How My Business Grew From Side Hustle to Seven Figures

John Frank and Third Road Management started offering fractional CFO services before fractional CFOs were a thing. See how he grew the business and why he says you should “never stop networking.”

How much revenue does the business generate?

We are a multi-seven-figure business, growing most recently at 15-20% per month.

Tell us about yourself and your business.

I started Third Road Management in the fall of 2015 with the goal of revolutionizing how small to mid-sized organizations view and manage their financial operations.

At the time, I had been doing this type of work as a side project for several years before the “little pink umbrella” idea hit me. I had never heard of a business that was fully designed to help lead small to mid-sized organizations strategically, financially, and operationally, and these businesses were everywhere.

I used the term “Fractional CFO” to describe our services, having never heard it before, as a way to differentiate us from businesses that were really doing what I think of as outsourced accounting. I also wanted a differentiated service offering from permanent placement or interim placement firms to avoid confusion. Now the “fractional” services industry is growing rapidly in popularity, and we’re trying to leverage our years of expertise and learning to be the market leader.

Prior to founding Third Road Management, I spent 13 years in corporate finance. My time in corporate finance was spent in mergers and acquisitions (quality of earnings analysis at Arthur Andersen and leveraged finance at Antares Capital and Denali Capital) as well as fixed income sales and trading (distressed structured products trading at Cohen & Company and R.W. Pressprich).

I earned my BS in Finance from the Gies College of Business at the University of Illinois at Urbana-Champaign. 

How does your business make money?

Third Road Management is a professional services firm that offers what we refer to as a “re-imagined CFO Suite.” We hire the most skilled Fractional CFOs, Controllers, and Bookkeepers available in the market, who then provide their expertise to our clients for a fee.  Some clients use us for every service, some use us for just one. We work with whatever makes the most sense for that client.

What was your inspiration for starting the business?

The truth is, I like to say that this business started itself.

I first started doing this type of work as a side hustle in May of 2014 when a friend of the family, who owned a commercial printing business, reached out for help when his CFO abruptly resigned.

Within months, we had taken a ton of positive ground from the perspectives of profits, business visibility, leverage, and overall risk profile. Then, having heard about this success, another friend reached out for assistance in operating their business which was in a completely different industry than the first.

After experiencing a good amount of success there as well, I had the “epiphany” moment when I realized: a) this work is rewarding, b) these types of organizations have a huge void in strategic, financial, and operational expertise, c) these organizations are everywhere you look, and d) nobody I could think of was doing what I was doing.

There are over a million organizations in the United States with less than $100 million in revenue that I believe can utilize our services. Our goal is to help as many of them as we can and do it by standards that others measure themselves against.

How and when did you launch the business?

In October 2015, I legally organized the business. By the spring of 2016, I had completed all the messaging, logo design, and website launch. By January 2017, I was working on Third Road Management full-time.

How much money did you invest to start the business?

Third Road Management has been bootstrapped since the beginning. I started the business with $5,000 that I used to pay an attorney, a graphic designer and a web developer.

How did you find your first few clients or customers?

My friends, family, former colleagues, and general network connections carried us then and continue to carry us now. The major difference is now we have a larger team with their own networks and as we deliver great work for more clients, those clients also are referring us to other clients via word of mouth.

What was your first year in business like?

Well, it seems like a lifetime ago! That being said, I know a lot of what I did was spreading the word. At the time, people in my network (and in general) didn’t really have a category to put Third Road Management in, so I spent a lot of time sitting down with people and telling them what we are and what we are not.

We are not … a) a project-based consulting firm, b) a placement agency, c) an interim/temporary labor firm, or d) a “gig” shop where we broker 1099 contractors with opportunities.

In the end, I think that all of these experiences really helped me develop the vision for the type of firm we wanted to be. Having this unified vision allowed us to put some guardrails up over the years against vision creep (aka…having the discipline to say “no” to good ideas that might make some money but were not ultimately moving us towards our vision).

We also hired some of our first employees as part-time, on-call staff, which helped us manage cash flow more easily and really helped us through our first several years. We’ve never had an unprofitable month since our inception.

What strategies did you use to grow the business?

We’ve tried a number of different strategies over the years, some with success and some….not so much. The strategies that didn’t work included a direct mail campaign that we did early on, some SEO/SEM investments, and some email marketing that was a bit of a “spray and pray” approach. On the SEO/SEM side, I think that was partially influenced by the lack of awareness of our service, so it might be something that we reconsider down the road.

The strategies that have worked have included me sending quarterly personal updates to my network via email, staying relatively active on LinkedIn, constantly taking networking meetings, and the launch of our podcast (The Drive-By Entrepreneur Podcast…available on Youtube, Spotify and Apple). In general, I also think investing early and continuously in our brand and “dressing for the job we want rather than the job we have” has also been crucial.

Tell us about your team.

