Strategic Finance: Key Levers for Business Growth with Michael Barbarita

strategic-finance-key-levers-for-business-growth-with-michael-barbarita

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Alright. Welcome back to The Daily Mastermind. George Wright III here with your daily dose of inspiration, motivation, and education. And we're gonna get real strategic today.

I've got a great guest. His name is Michael Barbarita. Michael, welcome to the show.

Thanks very much, George. Thanks for having me.

Listen, we've had a chance to talk, and I think people are gonna be really excited because generally, when I bring up financial and business topics, people are like, “Okay, where’s the energy?” But you have some intense background and strategy, so let me give a little intro.

For those of you listening, Michael’s the founder of Next Step CFO—a strategic financial advisory firm serving entrepreneurs and business owners. He’s been doing this for over 40 years across retail, manufacturing, and service-based companies. He’s also the former CEO of Ski Town USA, which he grew to $8 million in under five years.

Michael co-authored the book Powerful Business Strategies, and that’s what we’re going to talk about today. It’s not just about finance—it’s about the strategies that drive success.

Michael, I’m really glad you’re here with us. I’d love for you to give our listeners a quick two-minute background on where you come from and how you’ve built and grown into the place you’re at now.

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Michael’s Journey: Successes and Failures

Thank you, George. And thank you for having me. One of the strange things about my journey is that I did successful things—and then I did stupid things. Let me explain what I mean.

Back in 1999, I had just sold my second business successfully. My first business grew, as you mentioned, from two and a half million to $8 million in five years. What was interesting is that I always implemented business and financial strategies that my competition wasn’t doing.

But after I sold my second business, I got a huge head. I thought I could do anything—I thought I had the keys to the business kingdom. So I started an outpatient rehabilitation facility called Freedom Therapy Center. And I did exactly what my competition was doing.

After five years, I fell flat on my face. I had to close it out, pay off all the liabilities, and move on.

What was interesting is that I marketed the same way everyone else did. I used what I call “I hope so” marketing. I marketed to doctors just like everyone else. I had the same protocols, the same playbook, and as a result—I got nowhere. I didn’t implement any of the strategies that had made my previous businesses successful, and I paid for it.

“The toughest part of failure is not the fall itself—it’s taking the next step after the fall.”

Thirty days after I closed Freedom Therapy Center, Next Step CFO was born.

At Next Step CFO, we don’t just do fractional CFO services—we combine the financial with the strategic. What I call strategic implementation.

And I feel like that came from this idea that, early in your career, you shifted quickly from analyst to operator to CEO to growth driver. That probably changed the way you viewed money, right? You realized it wasn’t just about the numbers but the strategy tied to the money.

Absolutely. But it took me falling on my face to figure that out. I didn’t know it before then. The biggest lessons we learn always come from failure.

That’s correct. And you made an interesting point—most people are doing what’s “working” or what everyone else is doing. They get some results, but many businesses still fail because of that. What you’re saying is, when you apply unique strategies and principles—not copycats—you create separation.

That’s exactly right. Let me give you a quick example.

When I was in the ski business, the biggest problem customers had was that they didn’t know if the skis they were buying were the right ones for them until they got out on the mountain. Once a ski was used, it depreciated heavily. So I created something called the Ski Guarantee.

If you bought skis from us, you could ski on them up to three times. If you didn’t like them, bring them back for a brand-new pair—and keep doing that until we got it right.

My managers thought I was insane. They imagined thousands of pairs coming back and us losing tons of money.

But my mindset was different. All the customer really wanted was a great ski experience. And I also knew my competition would never take that risk.

We sold 8,000 pairs of skis the first year—a 25% increase—and only eight came back. The second year we sold 11,000 pairs and only fourteen came back.

That strategy—risk reversal—completely changed the business. It started with identifying the real problem the customer had.

“Your customer’s problem is your biggest opportunity—it’s where innovation begins.”

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Strategic Financial Advisory: The Birth of Next Step CFO

It’s interesting the way you think, Michael, because I find this true of a lot of high-level business leaders—they think differently.

Here you are, most would assume you’re purely a financial analyst or CFO, but you actually merge forecasting and strategy. You believe in clarity through financials but also in emotional and strategic clarity through process. You’ve developed something called the Conversion Formula. Let’s talk about that.

