Business Innovators Radio - Interview with Brooke Lively, Founder and CEO of CathCap

Episode Date: August 28, 2025

BROOKE LIVELY is the founder and CEO of Cathedral Capital. She earned her MBA in investments and corporate finance. Brooke built a seven-figure company in under two years before starting her own company, Cathedral Capital. As a Chartered Financial Analyst (CFA), she and her team have worked with Hall of Famers, Inc. 5000 businesses, CEOs, and small business owners. With expertise in growth management, creative problem-solving, and profitability strategy, Brooke was named to the “Top 25 Women to Watch” and “Fort Worth’s 2016 CFOs of the Year” lists. She is a highly regarded speaker and the author of several books. Brooke has been featured in international media, including Forbes, Fort Worth Business Press, Diversity Journal, Attorney at Work, and on podcasts, such as Playmakers and Find Your Tribe.Learn more: http://cathcap.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-brooke-lively-founder-and-ceo-of-cathcap

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of Influential Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have with this Brooke lively, who's the founder and CEO of Cath Cap. Brooke, welcome to the program. Thanks for having me, Mike. Hey, you are welcome. I'm looking forward to hearing what you do and how you do it, but get it started first with a little bit of your story and background. And how did you get into the industry?

Oh, wow. I don't know. I think like everything, it was kind of an accident. How many of your interviewees say that? You know, it's common. And I find that really intriguing because it's like when people say that, that means that something happened. They noticed it. They were aware of it. and then they pivoted or then they amplified or optimized that. And I find that really cool. Yeah, and I think that's really common among entrepreneurs. So I was working for a family business. We hired somebody to help with sales and marketing that worked exclusively in our industry. And, you know, I was in an industry that didn't really run like a business.

business. So they ran as a practice. They thought of what they did more as a, I don't want to say in art, but I was in the, I was in the legal world. And so it was all about the work and not about the business itself. And this guy's clients started coming to me and saying, can you do for us what you do for your family's firm. And that was when I realized that people who start their own businesses start it because they have a passion for a product or a service. They don't start it because they have a passion for owning a business. For getting in the weeds and doing all the things and all of the roll up your sleeve

and let's get into the numbers and the QuickBooks or the whatever the case is. They don't do it because, oh, I love finance. Yep. Let's go start a company. And so I started Cath Cap, which is a fractional CFO company. And I did it also because if you think about the American economy, the backbone of the American economy is the small business. It's something like 80% of the jobs are from small businesses. Who gets the really good strategic financial advice on how to run their company?

Is it the people employing 80% of Americans? No. It's Texaco and Walmart and Apple. That's who's getting all of these great financial strategic minds. But it sounds to me like there's a big gap between that high. high-end, you know, whoever the big consulting, you know, Deloitte Tush or whoever these days are the big dogs with all this high-end consulting advice. And then the mom and pop shop that go, I need that advice, but they can afford all of the money that it would take to hire that. They're like, wait a minute,

you're $1,500 an hour with a $10,000 minimum. Yeah. Yeah. Yeah. That's not going to happen. I guess I'll keep doing what I'm doing. Yeah. Right. I guess I'll keep figuring it out on my own. And so that's why I started CAF CAP was to help those entrepreneurs that are passionate about their product or their service to give them that strategic advice to grow and scale profitably. Because, you know, and Mike, I'm going to totally botch this. But what is it? Is it 5% of American businesses make it to a million dollars in revenue a year? You know, you hear stats like that. I don't know that stat, but it's like a large percent never make it past year five.

A large percent never make X in revenue. It's that kind of thing. And I think it stems down to what you mentioned before. Hey, I'm passionate about whatever. I'm going to start a business doing that. And then they start doing a thing or two. And then it starts to get in over their head. And they just wanted to do the fun stuff.

They didn't realize you had to hire, fire, manage and do the books as well. Yeah. So, yeah, like you said, So 50% of businesses fail within the first five years. And, you know, to hit a million dollars, yeah. Forbes says it's 5%. So let's give those people the tools they need to be the success story, to be the 50% that makes it to year six,

to be the 5% that's over a million dollars in revenue. Huge. Well, let's start. Where do you start? Because I guess that's what I would say is I think a lot of times businesses go, it makes me think of this, like the frog in the water scenario. You turn it up a little bit and it's fine, turn it up a little bit more. So the business owner is like, okay, it's getting a little busier.

