August 14, 2024 • 43 mins
Discover the secrets of transforming a side hustle into a thriving main business in our latest episode of Side Hustle City! We sit down with Noah Osterhage, the visionary owner of Payroll Partners, who took a leap from being a client to owning a payroll company. Noah opens up about his journey through the payroll industry, shedding light on the unparalleled advantages of Payroll Partners compared to giants like ADP and Paycor. Learn how personalized service and local expertise can make a world of difference in managing payroll complexities.
We dive into the concept of Entrepreneurship Through Acquisition (ETA) and how serendipitous moments can lead to major business opportunities. Noah’s story is a compelling mix of corporate America, owning pizza stores, and finally, finding his stride in payroll services. My co-host Kyle Stevie also shares his thoughts on real estate and side hustles, underscoring the role of hard work, continuous learning, and taking calculated risks in achieving entrepreneurial success. This episode is a treasure trove of insights for anyone looking to turn their part-time endeavors into full-time triumphs.
Economic downturns and unexpected challenges are part of any business journey, and Noah's experience during the COVID-19 pandemic provides invaluable lessons. We explore how Payroll Partners navigates data management, revenue fluctuations, and customer service, all while maintaining compliance across multiple states. Whether you're interested in expanding your business, retaining valuable employees, or simply understanding the nuances of payroll management, this episode offers a wealth of knowledge. Join us to leverage these insights and elevate your entrepreneurial journey!
As you're inspired to embark on your side hustle journey after listening to this episode, you might wonder where to start or how to make your vision a reality. With a team of experienced marketing professionals and a track record of helping clients achieve their dreams, we are ready to assist you in reaching your goals. To find out more, visit www.reversedout.com.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
Welcome to Side Hustle City and thanks for
joining us.
Our goal is to help you connectto real people who found
success turning their sidehustle into a main hustle, and
we hope you can too.
I'm Adam Kaler.
I'm joined by Kyle Stevie, myco-host.
Let's get started, All right?
(00:24):
Welcome back everybody to theSide Hustle City podcast.
And guess what guys?
Kyle Stevie is actually here,so Noah is our guest today.
Ostrich, is that how youpronounce it?
Osterhag, Osterhag, you own acompany, Payroll Partners.
Here in Northern Kentucky A lotof people are familiar with
(00:46):
payroll companies.
They write your checks and sendthem out to you.
For sure, Paycor is one hereand that ADP is another big one
I've seen on past paychecks thatI've had.
But what makes you guysdifferent?
Speaker 2 (01:01):
That's a great question.
Just had a chance to talk tosomebody who kind of asked me
like what do you do?
And I thought that feels likean odd question, because I would
think that anybody that'sgotten a paycheck before would
kind of-.
Speaker 1 (01:13):
But understand what's going on, yeah.
Speaker 2 (01:15):
But what I said was hey, start at the top of your
paycheck and there's the grosswages, the top number, and then
below that there's a bunch ofdeductions and taxes.
Well, that's my company, or anypayroll company, but that's my
company.
We're calculating those taxes,managing those deductions and
then working to that net numberon your paycheck and then we
(01:37):
move the money and pay all thosetaxes and move the money into
your bank account.
Speaker 1 (01:41):
Yeah, so most people should understand that, but how
long have you guys been around?
Speaker 2 (01:46):
The company was founded in 2001.
Speaker 1 (01:49):
Oh, wow, 2001.
Okay, and then you acquired thecompany at one point, right,
yep.
Speaker 2 (01:54):
So it was just over five years ago.
Speaker 3 (01:56):
Oh, wow.
Speaker 2 (01:57):
Yeah, I was.
I actually was a client first,so I didn't want to do my own
payroll, or you know, didn'tkind you were like yeah, kind of
intimidated by it.
The S corp thing you know I wasa small business consultant and,
just you know, needed to getthat payroll done for the kind
of the monthly quarterly thingis a one person S corp.
(02:18):
So if you're in the CPA or thesmall business space, you know
I'm talking about and I triedall the little QuickBooks, the
Gusto oh, pain in the butt.
Yeah, you actually have to.
You know they're not going tohelp you do anything.
No, you, you still have to putin the stuff.
Like, yeah, you got to knowsomething.
So I went across the street andI asked my neighbor and I said
(02:38):
hey, mark, how do you handlepayroll for your small business?
And he says I use payrollpartners.
And I said who?
Like, I've heard of ADP andsome of these other ones.
Yeah, so he said that.
I said okay.
So I called, got ahold of thecompany, got several phone calls
back, took really good care ofme, were able to set up what I
needed, and then it was done andI went, got on with what I
(03:02):
needed to be doing to run mybusiness and, interestingly
enough, though, that running mybusiness was helping other
businesses with finance relatedpast projects.
Oh, so kind of consulting onthe finance side, and we had a
business I was working with thathad a staffing company.
They had about 50, 60 employeesand every one of those
(03:25):
employees was getting paid outof the home office.
And I had just gone throughpayroll.
I learned just enough to bedangerous, that that's not right
Cause, if you didn't know, justa quick aside Pennsylvania,
ohio, Kentucky and Indiana have93, 94% of all the local payroll
taxes in the country, districtsin the country, really.
So if you, if you grew up intennessee, you have no idea what
(03:49):
we're talking about.
When we talk about county, citypayroll taxes.
It's not a thing I.
Speaker 1 (03:54):
I just assume, being here my whole life, that this
was nationwide.
Now this is very abnormal.
So you grew up in kentucky.
You and Kyle.
You know not a lot of peoplewhen they think of Kentucky
think of you know tons ofentrepreneurship, right, even in
Ohio.
You know we don't cross theborder very much, right, like
(04:16):
you've got all these things thathelp small businesses get off
the ground.
They there's a lot of support,I would say, in Ohio.
Just being somebody who's donestartups in the past for small
businesses, small businessownership, I know all the
programs.
Even though I have a businessover here, I'm not as familiar
with what's going on in Kentuckyand I'm all about starting
something like buying acash-flowing, working business,
(04:39):
modernizing it, making it better.
But not a lot of people thinkabout that as an option.
They think they have to startfrom scratch and go to one of
these organizations in the stateto help them out.
Try to get some free money ifthey can.
But talk about your journeyLike what led you to want to
purchase an already existingbusiness that you were actually
(05:00):
working with.
Speaker 2 (05:01):
Yeah, so sorry I finished the thought we were on
Cause.
I think it'll help get to theanswer.
Um, I was working in aconsulting capacity for a
business that had their payrollbasically messed up with one of
the big national companies, um,so I called payroll partners
back and said, hey, I was a oneperson deal, but how about a
bigger company?
Can you work with us on that?
And they said, yeah, sure.
(05:21):
And uh ended up having umbrought seven or eight different
businesses to payroll partnersthat I was working with.
So um got to know the owner ofthe company and, um, you know,
we I was talking to a guy that Iwas working with and invested
money with, and uh, he said, hey, how much is paychecks worth?
So I looked it up.
I said I think it was like $30billion.
(05:43):
He says so there's a company inNorthern Kentucky with a better
mousetrap than Paychex and youdon't want us to invest in that.
Speaker 1 (05:52):
I was actually invested in Paychex, like in the
stock market.
I remember yeah.
Speaker 2 (05:56):
So it could have been 18.
It could have been it was sevenor eight years ago.
My brain's shot today, butanyway.
So we were talking to the guyand owned it and he was looking
for some help because I thinkwhat?
Where he was with a great smallbusiness you've probably talked
to a lot of people that are inthis spot he was in that
entrepreneur ceiling right.
He had every hat, every directreport was all on him and he
(06:21):
really didn't have time.
If he was selling, he wasn'toperating.
If he was operating, he wasn'tselling.
Speaker 1 (06:25):
He was, he was trapped right, he's working on
the business, not in thebusiness, or yeah, that very
classic thing.
Speaker 2 (06:30):
So he, he looked us for some help.
We, we bought into the company,but really no sooner than we
did that he, he kind of wantedto to not be a part of a growth
company anymore.
He's like you know what itsounded good.
Now I'm seeing what we're goingto have to do.
Um, and wanted to sell thewhole company and uh,
essentially what happened was ittook us four or five months to
sort that out and essentially Iwas just the last man standing.
(06:52):
Uh, the the other guy that Ihad had been working with was
not in a position to buy anothercompany.
This guy was definitely goingto leave and so that left me.
If the company was going tostay in Northern Kentucky, say a
privately held thing, and notjust be sold to a Paychex or a
Paycor, I was going to have tobuy it Wow.
Speaker 1 (07:11):
So how did that process go with buying a
business?
I mean, you're a young guy,banks don't usually like us, so
how did that work out?
Speaker 2 (07:20):
Yeah.
So again, this was kind of aSaturday afternoon conversation
that he was going to sell thebusiness and within 45 minutes I
was on the phone with a bankerfriend of mine and we figured
out how I was going to puttogether an SBA deal and take
over the company, so go from areally small piece of the whole
thing and 45 days later ithappened.
(07:42):
So almost it wasn't 45 days,wow.
Yeah, it wasn't something thatI set out and said I have this,
this vision of owning a payrollcompany.
I just wanted to own somethingat some point and was just out
there doing things untilsomething broke my way.
Speaker 1 (07:56):
Well it the opportunity presented itself and
you took advantage of it, whichwas what a lot of people don't
do Right.
Speaker 2 (08:02):
You know, I was thinking kind of all day how I
would tie in with side hustleBecause I did some.
I just met Dave Knox from BlueNorth.
Speaker 1 (08:12):
Yeah, I just had an email conversation with him
yesterday.
Speaker 2 (08:14):
Yeah, and he clued me into a thing, eta, like
entrepreneurship throughacquisition, and honestly I had
never heard that acronym, but Iguess that's exactly what I did.
How, what was I going to say?
The?
Speaker 1 (08:28):
the the way you purchased the business.
Speaker 2 (08:30):
Yeah, it wasn't intentional.
I just wanted to put myself outthere to do things and you know
, from from a young age I thinkI mean there's stories with my
mom's, my grandpa, about youknow me wanting to ask him about
business and entrepreneurshipin second grade.
Speaker 1 (08:48):
Was he a business owner?
Speaker 2 (08:50):
Yeah, he, yeah, he did a lot of different things.
Okay, a lot of differentbusinesses.
He's 94, still around, butdoing a lot less these days.
Speaker 1 (08:58):
Well, good for you, man, 94 years old, you got some
good genetics there, yeah yearsold.
Speaker 2 (09:05):
You got some good genetics there, but yeah.
So I mean, you know, I think Ican remember building
spreadsheets and having likefinancial thoughts about
business going back forever, sothat kind of morphed into.
You know, I left corporateAmerica to start that consulting
business and work with someprivately held businesses that
some people I knew wereinvestors in and they gave me
that opportunity and so I kindof parlayed being a spreadsheet
(09:27):
financial analyst junkie intoinvestment opportunities, into
the opportunity to then becomean operator or an owner.
Speaker 1 (09:35):
Nice, I love it.
