What The Heck is an Embedded CEPA?

Driving Value Growth From The Inside

Holding a triggering event, assessing owner readiness, doing a value gap assessment, and developing a value growth game plan for the client. That's a great start... Now what?  

  Knowing what should be done and getting it done are two very different things! 

• How do you ensure that all the transformations needed in the business are actually carried out?   
• Value acceleration initiatives often span years. How do you maintain client focus and enthusiasm after the first couple of quarters?  
• How do you, and the others on the Exit Advisory Team, stay in tune with changes in the client's business over those years?

There is a lot of educational content out there discussing the ideal Exit Advisory Team, and it is usually accompanied by a diagram depicting the "ideal" team.  Invariably that graphic depicts an orbit of professionals—with these advisors on the outside, circling around the owner at the center. Typically, this Exit Advisory Team meets quarterly with the business.  

As for the aforementioned list of questions and challenges, how does this orbit of purely external advisors effectively address those execution challenges?

Imagine a different way... Where an Advisory Team member moves from the external orbit to the inside, next to the owner, "embedded" into the executive leadership team of the business. Imagine how much more effective that Value Growth Intiative could be with an "Embedded CEPA" on the leadership team. 

What The Heck is an Embedded CEPA?

The term "embedded" refers to something that is firmly and deeply integrated or fixed within a particular context or system.

With the concept of an "Embedded CEPA" it means that this CEPA professional is not just an external consultant or advisor,  but is deeply integrated into the day-to-day operations and decision-making processes of the company. As a true member of the executive leadership team, an Embedded CEPA is the Exit Advisory Team’s ‘inside man’ (or woman), with "boots on the ground.”

Why Your Exit Advisory Team Needs an Embedded CEPA

Maintaining client focus on needed transformations over the long term is always a challenge. An Embedded CEPA significantly enhances the effectiveness of Exit Advisory Teams by acting as an internal advocate, consistently focusing on key value growth initiatives. This direct integration into the leadership team ensures a streamlined approach to coordination with the advisory team and its execution advocate, mitigating challenges commonly faced in traditional advisory team structures. 

Embedded: Easier Said Than Done

Usually, it is not possible or pragmatic for most CEPA professionals to get truly embedded in each of their clients' businesses. The demands of running your practices and serving your clients do not permit that kind of time-intensive engagement model-which is why most members of the Exit Advisory Team are naturally in that external advisor orbit. 

Enter FocusCFO, the "Embedded Fractional CFO" Partner

However, there are some CEPA professionals whose practice model does naturally lend itself to that Embedded model. At FocusCFO, one of our key differentiators is the ‘Embedded’ nature of our service delivery model for Fractional CFO services. The term "Embedded" emphasizes the importance of a Fractional CFO, not as an outside consultant who opines periodically from afar,  but as a centrally and strategically positioned executive leader—and trusted advisor— inside the business.

Our Embedded Fractional CFOs work closely with internal teams, leadership, and key stakeholders to address financial challenges and contribute to the company's success. This unique approach of integration into the operations and leadership of our clients’ businesses enables a more hands-on and customized approach to financial management (both tactical and strategic). And, importantly, in an executive position to maintain focus—over the long haul—on executing the necessary transformation steps for the Value Growth Initiative.

Core to our mission and culture at FocusCFO is that every associate, as part of their initial onboarding and training, goes through an EPI-supplied education on Exit Planning and the Value Acceleration Methodology. In fact, these exit planning concepts are so core to our service delivery model that they are embodied in the FocusCFO mission statement: Helping Entrepreneurs Build Sustainable, Transferable Business Value
 

To connect the dots, an Embedded Fractional CFO from FocusCFO is an Embedded CEPA.

The Power of an Embedded CFO/CEPA: Watershed Distillery Case Study

Our Embedded Fractional CFOs, provide essential guidance to business owners on their journey towards a successful exit – often years in advance of a transaction or other exit event. In the case of Watershed Distillery, an award-winning Columbus-based distillery, that exit opportunity arrived in 2023, 6 years into their engagement with FocusCFO. Watershed was approached about a potential purchase by a multinational food and beverage group. “I knew that Greg [CEO of Watershed Distillery] always wanted to sell the company eventually and had been working all along to ensure the business was both ready and attractive. We were ready for the opportunity when it came.” explains Fractional CFO Jim Zins.

The Watershed team had a clear goal of selling the business by 2030. With that in mind, their CFO worked alongside their team to drive transformative changes for building value and ensuring a successful exit. “We went from a couple guys that were really just trying to make the business work, to a mature business that had its arms around our numbers, a strong understanding of what we had done, and a nice financial roadmap of where we were headed,” Greg Lehman, CEO of Watershed Distillery, says of the work that they did with FocusCFO.

As an embedded member of the leadership team, Zins helped the Watershed leadership team maintain focus on key value-building transformations and, when the time came to sell, he was with them every step of the way. He helped create the deck that was presented to the buyer, worked with the advisory team to fill requests and satisfy the buyer’s due diligence. “When the buyers approached us, Jim had all our ducks in a row on the financial side. That was so valuable to the buyer. I know I didn't have the expertise but with Jim beside me, I looked really smart.”

Partner with an Embedded CEPA Today

FocusCFO is the national leader for "Embedded Fractional CFO services".  With our client engagement model, our fractional CFOs are embedded into the executive leadership team.  On the climb weekly, leading the Finance function, side-by-side with the team. With decades of experience in financial leadership, a Fractional CFO is very much the 'right person in the right seat' for these clients.

If you're an Exit Planning Advisor looking for resources to support your clients, reach out to us today to discuss how we can partner together for client success. FocusCFO.com/Embedded-CEPA

Listen to the ‘Exit is Now’ podcast episode...