Oh, it's getting a little harder. and about the time they realize that it's boiling, it's too late. So why does every growing business need a CFO before they think they do? Well, so first I want to discuss the different financial people in your world. There are two that should be hired. There's one, well, let me back up. the first financial person you should hire is your tax accountant. You got to have him or her.

Their job is to keep you out of trouble with the IRS. What they were taught in school, what has been reinforced in every continuing education class they take, and they take 40 hours a year of continuing education, I feel so sorry for them, is that their job is to maximize deductions to minimize your tax liability. So everything they're doing is working for you to pay less tax. Now, I know that most of you are like pumping your fist right now going,

woo-hoo, that's awesome. Sometimes. Sometimes that's awesome. Not always. the next person you're going to need to hire is a bookkeeper. The bookkeeper's job is to make sure that they're keeping track of all the transactions, that they're making sure that all the money that comes in gets recorded, that all the money that goes out gets recorded, that bills are paid,

that invoices are collected, that your people get paid, all of that. if you're thinking about a bus, the bookkeeper is sitting in the middle of the bus taking notes about everything that's going on around them. They don't see anything because all they're doing is concentrating on the notes they're taking. Then there is a controller. A lot of people hire people and they give them the title of CFO because titles are cheap. and these people come in and all they do is tell you what has happened. They sit in the back of the bus and look out the rear window and say,

oh, we hit a pothole last month. And here's some numbers around that. Yeah, FYI. Yeah, FYI. How can we avoid it next month? Feel that? Yeah, right. We hit a pothole.

And controllers are very much concerned, about keeping everything in the right place, keeping your books really clean, and keeping you really close to your budget. These people are great, but they're looking out of the back of the bus. A CFO is standing in the front of the bus looking out the front window, standing right next to you, the driver saying, okay, I know where you want to go. And I have done all the research and I have mapped out how we're going to get there. So I need you to go up this road another half a mile. And then we're going to take a left. And by the way, there's going to be a pothole. So I'm going to need you to drive on the other side of the street for the first 300 yards.

Yeah. That's the difference. Expecting your. tax accountant to give you CFO advice. And no fault of theirs, you know, like your tax accountant is a fill in the blank. That's what they're doing. It's like, don't get, it's like the old story about what the, the frog of the scorpion. Like, hey, give me a ride across the pond. And he goes, I'm going to, you're going to sting me.

And he goes, no, I won't. And then he goes, okay, get on. And then halfway across he stung me. He's like, what's up? And he goes, well, I'm a scorpion. What do you think I was going to do? So you can't get mad. Add at that, it's just who you have on your team. And that's your point. You need someone that

sees the full landscape. Right. You can't go to a dentist to get your broken arm reset. Yeah. Well, they're both doctors. Yeah. But, you know, one's for your teeth and the other ones for your bones. You've got to go to the right one. So all of these people have a place in your in your company. Hire that tax accountant day one. Hire that bookkeeper really early because I promise you, the bookkeeper can do in two hours what it is taking you 10 hours to do. And you can make more money by selling your product or service in 10 hours,

then they will charge you to do your books in two. Yeah. So always do that. and then as you get bigger, as it starts to feel out of control, as you're really growing and scaling, and you know where you want to go, but you don't know the path to get there, that's when you want to bring in a CFO. That's when you want to bring in someone who's really going to be the ringleader of all of these people. So some people will bring in, like I said, the controller and give them the CFO title.

while controllers looking out the back window, bookkeepers taking notes, and the accountant's trying to save you on taxes, I have worked with companies before, where I have done everything I can to pull more revenue into a year. And the tax accountant just literally started yelling, what are you doing? They're going to have to pay more taxes. And my client was like, wait, no, we can't pay more taxes.

don't do that. I'm like, okay, guys, here's the thing. We can pull this $100,000 into this year. And yeah, it's ultimately going to cost you about $20,000, $25,000 in tax. And we can get that $5 million line of credit that we want to get in January. Or we can let that $100,000 dollars, go into next year, not show as much profit. And when we apply for that line of credit in January, we're not going to get it and you're not going to be able to expand your business. Take your pick. Yeah.