And it also takes guts to beable to say hey look, right now
I don't own a business.
I'm going to have to borrowmoney to buy this business.
Probably that's scary, and youjust did it in 45.
I, like you, just jumped in orI could think about it.
Yeah, yeah, Like they say uh,you know the, the, the pool's
(09:57):
not going to get any warmer bywaiting Right.
Sometimes you got to jump inand do it.
Speaker 2 (10:02):
Yeah, um, I, I, along the way I had tried a few
different things so I had hadgotten some experience.
My cousin and I bought a coupleof pizza stores about 12 years
ago, did that for a few years.
Um, it's pretty hard, hard tosell pizza.
But you, but I, I take everyexperience and and and view it
as something that you can buildon right, like no, nothing.
(10:24):
All experience is cumulative, Ithink, and nothing's really
wasted.
So what I learned there wasreally hard to be another, what
I call a me too business.
Speaker 1 (10:33):
So you know we're selling pizza and says everybody
else, yeah, I got Tom Manahan'sbook from Domino's pizza in
there.
You know it's just like.
You know he built a giant,giant business out of it.
But yeah, I mean, you got your,your pizza place and in five
minutes down the road there'sanother pizza place that does
commercials.
Speaker 2 (10:50):
Right, everybody's got a nine dollar pizza or
whatever.
Speaker 1 (10:52):
Yeah, they got an app and everything else, and here
you are just trying to selllocal pizzas, right, right so so
again, I think that was a goodexperience of you know.
Speaker 2 (11:00):
getting that chance, after a series of financial
analysts and type jobs, to workwith seven or eight different
businesses in multiplecapacities got a lot of exposure
and experience there as well.
So another thing that I wouldtell anybody is take the
experience over the job title,over the salary Like I guess you
have to hit the minimum salaryto live on but always take the
(11:22):
opportunity to learn more, dosomething harder.
That's a good yeah, good advice.
So I put myself in thosepositions.
I you know, side hustled, inthe sense that I was always, you
know, grinding on a spreadsheet, grinding on an idea, thinking
about something, always willingto work.
I guess you'd really it's kindof cliche, but I'd say I'm
always willing to outwork thecompetition.
(11:42):
Yeah, you know, if somebody isgoing to work 60 hours, I'll
work 70.
Speaker 1 (11:46):
That's that Kentucky spirit, so just got to do it.
Yeah, you take a swig ofwhiskey and then you, uh, you
just get it going.
The numbers get so much betterwhen you have perfect.
(12:06):
Kyle agrees with that, I thinkKyle's uh, kyle's a T.
He's been a TQL forever.
Speaker 2 (12:07):
So he's, uh, he's grown up with tql.
What?
Were you the 100th employee orout there around there,
somewhere, around somewhere?
I was like 917 or something.
Were you there?
Yeah, it was my my first uhkind of real job or something
kind of like a weird office.
Were you in, uh, the main onein, uh, milford?
Speaker 3 (12:24):
oh, yeah, I got kicked out of there pretty early
.
Speaker 1 (12:27):
Oh bummer kyle's doing okay, though, kyle.
Kyle figured it out.
Now, kyle, his side hustles areinvesting in other businesses.
I would say he's got.
Uh, yeah, he got the buildingright down the street, the
republic bank building.
He's a co-owner in that andthey're rocking that out with
that restaurant up on therooftop awesome spot yeah, once
they got it going, you know,once everything started working
(12:49):
out and there's someconstruction issues and stuff
like that.
Speaker 3 (12:52):
But someday I'll, someday I'll, be able to reclaim
some money from one of myinvestments.
Speaker 1 (12:57):
It'll be glorious well, you got that right.
Speaker 3 (13:00):
Now that ford thomas investments, all right well, I
have it and it's cash funds.
I don't take a monthly, it'snot.
Speaker 1 (13:08):
It's not replacing any income yeah, I don't have
this, with a lot of stuff Ididn't, I didn't have it I
didn't have the quite successour, our frontiers had with this
stuff yeah, well, I mean yougotta, you gotta do as many
little things as you can, in myopinion, like I mean I still I
rent my car out on taro just toshow people that it can make you
money, it pays my car payment.
I mean, last month I think Imade 1400 bucks, 1500 bucks just
(13:32):
ran out my car and just takingit to the airport, dropping it
off.
I mean there's people out therethat are do Uber and it comes
back to me, you know, and I, Ijust live right across the river
.
I don't even I could ride ascooter back to my house if I
wanted to.
So it's.
It's one of those things whereit's just like all these little
things add up right, if you canreplace your, if you could get
(13:55):
rid of your car payment, that'speople's second biggest expense.
Probably, you know, withoutstudent loans If you can't and a
lot of those are gettingcanceled right now but if you've
got a, your mortgage right, yougot a house, you got an extra
room or something.
Maybe you rent that out or gobuy a four family.
Instead of going and buyingthat $800,000 house right out of
college, just go buy a fourfamily and move, move into one
(14:16):
of them, but an $800,000 houseout of college.
I didn't but there's people outthere, believe me, they got to
be in the school district.
They got to.
I see a lot of people in thoseexpensive neighborhoods that
look pretty young, pushing,pushing babies around and I'm
like, wow, how do these peopleget this stuff Like?
Is it maybe their parents hadmoney or something and got them
into that neighborhood?
And then I look at the homeprices and I'm like those people
(14:37):
got to be in their twenties andthey're living here Like
something's not right here likesomething's not right, like it's
anything like.
Speaker 3 (14:47):
Is there anything like fort thomas?
Their parents probably soldthem their house they had and
just took a hit on the.
Speaker 1 (14:50):
That's a good point yeah, that's how high park and
stuff like that, yeah, that'show they get them.
But some people I mean you lookat things right now in the
country.
I mean you deal with payrollall the time.
I mean you've got debt is crazyright now for people, and folks
are asking for more money.
You know the fast foodemployees, particularly those
guys are all looking foropportunities right now to try
(15:11):
to find ways to make money.
Sometimes you just tapped youremployer out Like they just
can't do it anymore and peoplethink that these you know the
guys that own these franchisesare just bankrolling tons of
cash.
And we had franchise people onhere.
They're like hey, you don'treally don't make a whole bunch
of money.
I'm in a Dunkin' Donutsoperator.
You might make a hundred grand,depending on the location, but
(15:31):
it's not like you're making tonsof money.
So people don't reallyunderstand that.
Employees don't reallyunderstand it when you have that
mindset.
One of our goals on thispodcast is to get people to kind
of shift from hey, I'm a, I'man employee and this is what I'm
going to be all my life too.
Hey, there's otheropportunities out here to make
money.
At some point you did that.
Speaker 2 (15:49):
Yeah, um, I uh.
Part of the way I tell thatstory to people, or the lens
that I use, is that you can onlygrow your career inside of a
company that's growing fasterthan you want to grow.
Otherwise you will like.
If you think from like, if you,you know, if you're $10 doubles
(16:12):
and then double like at somepoint, you, you are the entire
revenue of the company, right?
So if the company's not growing, you're not going to grow.
If the company's shrinking andyou're growing at some point,
that's an intractable situation.
Yeah, so yeah, I think a lot ofpeople do think I think there's
.
I just saw a joke, I thinksomething to the effect of oh,
started an LLC, now amillionaire, you know like.
Speaker 1 (16:30):
Oh yeah, that's, it.
Speaker 2 (16:33):
Oh yeah, it just happens, right yeah.
But I think that you know Ithink more people are thinking
along the lines of you know aside hustle or an alternative
source of income, and I thinkyou know we kind of see that.
Actually on the way here I hada phone call.
Or you know one person,business who you know stepped
(16:54):
out and is consulting on largetech implementations and an
opportunity to you know make avery good salary and now you
know big enough to be an Scorporation and have a payroll.
Speaker 1 (17:07):
Oh, wow, yeah, so they're LLC now and you're
trying to switch over, right,okay?
Speaker 2 (17:10):
Yeah, so you know just the uptick and you know
we'll do a payroll for.
You know we have hundreds, ifnot more than hundreds, of you
know one person S corporations.
Our largest clients have two or3000 employees and operate.
You know multi-state operations, so we can do both but and
operate.
You know multi-state operations, so we can do both but the
uptick in the small businesspayrolls that we see you know
(17:31):
looking for that.
You know quarterly or themonthly payroll filing,
certainly that's increasing indemand, which would tell you
that people are looking forthose alternatives.
Speaker 1 (17:39):
Ways to make money and stuff, which that's
interesting, and I love talkingto you guys because you're like
feet on the ground, like youknow what's happening.
You see, all this stuff likewhy the economy is doing bad.
If it's doing bad, are we in arecession?
All this other stuff.
It's businesses like yours thatare ahead of it.
And have you seen it?
Just being in this industry fora while now, have you seen, if
(18:09):
you do have a gauge on how farahead you are, like you'll start
seeing companies letting peoplego six months maybe before it
really becomes a problem, or doyou?
Or or they start ramping upagain and you're like, hey,
economy must be picking up.
People are ramping up.
Speaker 2 (18:22):
Um, we probably have that data.
Um, and I'm the data nut at ourshop.
If anybody is, I just don't.
Uh, apply myself into that dataand I'm the data nut at our
shop.
Speaker 1 (18:30):
If anybody is, I just don't apply myself into that
data Sell that Some data brokersout there would scoop that up,
maybe even the government.
Speaker 2 (18:35):
Yeah, I won't, I don't play that game.
I tell I have a lot of you know, we have a lot of clients and
some of them are pretty goodfriends.
And I tell them hey, there's a,there's a pretty good, you know
, chinese firewall there.
I don't care what you make, Idon't care what your company's
doing, it's none of my business.
I look at our revenue and ourclient count.
But we would have data thatwould tell us if we wanted to
(19:02):
look at it.
You know new, higher volume oryou know average payroll dollars
, things like that, and I'velooked at it in the macro sense
from time to time.
The last time that I scrutinizedit would have been during the
pandemic at the beginning of thepandemic and I thought, you
know, I'd owned the business forless than a year and I thought
I had just committed financialsuicide, when every you know the
world is shutting down, noone's going to get paid, you
know.
So, you know we were looking atthose volumes and you could
(19:23):
definitely see, so we lag, youknow, really like payroll kind
of legs from like the momentsomebody would be laid off two
weeks or so because oh sure,right, You're going to get your
last paycheck.
So you know.
So for us, the volume drop.
When the world shut down in themiddle of March, our volume
declined heavily like the secondweek of April, wow.
(19:46):
So you just see like 20%straight off a cliff.
Speaker 1 (19:49):
Holy God.
Yeah, that must've been scary.
Speaker 2 (19:51):
Oh, I thought I told you, I thought I you know you
were done.
Speaker 1 (19:53):
You were like I'm done.
Speaker 2 (19:54):
Like you know, married four kids.
Wife stays home and I leveredup and bought a business and
died in the first year.
Speaker 1 (20:00):
Yeah.
Speaker 2 (20:01):
Crazy.
Yeah, that's what happened.
