📬 Running on empty: What to do when burnout catches up with you

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We’ve got some great topics. Here’s what’s on tap:

Now, let’s get into it.

Struggling CFO from the US asked:

I've been with my manufacturing company for 10+ years, starting as our first full-time accountant and "growing up" with the company throughout my tenure. I've been our CFO for ~8 years. It's been a roller coaster, to say the least; we grew revenue over 4x in my first 5 years, at which point the founders exited and we were acquired by a PE group. We had a successful year following the acquisition, also acquiring another company along the way.

We've had some rough times since then. Our revenue has been in a freefall over the last 4 years, with last year coming in at just over 25% of our peak year. I won't get into all the details of our cost reductions, but at a high level, we've closed two plants, one office, and reduced headcount by nearly 80%. I've actually recommended to the board that we replace my position with a general accountant/controller who can "run the railroad" at a lower salary, but they do not want to go that route—at least not at this point.

I never thought that burnout would be an issue for me, but I'm starting to lose steam in fighting this battle. AP aging is out of control, our LOC is nearly maxed out, and we're on our third round of renegotiating covenant provisions with our bank. I would give anything to feel that "fun" stress of scaling a company up again, or hell, even just keeping steady for a year or two. I also feel a sense of obligation to see this thing through, knowing that we arrived at this position under my watch. In hindsight, I think the only way we could have avoided this situation would have been to implement cost cuts much sooner, but we were playing to win, and we obviously can't change that now.

I do have a glimmer of hope that we can return to profitability, albeit at a much smaller scale. Last quarter was our first profitable quarter in over a year, and we should exceed budget for Q1 this year. We've cut so much cost out of the company that our breakeven threshold feels attainable from a sales perspective.

I know I must sound like the worst CFO in the history of the universe, but my long-winded question is: Do you think there is any value to sticking this thing out to the end, even in the worst-case scenario? And further, if you have ever been around for the bitter end of a company, what is that like?

Hey, and thanks for the question.

First up, cut yourself a little slack; you certainly don’t sound like the worst CFO in the universe. You've taken the business and the finance function through a number of stages, including an exit. That takes real chops. And you've been facing some incredibly difficult manufacturing conditions over the last few years. Just because the business is struggling doesn't mean you are failing.

You also recommended to the board that they replace you with a controller at a lower cost. That is one of the most selfless and professionally honest things a leader can do. The fact that they said ‘no’ tells you something worth holding onto.

But you are clearly at a crossroads, and I think there are two honest questions you need to sit with.

The first is whether it is right for you to keep going. Burnout isn’t just a word; it’s a real thing. I’ve been there. It takes a toll that compounds quietly, and a CFO running on empty is not serving the business, themselves, or their family well.

The second is whether you are still the right person for this specific phase. There is no shame in recognizing that you are wired for growth and scale, and that running a lean, optimized, survive-at-all-costs operation is a different job requiring a different gear.

One observation: If you came up through the business as the first accountant and went straight to CFO, you have probably never had the chance to learn under an experienced operator at a senior level. If you do move on, I would be deliberate about that. Either position yourself squarely in the growth situations you clearly thrive in, or consider going in as a number two under a seasoned CFO for a stint.

On your question about the bitter end: I have not been the CFO at the moment a business finally closed, but I have been very fucking close… and stared right into the abyss.

And I’ve done a lot of heavy operational restructuring and large-scale layoffs, and I've been involved in closing significant manufacturing facilities. It is not fun. What keeps you grounded is staying focused on building the most sustainable version of the business you can with what you have, and taking your responsibility to the people still in it seriously.

It’s clear from your question that you are giving it the best you have right now, and there are some glimmers of hope.

So, get some rest… then decide.

Oh, and one more thing. The Strokes are back:

And they are touring this summer. Get some tickets… you’ve earned it.

TL;DR: You are not the worst CFO in the universe… you are just tired and in the swamp. Decide honestly whether you are still the right person for this phase, and if you move on, be deliberate about your strengths.

Swiss M&A CFO from Switzerland asked:

I enjoyed your piece on storytelling, and am applying your concepts as a sell-side M&A advisor for SMEs. Drafting Information Memorandums (IMs) is a high-stakes storytelling moment, and I would love to get a bit more tactical on the implementation.