The Conversion Formula is designed to convert prospects into customers or bring them deeper into your sales process. It’s based on four key steps that must be done in order.

When researching for my book, I wanted to understand the keys to successful marketing, so I went all the way back to 1931. I discovered that great marketing always centers around one thing: getting inside the mind of the prospect.

But how do you do that? We’re not mind readers.

So I developed a four-part system that connects the customer’s pain to the desired solution. It’s based on the idea of identifying “the problem they have but don’t want” and “the solution they want but can’t find.”

The four steps are:

1. Captivate – Highlight the problem the customer has and doesn’t want.
2. Fascinate – Present the solution they want but can’t find.
3. Educate – Explain how your solution is superior.
4. Close – Deliver a compelling offer.

Each step ties to how people buy. Prospects buy emotionally first (Captivate and Fascinate) and then justify logically (Educate and Close).

I love that—and I agree completely. Most people try to educate first, skipping the emotional side. They talk about their solution without ever capturing the customer’s attention. Your order is perfect because it follows human psychology.

Exactly. If you skip Captivate and Fascinate, you never get into the prospect’s mind. When done correctly, this formula transforms how you communicate value.

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The Conversion Formula Explained

The Conversion Formula follows the same psychology as the way people buy. Prospects buy based on emotion first, and then they back up that emotion with logic. The “Captivate” and “Fascinate” steps are emotional; the “Educate” and “Close” steps are logical.

I love the formula, and it’s so true. From my thirty-plus years in sales and marketing, I can tell you that most people skip the emotional process entirely. They educate too early or focus on the solution before earning attention. You hit it dead on when you said it has to be in that order.

Exactly. Most businesses do it backward. They try to educate first or jump into their product features, but they haven’t captured attention or emotion.

And what’s powerful about your approach is that you’re tying it back to revenue and financial impact. It’s not just theory—it connects directly to money. What made you decide to bring the Conversion Formula into your work as a CFO? Why tie this so tightly to finance?

The way I see it, if you’re a CFO in a Fortune 500 company—and, by the way, I don’t work with companies that size—then you already know you have to master both financial and strategic thinking.

But in the small to midsize business world, most fractional CFOs only focus on the financial side. They’re great with forecasting, solving cash flow problems, and identifying key metrics, but they often lack the strategic insight needed to hit those forecasted goals.

That’s what drove me to combine both. Because strategy without financial clarity is chaos, and financial clarity without strategy is stagnation.

That’s so true. You can’t manage what you don’t create—and you can’t create without clarity. So it makes sense that your holistic approach starts with strategy and conversion, because if you don’t generate business, there’s nothing to manage.

Exactly. If you want to grow from $2 million to $4 million, you can’t just forecast the numbers—you have to understand how to create them. That includes managing people, sales, and scalability. It’s all connected.

“Strategy without financial clarity is chaos; financial clarity without strategy is stagnation.”

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The Critical Five Numbers for Business Decisions

You often talk about helping entrepreneurs use finances to create clarity—especially in uncertain markets. What do you do to help your clients use their numbers to gain confidence and direction?

Most business owners don’t like numbers. I’ve learned that over time. They know they have to deal with them, but they’d rather not.

So I tell them this: You don’t have to love numbers—you just have to know the right ones.

I help clients make decisions based on what I call the Critical Five Numbers. If you track these consistently, you can make 60–70% of your business decisions with more accuracy.

Those numbers are:

1. Weekly Sales
2. Weekly Gross Profit
3. Gross Profit Percentage – the “mother of all” numbers
4. Weekly Net Profit
5. Daily Cash Balance

If you understand these five metrics, you can run your business intelligently even if you hate reading financial statements.

I love the simplicity of that. Most people don’t even track these consistently. Adding gross profit percentage and daily cash flow takes it to another level. These are the metrics that influence every decision.

Right. These numbers are your foundation. But remember, the numbers tell the story—the strategy writes it.

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Adaptability and Flexibility in Business

Now, Michael, when it comes to financial success, one of the biggest themes we’ve been hearing lately is adaptability. Businesses are facing AI disruption, rapid shifts in marketing, and changing customer behavior. You’ve talked about how adaptability is one of the most important skills for modern business owners. Can you expand on that?

Absolutely. The ability to adapt and be flexible to change is, in my opinion, the greatest strength any business owner can have in the 21st century.

