Sometimes, if Fred Haupt does his job right, a CEO will tell him he needs to be replaced — and that he’ll be the one who has to track down his successor.
Most finance chiefs would cringe at such a directive. But for Haupt, who makes a living by giving small and midsize private companies financial services on a part-time basis, it means he’s done his part to help a business grow. “In essence, I’m replacing myself,” he says.
A CPA/entrepreneur/part-time CFO, Haupt likes to keep things casual. He doesn’t even give himself a formal title. “Some people call me CFO for hire, some call me a part-time CFO, others just say CFO. And some people call me Fred,” he says.
He works out of his home, sets his own hours, and currently juggles about 10 accounts. He’s worked for wholesalers, restaurants, technology companies, manufacturers, and retailers with sales ranging from $2 million to $50 million. Specific current clients include Columbia Elevator Products, Educational Warehouse, New York Hospitality Group, and Ramapo Wholesalers.
His responsibilities have run the gamut from basic financial tasks to the type of big-picture, strategy work that a full-timer would do. In addition to helping a company hire financial talent — such as a full-time CFO — and preparing financial statements, Haupt has handled business planning, budgeting, cash flow management, staff training, bank relations, and acquisition and expansion plans for his clients.
While he loves the variety and the freedom his job has afforded him since 1989, he acknowledges the setup wouldn’t be for everyone. It takes organizational skills, for one. In addition to keeping separate to-do lists for each of his clients, he has a written tally for himself to make sure he stays up-to-date on his invoices and keeps track of how he spends his time. He’s also lucky enough to avoid health-care expenses as he is on his teacher wife’s insurance plan.
Haupt admits that it’s not always easy to work by himself, although he doesn’t feel like he lacks support. He says he has good relationships with the accountants who work at his companies, and he also gets support from a networking group and outside CPA firms.
Also crucial to Haupt’s survival as a one-man shop is his personality. He prides himself on having a good sense of humor and a bit of salesmanship. In fact, he credits word of mouth for the majority of his business. That means having a thick skin — whether he’s trying to score new business or trying to convince someone that his suggestions deserve serious consideration. “I can present information and I can give you advice, but you’re the one who has to do it,” Haupt says of his clients. “They’re the ones who have their future tied up in their businesses, emotionally and financially.”
Starting up a CFO Shop
As a young accountant, Haupt found time to look up from his calculator to see firsthand the many aspects of running a business. Working at a midsize accounting firm, Ira Sarinsky & Co., early in his career, he was exposed to the various personality types of entrepreneurs. “I had the opportunity to interact not just with the numbers but with the flesh and blood of the business,” he says.
While there, he learned that accounting actually serves as the thread for running a company — rather than being an end-of-the-line process that businesses have to undertake. “Financial statements are not an end, it’s just the beginning,” he says. “It’s something to read and it’s a tool, but it’s also something to go forward with” to see why things happened and why they didn’t.
How Haupt gets involved with a company varies. Sometimes the client finds it needs a little more financial help than it’s getting with a controller or head bookkeeper, and other times he gets involved to solve a particular problem, such as helping the company secure financing.
Many times he has taken on a consulting type of role where he outlines a business plan to help the company start making money by pointing out that its operating expense is too high, for example, or that the company carries too much inventory, which is cutting into its cash flow. In some cases, his job is a matter of pointing out to the CEO that he or she is doing too much work and needs to offload some of it to someone like Haupt or another executive.
Haupt says he learned over time how to trust his instincts when he had to defend his work as a twentysomething accountant. “I was reviewing financial statements with an old, crispy, garment-center type owner,” Haupt recalls. “I was presenting quarterly results that were disappointing and that he was not expecting. He grilled me for about three hours and I had to stand by my numbers. It was one of the longest three hours of my life but it was a fantastic experience because he had to accept what I told him.”
It’s much easier for Haupt to be blunt with his clients and point out their flaws than it would if he were a full-timer, he admits. “If I can’t communicate freely and frankly to my accounts, I’m not going to be any good to them,” he says. “Then I shouldn’t be there to begin with.”