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Are You an Entrepreneur Trapped in a CFO Role?

For some CFOs, starting their own company is a step up.

In high school, Rob Ripp's first business was cutting lawns. That gave him a taste of working for himself.

But first he spent nearly a decade as an employee for companies like Lehman Brothers, Colgate-Palmolive, and Arthur Andersen. And in 1999, he got his first CFO job at Immedica. He never lost that entrepreneurial spirit though.

“My mission was largely accomplished,” Ripp says about his time at the venture-backed medical device company. “I helped raise about $10 million in additional financing and stabilized the company, enabling them to triple revenues within a year of post-financing. After a couple of years, I was seeking out a new challenge.”

So in 2003, he founded Fintelligent, which provides financial advisory services to businesses. Last year, he started to scale the business to include more robust services. “It is very gratifying to help business owners figure out how to make more money, then watch them hire people, build out facilities, and more, knowing that the things we did helped them get there,” says Ripp.

For Ripp, the move from CFO to entrepreneur was a dream fulfilled, as it is for other former CFOs who are running their own business, either as heads of their own company (such as Proformative CEO John Kogan, who previously held four CFO roles before co-founding this site) or as “part-time” CFOs who work on a contract basis and are able to work as little, or as much, as they like and live a similar lifestyle as a traditional entrepreneur.

Here are the stories of CFOs who have taken the plunge and are not looking back.

Stepping Out of the Comfort Zone
Nathan Beckord served as an interim CFO for a number of very early-stage startups, essentially as a fractional CFO to help them build their business models, create financial forecasts, and position themselves to raise capital. While he still does this type of work part-time, last year “in earnest,” he says, he started building the code for his software startup, Foundersuite, which provides tools for many things that a startup CFO does, such as raise capital.

Like most entrepreneurs, he works long hours – six days a week, anywhere from 60 to 70 hours in total. “It never stops,” Beckord says. “But it's very exciting to be building something and see a product take shape, based around customer feedback.” He also likes being in control.

However, every day is not Christmas. “It's definitely challenging wearing all hats at once: product manager, recruiter, salesman, marketer, head of engineering, finance guy, etc.,” he acknowledges. “I'm not equally strong in all areas. For example, I'm still learning how to manage engineers. But it's also very stimulating, especially versus a narrowly focused, siloed job.”

Do What You Know
Phil Symchych says he quit resisting the call to independence when he set up his accounting firm in 1994. “After two years of sheer and utter boredom preparing financial statements and tax returns, I wound up leaving my accounting firm and gave the files away.” He moved full time into CFO consulting in 1996 when he started Symco & Co.

“The leap was partly due to the fact that I ran out of places where I wanted to work,” he says. “As with most accountants, I started out working for a large accounting firm. I recorded my time in painstaking six-minute increments. That sure made the day drag on as I watched my progress inch along. I'm pleased to say since starting my own consulting firm, I've never kept track of my time.”

What does he cherish most? “Control of my time, my value, my clients, and my life,” Beckord says. “Some days are spent working from the deck, in the sun, while I advise clients on my cell phone. Others are spent obtaining financing and helping busy entrepreneurs become wealthy entrepreneurs. The best days are spent issuing invoices and making bank deposits.”

Ready to Fly Solo?
What advice do CFOs turned entrepreneurs have for those who are toying with the notion of following in their footsteps? “Be prepared to deal with all the personnel issues – all the personalities of employees in different areas,” says Don Kluthe, who is 50% owner of AmeriFirst, which provides home improvement financing. He was formerly the long-time CFO of Pacesetter Corp.

And be ready to adapt to different personality types; you’ll have to manage people outside the finance organization. “Everybody is not like accountants,” Kluthe says. “Accountants are easy to manage,”

Then there's the other people matter – having to lay people off. “I never enjoyed making the decision to reduce personnel,” he adds. “I always wanted a culture where everybody is close. It's tough when you have to make reductions, to decide who has to go.”

His best advice for would-be entrepreneurs: “Make sure you have enough capital and that it is available to you before you go into business. Know that lack of capital is why most businesses fail.”

Ripp also offers words of wisdom: “As CFOs, we know how to manage others' cash. We should know how to manage our own. That means knowing how much you need, how much you have, and putting in hard targets and plans in place to manage it.”

But the work is not all about numbers. You will have to go beyond your CFO skillset. “You'll have to do a lot of heavy lifting on your own, especially in customer satisfaction. If you are a CFO with little experience handling customers, learn fast or hire to your weakness,” says Ripp.

Maybe you’ve been able to hunker down in your corner office in the corporate world, but you’ll have no such luck in entrepreneur land. “There is no place to hide in a small business. You can't gloss over problems – they can cripple you quickly,” says Ripp.

But mostly, these former CFOs feel like Beckord, who says, “I wish I had done this much sooner. Now that I know how much fun it is to start a company, I think I'd have a hard time going back to being an employee or consultant.”

Sheryl Nance-Nash is a freelance writer specializing in personal finance, small business, general business, and career-related topics.