I know the bones of them. I know how they operate. Generally speaking, I don't need to do coding. I don't understand that. I don't want to understand it and somebody else is going to do a much better job at it than me.

Yeah, absolutely. Thank you for sharing your thought process on that. As we continue to look forward in your business, where do you see the business going in the next one to three years? Where would you like it to go? What are your current growth plans for the business, assuming you hit your next revenue milestone?

Yeah, yeah. Candidly, I thought it wouldn't even last 12 months. I gave myself six. I thought I'd have no customers. So the model that I use is very pie-in-the-sky generous. I need to go reconfigure it for my new trajectory. But in the next one year, I predict that we'll have at least hit, I think, half a million dollars in revenue. In three years, the goal is to be above 2.5. So with that entails actually running a business, right, building out teams, having feedback loops, making sure that we have fractional or full department heads in place with things that actually matter. The hope is that we can keep it really, really lightweight while retaining customer satisfaction. But we're in a really prime spot to start thinking about leveraging technology in how you can build a business, creating that top line and bottom line growth without necessarily always adding a huge amount of expense to headcount. So I'm hopeful that we can reach both of those goals. But it's certainly different than the SaaS-based businesses that I'm used to operating in.

Yep, understood. Thank you for sharing that. One last question I have for you is what legacy or impact do you hope your business will have in the world?

So when I was talking to interviewing folks in the market to say, hey, is this even something that would even interest you? I was thinking about all the businesses that I've come into as a RevOps leader. And I come in and basically what happens is you come in and you realize, oh shoot, all the systems are a mess. All the process is undocumented. I'm gonna need to spend at least my first couple months here unwinding the ball of yarn and not accelerating things as I was brought in the business to do, which is a bummer to come into a business and realize that a lot of what you're going to be doing is remediation rather than acceleration. My hope is that any business that takes over a revenue operations department built by fabricant, will have a very quick transition period and will allow RevOps leaders to more quickly and effectively transition from remediation to acceleration. If we do that, that's a pretty good outcome.

That's awesome to share. And where did you come up with the name FabrikantOps?

Fabrikant Ops, I was trying to find a fancy sounding, nice sounding version of Fabrikator. Fabrikator is somebody that takes somebody's engineering plans and makes that product into something real. So taking somebody else's idea, either company and trying to form it into something that can actually function in the real world. Fabrikator had a ton of really expensive domain options. So then I just started looking at different languages and Fabrikant is French for Fabrikator. I happen to love Paris. I'm useless at French, but I am Canadian, so I feel like a little bit of ownership there, too. Having a word or two of French in there. So that's how we came up with it. And then, obviously, just the back part of our box.

Got it, that's cool. Well, thank you so much for sharing. That's a wrap on this episode of Built by Margin. Huge thanks to Alex Mayer for sharing his story, his financial wins and lessons. If you enjoyed this conversation, don't forget to subscribe, share, or leave a review. And if you're an entrepreneur ready to build a smarter financial foundation, let's talk. Until next time, keep building wisely. Thanks for tuning in to Built by Margin. If you're ready to turn insights into income, subscribe and join me each week as we break down the numbers behind smart business growth. I'm Laurie Chen. See you next time.