December 12, 2024 • 39 mins
What if you could transform your accounting practice by simply rethinking your team structure and revenue model? Join us as we uncover the story of Garrick Foy from Lone Pine Capital, whose childhood curiosity led him to a unique pathway in the world of accounting and business. Inspired by his father's business dealings, Garrick pursued a master's in tax, equipping himself to tackle complex financial scenarios head-on. From his early days in Salt Lake City to becoming a business owner, Garrick highlights the significance of self-reliance in technical knowledge and strategic thinking.
Building a CPA firm isn't just about numbers—it's about people. Garrick shares his insights on conquering the fears small firm owners face, such as the risk of client poaching by team members, by introducing the "team of three" concept. This strategic structure enhances specialization and ensures multiple client connections, safeguarding your client base even if staff transitions occur. Furthermore, Garrick advocates for a shift from one-time tax return fees to monthly recurring revenue, enhancing client relationships and stabilizing cash flow with the help of automated billing systems like ACH.
Effective growth isn't left to chance; it's meticulously planned. Garrick underscores the critical role of well-documented Standard Operating Procedures (SOPs) in smoothing operations and elevating the chances of a successful business sale. Discover the PACE plan concept inspired by the military, designed to bolster team flexibility and self-reliance, and learn why a systematic approach to lead generation beats unpredictable word-of-mouth referrals. By keeping the end goal in sight, whether it's scaling up or planning an exit, businesses can avoid a chaotic structure and pave the way for long-term success.
Feeling stuck in your growth? Discover how to elevate your marketing, personal brand, and sales approach to attract clients who value your expertise.
Ready to make a shift?
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Welcome to CFO Chronicles the secrets behind
success the go-to podcast forfractional CFOs and accounting
firm owners who want to attractmore high-paying clients and
increase their revenue.
Hosted by James Donovan fromNine Two Media, this podcast
dives into marketing strategiesspecifically designed for lead
(00:22):
generation and clientacquisition.
In each episode, you'll hearfrom industry leaders sharing
their success stories and Thankyou to your bottom line.
Speaker 2 (00:49):
Super excited to have you on the podcast today,
Garrick.
We're joined by Garrick Foy,Lone Pine Capital.
Garrick, welcome to the showand please tell us a little bit
about yourself for those whodon't know your background.
Yeah, thanks.
Speaker 3 (01:05):
James, I'm excited to be show and please tell us a
little bit about yourself forthose who don't know your
background.
Thanks, james, I'm excited tobe here.
So a little bit about myself.
I grew up in Utah.
I have been very interested inbusiness from a very young age.
You know a lot of kids.
I remember four or five, sixyears old.
Saturday mornings were awesomebecause of Saturday morning
cartoons back in the day Right.
But for me that was when my dadhad his business meetings and I
(01:28):
was very fortunate to grow upwith a dad that was okay, with
me tagging along regardless ofthe age.
And so from a very young ageI've always been very enthralled
with business.
Didn't seem to matter to theindustry.
Speaker 2 (01:40):
That's so cool, that's awesome and we'll get
into you selling a firm recentlyand you know how we've
partnered up now and you'rehelping out coaching our clients
and operations.
But I would love to go back alittle bit to, as you mentioned,
you were young watchingcartoons, attending business
meetings with your dad, so howdid you get into the accounting
(02:03):
world?
Because that's not something Ifeel like a lot of children
dream of.
I'm going to get into theaccounting world.
Speaker 3 (02:11):
You know, I hate to say it, but getting into the
accounting industry was almost afluke, and I'll expound just a
little bit.
So, like I said, even at a veryyoung age, I always wanted to
be a business owner.
My dad was a business owner andI was very fortunate.
I read Rich Dad, poor Dad atthe ripe old age of like 11 when
(02:32):
it first came out.
So I've always really likedbusiness.
I've liked finance when I grewup.
We're fortunate to have a lotof universities right around us.
But it seemed like, uh, if youdidn't know what you wanted to
be, you got a businessmanagement degree and so I had a
.
You know a fair amount offriends and and just people in
my life that got a businessmanagement degree but kept the
(02:54):
same job they had when theystarted going to college and I
thought, well, that's not agreat return on investment, you
know.
And um, and I thought, well,you know the universities that
were around us.
The accounting curriculum andbusiness management curriculum
were very, very similar.
You had, you know, differentcore classes, but you could
still cover a lot.
And I thought, well, you know,if I'm going to be a, I want to
be the best business person Ican be, and so you know, I think
(03:19):
that the more I focus onaccounting, that'll help me be a
better business person.
Had I been able to look in thefuture you know, 15 years and
seeing what happened with thedigital marketing revolution,
maybe I'd have made differentchoices, but that wasn't a thing
back in the day.
So, anyway, I got my bachelor'sin accounting and took an
(03:39):
accounting job up in Salt LakeCity and, kind of looking at a
master's degree, I was kind ofreally focused on an MBA, but I
also was kind of working with alot of people that had MBAs and
we were doing the same job,making the same money and I
thought, once again, that's nota great return on investment.
And I thought, you know, one ofthe largest expenses and I'm
(04:01):
preaching to the choir because Iknow that most of your base is
accountants, but you know, oneof the largest expenses that any
business owner uh incurs istheir tax bill.
And, um, you know I told youthat my dad was a business owner
and, uh, about 15 or so yearsago we sold his businesses and I
was able to.
You know, I was the COO of hiscompany and so I was able to be
(04:24):
a I don't know if it was aninstrumental role, but an
integral role.
I was very privy to the thingsgoing on and helped with the
negotiations, helped with thecontracts, and I got to see
firsthand that our high dollarCPA was not really invested in
our cash in the pocket.
(04:45):
Result at the end.
He wasn't really invested inhelping us come up with a
strategic tax plan to helpprotect that or anything like
that, and we didn't know reallywho to go to.
Frankly, and it was a learningexperience and kind of a turning
point for me because I knewthat again, I wanted to be a
business owner.
(05:06):
At that time I wasn't thinkingthat it would be of an
accounting firm, even though Ihad an accounting degree.
So ultimately I ended upgetting a master's in tax,
specifically because I thought,you know, I'm not going to be
able to rely on somebody else toknow this technical piece and
or at least not rely solely onthem, right?
I wanted to be as educated aspossible.
And so while I was doing that,I got hired at a CPA firm there
(05:27):
in Salt Lake City, basicallyimmediately moved over to their
business development side,working with small business
owners, helping the smallbusiness owners create a
strategic tax plan thatencompassed the entity, their
personal, if they have an estatethat as well and kind of fast
forward a few years and Idecided that it was time to
(05:49):
actually embark and get intothat business owner stage of my
life and it's funny, it took acouple of years of looking at
businesses before I thought,well, maybe I ought to look at
an accounting firm.
It's what I've been doing, it'swhat my background's in Um and
the first firm that we acquiredwas in Southern Utah and, uh, it
(06:12):
was really a very smallboutique firm and, you know,
kind of fast forward over fiveyears we acquired a couple more
plus, had, you know, the greatblessing of solid, organic
growth and a wonderful,wonderful team.
And um, due to some other lifeevents, like, like you mentioned
, you know, we ultimately endedup selling a couple of months
(06:32):
ago and and uh, really wanted tokind of focus on working with
other firm owners, on, you know,the mistakes that we made, the
hard knock lessons that welearned, to help them hopefully
not have to learn through theschool of hard knocks and learn
from somebody else's you knowexperience, I guess and help
(06:52):
them get into a position where,when the time comes, they would
be able to also have asuccessful closing.
So perfect.
Speaker 2 (06:59):
well, let's dive into into some of those hard knocks
and the lessons learned.
That's a great overview, andit's, I'm guessing, of those
hard knocks and the lessonslearned.
That's a great overview, andI'm guessing, a very quick
overview and not diving too deepinto a lot of the big learning
lessons and the big milestones.
But now that you are workingwith other firms and helping
them avoid those ditches thatyou hit and hey, here's the
(07:22):
better way to do it, becauseI've already been down this path
what are some lessons thatstand out to you as a business
owner that would be beneficialfor others to ditches to avoid
as they move forward with thegrowth of their firm?
Speaker 3 (07:39):
Yeah, absolutely so I'm gonna probably sound like a
broken record.
A lot of this is gonna to befocused on the team, and cold
hard fact of this one is thatyou can't grow a firm without a
team.
I know that a lot of you lookat the statistics.
There's 80,000 CPA firms in theUnited States right now.
If you are doing over a milliondollars in gross revenue,
(08:03):
you're in the top like 1200 orsomething like that.