Speaker 1 (20:04):
Yeah, that was in.
So but the thing thing is iswhat people don't understand is
situations like that come up forowners so you can't really tap
out the owner like, oh, theowner's making all this money.
Let's tap him out like, oh, wewant another two dollars an hour
, three dollars an hour.
Eventually you got to close thespigot, like there's only so
much that happens.
You got to fire somebody, yougot, or you got to,
unfortunately, let people go.
(20:25):
Uh, if if to go, we see it inCalifornia now with the with the
minimum wage.
Speaker 3 (20:31):
Replace them with automated, with automated
service, whether it's a robot,indians or Vietnamese or
Filipinos or whatever, they'llfind ways to save money.
Speaker 1 (20:40):
I mean, it's just what businesses do, it's just
the nature of running a business.
But the problem is you neverknow when that 20% decline is
going to come.
You need a padding in there andyou need to protect yourself,
because you're the one that getspaid last.
Speaker 2 (20:54):
Yeah, I've always told people that you know my
family will, you know, has andalways will come last at our
company.
We've been, we've been in apretty good spot.
So you know what we do has beenrewarded in the marketplace
because we're a customer servicefirst outfit and our, our
unique lane is that we have, welicense the big company
technology from UKG but wedeliver it with a local service
(21:17):
team.
So we're essentially a valueadded reseller for the third
largest payroll software companyin the country.
Wow, so we compete.
I mean, you were looking at ourwebsite so you do all this stuff
for all these people.
You know that's not somethingthat we coded or that's you know
, native in a closet in a FortWright, that if we get hit by a
tornado it's it's over.
You know that's that's UKG'ssoftware.
(21:39):
We just get to deploy it forour clients with with service.
We do all the work, weconfigure it.
We do everything except codethe software.
So I go up against all the bignational payroll companies with
a differentiation aroundcustomer service.
So for me it's all about havingthose people and we've been in
growth mode and just clippingsome great growth rate over the
(21:59):
last four years.
So I've been a little fortunatein the sense that we've been
oriented towards growth andretaining people and rewarding
our better players on that runnow.
But you're exactly right,though At some point a certain
job is worth a certain number,and I want my grandpa always
(22:19):
told me there has to be a profitfor the employee to have a job
If.
Speaker 1 (22:23):
If you don't make a profit on that employee, then
there's no point in having whatis it typically like 2.5, x or
something I think it was withthe uh, their payroll in revenue
.
Like did you need to make anorder to like keep them around?
Speaker 2 (22:37):
There's some, there's some general rule of thumb
around it there, probably is I,and that conceptually makes
sense to me, Um, but you know, Ithink you could, when you're in
growth mode, you might look atit and say I'm I really want
this person and I'll, you know,I'll absorb some short-term pain
on that, or margin compression.
Speaker 1 (22:54):
I guess you know they're a winner.
Speaker 2 (22:55):
They're a winner.
I need to get you know throughthis phase.
But eventually and I thinkanother one of those things I
think about is like the, theboom and the butt, like I think
businesses go through oh, cycles, for sure yeah, I see it that
way.
Okay, we have to.
We centralize, then wedecentralize, or whatever it is
right.
So we're in an expansionarymoment in our company's time, so
(23:16):
a little looser, but at thesame time you have to be
prepared, or however you'd thinkstack ranked or who's valuable,
who's not, like those kinds ofthings come up.
Those are tough decisions.
Yeah, you have to be, butthat's a heavy as that.
Speaker 1 (23:31):
It's like a baby.
It's like baseball.
Like you might like a guy who'splaying center field for you,
but if he's hitting sub 200, atsome point you got to have a
tough conversation with them andput somebody else in there.
Speaker 2 (23:41):
Right.
I think it's a great analogy.
I one point I was talking withmy partner, if you will, the COO
of the business.
She's been with me from thebeginning and that really does
the.
If you do the EOS model, she'sthe completely the integrator.
And I'm just this crazyvisionary guy.
(24:02):
I hear you about that, yeah,but so I'm interested in this.
The analogy here for me of howmuch we're operating like a
professional sports team, wehave a, you've got the salary
cap and you've got to fitresources on the field, like it
makes a lot of sense and thatyou have to make, you know,
tough decisions and maybe youknow at different times, uh, you
, we have different departmentswithin our group.
(24:23):
Maybe at one point you have toshift resources there and then
base our football terms.
That's the offensive line.
Speaker 1 (24:29):
I mean I want T Higgins and Jamar Chase on the
same team, but I don't know.
Is the receiver position evenworth that much anymore Running
back we already know runningback's not as valuable as it
used to be, and now receiversseems like it's kind of doing
that.
But T Higgins is a great guy.
I agree.
He bought my subway in Newportone time.
I love T Higgins, but Kyle Imean Kyle might've had a
(24:50):
conversation Like look T man, welove you, but this we can only
afford.
So much Like that's Kyle'sattitude.
I'd send Kyle in to donegotiations.
Speaker 3 (24:57):
I always thought Joey Votto would have been Joey V
years ago.
I don't know.
You're 28.
You're coming off a knee injury.
Speaker 2 (25:10):
You're MVP two years ago.
We're getting ready.
Yeah, never signed him to that220, whatever it was.
Speaker 3 (25:15):
It's the Cardinals and the Steelers versus the
Bengals and reps.
I mean, look at how theSteelers and Cardinals treat
their stars Like once they getto the 31, they got a very, very
limited amount of ropes.
They 31, they got a very, verylimited amount of ropes they're
willing to give them.
And then, if you want to getcrazy, you paid market rate at
that age and it's just nothappening.
That's why pooh holes went tothe angels.
Speaker 1 (25:36):
Oh man, yeah we gotta be able to draft.
Speaker 2 (25:38):
Well, kyle, right and same with your business worked
out really well for the gardenoh, it did work out for the
cardinals, that's right you dohave to, and I think that's a
great point.
You have to draft well, tobuild the and that's the rest of
the analogy for the sports team, I would say, you have to, you
have to have a mix of you knowwe talked about that.
You go out and you hire aveteran player.
(25:58):
There's a couple of things thatI find difficult about that.
One, you're going to pay topdollar.
Two, you're going to introducequestion marks around culture
and fit.
You know some people, you know,I think in their mind, they,
they've, they've already done it, they've put in the work Right,
and so now they want to managea team or lead a team that they
(26:18):
tell how to do the work.
And I'm in a stage where I needpeople.
I want to come and get theirhands dirty.
We have work to do, so you know.
So if you hire somebody thathas the you know the been there,
done that experience at a paycore across the river or
something, will they, you know,come in and actually be able to
hit the ground?
Do they understand our culturearound service?
(26:39):
Do they understand our and I'llbe honest, we're like one for
eight.
Speaker 1 (26:43):
Oh man, yeah, it's tough, right, it's tough.
People are tough, like justdealing with people, dealing
with different personality typesin the same building.
A lot of times, you know, evenon a Zoom call, like you could
have people who just completelydisagree.
They come from differentaspects, you know, maybe
politically even, and now you'vegot to manage that culture so
it doesn't one person or twopeople don't become a cancer to
(27:05):
the entire organization.
Speaker 2 (27:07):
That's right.
So I try to move on fast.
If we've made the wrong hiringdecision, but in terms of you
know drafting, same way that youknow a good draft if you have a
Joe Burrow on his rookiecontract, you have a Superbowl
window.
If you hire some reallyoutstanding, you know younger
people that don't have highsalary expectations and can and
(27:28):
want to work really hard tobuild their career at the
beginning, you can kind of catchlightning in a bottle with that
and I think that's been a bigpart of our.
Our success is, you know, withour pretty rapid growth of last
four or five years, has beenable to depend on some, some
really good people that might,you know they may not have all
the polish and the glitz and theglamour of that would attract a
(27:50):
large corporation to want tohire them.
But you give somebody like thata chance to small business or
closely held business and givethem a chance and show them that
you're, you believe in them,you want to see them succeed and
build a career.
They give you a lot back inreturn.
Speaker 1 (28:04):
Well, kyle, a TQL too , I mean you were.
You guys were a startup at onetime.
I'd say you were probably stillkind of a startup when you got
there, even though you wereemployee 100, people don't
understand how big TQL I meanthe second biggest freight
broker in the country.
Right now they're a big, bigcompany and when Kyle started
they were still relatively smalla hundred people's, not.
It's still a smaller business,I would say your borderline
(28:25):
medium-sized business.
But how have you seen it change?
Because I think for you you'rechallenged by these.
People can go to a pay cord,they can go to an ADP, they can
go to some of these otherpayroll service companies or
they can try to scalp them fromyou.
Good employees that you have,they could try to scalp them
from you.
Kyle, have you seen that at TQ?
(28:46):
Have seen kind of the culturechange is it?
Is it harder to keep employeesaround?
Because now you're a bigcompany, you're not this like
scrappy startup that people wantto work for, like they're
excited it's growing?
Oh, I got a chance to grow withthe company because I think
that's your benefit, right,that's where I'm at.
Yeah, completely where I'm at.
So what do you think, kyle, isthat.
Have you seen it change?
Speaker 3 (29:06):
well, I, I think I did.
The major shift happened in2008 with the first real major
economic downturn.
That happened while the bill,while the company was uh, you
know in existence.
But I mean no way.
He was a operations analyst, sohe understands how it works
there.
It's a start.
(29:27):
It's an entry-level salesposition.
Basically, it's built off ofits entry-level sales guys, and
entry-level sales are based offof numbers and whether you hit
your numbers or not, that prettymuch dictates whether you stick
around.
You may go into another role,but someone's sales number
(29:48):
numbers got to have to be ableto pay for your position.
So in that regard, it's kind ofstayed the same.
It's still the same mentalityof you know, you, uh, you earn
what you get and you get whatyou earn.
Speaker 1 (30:01):
So yeah, maybe you're not the best analogy, but well,
yeah, it's not.
Speaker 3 (30:05):
It's not similar to like going to a Fifth, Third or
a bank that starts where you'renot customer facing or you're
not sales numbers, where you'reactually more like process.
Speaker 2 (30:23):
Where are you at in getting these files completed or
this loan approved or whatever?
In that regard To your point,adam, though, I think how many
Kyle, how many brokerage firmshave spun out of TQL?
So maybe they didn't leave togo to work for CH Robinson, but
they, you know, but they wentand started what?
75 competitors.
Speaker 1 (30:39):
Yeah, that's crazy, I mean somebody could technically
do that for you, but I'd saywhat percentage of people are
actually, I mean how many peoplethrough the door at tql versus
the number of people thatactually went out and did that.
The percentage has to berelatively small compared to the
overall numbers of people.
Sure, because I'd say 90percent of people just want a
job.
Speaker 3 (30:57):
I mean the barrier of entry.
The barrier of entry is way,way, way higher for payroll than
it is for freight brokering.
I mean freight brok.
You pay your bond and you dowhat you're trained to do.
When you're doing payroll, youhave to know tax law.
You have to have connectionswith people that are good CPAs.