We are building a world class team of professionals that I’m very honored to call colleagues.  Our leadership team consists of myself, our President, our CFO/COO, and our CFO Team Lead at the moment, all of which pass the “surround yourself with people smarter than you” test with flying colors.

I’ve purposely tried not to fall into the same pitfalls of leadership that I coach our clients out of by building a strong team around me and letting them do their thing while I let go of hats. Outside of our leadership team, we have the best Fractional CFOs, Controllers, and Bookkeepers in the world who deliver on-site, remote, and hybrid services with excellence and do whatever is necessary to provide the best experience for our clients.

What are your future plans for the business?

I’m of the fundamental belief that our “CFO Suite Revolutionized” offering is not just a different option but ultimately the best solution to staffing the financial office for over a million organizations across America.

We’re not going to serve all of them, but we sure as heck are going to try! I’ve communicated to our team since inception that we want to be the “Goldman Sachs” of this industry, the brand recognized as the standard. The ocean of opportunity is so richly blue with this focus on the CFO suite that, at least for now, we’re saying “no” to other great ideas to keep our primary focus.

The one thing that people might see from us in the mid-term is some geographic expansion.  Right now we serve the greater Chicago area locally and clients across the country remotely, but I think there will be a day that there will be more intentional boots on the ground in other metropolitan areas.

How did you make the transition from side hustle to full-time?

I was very fortunate to have outstanding, forward-thinking leaders that I worked for at the church during my side-hustle days. They were receptive to me bringing my big vision to them and were encouraging, supportive, and open to working on a formal transition plan. Moreover, Third Road Management still has a strong relationship with them as a client, and I still bring them the best of what I have to offer them individually as their Fractional CFO.

What was the turning point when you knew your business was successful?

I think that, like most entrepreneurs, I have a bit of imposter syndrome. When it comes to feeling too comfortable, I know that it all could change in the blink of an eye. That being said, I have gained a lot of comfort over the years knowing that we’ve been able to hire enormously talented people that both believe in and share our vision.Their buy-in and commitment to our vision has helped reinforce my conviction to the path we’re on.

What is the most important lesson you’ve learned growing the business?

Too many to even count! There’s nothing quite like learning on the job. Broadly speaking. I think some common euphemisms come to mind, like surrounding yourself with people smarter than yourself, hiring slow and firing fast, culture eating strategy for breakfast, the client is always right, and staying committed to your vision, mission, and values all apply.  

Additionally, I think some of the things I’ve learned that I was somewhat surprised by are:

• The overall company’s values, written or implied, have to be your values.  Also, your values have to be shared and agreed upon among the team. If those are incongruent trouble is around the corner.
• Trust your instincts. The times I feel like I’ve made the biggest mistakes is when I’ve ignored my instincts because the decisions were hard and inconvenient, and the ramifications of those mistakes were larger than if I had made the decision earlier.
• You never stop feeling like you are pushing yourself “all-in”…or at least I haven’t gotten to that point yet. I think that a lot of business owners limit their ceiling by becoming precautious and forgetting about all the risks they took to get to that point.
• Start cultivating business relationships early in your career. and never stop networking.  Even in the digitized world we live in, the power of authentic relationships is very real and rewarding.

What was the biggest challenge you had to overcome?

The biggest challenge has been bootstrapping the business without any external capital, not even a line of credit, while still earning a living for my family. I think, in some ways, that hindered our growth trajectory a bit, but we managed for years by hiring part-time, on-call employees.

An adjacent challenge to that has been the tension of having too much work and not enough employees or too many employees and not enough work. Thankfully we’re mostly past these challenges.

What advice do you have for other entrepreneurs?

There’s nothing else I’d rather be doing, but entrepreneurship is absolutely not for the thin-skinned. There are many days when it would have been easier to quit and find a job that doesn’t require all the brain power, but you have to power through those moments and remember your purpose as you strive for success.

What is your favorite quote?

Only those who will risk going too far can possibly find out how far one can go.

T.S. Eliot

If you had to start from scratch, where would you begin?

While I would have liked to avoid all the low points along the journey, I think that the right answer is that I would not have it any other way.  In the end, I’ve learned a ton from the experiences both good and bad.

Where we sit today, I am even more convinced that our vision is both real and achievable, even more so than it was on day one. I’m excited that it’s been seven years well spent, and also know the best is yet to come both for Third Road Management and our client partners.

What are some of your favorite books, blogs, podcasts, or YouTube channels?

Shameless plug here for the Drive-By Entrepreneur Podcast by Third Road Management, but in addition to that one, I’m a big fan of podcasts including:

How I Built This, The Tim Ferriss Show, Smartless, The Rewatchables and a number of true crime podcasts like Serial.

In terms of leadership books, I’m a fan of anything by Patrick Lencioni, Simon Sinek, Brene Brown, Adam Grant, Jim Collins, and John Maxwell.