So, uh, you know that meansthat we have almost 78 000 plus
firms that are one man and onewoman or you know very, very
small teams.
And so I guess you know we'rekind of trying to help them see
how to build that team.
And they know, right, it'sscary being at that small office
(08:28):
like that.
You have to be, excuse me,everything to everybody, almost
right, the buck stops and startswith you, and so like that's a
scary place to be.
I've worked with a couple offirm owners like that and the
stress is just unbelievable.
So, anyway, we're going tofocus on kind of developing that
team and one of the firstconcerns that comes up when
(08:52):
you're talking about developinga team and every business owner
that has a team can, you know,viscerally relate is that
there's a concern that you knowthey're not going to do as good
a job they're going to.
You know, on the extreme sideand a lot of firm owners have
seen this in other firms ormaybe in their own firm is that
(09:12):
there's the risk that you knowthey'll develop the relationship
with the clients and maybesteal your clients, and you know
just these horrible storiesthat you know will cycle in
somebody's mind in the dark ofnight, right?
Um, and so there's a couple ofways that we tried to come up
with, uh, you know, solutions tothat.
First is we tried to, um,implement something we called
(09:33):
the team of three.
So you'd have the director ofaccounting, director of tax, one
or the other.
You would have, uh, the taxperson, the tax, whether it's a
CPA, ea, and then you would have, like, the monthly business
accountant.
All of them would be touchpoints for each one of your
monthly clients.
Um, reason for that was kind ofmultiple folds.
(09:55):
One, you wanted to have theteam members be able to
specialize deep in their areas,right, I think one of the more
challenging places that any ofus could be is try to be a jack
of all trades, right, you haveto be a specialist in payroll
taxes, sales taxes, income taxes, estate taxes, you know on and
on and on and it's like, andalso the accounting side and
(10:15):
maybe a little bit of theoperations side.
That's a really tough role toplay.
Each one of those is afull-time job, right?
No wonder the stress is so highon those small firms job, right
.
No wonder the stress is so highon those small firms.
So it's better for the teambecause they can specialize in
and really know their trade.
It's better for the clientsbecause they have multiple touch
points to the firm, right.
If somebody is on vacation,it's not well, I have to wait on
(10:37):
this emergency for four or fivedays until they get back.
I just go to the next personthat I already know is on my
team.
And it's better for the firmitself as a whole because if and
when those team members leave,that client should have two
other anchor points to the firmand to the team and, uh, you
know, substantially increasesthe likelihood of that client
staying.
So, um, as they're kind ofbuilding out the team that would
(11:00):
be number one is I wouldredesign the workflow to make
sure that this team of threewould work.
Now, if you're only startingwith a team of two it's you and
one other person that's fine.
Again, I would emulate thatworkflow and just have it built
in that when your team continuesto grow, that's when you can
just plug in that third teammember.
(11:20):
The next part that I think thatwe did is we really focused on
monthly reoccurring revenue.
It was interesting working witha lot of CPA firms or having
friends and talking about whatthey're doing in their firms,
and it was very eye-opening tosee how much brutal competition
(11:42):
there would be for a tax returnthat would pay $1 or $1,200 a
year, right, and yet almostdisdain on the monthly
accounting work.
And yet that monthly accountingclient you know.
Correct me if I'm wrong, james,but I believe that you know a
lot of the clients that arecoming on board to your clients
(12:02):
are in the three, four or $5,000a month range, right, and so
you know these, these firmswould just tear into each other
over a thousand dollar a yearclient and then look down on a
$60,000 a year client.
That never made sense in mymind.
And so stepping over dollarsfor pennies, yeah, and sometimes
multiple dollars per pennies,you know.
(12:23):
And so we really focused onmonthly reoccurring revenue for
a few reasons.
One, on the annual side it wasmore money.
Two, I felt like it was easierto scale.
Three, it built a betterrelationship with the client
because we were talking with theclient every month, multiple
times a month.
One piece that I felt like wasreally important and kind of
crucial in that is at thebeginning, when I you know, when
(12:45):
we would acquire these firms,they were doing the kind of the
old-fashioned prepare an invoicethe next month, put it in the
mail, wait for the clients tomail you a check might be a net
30 agreement, maybe there are 10days beyond that.
All of a sudden, you'recarrying the cost of doing the
work 70, 80, 85 days.
(13:07):
That's very expensive andpretty difficult to do.
And so, um, you know, we endedup putting about 90 plus percent
of our monthly reoccurring workon ACH to where we controlled,
you know a big chunk of ourcashflow, and I know that you
know a lot of firms there's alittle bit of pushback.
Oh, my clients will never dothat.
So you know we grind into thattoo, right, it's not like we
(13:28):
were in some special niche ofthe country.
That is only okay with ACHs,right?
Um, what we ended up doing iswe offered a discounted hourly
rate, you know, because at thetime this was several years ago
we were still doing the hourlybilling kind of deal.
I think we gave them like $5less per hour or something, if
they would sign up at the ACHand pretty much all of them came
and then all the new clients wewould sign on would do that.
(13:50):
But having control of your cashflow was instrumental.
It took our AR down from, youknow, in the neighborhood of
$75,000 on a regular basis downto about $15,000.
Right, and I yeah, it's just, Idon't think I could overstate
that one.
So and it made it nice for theclients too, because, you know,
(14:13):
just automated it, but out ofsight, out of mind, and so I
thought it was a really goodmove.
Speaker 2 (14:19):
Yeah there's a couple things that stand out there,
garrick, that you're mentioningum one, the net 30, or you know,
sending, sending the, theinvoice in the mail and waiting
for a check.
Um, I mean, it's not arestaurant, so why are we asking
people to pay after the serviceis done?
Most services out there you payand then you get the service,
(14:43):
so accounting should be nodifferent.
That's the way you should beworking with your clients to
help with your cash flow.
And then the second piece youmentioned people are mentioning
oh well, my clients don't dothat.
When I hear that, I just thinkwhy are we saying someone else's
no for them?
Ask the question.
(15:03):
It's the worst case.
You're in the same situationyou're currently at.
Before you ask the questionBest case scenario they say yes
and now all of a sudden yourwhole business changes because
you actually have the cash flowand you have money to reinvest
in the business and you can goout and make that new hire
because you asked one simplequestion.
But if you don't ask, you justassume people are going to say
(15:26):
no.
You're going to be constantlypushing a boulder up the hill
100%.
Speaker 3 (15:32):
No, I agree with you.
And to answer like that firstone, first, or the first topic,
as far as why do we build inarrears in accounting?
That's a great question.
In fact, one of the firms thatwe acquired didn't they build in
advance, and it was probablythe only firm I've really looked
at that realistically build inadvance.
(15:53):
And um, I, I loved the concept,unfortunately, uh, so, talking
with the, the, the, the formerfirm owner at that time, I asked
her how she did that, right,did she start that way or did
she convert to that down theroad?
And she had converted down theroad, you know, mid, mid stride,
(16:16):
and um, I believe that she hadto basically give them a month
for free, in order to convertthem from arrears to an advance,
right, and for a lot of firmsthat's that's quite expensive to
get that to happen, right, um,is it insurmountable?
No, obviously she did it.
And uh, and it came.
(16:39):
There were a couple of problems,like if you fell behind in your
work, then all of a sudden youwere getting paid for work that
didn't get done, and then if aclient ended up leaving or
something like that, all of asudden it's like you know they
had paid for maybe two or threemonths that didn't get done or
something like that became alittle bit of a hassle and so we
ended up kind of converting allof them back to it was a small
piece of our overall larger firm.
We ended up converting themback to arrears.
(17:00):
I think it makes total sense todo it in advance.
There were a couple of thingsthat were problems that we kind
of ran into.
A lot of clients didn't like iteither.
So one of the ways that we'vekind of gotten around billing in
advance is when we bring on anew client we'll bill them a
onboarding fee and so that waywe kind of get paid because
(17:21):
there's always cleanup.
Right, you bring somebody over,it doesn't matter how good
their prior accounting firm was.
There is always going to becleanup to get them kind of onto
your system.
And you know, traditionallyfirms kind of ate that cost.
But doing a you know a faironboarding fee really helped a
lot there too.
Speaker 2 (17:39):
So um, I like, I like the, the onboarding fee on the
front end because it is coveringcosts for for your team to get
in there and clean things up.
It's in the in the marketingspace A lot of times.
Yeah, onboarding fee, setup fee, initial build out, whatever,
(18:00):
however you want to call it,it's the same idea, right?
