How to Scale a Small Business

Learn how to scale a small business with insights from our guest, Jason Atwood of Arkus. Jason shares his journey from a three-person startup to a flourishing company with over 75 employees. Listen as he emphasizes the crucial importance of cash flow management and financial health, providing a candid look at the ups and downs of entrepreneurship. Learn from his experiences to better understand how to manage your business's finances and avoid common pitfalls.

Episode Transcript

Speaker 1 (00:00):
This is Small Business, big World, our weekly
podcast prepared by the team atPaper Trails.
Owning and running a smallbusiness is hard.
Each week, we'll dive into thechallenges, headaches, trends,
fun and excitement of running asmall business.
After all, small businesses arethe heartbeat of America and
our team is here to keep thembeating.
Welcome to Small Business, bigWorld, our weekly podcast, where

(00:23):
we talk about all things smallbusiness.

Speaker 2 (00:29):
My guest again today is Jason Atwood of Arcus.
Thanks for joining me again,Jason.
You're very welcome.
I'm excited to hit this nexttopic.
I think it's a fun one.

Speaker 1 (00:34):
Yeah, absolutely.
We're going to talk today aboutscaling a small business and
Jason's got a pretty good casefor knowing how to do that.

Speaker 2 (00:42):
He's gone gangbusters the last few years, I could
tell you all the things thatwere great and all the things
that were a failure.

Speaker 1 (00:47):
So well, good, well, before we get, uh, hop into that
, don't forget, please like,follow, share, rate, review.
Uh, small business, big world.
Anywhere you get your podcast,anywhere you consume social
media, anywhere you consumepretty much any content, we're
probably there.
So, uh, if you could give us alike, follow, share, read or
review, that would be fun.
All right, jason, tell us aboutArcus, where you started and

(01:09):
where you are today, and let'sgo down the rabbit hole.

Speaker 2 (01:14):
Sure, I think it'll be a good rabbit hole.
I did take some time.
Since we talked about doingthis podcast, I've been taking
some time to think about it anddefinitely thinking, oh, what
did I do right?
What did I do wrong?
So just Arcus.
We started in 2010,.

(01:34):
Three founders all had workedtogether and started a
Salesforce consulting firm andwent from three people up to I
think we're 75, 76, 77 right now.
I don't know, there might bepeople literally starting today.
We've had fits and startsacross that.
Never shrank, I would say, butthere's definitely been years
where two or three year periodswhere we doubled in growth, both

(01:55):
on all the sides from revenue,from sales, from people.
Again, today we're servingmostly nonprofits in the
Salesforce ecosystem and helpingthem build out their systems to
help them do their constituencyor their programs or whatever
their missions are.
That's where we are.

Speaker 1 (02:17):
What period of time have you gone from the three
original Amigos to 75 employees?

Speaker 2 (02:24):
About 14 years rolling on 15.
So 2010 to now, it's about 15years and it's definitely been
some things in there, some,definitely some lessons, I think
we can talk about.

Speaker 1 (02:40):
So you started.
It was just three of you guysyou and Justin, thank you, and
uh, justin, thank you, and Larry, thank you.
It's been a day over here anduh, yeah, so you guys started.
I remember working with youguys way back then that first,
you know what are your firstprojects?
Uh, in my prior life and uh,you know, how did you you know

(03:02):
first.
I guess the question alwaysbecomes do you hire first?
Do you find the revenue first?
Did the chicken come first, orthe egg, I guess, but this was a
bootstrap effort.

Speaker 2 (03:13):
Right, this was.
We knew what we wanted to do.
We didn't have any money.
It was not like we were handed.
We didn't go out and get loans,we didn't get funding whatever.
So bootstrapping a business isalso very different from scaling

(03:34):
a funded business.
Someone hands you a milliondollars, 10 million dollars.
You're going to do differentthings than if you have to
bootstrap, so-.

Speaker 1 (03:41):
But the majority of small businesses.
That's how we start right.
We're not out there gettingseed money from investors or you
know, daddy's not giving us acheck.
It's you know, you start abusiness and you do it.
That's right.