While replacing a standard PowerPoint deck with a pure narrative memo seems unfeasible in our industry, I like the idea of outlining the IM in a text document first using your "therefore and but" structure.

I would appreciate tactical input on:

Thanks for the question from Switzerland. I'm heading over later in the year for a bit of a watch tour, and hoping to catch the glass train, too.

I LOVE this question because the information memorandum might be one of the purest examples of a high-stakes storytelling moment in finance. And I’ve sold a lot of businesses in the past, so I have plenty of thoughts here.

Let me work through your points.

First, a clarification on PowerPoint: I don't hate it. What I hate is using it as a thinking canvas. The lack of constraints leads to lazy thinking and lazy articulation. But a slide deck is (and will remain for a long time yet) a great format for sharing a story. So, your instinct is exactly right: build the story first within the two-dimensional constraints of a narrative memo, then use PowerPoint as the vehicle to tell the story you have already constructed.

On positioning the buyer as the hero: yes, emphatically. This is the art of great sell-side storytelling. You position the business as having everything lined up to charge into an explosive next phase, except for one or two specific constraints. Maybe it is capital; maybe it is distribution, reputation, the right ownership model, or a particular capability gap. And then the buyer is framed as the perfect person to unlock exactly that. They are not only acquiring a business, but they are stepping into a story that was written for them.

For the narrative draft itself, I would work in two layers.

First, on no more than half a page (or five to seven bullets), set out the headline story arc. Really spend time getting this right; if you do, everything else that follows will be easier. Then, behind that, build a more detailed page-by-page breakdown. This is your bridge between your high-level story and your eventual IM deck.

I use a table format, mapping each page to its role in the narrative, the headline point it needs to land, and what the supporting content needs to look like. That table becomes your control sheet for the PowerPoint build and keeps the story coherent as the deck gets built out.

To answer your question on Point A to Point B… you can think of Point A as the precise condition of the business today. This is where the Adjusted EBITDA bridge is important; this is the financialization of what Point A looks like… and it’s a fine balance between ensuring you leave nothing on the table and making sure it’s credible.

On promotional language: I would be careful with strong adjectives. The best selling of any kind lets the facts and the story architecture do the work. Apple does not advertise the “amazing” new iPhone; they show you what it does and let you reach the conclusion that it's amazing yourself.

On story arc frameworks: the "therefore and but" structure lends itself well to an IM, but the precise arc depends heavily on the underlying asset. A turnaround story, a market timing story, and a category creation story all have different shapes. Get that diagnosis right first, and the framework follows.

TL;DR: Build the story in a narrative memo first, then transfer to PowerPoint. And yes… make the buyer the hero.

Soto from the US asked:

Hi, you previously answered a question on invoice finance. My firm works in a related market, but one step higher in terms of risk. We provide purchase order financing and charge 0.1% per day on capital outstanding for the cost of goods financed; for example, 25 days would be 2.5%, and 43 days would be 4.3%.

We require our clients to have healthy gross margins (usually 37% or higher) in order to finance them. Our contracts are very simple, allowing exit after any amounts due are paid, and we require payment to be directed from the buyer to us, rather than to the client.

My question relates to our clients' concerns that directing payment to us will look bad to their customers. We believe it's common for invoice payments to go to a multitude of receivers and that this isn't an issue for 99% of buyers. Can you comment on this (and provide any overall thoughts on PO finance)? Do you think the rate we charge is too low for the risk, or too high? What other options have you seen in this market that we should be aware of?

Soto, I appreciate the question, but I should warn you upfront: you might not love my answer.

As a CFO, I have never been a fan of working capital funding solutions as a category. They have a place, used occasionally and deliberately, as a liquidity backstop or to smooth seasonal working capital swings. But that is rarely how they get used in practice. More often, they become either a permanent fixture in the capital structure or a way of funding growth in businesses with fundamentally ugly cash conversion cycles. Neither is healthy.