You can't just you got a lot ofoverhead expenses that have
(31:19):
nothing to do with direct actionin the business.
It's more along the lines ofkeeping you compliant with all
the regulations and all the lawsthat you have to follow.
In that regard, you can't be amoron like me.
I could leave TQL and I couldstart a freight brokerage firm,
because really all you need todo is be able to hustle and
outfight your competitor.
In that regard, it's anybusiness, but there aren't a lot
(31:45):
of nuances, as many nuances asthere is for what Noah's doing.
Speaker 2 (31:52):
Makes sense.
Yeah, I think what you do seein my space is on the on the
smaller end I'll see some CPAfirms or bookkeeper bookkeeping
groups that will hold outpayroll for their clients and I
think that they, you know, theyprobably view that and it's
probably a very logical thingthat, hey, I've started my
business, I'm a one person band,I want every revenue stream
(32:15):
available to me to try tosurvive and I think I get that.
But then you see them that youknow they get up a little bit
and then they get caught and Ibelieve I tell people payroll as
a business that works at scale.
It's not a business that worksbelow scale and scale can be
different.
But you know even step function.
But you know, for us with about1500 clients, it's it's quite a
(32:37):
bit easier to have departmentsand checks and balances and
backstops that can make it work.
If you're a one person, you knowyou're sick.
How do your clients get theiremployees paid?
Oh, it's, it's yeah, yeah, you,you get, you know.
So you know one per I said justone person.
That's not scale, um, I alsothink you know from a highest
and best use of time if you're aCPA, um and you have this great
(33:00):
high margin.
You know, relationship withyour client around consulting,
around the tax return, aroundtheir, maybe their monthly
bookkeeping or some fractionalCFO services you know, don't
introduce.
Personally, I guess I soundlike I have a vested interest,
but I wouldn't introduce payrollbecause now you've you've added
conceptually 38 deadlines 26paychecks a week or every two
(33:24):
weeks, 26 deadlines aroundpayroll and then 12 tax
deadlines every month andquarter.
Why would you want to add 38failure points to your business
when you for right now youcontrol it Like you know
everything isand, yeah, it would be the
lowest margin work you do forthat client with the most risk
to lose the high margin work.
Yes, right.
(33:44):
So we partner with a lot ofCPAs that don't want to be in in
the payroll space and we workwith them across.
Hey, if you want to um, youknow, white label payroll as for
you, or if you want to sellyour book, we've done both of
those.
But more commonly they just say, hey, we just want this taken
care of for our clients.
We don't want to be anywherenear pay, and so they you know
they were for us and that's whywe take you know, kind of that
whole gambit a lot of you knowmonthly, quarterly payrolls one,
(34:09):
two, three person companies,and so we do a lot of those for
our CPA friends.
Speaker 1 (34:13):
Yeah, what about companies like mine?
For example, I run an ad agencyfor essentially a one man band
too, but all the people thatwork for me are people that are
formerly, you know, at agenciesI used to work with, or you know
people I've just freelancersessentially, where they've kind
of priced themselves out of ajob.
So they don't even want to workfor me and I don't necessarily
(34:34):
want to pay them as a full-timeemployee because I may only need
their skills for five hours aweek, this week, 20 hours, next
week, 30 hours a week after that.
So I'm set up as kind of like avirtual agency where you know
the Hollywood model.
I guess, you know, I want thelighting director from Jurassic
Park, I want the animator fromToy Story, I want this guy, you
know, and I want to put togethera team right, the right team,
(34:55):
for that project.
A lot of people, when they'restarting their company, I feel
like they they can't avoid it,like I can avoid it.
They kind of have to hirepeople.
If you're a spa, you got tohave practitioners, right.
Maybe you can do it for acertain amount of time, but then
if you grow your businessenough, now you can't.
You just don't have enough timeday, right, so you have to
start hiring people.
(35:16):
That's a scary time.
How many of those types ofcompanies have you guys work
with and do you haveconversations with them about
how everything's going to workand and kind of settle them down
a little bit?
Speaker 2 (35:27):
Yeah, that's definitely a big part of what we
do and that's kind of theorigin story of me finding
payroll partners at thebeginning when I had my business
and was in that uncertainperiod.
So definitely have a lot ofconversations around.
You know what we need from you,what we're going to do for you,
how we're going to get youthere, and I always tell people
you know you have a business torun.
(35:49):
Payroll is an importantcomponent of it, but it's not
why you're in business.
We're going to handle that part.
Speaker 1 (35:54):
You worry about yourself out of that.
It's stressful dealing withpeople and you do some HR work
too right your firm.
Speaker 2 (36:01):
We have HR software and kind of what comes with that
is some light HR questionanswering things like that.
We avoid the like HR consultingspace where, where we would,
you know, really take ownershipof your hr department but you
probably have people that youcan forward on to them.
Speaker 1 (36:19):
We have a lot of partners in that space, a lot of
good friends that we could, wecould introduce to a client
because a bad employee couldlike, literally ruin your
company, ruin your mental health, make you feel like, why am I
in this business?
Doubt yourself?
Oh for sure, yeah.
So I mean it's tough and peopledon't understand that when you,
when you start running abusiness, it's not just you know
.
Oh, I'm gonna start a business,I'm gonna make all this money.
(36:39):
There's so much administrativestuff that you have to do.
If you're a spa, I mean you gottowels, you got linens you have
to take to the cleaner, you gotto pick up.
It's not you just sitting thereall day.
Oh, I'm going to have fiveclients a day, it's going to be
great.
No, you're half the day You'regoing to be in your QuickBooks,
you're going to be delivered.
You know, taking towels andsheets out, folding them up,
(37:00):
doing that.
It's crazy.
Like the amount of stuff youdon't get paid for is if you
were an employee.
Speaker 2 (37:07):
Uh, totally true and and uh, luckily, you know, for
me, uh said I, I was able toacquire the business and it
already had a nice base ofemployees and clients and I've
just been able to build on that.
Um, I personally don't knowthat I could get myself out of
that trap.
I'm very, um, I would, I wouldrun very hard at doing all the
things I needed to do and Ithink you could very easily I
(37:29):
could see myself having gottentrapped in that, you know you
have to know what's going on inevery aspect of the business.
I said I you know, if, if, um,you know, if you wanted to start
a payroll company, I thinkyou're nuts.
Uh, personally I wouldn't.
I wouldn't do it now.
I mean no, I know, now Iwouldn't have it's tough, yeah,
it's tough business, Um, but uh,it's a, it's a good business at
scale.
(37:49):
But again, I think you know, ifyou get to that, um, yeah, you
can make a job for yourself, butthen what?
Yeah, and that's probably thesame in every bit, right, Well?
Speaker 1 (37:58):
how many hours do you think you work a week?
Speaker 2 (38:01):
Uh, do we count golf.
Speaker 1 (38:03):
Golf is a.
It's part of the job.
Speaker 2 (38:04):
Yeah, I've gotten my wife to catch onto that.
That.
Speaker 1 (38:07):
This is, this is you got a golf shirt on, currently
headed there after this.
Speaker 2 (38:10):
Yeah, I was gonna say um, so I, yeah, I I'd say I get
, uh, most days probably 10, 11hours, five days a week easily,
and then it's just a question ofhow much has to get done on the
weekend to get back to areasonable starting point for
monday morning yeah.
So what is it?
(38:30):
You know, 55, 60 easy and someweeks it's worse.
Speaker 1 (38:35):
Yeah, oh yeah, it's never easier.
Yeah, maybe even tax time comesaround and stuff and people
were asking for things.
Speaker 2 (38:41):
Well, for us that's uh, that's January.
December and January are ourbusiest months of December.
Um, a lot of our small businessclients are are running those
one-off payrolls to make alltheir final adjustments, so
we're burning it pretty heavy.
In December we're also gettingready to a lot of clients make a
switch for payroll on a cleanquarter.
(39:03):
So January is a clean year anda clean quarter, so the number
one time people move.
So we're real busy in Decembertaking care of our current
clients, getting our new clientsready, and then you flip the
calendar to January and now thetax teams running downhill on
the December close the fourthquarter, close the year end and
(39:23):
W2s.
Speaker 1 (39:27):
What is who's your ideal client?
So for people listening they'relike, hey look, maybe I'm using
one of these other companiesright now, but I'm in Kentucky.
I want to be with like a localgroup.
I want to help Noah, I want tosupport his business.
Who's your ideal client?
Speaker 2 (39:41):
I appreciate the plug , wasn't expecting that.
We work with, broadly speaking,two different types of clients.
The one that we've been talkingabout a little bit here is that
smaller business that eitheryou know just starting out or
you know owner operator lookingto not be very heavily involved
in payroll.
So we call it full servicepayroll.
You know you can call or emailour team.
(40:02):
You have a dedicated rep andthey'll help you do everything
involved with payroll withoutyou having to be very committed
to logging into our system ordoing anything.
The other part of our businessis that more mid-sized and
upsized business.
Call it.
I mean really any number ofemployees.
It could be 30, 40, 50 and up.
Our largest are in thethousands and they're looking
for the technology that we alsooffer that they can use to run
(40:24):
their business, but they'relooking for that layer of
support.
So our clients in that space,typically you know one or two
people on a payroll or an HRteam who don't have time to wait
on hold who, who, who don'thave time to, you know, wait
three weeks for an answer.
They want they want to havemore of a service based
relationship.
Speaker 1 (40:42):
Ah, okay, oh, that that's hard to keep up with too.
As a payroll company, I mean Ican imagine like you calling
some of these other payrollcompanies and just being you
company.
I mean I can imagine like youcalling some of these other
payroll companies and just beingyou're on hold, you're, you're
waiting a long time to getsomething back, just because
they just don't have, they'renot prepared for that, they
haven't thought about that, theydidn't grow into that kind of
system, so they don't.
They don't have the people andthe resources available to do
that If it's not part of their,their strategy from the
(41:06):
beginning.
Speaker 2 (41:16):
Yeah, I mean the, the , the larger ones.
They hold themselves out astech companies.
So it's log a ticket.
Here's our FAQ, here's ourcommunity web page to search
your own answer.
My favorite parlor trick in theconference room of a potential
client is to call our 859 phonenumber and have our receptionist
answer the phone.
Yeah, Two rings boom.
Speaker 1 (41:35):
And you're on the phone with somebody that can
help you direct you wherever youneed to go.
Yeah, you know, two rings boomand you're on the phone with
somebody that can help youdirect you wherever you need to
go.
Right, that's awesome.
Well, no man, this has beengreat.
I appreciate you jumping onhere.
Guys, check out his websitepayrollpartnersnet.
Great URL, great name, by theway, legacy, yeah, yeah, and it
ties directly into what you do.
You're your partner, right?
So, yeah, definitely check outthat site.
And if you guys are in Kentucky, ohio, indiana, anywhere around
here, tennessee, even thoughTennessee is not as hard.
Speaker 2 (41:56):
Well, we still give service everywhere.
We do all 50 states, Guam,Saipan, Puerto Rico.
Speaker 1 (42:01):
Oh, wow, okay.
