Mastering Financial Clarity for Your Business with Brooke Lively

In this episode of the DealQuest Podcast, Brooke Lively, founder and CEO of Cathedral Capital, shares her expertise in helping businesses achieve financial clarity and stability. Known for her work with fast-growing companies, Brooke specializes in building effective financial strategies that drive sustainable growth. She’s been recognized as a Top 25 QuickBooks ProAdvisor and is the author of several books, including From Panic to Profit.

After earning her MBA in corporate finance and investments from Texas Christian University, she helped her family's business reach seven figures in just 18 months. Realizing that many entrepreneurs rely on gut instincts rather than data, Brooke launched CAFCAP in 2013 to offer fractional CFO services. Her company has since helped hundreds of businesses make data-driven decisions for faster growth and predictability. Drawing from her experience working with law firms and small businesses, she provides actionable insights to help entrepreneurs make confident financial decisions.

RECURRING REVENUE ENHANCES STABILITY AND VALUATION

Businesses with recurring revenue models, such as SaaS companies or investment advisory firms, are more attractive to investors and buyers because of their predictable income streams. For example, investment advisors charge a percentage of assets under management, paid quarterly in advance, which creates steady cash flow without the risk of unpaid invoices.

In contrast, industries like law firms and consulting services often rely on project-based or hourly work, which can lead to fluctuating revenue and fewer long-term guarantees. While not every business can adopt a subscription model, finding ways to build predictable income—such as recurring retainers or multi-year service agreements—can increase stability and make the business more appealing for exit opportunities.


ADAPT STRATEGIES FOR NON-RECURRING REVENUE MODELS

For businesses that cannot adopt a subscription or recurring revenue model, focusing on other value-adding strategies is essential. This includes building long-term client relationships, diversifying services, and establishing consistent referral sources. Even though law firms cannot lock in clients to multi-year contracts due to ethical constraints, they can foster trust and dependability that encourage repeat business.

Businesses in these industries should prioritize creating a strong operational foundation, such as efficient processes and excellent customer experiences. These factors not only help maintain steady income streams but also make the business more scalable and attractive to buyers. Additionally, understanding key metrics and preparing for potential exit opportunities are vital for maximizing enterprise value, even in non-recurring revenue models.


KEEP YOUR FINANCIALS CLEAN AND ACCESSIBLE

Make sure your financials are clean and easy to access. Brooke shared a story about a business owner who struggled to provide basic financial documents like profit and loss statements during a due diligence process. This delay raised red flags for potential buyers and dragged the deal out much longer than necessary. Brooke stressed that businesses need to keep their financials organized and ready to go at all times.

Business owners need to know their financial numbers inside and out, and they need to make sure these documents are prepared and easily accessible at all times. this isn't something the business owner should be doing themselves—especially if they're still handling tasks like billing or managing their QuickBooks account. These are tasks that can be better handled by a professional bookkeeper or CFO service, which allows the owner to focus on more critical areas of the business. When financials are in order and can be quickly produced, it not only improves the day-to-day operations but also boosts the business’s credibility and increases its value when it comes time to sell.


SHIFT FROM PERSONAL BRAND TO SCALABLE BUSINESS

When you’re starting out, building a personal brand can be a game changer. It helps you establish credibility, position yourself as an authority, and connect with customers on a more personal level. But as your business grows, you’ll need to think about shifting gears. What worked in the beginning might not be the best long-term strategy.

As your company matures, it’s important for the founder to step back a bit and stop relying solely on their personal identity. If your business is too tied to your personal brand, it could create a problem when it’s time to sell. Potential buyers might worry that the business is too dependent on you—meaning if you’re no longer involved, the company’s success could be at risk. Brooke shared that she spent two years making sure her company wasn’t named anything like “Brook Inc.” or anything else that tied her directly to the business.