And of all the flavors of working capital funding, PO financing sits near the top of my shitlist. You are inserting a financing company directly into the supplier-buyer relationship, which in itself will make suppliers nervous about the buyer and their creditworthiness. And 0.1% per day is, let's be honest, an extraordinary rate.

I understand the risk model from your side, and I am not casting shade on the business you are building. But any business that depends on that kind of funding at any meaningful scale does not yet have a proven business model. And if the model is not proven, it probably should not be scaling...

This is not an abstract concern for me. I recently wrote an angel check into a business with major dependency on PO funding. I have been pretty vocal with them about paying it down as fast as possible and fixing their core cash conversion cycle before they think about growing further.

The reason I feel so strongly about this is that I believe the cash conversion cycle is inseparable from the business model itself, especially in the early days. Look at the great growth stories: Costco, Walmart, and Nike. Working capital management was a strategic weapon, and without it, they wouldn’t be here today.

Costco's entire expansion model is built on the fact that they turn inventory fast, collect cash at point of sale, and pay suppliers one month later. Every new store opening is partially self-funded through the working capital flywheel.

My problem with PO finance is that it removes an important and useful constraint. One that forces founders and operators to think hard about their cash conversion cycle, to treat it as a core part of the business model rather than an inconvenience to be solved later. PO finance lets people defer that thinking, often until it is too late. By which point the business model is fully baked, the customer relationships have set like concrete, the supplier relationships too, and any lazy inventory discipline is built into the culture and hard to change.

I wrote about this dynamic with an example here, two otherwise identical businesses growing at the same rate, with different working capital profiles, ending up $10m apart in cash:

So to answer your question honestly, I am probably the wrong person to ask. But if your clients are asking whether they should be using your product at all, I know what I would tell them…

TLDR: PO finance solves a symptom, not the problem. The cash conversion cycle is part of the business model. Businesses that depend on expensive working capital funding to scale are deferring a reckoning, not avoiding one.

A few of the biggest stories that every CFO is paying close attention to. This is the section you might not want to see your name in.

Ex-CEO and ex-CFO of bankrupt AI company indicted on fraud charges

Prosecutors allege the pair hallucinated “virtually all" of the company’s revenue and clients. And this was a public company… you do have to wonder how that happened.

PE CFOs see a bump in pay

Longer PE hold periods mean CFOs waiting longer for a liquidity event. Naturally that means we are negotiating harder on base salary in the comp mix. But that’s a two-edged sword … PE firms are swapping out CFOs mid-hold more often too. Make sure you read those ‘bad leaver’ clauses in your contract, and then read them again!

Mega layoffs are becoming a (controversial) business strategy

The reporting of the tech layoffs is sensationalizing the short term impact of AI on companies. Nobody is cutting 40% of headcount because of AI. Not yet.

Any company cutting 40% of their heads didn’t need most of those people in the first place.

I am still yet to see real evidence of delivered cost savings that can attributed to AI. It’s coming, but it’s not here yet. I’ll be talking more about ROI on AI investment in this week’s playbook.

ICYMI, here are some of my favorite finance/business social media posts from this week.

In SimCFO you’re the new interim CFO of Numa, a sports apparel business that’s quietly bleeding out. Numa’s last CFO left abruptly, and Otis Chamberlain is your VP of Finance and right-hand man.

He's smart, he's loyal, and he has a theory about everything. The cash problem. The accounting head. The AI rollout at corporate. Some of what he tells you is gold. Some of it might be Otis positioning for the job he thinks he deserves. You're not always sure which is which, and neither, probably, is he.

Figuring out which is which is the job.

You make the calls, and you’ll have to live with the results. At year-end, you find out whether you got the permanent CFO job or not.

Most CFOs don't get a practice run before they're in the seat. This is yours.

Let me know what you thought of today’s Mailbag. Just hit reply… I read every message.

Last weekend’s Playbook dug deep into how to make the technology decisions for implementing AI.

In last week’s Boardroom Brief, we looked at whether CFOs are set up to review AI produced work..

Disclaimer: I am not your accountant, tax advisor, lawyer, CFO, director, or friend. Well, maybe I’m your friend, but I am not any of those other things. Everything I publish represents my opinions only, not advice. Running the finances for a company is serious business, and you should take the proper advice you need