Speaker 2 (03:51):
So you know, first lesson, when you bootstop it.
Bootstrapping and it's reallythe first lesson I learned
starting and running Arcus for along period of time is cash is
king.
Right, cash is the king or cashis killer.
So, whatever you want to thinkabout, you have to be prepared
to run and understand your cashflows, because it is the thing

(04:11):
that most businesses, smallbusinesses you know it's what
one of 10 businesses make it outof.
One year.
They die, they run out of theirrunway of what they can do.
So be prepared to not only tohave cash.
I was like well, jason, you justsaid you bootstrapped yeah, I
did, but we ran off our ownpersonal savings of things we
had gotten ready for.

(04:32):
But we also understood cash andwe paid very, very close
attention to it.
So, anyone starting a businessif you want to start a business,
go out.
There's some really good onesout there.
Maybe we can leave some of thenotes or later, but that's the
one I read 15 years ago.
Probably doesn't apply anymore,but I went out, got three or
four books on cash management,cash flows and almost the

(05:00):
spreadsheet that I have run thecash flows from since 2010 is
the same spreadsheet I run thecash flows from now.
It works I mean, it's beenadded to.
But understanding your cashflows and the bills and the ins
and outs of your company, I justif you just want to drop the
podcast now say, oh, I'velearned something great.
That is the number one thing tolearn and to skill and to grow
your company.

Speaker 1 (05:18):
Yeah, absolutely.
I mean, we see, you know, wesee a lot of our clients, gosh,
they have great success and thenthere's a ton of money in the
bank and the owner's like, let'sgo buy a truck and let's go
build a new house, and let's buya house in Florida and whatever
, right, and then all of asudden they hit a slow period.
You know, winter comes orwhatever, and gosh, now we're
scraping pennies together tocover payroll and keep the

(05:38):
lights on, right, and that's notwhat any small business owner
wants to do.
So, you know, I think thatcertainly has an impact on your
service delivery, regardless ofwhat industry you're in.
Right, you know, hospitality,you know consulting doesn't
matter.
If you can't deliver yourproduct effectively because you
can't pay your people or can'tbuy materials or some lies, you
know you're going to be out ofbusiness.

Speaker 2 (05:58):
Pretty soon, so I think that's a really great tip,
yeah, and it's the thing Ithink you cannot take serious
enough.
The second thing is I just havelike a little saying that I
think kind of applies.
It is a strange one, but whenyou're starting a company, I
think you need to do things thatdon't scale, but pick things
that will.
Sorry, I'm going to say itagain, you have to do things

(06:20):
that don't scale, that just willnot scale with your company
because you have to, but on theother side of that, pick things
will not scale with your companybecause you have to, but on the
other side of that, pick thingsthat will scale with your
company, with your business.
So I'll give you a couple oftips, and this is where I think
the heart of the conversationshould really go into.
So, for example, let's talkabout not scale.
When you start your firm, you'regoing to do things that you

(06:41):
just know you're going to haveto replace or get rid of right,
like the payroll right.
The way you do payroll when youfirst start your company might
be very basic.
It'll be simple.
You know that if you go to 100people, you're not going to be
running payroll all the wayYou're doing it.
When we ran it.
We had an accountant.
He would run it manually everymonth.
He would send us links and,like that, we would just put

(07:01):
checks to ourselves or maybewrite checks ourselves.
Clearly that was not a scalablesolution, right?
So you know that you're goingto need to change that as you
grow and when you're startingoff you know you don't need to
go invest million to million tomillion dollars into the highest
end payroll systems ever work,because you know you're going to
change the system.
But you're going to do thosethings right, even the way you

(07:23):
do your marketing, your hiring.
Another example is HR.
Right, when you get to acertain size and we can argue
about what size that is I thinkI have some numbers crunch here
the way you do hiring andonboarding and even having an HR
part right, you might startwith nobody and just the
founders are going to do that HRthing.

(07:43):
But then as you scale, youmight hire on virtuals, you
might hire a company andeventually you might have your
own HR department and eventuallyyou might have like 10, 15
people in that HR department,depending.
So you know that that thing,the way you started, that the
founder's doing everything andhiring everybody, isn't the
thing that's going to scale.
So there's so many things onthat side and that's okay.