There's work that needs to getdone, so this is facilitating
that work that's going to happen.
I think what you werementioning as well, where you
guys would offer, you know, five, $5 off the hourly to
incentivize someone to switch toACH.
The same thing can be done forincentivizing someone to pay,
(18:22):
pay the start of the month orpay in full, as long as there's
an incentive and there's abenefit to the, to your client,
to do so.
It's going to make it a lotmore enticing and what.
What comes to mind and I'm Idon't run an accounting firm, so
you can tell me if I'm wrong onthis, especially being the ops
guy but having people pay at thestart of the month and then
(18:44):
potentially, things aren'tgetting done and you're doing
things that haven't been paidfor, etc.
The bigger picture, that almostjust sounds like a bit of a
systems process that could bebuttoned up and then that's like
a relatively easy fix and it'ssolved and you're still paid at
the start of the month.
But obviously just to say thatyou know 30,000 foot overview.
(19:04):
It's probably a lot easier saidthan done, but ultimately most
of the times it kind of boilsdown to is it a?
Is it a systems problem or isit a people problem?
Speaker 3 (19:12):
yep, and I think you're absolutely right.
The one part that I would saythat uh is outside of the firm's
control is that even though wecan, you know, sync and automate
, get our own logins for a lotof the information to actually
complete a month and close amonth, we are still relying on
the client's help a good chunkof the time.
(19:34):
Right, um, at least if we'retrying to do what I would say is
kind of the best job, and ifthe client isn't super
responsive or is kind ofdelaying their feet, and
especially if they're looking atother firms right, if they're
looking at other firms, they'renot really happy with us and
that's going to delay thatresponse time.
And so, like, if we haven'tclosed out those last couple of
months because we're waiting onthem all of a sudden, that's
(20:02):
when uh, the situation wouldrise where it's.
It is a people problem, butit's a people problem that you
know.
We're outside of our control,if you will, um, or at least to
a certain degree.
So, but no, you're absolutelyright.
If it's just like work's notgetting done in a timely manner,
that's because of us.
Absolutely, it's a systemsproblem.
Speaker 2 (20:13):
100 okay, um, tell me a little bit, garrick, about
what you were doing with your,with your past firms, for client
acquisition.
So, with this being a moremarketing focused podcast, I
would love to hear, and for theother listeners, how did you go
out and find new, new clients?
(20:35):
How did you generate salescalls for your business?
Speaker 3 (20:38):
You know that's a good question, james, and
frankly, I wish that you and Iwould have been acquainted a
couple of years ago, right?
Because I don't feel like I hada great marketing consultant to
help us with our firm.
This is going to sound probablya little disappointing where it
is a marketing focused podcast.
Sorry about that.
Uh, and you know you can readmost the articles online are
(21:03):
going to tell you somethingsimilar that you know, the best
marketing is word of mouth andthat always used to kind of bug
me, especially as a new firmowner, because it's like I don't
have time for word of mouth towork.
I need this to work now.
And, uh, you know, like I said,I wish that you and I would
have been acquainted a few yearsago, but the best thing that I
can tell firm owners is if theywill take care of their team,
their team will take care oftheir clients and, in turn,
(21:25):
their clients will take care ofthe firm through, obviously
paying the bill and helping themgrow their own business.
We're able to have, you know, Ithink over the last five years,
which included COVID, ourhighest organic growth year over
year was like 32%, and that wason a marketing budget of a
(21:46):
couple of thousand dollars, allbecause of the team taking care
of the clients.
Do I think that we could havebeen better off had I been able
to work with you?
Then, yes, I do, because wewould have been able to work
with you.
Then, yes, I do, because wewould have been able to really
kind of dial in.
You know, the downside of theword of mouth is that you kind
of get what you get right andit's hard to specialize in in
(22:08):
one industry over another whenyou're just trying to take the
work that's coming in the doorright, and especially if one of
your clients has referredsomebody else, that's always a
tricky situation because whetheryou want to take them or not,
you definitely don't want totick off your current client,
you know.
And so you try to kind of makethat work and you, I think,
naturally give a lot of grace,if you will, to that that
(22:29):
referral right, even if they'reoutside of an industry that you
wanted to focus in, as long asthey're willing to be a good
client, basically, um, so youknow the services that you and
your company, your team, provide, I think would have been just
instrumental to increasing our,our growth.
Speaker 2 (22:45):
So I appreciate that.
It's so true, though, aboutreferrals and word of mouth.
I mean, word of mouth is thebest it it.
You're getting referrals comingfrom a trusted source already.
If someone who's used yourservice, they know I can trust
you.
So, yes, it's a layup.
Um, I would hope that you'reclosing 90 of those referrals
(23:08):
that are coming through.
I I always get a kick whenpeople tell me you know we, yeah
, we close 90.
We don't have a problem withsales.
Okay, cool, how are you guysgetting your your sales right
now?
What are referrals?
Okay, perfect, you should beclosing 90 of them, because the
person who sent them over hasalready been paid all the work
and they've already done all thework.
You just need to essentiallyfacilitate getting started right
(23:31):
.
Losing like going out andfinding new leads and new
appointments from people whodon't know you.
That that's where getting apredictable system in place
works, because, like youmentioned, you could get a
referral in one industry.
Then you're across the map onsomething else.
Maybe you don't really wannawork with this person, or
they're a terrible fit, and nowyou have two relationships in
jeopardy, so they're great.
(23:52):
But you also need a predictablesystem where you know okay, I'm
gonna get X amount ofopportunities every single month
.
Also need a predictable systemwhere you know okay, I'm going
to get X amount of opportunitiesevery single month and if I
close X amount, here's ourpredictable growth and you have
a path versus I have no ideawhen the next referral is coming
in and you're sitting therelooking at your phone and it's
not ringing.
Speaker 3 (24:08):
Yeah, 100%.
That's a scary place to beright.
Speaker 2 (24:11):
Yeah, and the other.
The other piece on that is the,the kind of irony behind word
of mouth, especially when you'regetting started.
Who's referring you if youdon't have any clients?
No one.
You haven't spent money onmarketing, so nobody knows you
exist, but yet you rely on wordof mouth.
So I don't know.
That one makes me chuckle whenwe're on sales calls and people
(24:35):
are like, yeah, we do word ofmouth.
Okay, everyone technically isdoing word of mouth.
Okay, everyone technically isdoing word of mouth, but what
else are you doing to get peoplecoming through?
So yeah, having a predictablesystem in place, it just takes
out all that guesswork and youknow where the next
opportunities are coming fromand you trust the process and
you know all right, I just needto speak to 10 people this month
and I'm going to sign two orthree new clients a month.
(24:57):
Perfect, perfect.
It could be the first two orthree people you speak to and
you know the next seven onaverage, are not going to close.
That's fine.
Or you have a really good monthand then you say, all right,
next, next set of 10.
And you just you look at itfrom a more data driven, um, you
know perspective.
Speaker 3 (25:13):
Yep, 100%.
And you know, I think you hitthe nail on the head with that
because, um, you know, while wedid have good growth from word
of mouth or the referrals, wewere very fortunate, uh, and
trying to do any kind of salestarget.
You know, we tried that, but itwas like it wasn't reliable, it
(25:36):
definitely wasn't predictableand it wasn't systemized.
So we're systematized.
So, um, no, I think you're 100%right on there.
Speaker 2 (25:44):
Cool, cool, um, what's one thing for everyone
listening, garrick, that thatyou'd want everyone to know, um,
if they're thinking about, Imean, everyone should be getting
into business to eventuallysell their business, their
creating, not just build it andthen walk away from it, and this
asset, just you know, slowlyburns off.
(26:05):
So what's one piece of adviceselling, selling a few
businesses and acquiring othersthat comes to mind for you that
it's like this is this is areally important metric or this
is what you should have in theback of your mind, whether
you're thinking about selling inthe next couple of years or
it's a play, you know, 10, 15years down the road.
Speaker 3 (26:24):
Yeah, well, the first step and this is going to sound
a little cliche because, youknow, I know that everybody will
say oh yeah, I knew thatKnowing it and doing it are very
different, and that's to beginwith the end in mind, right?
Um, begin with the kind of yourexit plan, at least roughly
(26:46):
formed, right?
Um, a lot of businesses, it'slike they just get and
accounting firms are nodifferent, unfortunately uh,
it's like they get added on to ahouse with no real plan and you
got random rooms over here andthis, and that you know they get
added onto a house with no realplan and you got random rooms
over here and this, and that youknow they don't have a true
system.
Also, documentation, right,document your systems and your
(27:07):
processes is absolutely crucial,right?