DIVERSIFY CLIENTS TO MINIMIZE RISK

Relying too heavily on one or just a few clients creates a significant risk. This is referred to as concentration risk. If too much of your revenue comes from a single client, or just a small group of clients, it becomes a vulnerability. If one of those clients decides to walk away, your business can take a severe hit.

On the other hand, if the business has a diversified client portfolio—where no single client makes up more than 10-15% of its revenue—this reduces the risk. A balanced client base makes the business more attractive to potential buyers, as they can see that the company is less vulnerable to losing a major account. It also provides more stability and the opportunity for growth, as the business is less reliant on any single source of income.


FINANCIAL REPORTS ARE JUST THE BEGINNING

Brooke Lively made an important point: financial reports, like profit and loss statements (P&Ls) or balance sheets, shouldn’t be seen as crystal balls for predicting the future. They’re tools to understand what happened in the past. These reports are just the starting point for a deeper dive, not the end-all, be-all.

Brooke explained how her team approaches these reports. If something stands out or doesn’t match expectations, they dig deeper to figure out why. They might look at contracts to spot inefficiencies, tweak compensation plans to better align incentives, evaluate marketing strategies to boost conversions, or streamline production to save time and money. In one case, her team even found opportunities for automation that cut costs and saved a ton of time—all thanks to starting with the financial data.


LEADERSHIP REQUIRES A BIG-PICTURE APPROACH TO FINANCIAL

Managing financial performance isn't just about crunching numbers or keeping spreadsheets tidy; it's about understanding how every part of the business works together. Brooke shared how her team goes beyond the usual CFO tasks by getting involved in areas like automating workflows, optimizing productivity, and improving marketing strategies—because all of these “touch the money.”

When they noticed a low conversion rate in marketing, they didn’t just flag it and move on. Instead, her team teamed up with marketing to dig into the issue and came up with strategies to turn it around. They also spotted inefficiencies in production that were slowing things down and found ways to streamline those processes—saving both time and money. This holistic approach ties into the principles of EOS (Entrepreneurial Operating System), which is all about aligning goals, systems, and execution to close performance gaps and fuel growth.


EOS DRIVES HIGH-IMPACT RESULTS

Brooke Lively emphasizes that the Entrepreneurial Operating System (EOS) is a powerful tool for businesses. With its six core components, when done right, EOS can lead to major progress. The big takeaway? Businesses using EOS, where the team is aligned on the vision, the right people are in the right roles, key data is tracked, problems are tackled head-on, processes are streamlined, and traction is gained, see incredible growth. In fact, companies that fully implement EOS often experience a “hockey stick” effect—seeing a huge jump in success compared to those who don’t.


PLAN YOUR EXIT STRATEGY EARLY

Don’t rush the decision to sell your business. Many business owners who later regret their decision to sell often did so impulsively, without thoroughly preparing or exploring all their options. It’s essential to take the time to strategically plan for an exit, whether that's learning about the market, getting multiple offers, or mentally preparing yourself for the emotional aspect of letting go.

Brooke Lively shared, it’s critical to not only think about the financial aspects but also ensure that you’re psychologically ready to part with something you’ve poured your heart into. By thoughtfully approaching the sale and timing, you can avoid future regrets and ensure you make the best decision for your future.

Tune in to this episode to gain insights from Brooke Lively on mastering financial clarity, stabilizing cash flow, and building a business that supports your goals.

• • •
Listen to the Full DealQuest Podcast Episode Here

• • •
FOR MORE ON BROOKE LIVELY
Brooke Lively’s LinkedIn
Website
Cathedral Capital


FOR MORE ON COREY KUPFER:
Corey Kupfer's LinkedIn
Corey Kupfer's Website

Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

Get deal-ready with the DealQuest Podcast with Corey Kupfer, where like-minded entrepreneurs and business leaders converge, share insights and challenges, and success stories. Equip yourself with the tools, resources, and support necessary to navigate the complex yet rewarding world of dealmaking. Dive into the world of deal-driven growth today!