If you can’t adapt, you’ll end up repeating the same mistakes because staying comfortable feels safe. But comfort kills progress.

Adaptability isn’t just about resilience—it’s about having the courage to evolve your strategies, your offers, even your mindset.

That’s powerful. So, when you talk about adaptability, are you referring to being proactive or reactive? Is it about adjusting to change that happens to you, or creating change intentionally?

Both. You must be ready to react when necessary, but also create change before it’s forced upon you.

For example, look at AI right now. If you’re not in, you’re out. Businesses that resist new tools or new ways of operating will get left behind. The best owners are always asking, “What do I need to change today to stay relevant tomorrow?”

“Comfort kills progress. The ability to adapt and be flexible to change is the biggest advantage a business owner can have.”

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Seven Steps to Drive Revenue

That brings me to something you mentioned from your book—your seven steps to drive revenue. Let’s go through those because I think our audience will really benefit from them.

Sure. When we wrote Powerful Business Strategies, we realized most businesses misunderstand the 80/20 rule. They think it means 80% of their business comes from 20% of their customers. That’s true—but there’s another side.

We found that 80% of your revenue comes from 20% of what you do every day.

So we broke it down into seven steps that represent the 20% of actions driving 80% of results:

1. Leads – You need a constant flow of quality leads.
2. Conversions – Track how many leads enter your sales process.
3. Closing Rate – Know your ratios and how to improve them.
4. Customer Retention – Keep your clients; it’s cheaper than acquiring new ones.
5. Average Dollar per Sale – Always seek to raise your average ticket.
6. Frequency of Sale – Encourage repeat business; once a customer buys, there’s a 34% chance they’ll buy again.
7. Costs – Manage both fixed and variable costs.

Focus on those seven, and you’ll see 80% of your business growth come from them.

That’s a brilliant way to frame it. Think of these as seven levers—if you pull even one, just a 10% increase can change everything. It’s such a clear and actionable system.

Exactly. And when you connect these seven levers to the Critical Five Numbers, you’ve got a complete roadmap for growing and scaling your business.

I love it. You’ve tied the data-driven side with actionable growth levers—it’s the bridge between financial clarity and operational excellence.

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Final Advice and Closing Remarks

Michael, this has been amazing. For those listening who want to connect, what’s the best way to reach you?

They can go to NextStepCFO.net to download a free copy of my book Powerful Business Strategies.

Even better, they can participate in what I call a Book Interview. If you go to NextStepCFO.net/contact and write “book interview” in the message box, I’ll invite you to a 60-minute Zoom session where I present strategies from the book.

Then I ask: “If a business in your industry implemented this, what would the impact be?”
It helps me refine my work, and you get new strategies your competitors aren’t using. It’s a win-win.

That’s fantastic. I’ll include all those links in the show notes. And you’re right—it’s about collaboration. Information is everywhere, but implementation is what matters. Michael, thank you for being on the show.

Thank you, George. It was a lot of fun.

Absolutely. And to everyone listening—remember, it’s never too late to start creating the life or business you want. Take action, focus on these levers, and use your adaptability as your advantage.

This is George Wright III with Michael Barbarita on The Daily Mastermind. Have a great day.

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About Michael Barbarita:

Michael Barbarita has owned and operated retail, manufacturing, and service companies for over 30 years. One of the retail companies he operated, called “Ski Town USA,” grew from $2.5 million to $8.0 million in less than 5 years. One of the products he manufactured was “Cookies To Scoop Frozen Cookie Dough,” which was featured on the QVC Home Shopping Network and was selected as one of the top 20 products in the State of Massachusetts in 1997. He has sat on the Board of Directors of 5 different companies and was a Chief Financial Officer and Treasurer for a large specialty retailer, as well as for all of his previously owned companies. Michael has been involved in the structuring of leveraged buyouts, has experience in owning both commercial and residential investment real estate, exporting and doing business on a global scale, and is an award-winning public speaker and Published Co-author with a Bachelor of Science in Business Administration at Babson College in Wellesley, Massachusetts.

Connect with Michael Barbarita:  

Instagram: https://www.instagram.com/nextstepcfo/

Website: https://www.nextstepcfo.net/

Show: Powerful Business Strategies: https://podcasts.apple.com/us/podcast... | https://www.powerfulbusinessstrategie...

YouTube: / michaelbarbarita  

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