You talk with business owners,and I would be kind of
interested to hear yourexperience on this too, james.
If you ever had an operationalconversation with one of your
clients but you talk to themabout their business and about
their processes and they willalmost brag about, oh, it's all
(27:27):
up here and it's like wonderful,then your business will never
sell on average because when youleave, all that stuff up here
goes with you and that new ownerall of a sudden doesn't have a
predictable system at all,whether it's sales, whether it's
operations, anything like that.
I'll pause for a second andkind of see like have you had
(27:48):
that experience at all?
Speaker 2 (27:50):
I don't.
Nothing stands out too much forconversations with our clients,
but definitely learning thatlesson the hard way with my own
business of getting started andthinking someone else should be
able to do this.
I show them once hey, youshould be able to do this now.
It's still something that I'mconstantly on the team about.
(28:13):
We need to make this SOP sosolid.
We need to make this SOP sosolid.
Somebody off the street with noexperience could essentially
walk through this process andcomplete what it is we're
looking to do.
If not, I think there's gaps inthis process and it's hard to
get your SOPs to that pointbecause they take time.
(28:34):
But I've also learned thatspending hours on an SOP will
free up so much time in thefuture, because now you can
truly let go and delegate thattask and you don't have to
revisit it because you know,okay, I've walked through it,
I've recorded it.
There's written instructions,there's a visual.
A team member has tried it outwith me, you know, sharing their
(28:54):
screen or in front of me.
They've asked questions.
We filled in the gaps.
Now they're good to go with it.
I don't need to worry.
Is this going to get done?
And if it doesn't, then we know.
Okay, it's not a process problem, it's a people problem.
But it does take time to buildall those assets up within your
business and I'm assuming it'sno different with an accounting
firm.
It really doesn't matter thebusiness you're in, you just
(29:16):
need to have the instructionsand kind of building off of that
I always think of.
And now, being in business, Ilaugh at myself when I, when
something new comes in the mailthat I've ordered and it has the
, the setup instructions or howto assemble what it is you're
getting, I'm like, okay, this isa really impressive SOP.
I now know how to build thething that I ordered.
(29:38):
Or I get really frustrated whensomething comes in and there's
like two pictures, reallyunclear documentation, and I'm
like how does this go together?
Then you're calling support andit's like this is not how to
make an SOP.
Make it like this, where it's soeasy to put together.
So that's my benchmark when I,when we're making SOPs within
(30:02):
the business, like somebodyshould be able to come off the
street and know how to do thisthing without, to a to a certain
extent, without really havingany experience in what we're
doing.
Speaker 3 (30:12):
Yep, no, without a doubt.
And you know, I think, that ifanybody tells you that a hundred
percent of their business isthat way, they're probably
fibbing a little bit.
Uh, you know, at least Ihaven't seen it yet, and
especially cause we're always.
You know businesses, especiallyright now.
You know, over the last 10 or15 years, like business has
changed so much.
You think about it.
Right, 15, maybe 20 years agothis kind of conversation was
(30:35):
like a Star Trek fantasy, almostjust in a very short amount of
time.
And now you know there'scountless products out there
that can help us.
One plan that we've tried towork into our SOPs is also the
military uses something called aPACE plan, right, and that's
your primary alternate,contingent and emergency, and so
(30:55):
, like in a perfect world, thisis how we do our sop.
What if this person's sick?
Okay, who does it fall on tothis person?
This person, this person, right.
Um, and that I felt like gavethe team a lot of flexibility
and, and really kind of you know, a lot of direction, so that it
didn't have to come directlyfrom me.
They already knew, oh,somebody's out sick, somebody's
(31:16):
on vacation.
What do we do now?
It's already built into thatSOP, right, that's cool.
But the next thing that I wouldI guess this is a little bit of
a scary statistic.
All of us have heard that 80%of businesses fail in the first
year.
Most of us know, depending onwhich statistic you look at,
(31:38):
that 80% of the ones thatsurvive will fail between the
next five and 10 years.
Right, the one that I had neverheard is that when you go to
sell, 80% of businesses willfail to sell.
Only 20% of businesses willsuccessfully sell and, like I
said, that's a pretty scarystatistic.
If you use a business broker,it does go up a little bit, but
(32:00):
it's still.
You know, most of the time it'sbecause they didn't plan with
that exit in mind.
They had all those things up intheir mind.
Or, or you know, theirfinancials financials which, in
an accounting firm setting,shouldn't be a big deal, but
their, their financials didn'tmake sense or whatever.
And so, um, you know you thinkabout it, not only building the
(32:22):
team right now.
Building the team helps yourcash flow right now.
The chances of selling down theroad, if you have a team in
place, triple the odds of yourbusiness actually selling.
And the reason for that is, youknow, you think about it from a
(32:44):
buyer perspective.
A lot of business owners, youknow they.
They started their business,they grew it from scratch and
then, unfortunately I I see thisa lot in accounting firms, in
medical offices and construction.
I don't know why those threespecifically, but that's where
it seems to be They'll say oh,you know, I started on on my own
.
Nobody will really buy thisbecause you'll hear it a ton
with well, actually, all threeof those.
Still, there's nothing for salehere.
I have a little bit of assetsand that's it, and it's like no,
(33:06):
you have a cash producing asset.
It has nothing to do with howmany laptops you have or if
you're a medical office, howmany rooms you may have.
You have a reputation, you havea relationship.
If you can transfer thatrelationship from you to your
team, all of a sudden, you havetruly something very, very
valuable to sell to a new buyer.
And I'm not just talking aboutPE groups, I'm talking about
(33:28):
somebody just like yourself thatwants to step in but doesn't
want to start at the groundfloor.
Right, and so building thatteam, I think, would absolutely,
again, not just help yourbusiness grow today, but will
absolutely make your businessmore desirable and more likely
to sell down the road.
So you'll be getting incomefrom multiple sources in that
way from the same function now,if that makes any sense.
Speaker 2 (33:49):
Yeah, it does.
That's so insightful, garrick.
Last thing, before we wrap upYou're doing some new stuff now.
You've sold your firm, you'vecome on board.
You're helping our clients growand scale their business,
running some coaching calls.
Do you mind quickly telling meabout what it is you're also
doing on your own, now that youknow, or for anyone who is
(34:15):
listening like, how can they getin touch with you?
What are you offering to newfirms?
The insight you have frombuilding and selling a firm?
Speaker 3 (34:25):
what would, what would some people get from you
know, reaching out and having aconversation with you?
Well, you know that's a greatquestion.
So, as far as getting incontact with me, you know I'm on
LinkedIn, facebook, my email ismy name at hotmailcom.
Pretty basic there.
As far as what they would getis they would get somebody who
has been in the seat with themright, an actual practitioner
who is now doing coaching, notjust a coach that hasn't been in
(34:48):
their seat and face thosechallenges.
So I know that it took me acouple of years of being a
business owner before I hired acoach right, and I always kind
of felt like one that was alittle too touchy-feely for me.
I'm a numbers guy, kind of adeal.
Two, I always felt like thatwas maybe a big business thing,
not a small business thing.
I can't tell you the change inhiring a coach and having
(35:10):
somebody that I could talk tothat wasn't an employee, that
wasn't a friend, that wasn't myspouse.
The last thing we want to bedoing is venting, especially the
first and last.
The last thing you want to bedoing is coming home and venting
to your spouse every day orventing to your team.
Both those things are superdestructive.
Having a coach that can sitthere.
Not that your coach would haveall the answers, but they can be
(35:32):
there.
They can be in that seat withyou, listen to what's going on,
give you some feedback, becausewe all have our internal
dialogue that's going andsometimes that thing is good for
us and sometimes it's not.
And we need somebody that cansit there with us and kind of
call us on our own mentalnonsense and help us make sure
that we're seeing reality,that's true reality and not just
our perspective of reality,right, um?
(35:54):
And so, as far as, uh, you know, what they would get is we do
weekly calls with our clients,um, to make sure that you know
they have somebody that they cankind of count on to just like a
uh, a personal trainer on yourbody, having a personal trainer
for the business and your mind.
So, making sure that you'remaking the, the you know
strategic steps to get you towhere you want to be.
Speaker 2 (36:17):
That's awesome and I I I'll back that up with what
you said.
Investing into a coach is it'sthe greatest ROI I've ever
received.
It's just having that personeither individually or multiple
coders to lean on for anyquestions you have.
I mean, they can help you solvea really small problem or they
(36:39):
can help you solve a problemthat is going to help you make
an extra $100,000.