So some military paychecks,possibly Travel nurses, travel
nurses.
Oh, there you go, there you go.
So, guys, if you're looking forsome payroll help, uh,
definitely hit Noahpayrollpartnersnet guys.
Thanks, noah, thanks for havingme, thanks for joining us on
this week's episode of sidehustle city.
Well, you've heard from ourguests.
Now let's hear from you.
Join our community on Facebookside hustle city.
(42:23):
It's a group where people shareideas, share their
inspirational stories andmotivate each other to be
successful and turn their sidehustle into their main hustle.
We'll see you there and we'llBye, bye, bye, bye, bye, bye,
bye, bye, bye, bye, bye, bye,bye, bye, bye.
Speaker 3 (42:58):
Bye, bye, bye, bye, bye, bye, bye, bye, bye, bye,
bye, bye.
Welcome to Side Hustle City and thanks for
joining us.
Our goal is to help you connectto real people who found
success turning their sidehustle into a main hustle, and
we hope you can too.
I'm Adam Kaler.
I'm joined by Kyle Stevie, myco-host.
Let's get started, All right?
(00:24):
Welcome back everybody to theSide Hustle City podcast.
And guess what guys?
Kyle Stevie is actually here,so Noah is our guest today.
Ostrich, is that how youpronounce it?
Osterhag, Osterhag, you own acompany, Payroll Partners.
Here in Northern Kentucky A lotof people are familiar with
(00:46):
payroll companies.
They write your checks and sendthem out to you.
For sure, Paycor is one hereand that ADP is another big one
I've seen on past paychecks thatI've had.
But what makes you guysdifferent?
Speaker 2 (01:01):
That's a great question.
Just had a chance to talk tosomebody who kind of asked me
like what do you do?
And I thought that feels likean odd question, because I would
think that anybody that'sgotten a paycheck before would
kind of-.
Speaker 1 (01:13):
But understand what's going on, yeah.
Speaker 2 (01:15):
But what I said was hey, start at the top of your
paycheck and there's the grosswages, the top number, and then
below that there's a bunch ofdeductions and taxes.
Well, that's my company, or anypayroll company, but that's my
company.
We're calculating those taxes,managing those deductions and
then working to that net numberon your paycheck and then we
(01:37):
move the money and pay all thosetaxes and move the money into
your bank account.
Speaker 1 (01:41):
Yeah, so most people should understand that, but how
long have you guys been around?
Speaker 2 (01:46):
The company was founded in 2001.
Speaker 1 (01:49):
Oh, wow, 2001.
Okay, and then you acquired thecompany at one point, right,
yep.
Speaker 2 (01:54):
So it was just over five years ago.
Speaker 3 (01:56):
Oh, wow.
Speaker 2 (01:57):
Yeah, I was.
I actually was a client first,so I didn't want to do my own
payroll, or you know, didn'tkind you were like yeah, kind of
intimidated by it.
The S corp thing you know I wasa small business consultant and,
just you know, needed to getthat payroll done for the kind
of the monthly quarterly thingis a one person S corp.
(02:18):
So if you're in the CPA or thesmall business space, you know
I'm talking about and I triedall the little QuickBooks, the
Gusto oh, pain in the butt.
Yeah, you actually have to.
You know they're not going tohelp you do anything.
No, you, you still have to putin the stuff.
Like, yeah, you got to knowsomething.
So I went across the street andI asked my neighbor and I said
(02:38):
hey, mark, how do you handlepayroll for your small business?
And he says I use payrollpartners.
And I said who?
Like, I've heard of ADP andsome of these other ones.
Yeah, so he said that.
I said okay.
So I called, got ahold of thecompany, got several phone calls
back, took really good care ofme, were able to set up what I
needed, and then it was done andI went, got on with what I
(03:02):
needed to be doing to run mybusiness and, interestingly
enough, though, that running mybusiness was helping other
businesses with finance relatedpast projects.
Oh, so kind of consulting onthe finance side, and we had a
business I was working with thathad a staffing company.
They had about 50, 60 employeesand every one of those
(03:25):
employees was getting paid outof the home office.
And I had just gone throughpayroll.
I learned just enough to bedangerous, that that's not right
Cause, if you didn't know, justa quick aside Pennsylvania,
ohio, Kentucky and Indiana have93, 94% of all the local payroll
taxes in the country, districtsin the country, really.
So if you, if you grew up intennessee, you have no idea what
(03:49):
we're talking about.
When we talk about county, citypayroll taxes.
It's not a thing I.
Speaker 1 (03:54):
I just assume, being here my whole life, that this
was nationwide.
Now this is very abnormal.
So you grew up in kentucky.
You and Kyle.
You know not a lot of peoplewhen they think of Kentucky
think of you know tons ofentrepreneurship, right, even in
Ohio.
You know we don't cross theborder very much, right, like
(04:16):
you've got all these things thathelp small businesses get off
the ground.
They there's a lot of support,I would say, in Ohio.
Just being somebody who's donestartups in the past for small
businesses, small businessownership, I know all the
programs.
Even though I have a businessover here, I'm not as familiar
with what's going on in Kentuckyand I'm all about starting
something like buying acash-flowing, working business,
(04:39):
modernizing it, making it better.
But not a lot of people thinkabout that as an option.
They think they have to startfrom scratch and go to one of
these organizations in the stateto help them out.
Try to get some free money ifthey can.
But talk about your journeyLike what led you to want to
purchase an already existingbusiness that you were actually
(05:00):
working with.
Speaker 2 (05:01):
Yeah, so sorry I finished the thought we were on
Cause.
I think it'll help get to theanswer.
Um, I was working in aconsulting capacity for a
business that had their payrollbasically messed up with one of
the big national companies, um,so I called payroll partners
back and said, hey, I was a oneperson deal, but how about a
bigger company?
Can you work with us on that?
And they said, yeah, sure.
(05:21):
And uh ended up having umbrought seven or eight different
businesses to payroll partnersthat I was working with.
So um got to know the owner ofthe company and, um, you know,
we I was talking to a guy that Iwas working with and invested
money with, and uh, he said, hey, how much is paychecks worth?
So I looked it up.
I said I think it was like $30billion.
(05:43):
He says so there's a company inNorthern Kentucky with a better
mousetrap than Paychex and youdon't want us to invest in that.
Speaker 1 (05:52):
I was actually invested in Paychex, like in the
stock market.
I remember yeah.
Speaker 2 (05:56):
So it could have been 18.
It could have been it was sevenor eight years ago.
My brain's shot today, butanyway.
So we were talking to the guyand owned it and he was looking
for some help because I thinkwhat?
Where he was with a great smallbusiness you've probably talked
to a lot of people that are inthis spot he was in that
entrepreneur ceiling right.
He had every hat, every directreport was all on him and he
(06:21):
really didn't have time.
If he was selling, he wasn'toperating.
If he was operating, he wasn'tselling.
Speaker 1 (06:25):
He was, he was trapped right, he's working on
the business, not in thebusiness, or yeah, that very
classic thing.
Speaker 2 (06:30):
So he, he looked us for some help.
We, we bought into the company,but really no sooner than we
did that he, he kind of wantedto to not be a part of a growth
company anymore.
He's like you know what itsounded good.
Now I'm seeing what we're goingto have to do.
Um, and wanted to sell thewhole company and uh,
essentially what happened was ittook us four or five months to
sort that out and essentially Iwas just the last man standing.
(06:52):
Uh, the the other guy that Ihad had been working with was
not in a position to buy anothercompany.
This guy was definitely goingto leave and so that left me.
If the company was going tostay in Northern Kentucky, say a
privately held thing, and notjust be sold to a Paychex or a
Paycor, I was going to have tobuy it Wow.
Speaker 1 (07:11):
So how did that process go with buying a
business?
I mean, you're a young guy,banks don't usually like us, so
how did that work out?
Speaker 2 (07:20):
Yeah.
So again, this was kind of aSaturday afternoon conversation
that he was going to sell thebusiness and within 45 minutes I
was on the phone with a bankerfriend of mine and we figured
out how I was going to puttogether an SBA deal and take
over the company, so go from areally small piece of the whole
thing and 45 days later ithappened.
(07:42):
So almost it wasn't 45 days,wow.
Yeah, it wasn't something thatI set out and said I have this,
this vision of owning a payrollcompany.
I just wanted to own somethingat some point and was just out
there doing things untilsomething broke my way.
Speaker 1 (07:56):
Well it the opportunity presented itself and
you took advantage of it, whichwas what a lot of people don't
do Right.
Speaker 2 (08:02):
You know, I was thinking kind of all day how I
would tie in with side hustleBecause I did some.
I just met Dave Knox from BlueNorth.
Speaker 1 (08:12):
Yeah, I just had an email conversation with him
yesterday.
Speaker 2 (08:14):
Yeah, and he clued me into a thing, eta, like
entrepreneurship throughacquisition, and honestly I had
never heard that acronym, but Iguess that's exactly what I did.
How, what was I going to say?
The?
Speaker 1 (08:28):
the the way you purchased the business.
Speaker 2 (08:30):
Yeah, it wasn't intentional.
I just wanted to put myself outthere to do things and you know
, from from a young age I thinkI mean there's stories with my
mom's, my grandpa, about youknow me wanting to ask him about
business and entrepreneurshipin second grade.
Speaker 1 (08:48):
Was he a business owner?
Speaker 2 (08:50):
Yeah, he, yeah, he did a lot of different things.
Okay, a lot of differentbusinesses.
He's 94, still around, butdoing a lot less these days.
Speaker 1 (08:58):
Well, good for you, man, 94 years old, you got some
good genetics there, yeah yearsold.
Speaker 2 (09:05):
You got some good genetics there, but yeah.
So I mean, you know, I think Ican remember building
spreadsheets and having likefinancial thoughts about
business going back forever, sothat kind of morphed into.
You know, I left corporateAmerica to start that consulting
business and work with someprivately held businesses that
some people I knew wereinvestors in and they gave me
that opportunity and so I kindof parlayed being a spreadsheet
(09:27):
financial analyst junkie intoinvestment opportunities, into
the opportunity to then becomean operator or an owner.
Speaker 1 (09:35):
Nice, I love it.
And it also takes guts to beable to say hey look, right now
I don't own a business.
I'm going to have to borrowmoney to buy this business.
Probably that's scary, and youjust did it in 45.
I, like you, just jumped in orI could think about it.
Yeah, yeah, Like they say uh,you know the, the, the pool's
(09:57):
not going to get any warmer bywaiting Right.
Sometimes you got to jump inand do it.
Speaker 2 (10:02):
Yeah, um, I, I, along the way I had tried a few
different things so I had hadgotten some experience.
My cousin and I bought a coupleof pizza stores about 12 years
ago, did that for a few years.
Um, it's pretty hard, hard tosell pizza.
But you, but I, I take everyexperience and and and view it
as something that you can buildon right, like no, nothing.
(10:24):
All experience is cumulative, Ithink, and nothing's really
wasted.
So what I learned there wasreally hard to be another, what
I call a me too business.