(08:06):
You're going to do things thatdon't scale and I would say
don't worry about it, right,don't go.
Oh, this won't scale, that'sfine, because your first job in
your first year of business isjust to stay in business,
literally just get through thatfirst year, get your customers,
get your revenues, get yourproduct out there.
Those are the things you needto focus on.
Not will this process scaleforever, because some of these

(08:30):
things are not.
But now I'm going to go theother side of that.
I think there's things you canpick and choices you can make
along the way, and I think abunch that we started touching
on this last time, the lastpodcast.
There's things that you canpick that will scale with you.
Right, there are things you cando, and a lot of those come
into, you know, sort of software, what you pick in your first

(08:53):
set of software to run yourbusiness.
Your organization can scalenowadays and there are pieces of
software I'm using the exactsame piece of software that I
use with three people, that I'mworking with 75, and I know it
can go to 200, 500, 1,000,10,000.
And so some of those examples.
Right, say, I'm a CRM guy, youknow I'm Salesforce, true and

(09:16):
true drink and make the Kool-Aid.
But our Salesforce instance isthe same one that I booted up
and it has my name on it andit's been 15 years and that
thing has scaled beautifully,right yeah, we make those
decisions too.

Speaker 1 (09:30):
I mean, I look at it as okay.
What's the difficulty?
To scale something, grow right.
So if it's that piece ofsoftware, if it's a salesforce
instance or so or whateveryou're going to choose, you know
the shitty crm to start,because you can't afford
salesforce, maybe, but gosh, youknow how hard it is to do a
conversion later.
Then guess what that's when wehave to hire someone like you to
come to a force and it getsexpensive, right, pay me now or

(09:52):
pay me later.

Speaker 2 (09:53):
But yes, and I think that is the hard part Again, as
a small business owner, growinga company, the hard part is to
make those decisions and knowingthe things, that's like okay,
this is the thing we're going toinvest in because this will
scale with us as an organizationor as a company.
This is the thing we're kind ofgoing to flub it for now we're
just going to wing it because weknow we're going to have to
change.
Some things are easier than not.
I know the system that you knowfinancial software.

(10:15):
We started with QuickBooksOnline, have started with
QuickBooks company out ofQuickBooks.
But as a solution for the timebeing and for the cost is one of
those things like I'll pay the$35 a month and, trust me, when

(10:37):
you're starting off, $35 a monthfeels like a lot right.
Looking back, it's like reallythat's nothing compared to what
other things we do.
So there are things like thatyou can pick and I think other
things like office sweepsNowadays it's not so bad.
Everything's subscription.
You've got Google, you have,you know, office, microsoft.

(10:59):
You have lots of things to pickfrom.
They're very scalable solutions.
But those are the things thatyou don't want to move in the
middle.
The first email I ever sentfrom Arcus is sitting in my sent
box.
The first email I ever got fromArcus is sitting in my inbox.
They've never moved.
I've never had to change them.
And then I scaled perfectlywell.
So those types of things.

Speaker 1 (11:22):
You know there are choices you can make that will
actually scale.
So how have you taken intoconsideration when it's time to
make a change in a scale right?
So perfect example.
We just recently did anacquisition.
We added 200 clients literallyovernight.
We took on a couple of newemployees and now it's only been
a few weeks that I'm stilllosing air from the craziness
that's going on with that.

(11:42):
But there are all of a sudden,are things that I used to just
kind of do that gosh.
I did because I could right aswe've been growing.
It's fine Things like ourbookkeeping right.
I'm a little bit of a controlfreak and you know I like to
same thing.
I need to know my numbers, Ineed to keep my cashflow on top
of things, but I haven't paidthe bills.
I realized this weekend Ihadn't paid the bills in over

(12:03):
two weeks because I just had toomuch stuff going on Like well,
that's going to be a problemhere pretty soon.
So you know, I was kind ofrealizing listen, the cup has
run over and now I need to finda resource that can do some,
take these, some of these thingsoff of my desk and scale this.
And you know, certainly, asthings are getting more
complicated now, I just addedmore clients with more.
You know it doesn't sound likea lot, but more bookkeeping that

(12:24):
kind of goes along with thattoo.
Um, you know, so it's.
I'm at the point now where Iliterally have a list on my desk
of, okay, these are things Ineed to get off my desk because
you know, and or figure out adifferent solution, a better way
, things like that.
Um, and it kind of hit meupside the head these last few
weeks that it was time.
And, you know, I think that'spart of the evolution of scaling

(12:46):
.