It really depends on theproblems you're looking to be
solved.
So for anyone listening, Iwould highly recommend getting
in touch with Garrick.
You're amazing at what you do.
Thank you so much for coming onthe show and sharing all this,
and I'm really excited for thecontinued value that you're
going to continue to share withour clients on these weekly
(37:01):
calls.
So thanks again, eric.
I really appreciate it.
Speaker 3 (37:04):
Thank you, james, really appreciate it being here.
Speaker 1 (37:06):
Thanks for listening to CFO Chronicles the secrets
behind success.
We hope today's episodeprovided valuable strategies to
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Your feedback helps us bringyou the best insights in finance
(37:30):
and marketing.
Until next time, keep strivingfor success and unlocking your
business's potential.
Welcome to CFO Chronicles the secrets behind
success the go-to podcast forfractional CFOs and accounting
firm owners who want to attractmore high-paying clients and
increase their revenue.
Hosted by James Donovan fromNine Two Media, this podcast
dives into marketing strategiesspecifically designed for lead
(00:22):
generation and clientacquisition.
In each episode, you'll hearfrom industry leaders sharing
their success stories and Thankyou to your bottom line.
Speaker 2 (00:49):
Super excited to have you on the podcast today,
Garrick.
We're joined by Garrick Foy,Lone Pine Capital.
Garrick, welcome to the showand please tell us a little bit
about yourself for those whodon't know your background.
Yeah, thanks.
Speaker 3 (01:05):
James, I'm excited to be show and please tell us a
little bit about yourself forthose who don't know your
background.
Thanks, james, I'm excited tobe here.
So a little bit about myself.
I grew up in Utah.
I have been very interested inbusiness from a very young age.
You know a lot of kids.
I remember four or five, sixyears old.
Saturday mornings were awesomebecause of Saturday morning
cartoons back in the day Right.
But for me that was when my dadhad his business meetings and I
(01:28):
was very fortunate to grow upwith a dad that was okay, with
me tagging along regardless ofthe age.
And so from a very young ageI've always been very enthralled
with business.
Didn't seem to matter to theindustry.
Speaker 2 (01:40):
That's so cool, that's awesome and we'll get
into you selling a firm recentlyand you know how we've
partnered up now and you'rehelping out coaching our clients
and operations.
But I would love to go back alittle bit to, as you mentioned,
you were young watchingcartoons, attending business
meetings with your dad, so howdid you get into the accounting
(02:03):
world?
Because that's not something Ifeel like a lot of children
dream of.
I'm going to get into theaccounting world.
Speaker 3 (02:11):
You know, I hate to say it, but getting into the
accounting industry was almost afluke, and I'll expound just a
little bit.
So, like I said, even at a veryyoung age, I always wanted to
be a business owner.
My dad was a business owner andI was very fortunate.
I read Rich Dad, poor Dad atthe ripe old age of like 11 when
(02:32):
it first came out.
So I've always really likedbusiness.
I've liked finance when I grewup.
We're fortunate to have a lotof universities right around us.
But it seemed like, uh, if youdidn't know what you wanted to
be, you got a businessmanagement degree and so I had a
.
You know a fair amount offriends and and just people in
my life that got a businessmanagement degree but kept the
(02:54):
same job they had when theystarted going to college and I
thought, well, that's not agreat return on investment, you
know.
And um, and I thought, well,you know the universities that
were around us.
The accounting curriculum andbusiness management curriculum
were very, very similar.
You had, you know, differentcore classes, but you could
still cover a lot.
And I thought, well, you know,if I'm going to be a, I want to
be the best business person Ican be, and so you know, I think
(03:19):
that the more I focus onaccounting, that'll help me be a
better business person.
Had I been able to look in thefuture you know, 15 years and
seeing what happened with thedigital marketing revolution,
maybe I'd have made differentchoices, but that wasn't a thing
back in the day.
So, anyway, I got my bachelor'sin accounting and took an
(03:39):
accounting job up in Salt LakeCity and, kind of looking at a
master's degree, I was kind ofreally focused on an MBA, but I
also was kind of working with alot of people that had MBAs and
we were doing the same job,making the same money and I
thought, once again, that's nota great return on investment.
And I thought, you know, one ofthe largest expenses and I'm
(04:01):
preaching to the choir because Iknow that most of your base is
accountants, but you know, oneof the largest expenses that any
business owner uh incurs istheir tax bill.
And, um, you know I told youthat my dad was a business owner
and, uh, about 15 or so yearsago we sold his businesses and I
was able to.
You know, I was the COO of hiscompany and so I was able to be
(04:24):
a I don't know if it was aninstrumental role, but an
integral role.
I was very privy to the thingsgoing on and helped with the
negotiations, helped with thecontracts, and I got to see
firsthand that our high dollarCPA was not really invested in
our cash in the pocket.
(04:45):
Result at the end.
He wasn't really invested inhelping us come up with a
strategic tax plan to helpprotect that or anything like
that, and we didn't know reallywho to go to.
Frankly, and it was a learningexperience and kind of a turning
point for me because I knewthat again, I wanted to be a
business owner.
(05:06):
At that time I wasn't thinkingthat it would be of an
accounting firm, even though Ihad an accounting degree.
So ultimately I ended upgetting a master's in tax,
specifically because I thought,you know, I'm not going to be
able to rely on somebody else toknow this technical piece and
or at least not rely solely onthem, right?
I wanted to be as educated aspossible.
And so while I was doing that,I got hired at a CPA firm there
(05:27):
in Salt Lake City, basicallyimmediately moved over to their
business development side,working with small business
owners, helping the smallbusiness owners create a
strategic tax plan thatencompassed the entity, their
personal, if they have an estatethat as well and kind of fast
forward a few years and Idecided that it was time to
(05:49):
actually embark and get intothat business owner stage of my
life and it's funny, it took acouple of years of looking at
businesses before I thought,well, maybe I ought to look at
an accounting firm.
It's what I've been doing, it'swhat my background's in Um and
the first firm that we acquiredwas in Southern Utah and, uh, it
(06:12):
was really a very smallboutique firm and, you know,
kind of fast forward over fiveyears we acquired a couple more
plus, had, you know, the greatblessing of solid, organic
growth and a wonderful,wonderful team.
And um, due to some other lifeevents, like, like you mentioned
, you know, we ultimately endedup selling a couple of months
(06:32):
ago and and uh, really wanted tokind of focus on working with
other firm owners, on, you know,the mistakes that we made, the
hard knock lessons that welearned, to help them hopefully
not have to learn through theschool of hard knocks and learn
from somebody else's you knowexperience, I guess and help
(06:52):
them get into a position where,when the time comes, they would
be able to also have asuccessful closing.
So perfect.
Speaker 2 (06:59):
well, let's dive into into some of those hard knocks
and the lessons learned.
That's a great overview, andit's, I'm guessing, of those
hard knocks and the lessonslearned.
That's a great overview, andI'm guessing, a very quick
overview and not diving too deepinto a lot of the big learning
lessons and the big milestones.
But now that you are workingwith other firms and helping
them avoid those ditches thatyou hit and hey, here's the
(07:22):
better way to do it, becauseI've already been down this path
what are some lessons thatstand out to you as a business
owner that would be beneficialfor others to ditches to avoid
as they move forward with thegrowth of their firm?
Speaker 3 (07:39):
Yeah, absolutely so I'm gonna probably sound like a
broken record.
A lot of this is gonna to befocused on the team, and cold
hard fact of this one is thatyou can't grow a firm without a
team.
I know that a lot of you lookat the statistics.
There's 80,000 CPA firms in theUnited States right now.
If you are doing over a milliondollars in gross revenue,
(08:03):
you're in the top like 1200 orsomething like that.
So, uh, you know that meansthat we have almost 78 000 plus
firms that are one man and onewoman or you know very, very
small teams.
And so I guess you know we'rekind of trying to help them see
how to build that team.
And they know, right, it'sscary being at that small office
(08:28):
like that.
You have to be, excuse me,everything to everybody, almost
right, the buck stops and startswith you, and so like that's a
scary place to be.
I've worked with a couple offirm owners like that and the
stress is just unbelievable.
So, anyway, we're going tofocus on kind of developing that
team and one of the firstconcerns that comes up when
(08:52):
you're talking about developinga team and every business owner
that has a team can, you know,viscerally relate is that
there's a concern that you knowthey're not going to do as good
a job they're going to.
You know, on the extreme sideand a lot of firm owners have
seen this in other firms ormaybe in their own firm is that
(09:12):
there's the risk that you knowthey'll develop the relationship
with the clients and maybesteal your clients, and you know
just these horrible storiesthat you know will cycle in
somebody's mind in the dark ofnight, right?