Speaker 1 (10:33):
So you know we're selling pizza and says everybody
else, yeah, I got Tom Manahan'sbook from Domino's pizza in
there.
You know it's just like.
You know he built a giant,giant business out of it.
But yeah, I mean, you got your,your pizza place and in five
minutes down the road there'sanother pizza place that does
commercials.
Speaker 2 (10:50):
Right, everybody's got a nine dollar pizza or
whatever.
Speaker 1 (10:52):
Yeah, they got an app and everything else, and here
you are just trying to selllocal pizzas, right, right so so
again, I think that was a goodexperience of you know.
Speaker 2 (11:00):
getting that chance, after a series of financial
analysts and type jobs, to workwith seven or eight different
businesses in multiplecapacities got a lot of exposure
and experience there as well.
So another thing that I wouldtell anybody is take the
experience over the job title,over the salary Like I guess you
have to hit the minimum salaryto live on but always take the
(11:22):
opportunity to learn more, dosomething harder.
That's a good yeah, good advice.
So I put myself in thosepositions.
I you know, side hustled, inthe sense that I was always, you
know, grinding on a spreadsheet, grinding on an idea, thinking
about something, always willingto work.
I guess you'd really it's kindof cliche, but I'd say I'm
always willing to outwork thecompetition.
(11:42):
Yeah, you know, if somebody isgoing to work 60 hours, I'll
work 70.
Speaker 1 (11:46):
That's that Kentucky spirit, so just got to do it.
Yeah, you take a swig ofwhiskey and then you, uh, you
just get it going.
The numbers get so much betterwhen you have perfect.
(12:06):
Kyle agrees with that, I thinkKyle's uh, kyle's a T.
He's been a TQL forever.
Speaker 2 (12:07):
So he's, uh, he's grown up with tql.
What?
Were you the 100th employee orout there around there,
somewhere, around somewhere?
I was like 917 or something.
Were you there?
Yeah, it was my my first uhkind of real job or something
kind of like a weird office.
Were you in, uh, the main onein, uh, milford?
Speaker 3 (12:24):
oh, yeah, I got kicked out of there pretty early
.
Speaker 1 (12:27):
Oh bummer kyle's doing okay, though, kyle.
Kyle figured it out.
Now, kyle, his side hustles areinvesting in other businesses.
I would say he's got.
Uh, yeah, he got the buildingright down the street, the
republic bank building.
He's a co-owner in that andthey're rocking that out with
that restaurant up on therooftop awesome spot yeah, once
they got it going, you know,once everything started working
(12:49):
out and there's someconstruction issues and stuff
like that.
Speaker 3 (12:52):
But someday I'll, someday I'll, be able to reclaim
some money from one of myinvestments.
Speaker 1 (12:57):
It'll be glorious well, you got that right.
Speaker 3 (13:00):
Now that ford thomas investments, all right well, I
have it and it's cash funds.
I don't take a monthly, it'snot.
Speaker 1 (13:08):
It's not replacing any income yeah, I don't have
this, with a lot of stuff Ididn't, I didn't have it I
didn't have the quite successour, our frontiers had with this
stuff yeah, well, I mean yougotta, you gotta do as many
little things as you can, in myopinion, like I mean I still I
rent my car out on taro just toshow people that it can make you
money, it pays my car payment.
I mean, last month I think Imade 1400 bucks, 1500 bucks just
(13:32):
ran out my car and just takingit to the airport, dropping it
off.
I mean there's people out therethat are do Uber and it comes
back to me, you know, and I, Ijust live right across the river
.
I don't even I could ride ascooter back to my house if I
wanted to.
So it's.
It's one of those things whereit's just like all these little
things add up right, if you canreplace your, if you could get
(13:55):
rid of your car payment, that'speople's second biggest expense.
Probably, you know, withoutstudent loans If you can't and a
lot of those are gettingcanceled right now but if you've
got a, your mortgage right, yougot a house, you got an extra
room or something.
Maybe you rent that out or gobuy a four family.
Instead of going and buyingthat $800,000 house right out of
college, just go buy a fourfamily and move, move into one
(14:16):
of them, but an $800,000 houseout of college.
I didn't but there's people outthere, believe me, they got to
be in the school district.
They got to.
I see a lot of people in thoseexpensive neighborhoods that
look pretty young, pushing,pushing babies around and I'm
like, wow, how do these peopleget this stuff Like?
Is it maybe their parents hadmoney or something and got them
into that neighborhood?
And then I look at the homeprices and I'm like those people
(14:37):
got to be in their twenties andthey're living here Like
something's not right here likesomething's not right, like it's
anything like.
Speaker 3 (14:47):
Is there anything like fort thomas?
Their parents probably soldthem their house they had and
just took a hit on the.
Speaker 1 (14:50):
That's a good point yeah, that's how high park and
stuff like that, yeah, that'show they get them.
But some people I mean you lookat things right now in the
country.
I mean you deal with payrollall the time.
I mean you've got debt is crazyright now for people, and folks
are asking for more money.
You know the fast foodemployees, particularly those
guys are all looking foropportunities right now to try
(15:11):
to find ways to make money.
Sometimes you just tapped youremployer out Like they just
can't do it anymore and peoplethink that these you know the
guys that own these franchisesare just bankrolling tons of
cash.
And we had franchise people onhere.
They're like hey, you don'treally don't make a whole bunch
of money.
I'm in a Dunkin' Donutsoperator.
You might make a hundred grand,depending on the location, but
(15:31):
it's not like you're making tonsof money.
So people don't reallyunderstand that.
Employees don't reallyunderstand it when you have that
mindset.
One of our goals on thispodcast is to get people to kind
of shift from hey, I'm a, I'man employee and this is what I'm
going to be all my life too.
Hey, there's otheropportunities out here to make
money.
At some point you did that.
Speaker 2 (15:49):
Yeah, um, I uh.
Part of the way I tell thatstory to people, or the lens
that I use, is that you can onlygrow your career inside of a
company that's growing fasterthan you want to grow.
Otherwise you will like.
If you think from like, if you,you know, if you're $10 doubles
(16:12):
and then double like at somepoint, you, you are the entire
revenue of the company, right?
So if the company's not growing, you're not going to grow.
If the company's shrinking andyou're growing at some point,
that's an intractable situation.
Yeah, so yeah, I think a lot ofpeople do think I think there's
.
I just saw a joke, I thinksomething to the effect of oh,
started an LLC, now amillionaire, you know like.
Speaker 1 (16:30):
Oh yeah, that's, it.
Speaker 2 (16:33):
Oh yeah, it just happens, right yeah.
But I think that you know Ithink more people are thinking
along the lines of you know aside hustle or an alternative
source of income, and I thinkyou know we kind of see that.
Actually on the way here I hada phone call.
Or you know one person,business who you know stepped
(16:54):
out and is consulting on largetech implementations and an
opportunity to you know make avery good salary and now you
know big enough to be an Scorporation and have a payroll.
Speaker 1 (17:07):
Oh, wow, yeah, so they're LLC now and you're
trying to switch over, right,okay?
Speaker 2 (17:10):
Yeah, so you know just the uptick and you know
we'll do a payroll for.
You know we have hundreds, ifnot more than hundreds, of you
know one person S corporations.
Our largest clients have two or3000 employees and operate.
You know multi-state operations, so we can do both but and
operate.
You know multi-state operations, so we can do both but the
uptick in the small businesspayrolls that we see you know
(17:31):
looking for that.
You know quarterly or themonthly payroll filing,
certainly that's increasing indemand, which would tell you
that people are looking forthose alternatives.
Speaker 1 (17:39):
Ways to make money and stuff, which that's
interesting, and I love talkingto you guys because you're like
feet on the ground, like youknow what's happening.
You see, all this stuff likewhy the economy is doing bad.
If it's doing bad, are we in arecession?
All this other stuff.
It's businesses like yours thatare ahead of it.
And have you seen it?
Just being in this industry fora while now, have you seen, if
(18:09):
you do have a gauge on how farahead you are, like you'll start
seeing companies letting peoplego six months maybe before it
really becomes a problem, or doyou?
Or or they start ramping upagain and you're like, hey,
economy must be picking up.
People are ramping up.
Speaker 2 (18:22):
Um, we probably have that data.
Um, and I'm the data nut at ourshop.
If anybody is, I just don't.
Uh, apply myself into that dataand I'm the data nut at our
shop.
Speaker 1 (18:30):
If anybody is, I just don't apply myself into that
data Sell that Some data brokersout there would scoop that up,
maybe even the government.
Speaker 2 (18:35):
Yeah, I won't, I don't play that game.
I tell I have a lot of you know, we have a lot of clients and
some of them are pretty goodfriends.
And I tell them hey, there's a,there's a pretty good, you know
, chinese firewall there.
I don't care what you make, Idon't care what your company's
doing, it's none of my business.
I look at our revenue and ourclient count.
But we would have data thatwould tell us if we wanted to
(19:02):
look at it.
You know new, higher volume oryou know average payroll dollars
, things like that, and I'velooked at it in the macro sense
from time to time.
The last time that I scrutinizedit would have been during the
pandemic at the beginning of thepandemic and I thought, you
know, I'd owned the business forless than a year and I thought
I had just committed financialsuicide, when every you know the
world is shutting down, noone's going to get paid, you
know.
So, you know we were looking atthose volumes and you could
(19:23):
definitely see, so we lag, youknow, really like payroll kind
of legs from like the momentsomebody would be laid off two
weeks or so because oh sure,right, You're going to get your
last paycheck.
So you know.
So for us, the volume drop.
When the world shut down in themiddle of March, our volume
declined heavily like the secondweek of April, wow.
(19:46):
So you just see like 20%straight off a cliff.
Speaker 1 (19:49):
Holy God.
Yeah, that must've been scary.
Speaker 2 (19:51):
Oh, I thought I told you, I thought I you know you
were done.
Speaker 1 (19:53):
You were like I'm done.
Speaker 2 (19:54):
Like you know, married four kids.
Wife stays home and I leveredup and bought a business and
died in the first year.
Speaker 1 (20:00):
Yeah.
Speaker 2 (20:01):
Crazy.
Yeah, that's what happened.
Speaker 1 (20:04):
Yeah, that was in.
So but the thing thing is iswhat people don't understand is
situations like that come up forowners so you can't really tap
out the owner like, oh, theowner's making all this money.
Let's tap him out like, oh, wewant another two dollars an hour
, three dollars an hour.
Eventually you got to close thespigot, like there's only so
much that happens.
You got to fire somebody, yougot, or you got to,
unfortunately, let people go.
(20:25):
Uh, if if to go, we see it inCalifornia now with the with the
minimum wage.
Speaker 3 (20:31):
Replace them with automated, with automated
service, whether it's a robot,indians or Vietnamese or
Filipinos or whatever, they'llfind ways to save money.
Speaker 1 (20:40):
I mean, it's just what businesses do, it's just
the nature of running a business.
But the problem is you neverknow when that 20% decline is
going to come.