What do you want to do? They're like, we'll take 20,000 in tax. I'm like, great. You can pay it from your $5 million line of credit. Yep. So that's what a C.E. CFO sees. A CFO take all those different parts and puts them together into the roadmap to your destination. So how many times do you say something like that to someone and they're just shocked and

amazed like, oh my word, how I've never heard of or thought of or, you know, that kind of thing? You know, I tell that story fairly often. The other story I tell a lot is the, So the guy who went by a house during the pandemic and is, he, he found one. He called the mortgage guy. Mortgage guy goes and does this deal and calls him back and says, you don't pay a lot in tax, do you? He's like, no, I love my accountant. And the mortgage guy's response was, you're the poorest. You don't get a house.

I've ever met. Yeah. Yeah, he did not get the mortgage. Yeah. Yeah, I very often, in pointing out things. things that may seem counterintuitive, but that's what gets us to the goal. Yep. You know, we want more clients.

Okay, so you think the first thing we need to do is run a big marketing campaign. And a lot of times I'll look at people and say, oh, no, we can't run that marketing campaign for six months. We have to hire first. Yeah. They're like, yeah, but I can't hire until I have the, clients coming in. I'm like, but if you have those clients coming in, you can't take care of them. And by the time you've hired the people to do the work, your reputation's going to be gone, just decimated. So what do you want to do? Let's go talk to the bank about a line of credit.

Let's figure out how we're going to finance it. So what are some of those numbers that entrepreneurs ought to track? Because I have a feeling that when people hear QuickBooks or, books or numbers, their mind goes to this big old chart of things with numbers and an Excel file and their eyes glaze over. So what are some of those numbers that you ought to really zero in on? So I think about it this way. There are really six categories. And you need to track a number in each of these categories. The categories are cash, ideal ratios, production, budget versus actual, marketing and sales, and, and then one around, well, it's a little bit more production. I'll find that one in a minute. So let's look at cash. When we're talking about cash, there are all kinds of things you could

look at. You can look at your AR, how much AR you have. You can look at, you know, what's my monthly nut. Really what I think is most important is that you know how much cash you are going to have every week at the end of the week for the next six to eight weeks or even 12. And, you know, I say at the end of the week because your money does not go out in four equal installments every month. And money doesn't come in. in four equal installments. Week one and week three are the most expensive weeks of the month because their payroll in week one you have rent.

Weeks two and four are usually less expensive. Does your money come in in week one and three? No, because your clients have payroll and rent in week one and three. So they're going to do everything they can to pay you in week four. So you need to know in advance if you're going to have enough money or if you need to do something like talk to your landlord about, you know, can I be a few days late on rent this month and shift it? When we're talking about ideal ratios, this is where we're looking at overall profitability. And, you know, I run companies based on the rule of thirds. one-third of gross revenue. So revenue after your cost of goods sold should go to payroll.

One-third should go to marketing. And I'm sorry, one-third to payroll, one-third to overhead, and one-third to profit. And it's that profit number in conjunction with your salary. What I really want to monitor is owner compensation. Yeah. And most owners don't know their total owner benefit. What they're getting in their salary, in their distributions, and in all those expenses that we run through the firm. Because let's face it, we all run expenses through our companies.

We all do it. You know, no judgment. I do it too. Whatever. I'm not the IRS. I don't care. Go for it. However, you should know what you're actually making, what your total benefit is. And that's really important because if you're not getting paid, why is this company exist? You need to be compensated for the time, the effort, and the risk you're taking. So then we want to look at a production number. And this could be your capacity. You know, how many widgets can we produce or utilization?

We can produce a thousand widgets, but we're, we only have orders for 800. So we're at 80% utilization. It may be sales goals. It might be billing goals if you bill by the hour. but really what it normally is is some kind of work-in-progress number. So if you are in the service industry, how much work have we done this month that we're going to bill out at the end of the month? If you're a product-based company,

how many orders do we have in production that we're going to ship out this month and get paid on? How much work do we have in progress? Because this month's work in progress is next month's billing. Yeah. Which means it's the month after that's cash. So that allows you to start really building that cash flow forecast three months out. When we look at marketing and sales, we want to know how long your conversion cycle is. you know, from the time you first meet a prospect until they sign on the line that is dotted.