Um, and so there's a couple ofways that we tried to come up
with, uh, you know, solutions tothat.
First is we tried to, um,implement something we called
(09:33):
the team of three.
So you'd have the director ofaccounting, director of tax, one
or the other.
You would have, uh, the taxperson, the tax, whether it's a
CPA, ea, and then you would have, like, the monthly business
accountant.
All of them would be touchpoints for each one of your
monthly clients.
Um, reason for that was kind ofmultiple folds.
(09:55):
One, you wanted to have theteam members be able to
specialize deep in their areas,right, I think one of the more
challenging places that any ofus could be is try to be a jack
of all trades, right, you haveto be a specialist in payroll
taxes, sales taxes, income taxes, estate taxes, you know on and
on and on and it's like, andalso the accounting side and
(10:15):
maybe a little bit of theoperations side.
That's a really tough role toplay.
Each one of those is afull-time job, right?
No wonder the stress is so highon those small firms job, right
.
No wonder the stress is so highon those small firms.
So it's better for the teambecause they can specialize in
and really know their trade.
It's better for the clientsbecause they have multiple touch
points to the firm, right.
If somebody is on vacation,it's not well, I have to wait on
(10:37):
this emergency for four or fivedays until they get back.
I just go to the next personthat I already know is on my
team.
And it's better for the firmitself as a whole because if and
when those team members leave,that client should have two
other anchor points to the firmand to the team and, uh, you
know, substantially increasesthe likelihood of that client
staying.
So, um, as they're kind ofbuilding out the team that would
(11:00):
be number one is I wouldredesign the workflow to make
sure that this team of threewould work.
Now, if you're only startingwith a team of two it's you and
one other person that's fine.
Again, I would emulate thatworkflow and just have it built
in that when your team continuesto grow, that's when you can
just plug in that third teammember.
(11:20):
The next part that I think thatwe did is we really focused on
monthly reoccurring revenue.
It was interesting working witha lot of CPA firms or having
friends and talking about whatthey're doing in their firms,
and it was very eye-opening tosee how much brutal competition
(11:42):
there would be for a tax returnthat would pay $1 or $1,200 a
year, right, and yet almostdisdain on the monthly
accounting work.
And yet that monthly accountingclient you know.
Correct me if I'm wrong, james,but I believe that you know a
lot of the clients that arecoming on board to your clients
(12:02):
are in the three, four or $5,000a month range, right, and so
you know these, these firmswould just tear into each other
over a thousand dollar a yearclient and then look down on a
$60,000 a year client.
That never made sense in mymind.
And so stepping over dollarsfor pennies, yeah, and sometimes
multiple dollars per pennies,you know.
(12:23):
And so we really focused onmonthly reoccurring revenue for
a few reasons.
One, on the annual side it wasmore money.
Two, I felt like it was easierto scale.
Three, it built a betterrelationship with the client
because we were talking with theclient every month, multiple
times a month.
One piece that I felt like wasreally important and kind of
crucial in that is at thebeginning, when I you know, when
(12:45):
we would acquire these firms,they were doing the kind of the
old-fashioned prepare an invoicethe next month, put it in the
mail, wait for the clients tomail you a check might be a net
30 agreement, maybe there are 10days beyond that.
All of a sudden, you'recarrying the cost of doing the
work 70, 80, 85 days.
(13:07):
That's very expensive andpretty difficult to do.
And so, um, you know, we endedup putting about 90 plus percent
of our monthly reoccurring workon ACH to where we controlled,
you know a big chunk of ourcashflow, and I know that you
know a lot of firms there's alittle bit of pushback.
Oh, my clients will never dothat.
So you know we grind into thattoo, right, it's not like we
(13:28):
were in some special niche ofthe country.
That is only okay with ACHs,right?
Um, what we ended up doing iswe offered a discounted hourly
rate, you know, because at thetime this was several years ago
we were still doing the hourlybilling kind of deal.
I think we gave them like $5less per hour or something, if
they would sign up at the ACHand pretty much all of them came
and then all the new clients wewould sign on would do that.
(13:50):
But having control of your cashflow was instrumental.
It took our AR down from, youknow, in the neighborhood of
$75,000 on a regular basis downto about $15,000.
Right, and I yeah, it's just, Idon't think I could overstate
that one.
So and it made it nice for theclients too, because, you know,
(14:13):
just automated it, but out ofsight, out of mind, and so I
thought it was a really goodmove.
Speaker 2 (14:19):
Yeah there's a couple things that stand out there,
garrick, that you're mentioningum one, the net 30, or you know,
sending, sending the, theinvoice in the mail and waiting
for a check.
Um, I mean, it's not arestaurant, so why are we asking
people to pay after the serviceis done?
Most services out there you payand then you get the service,
(14:43):
so accounting should be nodifferent.
That's the way you should beworking with your clients to
help with your cash flow.
And then the second piece youmentioned people are mentioning
oh well, my clients don't dothat.
When I hear that, I just thinkwhy are we saying someone else's
no for them?
Ask the question.
(15:03):
It's the worst case.
You're in the same situationyou're currently at.
Before you ask the questionBest case scenario they say yes
and now all of a sudden yourwhole business changes because
you actually have the cash flowand you have money to reinvest
in the business and you can goout and make that new hire
because you asked one simplequestion.
But if you don't ask, you justassume people are going to say
(15:26):
no.
You're going to be constantlypushing a boulder up the hill
100%.
Speaker 3 (15:32):
No, I agree with you.
And to answer like that firstone, first, or the first topic,
as far as why do we build inarrears in accounting?
That's a great question.
In fact, one of the firms thatwe acquired didn't they build in
advance, and it was probablythe only firm I've really looked
at that realistically build inadvance.
(15:53):
And um, I, I loved the concept,unfortunately, uh, so, talking
with the, the, the, the formerfirm owner at that time, I asked
her how she did that, right,did she start that way or did
she convert to that down theroad?
And she had converted down theroad, you know, mid, mid stride,
(16:16):
and um, I believe that she hadto basically give them a month
for free, in order to convertthem from arrears to an advance,
right, and for a lot of firmsthat's that's quite expensive to
get that to happen, right, um,is it insurmountable?
No, obviously she did it.
And uh, and it came.
(16:39):
There were a couple of problems,like if you fell behind in your
work, then all of a sudden youwere getting paid for work that
didn't get done, and then if aclient ended up leaving or
something like that, all of asudden it's like you know they
had paid for maybe two or threemonths that didn't get done or
something like that became alittle bit of a hassle and so we
ended up kind of converting allof them back to it was a small
piece of our overall larger firm.
We ended up converting themback to arrears.
(17:00):
I think it makes total sense todo it in advance.
There were a couple of thingsthat were problems that we kind
of ran into.
A lot of clients didn't like iteither.
So one of the ways that we'vekind of gotten around billing in
advance is when we bring on anew client we'll bill them a
onboarding fee and so that waywe kind of get paid because
(17:21):
there's always cleanup.
Right, you bring somebody over,it doesn't matter how good
their prior accounting firm was.
There is always going to becleanup to get them kind of onto
your system.
And you know, traditionallyfirms kind of ate that cost.
But doing a you know a faironboarding fee really helped a
lot there too.
Speaker 2 (17:39):
So um, I like, I like the, the onboarding fee on the
front end because it is coveringcosts for for your team to get
in there and clean things up.
It's in the in the marketingspace A lot of times.
Yeah, onboarding fee, setup fee, initial build out, whatever,
(18:00):
however you want to call it,it's the same idea, right?
There's work that needs to getdone, so this is facilitating
that work that's going to happen.
I think what you werementioning as well, where you
guys would offer, you know, five, $5 off the hourly to
incentivize someone to switch toACH.
The same thing can be done forincentivizing someone to pay,
(18:22):
pay the start of the month orpay in full, as long as there's
an incentive and there's abenefit to the, to your client,
to do so.
It's going to make it a lotmore enticing and what.
What comes to mind and I'm Idon't run an accounting firm, so
you can tell me if I'm wrong onthis, especially being the ops
guy but having people pay at thestart of the month and then
(18:44):
potentially, things aren'tgetting done and you're doing
things that haven't been paidfor, etc.
The bigger picture, that almostjust sounds like a bit of a
systems process that could bebuttoned up and then that's like
a relatively easy fix and it'ssolved and you're still paid at
the start of the month.
But obviously just to say thatyou know 30,000 foot overview.