You need a padding in there andyou need to protect yourself,
because you're the one that getspaid last.
Speaker 2 (20:54):
Yeah, I've always told people that you know my
family will, you know, has andalways will come last at our
company.
We've been, we've been in apretty good spot.
So you know what we do has beenrewarded in the marketplace
because we're a customer servicefirst outfit and our, our
unique lane is that we have, welicense the big company
technology from UKG but wedeliver it with a local service
(21:17):
team.
So we're essentially a valueadded reseller for the third
largest payroll software companyin the country.
Wow, so we compete.
I mean, you were looking at ourwebsite so you do all this stuff
for all these people.
You know that's not somethingthat we coded or that's you know
, native in a closet in a FortWright, that if we get hit by a
tornado it's it's over.
You know that's that's UKG'ssoftware.
(21:39):
We just get to deploy it forour clients with with service.
We do all the work, weconfigure it.
We do everything except codethe software.
So I go up against all the bignational payroll companies with
a differentiation aroundcustomer service.
So for me it's all about havingthose people and we've been in
growth mode and just clippingsome great growth rate over the
(21:59):
last four years.
So I've been a little fortunatein the sense that we've been
oriented towards growth andretaining people and rewarding
our better players on that runnow.
But you're exactly right,though At some point a certain
job is worth a certain number,and I want my grandpa always
(22:19):
told me there has to be a profitfor the employee to have a job
If.
Speaker 1 (22:23):
If you don't make a profit on that employee, then
there's no point in having whatis it typically like 2.5, x or
something I think it was withthe uh, their payroll in revenue
.
Like did you need to make anorder to like keep them around?
Speaker 2 (22:37):
There's some, there's some general rule of thumb
around it there, probably is I,and that conceptually makes
sense to me, Um, but you know, Ithink you could, when you're in
growth mode, you might look atit and say I'm I really want
this person and I'll, you know,I'll absorb some short-term pain
on that, or margin compression.
Speaker 1 (22:54):
I guess you know they're a winner.
Speaker 2 (22:55):
They're a winner.
I need to get you know throughthis phase.
But eventually and I thinkanother one of those things I
think about is like the, theboom and the butt, like I think
businesses go through oh, cycles, for sure yeah, I see it that
way.
Okay, we have to.
We centralize, then wedecentralize, or whatever it is
right.
So we're in an expansionarymoment in our company's time, so
(23:16):
a little looser, but at thesame time you have to be
prepared, or however you'd thinkstack ranked or who's valuable,
who's not, like those kinds ofthings come up.
Those are tough decisions.
Yeah, you have to be, butthat's a heavy as that.
Speaker 1 (23:31):
It's like a baby.
It's like baseball.
Like you might like a guy who'splaying center field for you,
but if he's hitting sub 200, atsome point you got to have a
tough conversation with them andput somebody else in there.
Speaker 2 (23:41):
Right.
I think it's a great analogy.
I one point I was talking withmy partner, if you will, the COO
of the business.
She's been with me from thebeginning and that really does
the.
If you do the EOS model, she'sthe completely the integrator.
And I'm just this crazyvisionary guy.
(24:02):
I hear you about that, yeah,but so I'm interested in this.
The analogy here for me of howmuch we're operating like a
professional sports team, wehave a, you've got the salary
cap and you've got to fitresources on the field, like it
makes a lot of sense and thatyou have to make, you know,
tough decisions and maybe youknow at different times, uh, you
, we have different departmentswithin our group.
(24:23):
Maybe at one point you have toshift resources there and then
base our football terms.
That's the offensive line.
Speaker 1 (24:29):
I mean I want T Higgins and Jamar Chase on the
same team, but I don't know.
Is the receiver position evenworth that much anymore Running
back we already know runningback's not as valuable as it
used to be, and now receiversseems like it's kind of doing
that.
But T Higgins is a great guy.
I agree.
He bought my subway in Newportone time.
I love T Higgins, but Kyle Imean Kyle might've had a
(24:50):
conversation Like look T man, welove you, but this we can only
afford.
So much Like that's Kyle'sattitude.
I'd send Kyle in to donegotiations.
Speaker 3 (24:57):
I always thought Joey Votto would have been Joey V
years ago.
I don't know.
You're 28.
You're coming off a knee injury.
Speaker 2 (25:10):
You're MVP two years ago.
We're getting ready.
Yeah, never signed him to that220, whatever it was.
Speaker 3 (25:15):
It's the Cardinals and the Steelers versus the
Bengals and reps.
I mean, look at how theSteelers and Cardinals treat
their stars Like once they getto the 31, they got a very, very
limited amount of ropes.
They 31, they got a very, verylimited amount of ropes they're
willing to give them.
And then, if you want to getcrazy, you paid market rate at
that age and it's just nothappening.
That's why pooh holes went tothe angels.
Speaker 1 (25:36):
Oh man, yeah we gotta be able to draft.
Speaker 2 (25:38):
Well, kyle, right and same with your business worked
out really well for the gardenoh, it did work out for the
cardinals, that's right you dohave to, and I think that's a
great point.
You have to draft well, tobuild the and that's the rest of
the analogy for the sports team, I would say, you have to, you
have to have a mix of you knowwe talked about that.
You go out and you hire aveteran player.
(25:58):
There's a couple of things thatI find difficult about that.
One, you're going to pay topdollar.
Two, you're going to introducequestion marks around culture
and fit.
You know some people, you know,I think in their mind, they,
they've, they've already done it, they've put in the work Right,
and so now they want to managea team or lead a team that they
(26:18):
tell how to do the work.
And I'm in a stage where I needpeople.
I want to come and get theirhands dirty.
We have work to do, so you know.
So if you hire somebody thathas the you know the been there,
done that experience at a paycore across the river or
something, will they, you know,come in and actually be able to
hit the ground?
Do they understand our culturearound service?
(26:39):
Do they understand our and I'llbe honest, we're like one for
eight.
Speaker 1 (26:43):
Oh man, yeah, it's tough, right, it's tough.
People are tough, like justdealing with people, dealing
with different personality typesin the same building.
A lot of times, you know, evenon a Zoom call, like you could
have people who just completelydisagree.
They come from differentaspects, you know, maybe
politically even, and now you'vegot to manage that culture so
it doesn't one person or twopeople don't become a cancer to
(27:05):
the entire organization.
Speaker 2 (27:07):
That's right.
So I try to move on fast.
If we've made the wrong hiringdecision, but in terms of you
know drafting, same way that youknow a good draft if you have a
Joe Burrow on his rookiecontract, you have a Superbowl
window.
If you hire some reallyoutstanding, you know younger
people that don't have highsalary expectations and can and
(27:28):
want to work really hard tobuild their career at the
beginning, you can kind of catchlightning in a bottle with that
and I think that's been a bigpart of our.
Our success is, you know, withour pretty rapid growth of last
four or five years, has beenable to depend on some, some
really good people that might,you know they may not have all
the polish and the glitz and theglamour of that would attract a
(27:50):
large corporation to want tohire them.
But you give somebody like thata chance to small business or
closely held business and givethem a chance and show them that
you're, you believe in them,you want to see them succeed and
build a career.
They give you a lot back inreturn.
Speaker 1 (28:04):
Well, kyle, a TQL too , I mean you were.
You guys were a startup at onetime.
I'd say you were probably stillkind of a startup when you got
there, even though you wereemployee 100, people don't
understand how big TQL I meanthe second biggest freight
broker in the country.
Right now they're a big, bigcompany and when Kyle started
they were still relatively smalla hundred people's, not.
It's still a smaller business,I would say your borderline
(28:25):
medium-sized business.
But how have you seen it change?
Because I think for you you'rechallenged by these.
People can go to a pay cord,they can go to an ADP, they can
go to some of these otherpayroll service companies or
they can try to scalp them fromyou.
Good employees that you have,they could try to scalp them
from you.
Kyle, have you seen that at TQ?
(28:46):
Have seen kind of the culturechange is it?
Is it harder to keep employeesaround?
Because now you're a bigcompany, you're not this like
scrappy startup that people wantto work for, like they're
excited it's growing?
Oh, I got a chance to grow withthe company because I think
that's your benefit, right,that's where I'm at.
Yeah, completely where I'm at.
So what do you think, kyle, isthat.
Have you seen it change?
Speaker 3 (29:06):
well, I, I think I did.
The major shift happened in2008 with the first real major
economic downturn.
That happened while the bill,while the company was uh, you
know in existence.
But I mean no way.
He was a operations analyst, sohe understands how it works
there.
It's a start.
(29:27):
It's an entry-level salesposition.
Basically, it's built off ofits entry-level sales guys, and
entry-level sales are based offof numbers and whether you hit
your numbers or not, that prettymuch dictates whether you stick
around.
You may go into another role,but someone's sales number
(29:48):
numbers got to have to be ableto pay for your position.
So in that regard, it's kind ofstayed the same.
It's still the same mentalityof you know, you, uh, you earn
what you get and you get whatyou earn.
Speaker 1 (30:01):
So yeah, maybe you're not the best analogy, but well,
yeah, it's not.
Speaker 3 (30:05):
It's not similar to like going to a Fifth, Third or
a bank that starts where you'renot customer facing or you're
not sales numbers, where you'reactually more like process.
Speaker 2 (30:23):
Where are you at in getting these files completed or
this loan approved or whatever?
In that regard To your point,adam, though, I think how many
Kyle, how many brokerage firmshave spun out of TQL?
So maybe they didn't leave togo to work for CH Robinson, but
they, you know, but they wentand started what?
75 competitors.
Speaker 1 (30:39):
Yeah, that's crazy, I mean somebody could technically
do that for you, but I'd saywhat percentage of people are
actually, I mean how many peoplethrough the door at tql versus
the number of people thatactually went out and did that.
The percentage has to berelatively small compared to the
overall numbers of people.
Sure, because I'd say 90percent of people just want a
job.
Speaker 3 (30:57):
I mean the barrier of entry.
The barrier of entry is way,way, way higher for payroll than
it is for freight brokering.
I mean freight brok.
You pay your bond and you dowhat you're trained to do.
When you're doing payroll, youhave to know tax law.
You have to have connectionswith people that are good CPAs.
You can't just you got a lot ofoverhead expenses that have
(31:19):
nothing to do with direct actionin the business.
It's more along the lines ofkeeping you compliant with all
the regulations and all the lawsthat you have to follow.
In that regard, you can't be amoron like me.
I could leave TQL and I couldstart a freight brokerage firm,
because really all you need todo is be able to hustle and
outfight your competitor.
In that regard, it's anybusiness, but there aren't a lot
(31:45):
of nuances, as many nuances asthere is for what Noah's doing.
Speaker 2 (31:52):
Makes sense.
Yeah, I think what you do seein my space is on the on the
smaller end I'll see some CPAfirms or bookkeeper bookkeeping
groups that will hold outpayroll for their clients and I
think that they, you know, theyprobably view that and it's
probably a very logical thingthat, hey, I've started my
business, I'm a one person band,I want every revenue stream
(32:15):
available to me to try tosurvive and I think I get that.