What percentage of your prospects convert? Which, where do your prospects come from? Do they come from referrals or somewhere else? Yeah, you might be putting a whole lot of money in a channel of business that's not bringing in the percentage as others. So find out where that's coming from. dump more money on the profitable pillars. Right. So, you know, really look at that.

But the number that I like the most, and this is for most types of companies, not all of them. If you're in retail, this isn't for you, but sales calls booked. Yeah. Because if you know what percentage of your sales calls show up and you know what percentage of your sales calls

convert and you know about how long it takes you to produce that that product or service. You can look at how many sales calls you have booked this month to know how many contracts you're going to get, which will tell you next month's whip, which will tell you month three's billing, which will tell you month four's cash. Wow. Yeah. You can start looking really far out. It kind of reminds me of the shark tank comments when you see people on there going, you got to know your numbers. You do. And they're not complicated numbers. And they do stack on top of each other to some extent.

You know, that's why I start with your cash balance. That's the most important one. Yeah. where are we on cash? And then you start adding numbers that enable you to look further and further out and be more accurate. It also enables you to make sure that we're staffed properly. And that kind of brings us to the next one that looks at the relationship between people and work. How much, how long does it take for you to service a client or produce a product? How many people does it take? How many products can one person produce a month? So it goes, it kind of goes back to capacity, but also what does it cost us to produce it? and what are we selling it for?

But we want to know overall what we have in stock. What are we doing right now? So if you are, let's make something up, an architecture firm, you know that you can handle eight projects at any given time. We want to know. net new projects every month. We finished two projects. We picked up two more.

We finished three projects. We only picked up one. Now we're down. Net new two. So, you know, that will tell you in the future where you're going to start to have not enough work for the people that you have, or if your net new is huge every month, you better start hiring.

Yeah. And if you know those numbers, then you're not the one in the bus looking behind going, we hit a pothole. You're knowing those numbers going, we're looking ahead six to eight weeks or above and being prepared. Right. And when you start to see that trend and you know that it takes four, months to hire an architect? You're like, oh, look, man, we're maxing out pretty soon. We're maxing out in three months.

Uh-oh, we better get that architect in here today. Or this assembly line is going to max out in two weeks. How fast can we get a new assembly line, an additional assembly line up and running? or are there tweaks we can make to the existing one to increase its capacity? What do we need to do? Yeah. And then the last one I mentioned was budget versus actual. And this is really, I don't like the B word.

The B word is awful. I don't like budget. Nobody wants a budget. Yeah. I mean, that's all about limiting. and in what you can't do and the word no. We like to say profit plan because who doesn't want more profit?

And that sounds much more positive, but you want to look at your budget versus actual report that comes out of QuickBooks every month to know, did I predict correctly? And if I didn't, why not? was it because I was too optimistic? Was it because I wasn't optimistic enough? You know, was I over or under?

Was I over for a good reason? Was I under for a good reason? So, for instance, in a law firm, if you're a trust in a state firm and your office supplies are all of a sudden really high one month, some people might be going, uh-oh, we've got to

rogue office manager stashing staples. Well, I mean, that is possible, but you may also have gotten a whole lot of new clients in, and she has ordered binders for all of their wills because you give them their wills in these beautiful leather bound binders. So that's a good reason to be over. Right? Yeah, sure. So look at every number.

Are we over or under an in a. Is it for a good reason or a bad reason? If it's for a good reason, do everything you can to repeat that good reason. If it's for a bad reason, figure out what the root cause was and make a change. Now, you can only do a few every month. You can't fix everything at once. So pick two or three that will have the biggest impact. Yeah.

It's steadily fix them every month. Well, I tell you, there's about 437 other numbers we should be looking at I'm confident of. So if someone is interested in kind of getting a little bird's eye view and peek under the hood at what you could do to potentially help them out. What's the best way that they can reach out and connect with you and learn more? The best way is actually our website, cathcap.com. You can find out more about us. You can find out about my books. a lot of what I've talked about today is in my book, Panic to Profit,

how six key numbers can make a six-figure difference in your business. And you can also email us or book an appointment to talk to us. Excellent. Well, thank you so much. I really appreciate you coming on, Brooke. It's been a real pleasure chatting with you. It's been great talking to you, Mike. Thank you. You've been listening to Influential Entrepreneurs with Mike Saunders, To learn more about the resources mentioned on today's show or listen to past episodes, visit www.

www. influential entrepreneursradio.com.