(19:04):
It's probably a lot easier saidthan done, but ultimately most
of the times it kind of boilsdown to is it a?
Is it a systems problem or isit a people problem?
Speaker 3 (19:12):
yep, and I think you're absolutely right.
The one part that I would saythat uh is outside of the firm's
control is that even though wecan, you know, sync and automate
, get our own logins for a lotof the information to actually
complete a month and close amonth, we are still relying on
the client's help a good chunkof the time.
(19:34):
Right, um, at least if we'retrying to do what I would say is
kind of the best job, and ifthe client isn't super
responsive or is kind ofdelaying their feet, and
especially if they're looking atother firms right, if they're
looking at other firms, they'renot really happy with us and
that's going to delay thatresponse time.
And so, like, if we haven'tclosed out those last couple of
months because we're waiting onthem all of a sudden, that's
(20:02):
when uh, the situation wouldrise where it's.
It is a people problem, butit's a people problem that you
know.
We're outside of our control,if you will, um, or at least to
a certain degree.
So, but no, you're absolutelyright.
If it's just like work's notgetting done in a timely manner,
that's because of us.
Absolutely, it's a systemsproblem.
Speaker 2 (20:13):
100 okay, um, tell me a little bit, garrick, about
what you were doing with your,with your past firms, for client
acquisition.
So, with this being a moremarketing focused podcast, I
would love to hear, and for theother listeners, how did you go
out and find new, new clients?
(20:35):
How did you generate salescalls for your business?
Speaker 3 (20:38):
You know that's a good question, james, and
frankly, I wish that you and Iwould have been acquainted a
couple of years ago, right?
Because I don't feel like I hada great marketing consultant to
help us with our firm.
This is going to sound probablya little disappointing where it
is a marketing focused podcast.
Sorry about that.
Uh, and you know you can readmost the articles online are
(21:03):
going to tell you somethingsimilar that you know, the best
marketing is word of mouth andthat always used to kind of bug
me, especially as a new firmowner, because it's like I don't
have time for word of mouth towork.
I need this to work now.
And, uh, you know, like I said,I wish that you and I would
have been acquainted a few yearsago, but the best thing that I
can tell firm owners is if theywill take care of their team,
their team will take care oftheir clients and, in turn,
(21:25):
their clients will take care ofthe firm through, obviously
paying the bill and helping themgrow their own business.
We're able to have, you know, Ithink over the last five years,
which included COVID, ourhighest organic growth year over
year was like 32%, and that wason a marketing budget of a
(21:46):
couple of thousand dollars, allbecause of the team taking care
of the clients.
Do I think that we could havebeen better off had I been able
to work with you?
Then, yes, I do, because wewould have been able to work
with you.
Then, yes, I do, because wewould have been able to really
kind of dial in.
You know, the downside of theword of mouth is that you kind
of get what you get right andit's hard to specialize in in
(22:08):
one industry over another whenyou're just trying to take the
work that's coming in the doorright, and especially if one of
your clients has referredsomebody else, that's always a
tricky situation because whetheryou want to take them or not,
you definitely don't want totick off your current client,
you know.
And so you try to kind of makethat work and you, I think,
naturally give a lot of grace,if you will, to that that
(22:29):
referral right, even if they'reoutside of an industry that you
wanted to focus in, as long asthey're willing to be a good
client, basically, um, so youknow the services that you and
your company, your team, provide, I think would have been just
instrumental to increasing our,our growth.
Speaker 2 (22:45):
So I appreciate that.
It's so true, though, aboutreferrals and word of mouth.
I mean, word of mouth is thebest it it.
You're getting referrals comingfrom a trusted source already.
If someone who's used yourservice, they know I can trust
you.
So, yes, it's a layup.
Um, I would hope that you'reclosing 90 of those referrals
(23:08):
that are coming through.
I I always get a kick whenpeople tell me you know we, yeah
, we close 90.
We don't have a problem withsales.
Okay, cool, how are you guysgetting your your sales right
now?
What are referrals?
Okay, perfect, you should beclosing 90 of them, because the
person who sent them over hasalready been paid all the work
and they've already done all thework.
You just need to essentiallyfacilitate getting started right
(23:31):
.
Losing like going out andfinding new leads and new
appointments from people whodon't know you.
That that's where getting apredictable system in place
works, because, like youmentioned, you could get a
referral in one industry.
Then you're across the map onsomething else.
Maybe you don't really wannawork with this person, or
they're a terrible fit, and nowyou have two relationships in
jeopardy, so they're great.
(23:52):
But you also need a predictablesystem where you know okay, I'm
gonna get X amount ofopportunities every single month
.
Also need a predictable systemwhere you know okay, I'm going
to get X amount of opportunitiesevery single month and if I
close X amount, here's ourpredictable growth and you have
a path versus I have no ideawhen the next referral is coming
in and you're sitting therelooking at your phone and it's
not ringing.
Speaker 3 (24:08):
Yeah, 100%.
That's a scary place to beright.
Speaker 2 (24:11):
Yeah, and the other.
The other piece on that is the,the kind of irony behind word
of mouth, especially when you'regetting started.
Who's referring you if youdon't have any clients?
No one.
You haven't spent money onmarketing, so nobody knows you
exist, but yet you rely on wordof mouth.
So I don't know.
That one makes me chuckle whenwe're on sales calls and people
(24:35):
are like, yeah, we do word ofmouth.
Okay, everyone technically isdoing word of mouth.
Okay, everyone technically isdoing word of mouth, but what
else are you doing to get peoplecoming through?
So yeah, having a predictablesystem in place, it just takes
out all that guesswork and youknow where the next
opportunities are coming fromand you trust the process and
you know all right, I just needto speak to 10 people this month
and I'm going to sign two orthree new clients a month.
(24:57):
Perfect, perfect.
It could be the first two orthree people you speak to and
you know the next seven onaverage, are not going to close.
That's fine.
Or you have a really good monthand then you say, all right,
next, next set of 10.
And you just you look at itfrom a more data driven, um, you
know perspective.
Speaker 3 (25:13):
Yep, 100%.
And you know, I think you hitthe nail on the head with that
because, um, you know, while wedid have good growth from word
of mouth or the referrals, wewere very fortunate, uh, and
trying to do any kind of salestarget.
You know, we tried that, but itwas like it wasn't reliable, it
(25:36):
definitely wasn't predictableand it wasn't systemized.
So we're systematized.
So, um, no, I think you're 100%right on there.
Speaker 2 (25:44):
Cool, cool, um, what's one thing for everyone
listening, garrick, that thatyou'd want everyone to know, um,
if they're thinking about, Imean, everyone should be getting
into business to eventuallysell their business, their
creating, not just build it andthen walk away from it, and this
asset, just you know, slowlyburns off.
(26:05):
So what's one piece of adviceselling, selling a few
businesses and acquiring othersthat comes to mind for you that
it's like this is this is areally important metric or this
is what you should have in theback of your mind, whether
you're thinking about selling inthe next couple of years or
it's a play, you know, 10, 15years down the road.
Speaker 3 (26:24):
Yeah, well, the first step and this is going to sound
a little cliche because, youknow, I know that everybody will
say oh yeah, I knew thatKnowing it and doing it are very
different, and that's to beginwith the end in mind, right?
Um, begin with the kind of yourexit plan, at least roughly
(26:46):
formed, right?
Um, a lot of businesses, it'slike they just get and
accounting firms are nodifferent, unfortunately uh,
it's like they get added on to ahouse with no real plan and you
got random rooms over here andthis, and that you know they get
added onto a house with no realplan and you got random rooms
over here and this, and that youknow they don't have a true
system.
Also, documentation, right,document your systems and your
(27:07):
processes is absolutely crucial,right?
You talk with business owners,and I would be kind of
interested to hear yourexperience on this too, james.
If you ever had an operationalconversation with one of your
clients but you talk to themabout their business and about
their processes and they willalmost brag about, oh, it's all
(27:27):
up here and it's like wonderful,then your business will never
sell on average because when youleave, all that stuff up here
goes with you and that new ownerall of a sudden doesn't have a
predictable system at all,whether it's sales, whether it's
operations, anything like that.
I'll pause for a second andkind of see like have you had
(27:48):
that experience at all?
Speaker 2 (27:50):
I don't.
Nothing stands out too much forconversations with our clients,
but definitely learning thatlesson the hard way with my own
business of getting started andthinking someone else should be
able to do this.
I show them once hey, youshould be able to do this now.
It's still something that I'mconstantly on the team about.
(28:13):
We need to make this SOP sosolid.