But then you see them that youknow they get up a little bit
and then they get caught and Ibelieve I tell people payroll as
a business that works at scale.
It's not a business that worksbelow scale and scale can be
different.
But you know even step function.
But you know, for us with about1500 clients, it's it's quite a
(32:37):
bit easier to have departmentsand checks and balances and
backstops that can make it work.
If you're a one person, you knowyou're sick.
How do your clients get theiremployees paid?
Oh, it's, it's yeah, yeah, you,you get, you know.
So you know one per I said justone person.
That's not scale, um, I alsothink you know from a highest
and best use of time if you're aCPA, um and you have this great
(33:00):
high margin.
You know, relationship withyour client around consulting,
around the tax return, aroundtheir, maybe their monthly
bookkeeping or some fractionalCFO services you know, don't
introduce.
Personally, I guess I soundlike I have a vested interest,
but I wouldn't introduce payrollbecause now you've you've added
conceptually 38 deadlines 26paychecks a week or every two
(33:24):
weeks, 26 deadlines aroundpayroll and then 12 tax
deadlines every month andquarter.
Why would you want to add 38failure points to your business
when you for right now youcontrol it Like you know
everything isand, yeah, it would be the
lowest margin work you do forthat client with the most risk
to lose the high margin work.
Yes, right.
(33:44):
So we partner with a lot ofCPAs that don't want to be in in
the payroll space and we workwith them across.
Hey, if you want to um, youknow, white label payroll as for
you, or if you want to sellyour book, we've done both of
those.
But more commonly they just say, hey, we just want this taken
care of for our clients.
We don't want to be anywherenear pay, and so they you know
they were for us and that's whywe take you know, kind of that
whole gambit a lot of you knowmonthly, quarterly payrolls one,
(34:09):
two, three person companies,and so we do a lot of those for
our CPA friends.
Speaker 1 (34:13):
Yeah, what about companies like mine?
For example, I run an ad agencyfor essentially a one man band
too, but all the people thatwork for me are people that are
formerly, you know, at agenciesI used to work with, or you know
people I've just freelancersessentially, where they've kind
of priced themselves out of ajob.
So they don't even want to workfor me and I don't necessarily
(34:34):
want to pay them as a full-timeemployee because I may only need
their skills for five hours aweek, this week, 20 hours, next
week, 30 hours a week after that.
So I'm set up as kind of like avirtual agency where you know
the Hollywood model.
I guess, you know, I want thelighting director from Jurassic
Park, I want the animator fromToy Story, I want this guy, you
know, and I want to put togethera team right, the right team,
(34:55):
for that project.
A lot of people, when they'restarting their company, I feel
like they they can't avoid it,like I can avoid it.
They kind of have to hirepeople.
If you're a spa, you got tohave practitioners, right.
Maybe you can do it for acertain amount of time, but then
if you grow your businessenough, now you can't.
You just don't have enough timeday, right, so you have to
start hiring people.
(35:16):
That's a scary time.
How many of those types ofcompanies have you guys work
with and do you haveconversations with them about
how everything's going to workand and kind of settle them down
a little bit?
Speaker 2 (35:27):
Yeah, that's definitely a big part of what we
do and that's kind of theorigin story of me finding
payroll partners at thebeginning when I had my business
and was in that uncertainperiod.
So definitely have a lot ofconversations around.
You know what we need from you,what we're going to do for you,
how we're going to get youthere, and I always tell people
you know you have a business torun.
(35:49):
Payroll is an importantcomponent of it, but it's not
why you're in business.
We're going to handle that part.
Speaker 1 (35:54):
You worry about yourself out of that.
It's stressful dealing withpeople and you do some HR work
too right your firm.
Speaker 2 (36:01):
We have HR software and kind of what comes with that
is some light HR questionanswering things like that.
We avoid the like HR consultingspace where, where we would,
you know, really take ownershipof your hr department but you
probably have people that youcan forward on to them.
Speaker 1 (36:19):
We have a lot of partners in that space, a lot of
good friends that we could, wecould introduce to a client
because a bad employee couldlike, literally ruin your
company, ruin your mental health, make you feel like, why am I
in this business?
Doubt yourself?
Oh for sure, yeah.
So I mean it's tough and peopledon't understand that when you,
when you start running abusiness, it's not just you know
.
Oh, I'm gonna start a business,I'm gonna make all this money.
(36:39):
There's so much administrativestuff that you have to do.
If you're a spa, I mean you gottowels, you got linens you have
to take to the cleaner, you gotto pick up.
It's not you just sitting thereall day.
Oh, I'm going to have fiveclients a day, it's going to be
great.
No, you're half the day You'regoing to be in your QuickBooks,
you're going to be delivered.
You know, taking towels andsheets out, folding them up,
(37:00):
doing that.
It's crazy.
Like the amount of stuff youdon't get paid for is if you
were an employee.
Speaker 2 (37:07):
Uh, totally true and and uh, luckily, you know, for
me, uh said I, I was able toacquire the business and it
already had a nice base ofemployees and clients and I've
just been able to build on that.
Um, I personally don't knowthat I could get myself out of
that trap.
I'm very, um, I would, I wouldrun very hard at doing all the
things I needed to do and Ithink you could very easily I
(37:29):
could see myself having gottentrapped in that, you know you
have to know what's going on inevery aspect of the business.
I said I you know, if, if, um,you know, if you wanted to start
a payroll company, I thinkyou're nuts.
Uh, personally I wouldn't.
I wouldn't do it now.
I mean no, I know, now Iwouldn't have it's tough, yeah,
it's tough business, Um, but uh,it's a, it's a good business at
scale.
(37:49):
But again, I think you know, ifyou get to that, um, yeah, you
can make a job for yourself, butthen what?
Yeah, and that's probably thesame in every bit, right, Well?
Speaker 1 (37:58):
how many hours do you think you work a week?
Speaker 2 (38:01):
Uh, do we count golf.
Speaker 1 (38:03):
Golf is a.
It's part of the job.
Speaker 2 (38:04):
Yeah, I've gotten my wife to catch onto that.
That.
Speaker 1 (38:07):
This is, this is you got a golf shirt on, currently
headed there after this.
Speaker 2 (38:10):
Yeah, I was gonna say um, so I, yeah, I I'd say I get
, uh, most days probably 10, 11hours, five days a week easily,
and then it's just a question ofhow much has to get done on the
weekend to get back to areasonable starting point for
monday morning yeah.
So what is it?
(38:30):
You know, 55, 60 easy and someweeks it's worse.
Speaker 1 (38:35):
Yeah, oh yeah, it's never easier.
Yeah, maybe even tax time comesaround and stuff and people
were asking for things.
Speaker 2 (38:41):
Well, for us that's uh, that's January.
December and January are ourbusiest months of December.
Um, a lot of our small businessclients are are running those
one-off payrolls to make alltheir final adjustments, so
we're burning it pretty heavy.
In December we're also gettingready to a lot of clients make a
switch for payroll on a cleanquarter.
(39:03):
So January is a clean year anda clean quarter, so the number
one time people move.
So we're real busy in Decembertaking care of our current
clients, getting our new clientsready, and then you flip the
calendar to January and now thetax teams running downhill on
the December close the fourthquarter, close the year end and
(39:23):
W2s.
Speaker 1 (39:27):
What is who's your ideal client?
So for people listening they'relike, hey look, maybe I'm using
one of these other companiesright now, but I'm in Kentucky.
I want to be with like a localgroup.
I want to help Noah, I want tosupport his business.
Who's your ideal client?
Speaker 2 (39:41):
I appreciate the plug , wasn't expecting that.
We work with, broadly speaking,two different types of clients.
The one that we've been talkingabout a little bit here is that
smaller business that eitheryou know just starting out or
you know owner operator lookingto not be very heavily involved
in payroll.
So we call it full servicepayroll.
You know you can call or emailour team.
(40:02):
You have a dedicated rep andthey'll help you do everything
involved with payroll withoutyou having to be very committed
to logging into our system ordoing anything.
The other part of our businessis that more mid-sized and
upsized business.
Call it.
I mean really any number ofemployees.
It could be 30, 40, 50 and up.
Our largest are in thethousands and they're looking
for the technology that we alsooffer that they can use to run
(40:24):
their business, but they'relooking for that layer of
support.
So our clients in that space,typically you know one or two
people on a payroll or an HRteam who don't have time to wait
on hold who, who, who don'thave time to, you know, wait
three weeks for an answer.
They want they want to havemore of a service based
relationship.
Speaker 1 (40:42):
Ah, okay, oh, that that's hard to keep up with too.
As a payroll company, I mean Ican imagine like you calling
some of these other payrollcompanies and just being you
company.
I mean I can imagine like youcalling some of these other
payroll companies and just beingyou're on hold, you're, you're
waiting a long time to getsomething back, just because
they just don't have, they'renot prepared for that, they
haven't thought about that, theydidn't grow into that kind of
system, so they don't.
They don't have the people andthe resources available to do
that If it's not part of their,their strategy from the
(41:06):
beginning.
Speaker 2 (41:16):
Yeah, I mean the, the , the larger ones.
They hold themselves out astech companies.
So it's log a ticket.
Here's our FAQ, here's ourcommunity web page to search
your own answer.
My favorite parlor trick in theconference room of a potential
client is to call our 859 phonenumber and have our receptionist
answer the phone.
Yeah, Two rings boom.
Speaker 1 (41:35):
And you're on the phone with somebody that can
help you direct you wherever youneed to go.
Yeah, you know, two rings boomand you're on the phone with
somebody that can help youdirect you wherever you need to
go.
Right, that's awesome.
Well, no man, this has beengreat.
I appreciate you jumping onhere.
Guys, check out his websitepayrollpartnersnet.
Great URL, great name, by theway, legacy, yeah, yeah, and it
ties directly into what you do.
You're your partner, right?
So, yeah, definitely check outthat site.
And if you guys are in Kentucky, ohio, indiana, anywhere around
here, tennessee, even thoughTennessee is not as hard.
Speaker 2 (41:56):
Well, we still give service everywhere.
We do all 50 states, Guam,Saipan, Puerto Rico.
Speaker 1 (42:01):
Oh, wow, okay.
So some military paychecks,possibly Travel nurses, travel
nurses.
Oh, there you go, there you go.
So, guys, if you're looking forsome payroll help, uh,
definitely hit Noahpayrollpartnersnet guys.
Thanks, noah, thanks for havingme, thanks for joining us on
this week's episode of sidehustle city.
Well, you've heard from ourguests.
Now let's hear from you.
Join our community on Facebookside hustle city.
(42:23):
It's a group where people shareideas, share their
inspirational stories andmotivate each other to be
successful and turn their sidehustle into their main hustle.
We'll see you there and we'llBye, bye, bye, bye, bye, bye,
bye, bye, bye, bye, bye, bye,bye, bye, bye.
Speaker 3 (42:58):
Bye, bye, bye, bye, bye, bye, bye, bye, bye, bye,
bye, bye.
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