We need to make this SOP sosolid.
Somebody off the street with noexperience could essentially
walk through this process andcomplete what it is we're
looking to do.
If not, I think there's gaps inthis process and it's hard to
get your SOPs to that pointbecause they take time.
(28:34):
But I've also learned thatspending hours on an SOP will
free up so much time in thefuture, because now you can
truly let go and delegate thattask and you don't have to
revisit it because you know,okay, I've walked through it,
I've recorded it.
There's written instructions,there's a visual.
A team member has tried it outwith me, you know, sharing their
(28:54):
screen or in front of me.
They've asked questions.
We filled in the gaps.
Now they're good to go with it.
I don't need to worry.
Is this going to get done?
And if it doesn't, then we know.
Okay, it's not a process problem, it's a people problem.
But it does take time to buildall those assets up within your
business and I'm assuming it'sno different with an accounting
firm.
It really doesn't matter thebusiness you're in, you just
(29:16):
need to have the instructionsand kind of building off of that
I always think of.
And now, being in business, Ilaugh at myself when I, when
something new comes in the mailthat I've ordered and it has the
, the setup instructions or howto assemble what it is you're
getting, I'm like, okay, this isa really impressive SOP.
I now know how to build thething that I ordered.
(29:38):
Or I get really frustrated whensomething comes in and there's
like two pictures, reallyunclear documentation, and I'm
like how does this go together?
Then you're calling support andit's like this is not how to
make an SOP.
Make it like this, where it's soeasy to put together.
So that's my benchmark when I,when we're making SOPs within
(30:02):
the business, like somebodyshould be able to come off the
street and know how to do thisthing without, to a to a certain
extent, without really havingany experience in what we're
doing.
Speaker 3 (30:12):
Yep, no, without a doubt.
And you know, I think, that ifanybody tells you that a hundred
percent of their business isthat way, they're probably
fibbing a little bit.
Uh, you know, at least Ihaven't seen it yet, and
especially cause we're always.
You know businesses, especiallyright now.
You know, over the last 10 or15 years, like business has
changed so much.
You think about it.
Right, 15, maybe 20 years agothis kind of conversation was
(30:35):
like a Star Trek fantasy, almostjust in a very short amount of
time.
And now you know there'scountless products out there
that can help us.
One plan that we've tried towork into our SOPs is also the
military uses something called aPACE plan, right, and that's
your primary alternate,contingent and emergency, and so
(30:55):
, like in a perfect world, thisis how we do our sop.
What if this person's sick?
Okay, who does it fall on tothis person?
This person, this person, right.
Um, and that I felt like gavethe team a lot of flexibility
and, and really kind of you know, a lot of direction, so that it
didn't have to come directlyfrom me.
They already knew, oh,somebody's out sick, somebody's
(31:16):
on vacation.
What do we do now?
It's already built into thatSOP, right, that's cool.
But the next thing that I wouldI guess this is a little bit of
a scary statistic.
All of us have heard that 80%of businesses fail in the first
year.
Most of us know, depending onwhich statistic you look at,
(31:38):
that 80% of the ones thatsurvive will fail between the
next five and 10 years.
Right, the one that I had neverheard is that when you go to
sell, 80% of businesses willfail to sell.
Only 20% of businesses willsuccessfully sell and, like I
said, that's a pretty scarystatistic.
If you use a business broker,it does go up a little bit, but
(32:00):
it's still.
You know, most of the time it'sbecause they didn't plan with
that exit in mind.
They had all those things up intheir mind.
Or, or you know, theirfinancials financials which, in
an accounting firm setting,shouldn't be a big deal, but
their, their financials didn'tmake sense or whatever.
And so, um, you know you thinkabout it, not only building the
(32:22):
team right now.
Building the team helps yourcash flow right now.
The chances of selling down theroad, if you have a team in
place, triple the odds of yourbusiness actually selling.
And the reason for that is, youknow, you think about it from a
(32:44):
buyer perspective.
A lot of business owners, youknow they.
They started their business,they grew it from scratch and
then, unfortunately I I see thisa lot in accounting firms, in
medical offices and construction.
I don't know why those threespecifically, but that's where
it seems to be They'll say oh,you know, I started on on my own
.
Nobody will really buy thisbecause you'll hear it a ton
with well, actually, all threeof those.
Still, there's nothing for salehere.
I have a little bit of assetsand that's it, and it's like no,
(33:06):
you have a cash producing asset.
It has nothing to do with howmany laptops you have or if
you're a medical office, howmany rooms you may have.
You have a reputation, you havea relationship.
If you can transfer thatrelationship from you to your
team, all of a sudden, you havetruly something very, very
valuable to sell to a new buyer.
And I'm not just talking aboutPE groups, I'm talking about
(33:28):
somebody just like yourself thatwants to step in but doesn't
want to start at the groundfloor.
Right, and so building thatteam, I think, would absolutely,
again, not just help yourbusiness grow today, but will
absolutely make your businessmore desirable and more likely
to sell down the road.
So you'll be getting incomefrom multiple sources in that
way from the same function now,if that makes any sense.
Speaker 2 (33:49):
Yeah, it does.
That's so insightful, garrick.
Last thing, before we wrap upYou're doing some new stuff now.
You've sold your firm, you'vecome on board.
You're helping our clients growand scale their business,
running some coaching calls.
Do you mind quickly telling meabout what it is you're also
doing on your own, now that youknow, or for anyone who is
(34:15):
listening like, how can they getin touch with you?
What are you offering to newfirms?
The insight you have frombuilding and selling a firm?
Speaker 3 (34:25):
what would, what would some people get from you
know, reaching out and having aconversation with you?
Well, you know that's a greatquestion.
So, as far as getting incontact with me, you know I'm on
LinkedIn, facebook, my email ismy name at hotmailcom.
Pretty basic there.
As far as what they would getis they would get somebody who
has been in the seat with themright, an actual practitioner
who is now doing coaching, notjust a coach that hasn't been in
(34:48):
their seat and face thosechallenges.
So I know that it took me acouple of years of being a
business owner before I hired acoach right, and I always kind
of felt like one that was alittle too touchy-feely for me.
I'm a numbers guy, kind of adeal.
Two, I always felt like thatwas maybe a big business thing,
not a small business thing.
I can't tell you the change inhiring a coach and having
(35:10):
somebody that I could talk tothat wasn't an employee, that
wasn't a friend, that wasn't myspouse.
The last thing we want to bedoing is venting, especially the
first and last.
The last thing you want to bedoing is coming home and venting
to your spouse every day orventing to your team.
Both those things are superdestructive.
Having a coach that can sitthere.
Not that your coach would haveall the answers, but they can be
(35:32):
there.
They can be in that seat withyou, listen to what's going on,
give you some feedback, becausewe all have our internal
dialogue that's going andsometimes that thing is good for
us and sometimes it's not.
And we need somebody that cansit there with us and kind of
call us on our own mentalnonsense and help us make sure
that we're seeing reality,that's true reality and not just
our perspective of reality,right, um?
(35:54):
And so, as far as, uh, you know, what they would get is we do
weekly calls with our clients,um, to make sure that you know
they have somebody that they cankind of count on to just like a
uh, a personal trainer on yourbody, having a personal trainer
for the business and your mind.
So, making sure that you'remaking the, the you know
strategic steps to get you towhere you want to be.
Speaker 2 (36:17):
That's awesome and I I I'll back that up with what
you said.
Investing into a coach is it'sthe greatest ROI I've ever
received.
It's just having that personeither individually or multiple
coders to lean on for anyquestions you have.
I mean, they can help you solvea really small problem or they
(36:39):
can help you solve a problemthat is going to help you make
an extra $100,000.
It really depends on theproblems you're looking to be
solved.
So for anyone listening, Iwould highly recommend getting
in touch with Garrick.
You're amazing at what you do.
Thank you so much for coming onthe show and sharing all this,
and I'm really excited for thecontinued value that you're
going to continue to share withour clients on these weekly
(37:01):
calls.
So thanks again, eric.
I really appreciate it.
Speaker 3 (37:04):
Thank you, james, really appreciate it being here.
Speaker 1 (37:06):
Thanks for listening to CFO Chronicles the secrets
behind success.
We hope today's episodeprovided valuable strategies to
help you attract more highpaying clients.
Be sure to subscribe, followand share with fellow
professionals.
Connect with us on LinkedIn andleave a review or comment to
join the conversation.
Your feedback helps us bringyou the best insights in finance
(37:30):
and marketing.
Until next time, keep strivingfor success and unlocking your
business's potential.
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