Speaker 2 (12:46):
Yeah, I think we have two answers to that, and you
kind of set me up because I'mreading off my notes that I
jotted down for the podcast.
There's two things there.
One is automate early right,and it's one of those things
that you think oh, why should Iautomate this process?
If you automate something early, it can take it so that it's

(13:08):
easier and easier to do as youscale.
So if you take a process, justthink of something you do, I
mean whether it's invoicing orwhether it's your process for
how you bring on clients.
If you can think aboutautomating those processes early
in this, then they will scalewith you because I don't spend
as much time on it.
So that's my one tip is you canautomate things and connect

(13:31):
things, and the world ofsoftware nowadays the Zapiers
and the Ricottos and the way toautomate and connect data so
they can work together is somuch better than it was 15 years
ago that I would say look intothat earlier than you would
think.
Oh, I don't need to connectthese two systems.
Do it if it saves you some time, because then you'll be able to

(13:52):
scale with it.
The second is.

Speaker 1 (13:54):
I have my team trained.
Similarly, I have my teamtrained.
Everyone has a list on theirdesk somewhere.
I call it the 10-minute list.
Something takes you longer than10 minutes to do, whether it's
client work or you know aprocess that we have to do.
Let's stop and find a betterway to do it Right, and you know
, 75% of the time we can come upwith probably fix something, or

(14:16):
we have already have a solutionto do it.
We just have to stop, take ahalf an hour, implement it, and
then it goes from 10 minutes toa minute or no time right,
because we're automating andintegrating it or whatever the
case may be.
So you know, we deal with a lotin our world.
We deal with a lot of importsfrom timekeeping systems and
things like that, where yearsago we were hand keying payrolls

(14:36):
right.
Print out the Excel sheet andliterally take your ruler and
yep, 40 hours for Joey and 20hours for Susie and um, and we
don't do that hardly at allanymore.
We're like no, no, no, send usthat Excel sheet.
We're going to create a macro,we're going to import it and
we're going to be done Um and soI'd really harped on my team
the 10 minute list, right, likeanything that takes you longer
than 10 minutes.
Let's find a battle and that'sand I, to have you know I don't

(14:59):
have to hire more people becausethey're more efficient, so
we're still giving the samegreat service to the client.
They have no idea that.
You know it's taking us only aminute now, where it used to
take us a half an hour, and Ican take on 30 more clients.
Oh, so you know that's reallyimportant is use the tools that

(15:20):
you have available and worksmarter.

Speaker 2 (15:23):
Yeah, and learn to automate it.
And it does.
It has that thing.
You do something over and overagain.
You're like, wow, I really takethe stop and I like the
10-minute rule, so that's good.
The second thing you wereactually talking about was
delegation.
And when is it time to scaledelegation?
Delegation is probably thenumber one thing that people who
get beyond the first year andsurvive.
When do I start to delegate outthose tasks?

(15:50):
Right, I'm the founder, I dideverything to start.
Maybe I'm one of three.
We did everything.
When do we start to delegateout those tasks and to hire in?
And this is not mine, not makethis up, so I'll just use it and
someone else can take creditfor it.
Do it when it really reallyhurts.
You Don't expand or change orgrow or hire in or start to
delegate things until it'sreally painful, because the
opposite of that is overdelegating and over and bringing

(16:12):
people too early, and then it'snot being done right or it's
not being done officially, oryou can't afford to do it.
It's just the worst part to doit.
So I say, do it when it'spainful.
If it's painful, then you'relike, okay, time now to bring in
that second person, time now tobring in that.
We went for years and years andyears and I was doing a lot of

(16:33):
the COO stuff and a lot of itmanually.
In fact, I had to be I wouldsay I'm probably the worst
example of this.
They had to pry some processesout of my hands that I was like
I don't want to get you know,they're like you have to in
order for us to scale.
And it did hurt.
I was really struggling becauseI was juggling too many balls
and things were slipping, andthat's when you can say, hey,

(16:54):
it's hurting, right, and it'snot temporary, this is permanent
, let's bring in somebody tohelp do that.

Speaker 1 (17:01):
So I think that's the really good thing about you
just mentioned with that is youknow, is it a temporary slip?
I mean, I've noticed myselfslipping things the last few
weeks, but I've also beenjuggling 47 balls the last
couple of weeks.
We're starting to normalize asthings are getting settled down.
I'm feeling more comfortablewith these things, but still on
my list that I've got on my desk, there are things that are

(17:22):
painful or things that caneasily be delegated.
I have resources today.
I'm not going to go hiresomebody or it's not going to
cost me any more, but for me,you know, just like you said,
there are things that I'm notready to let go of right,
because in my mind they'reeither too important or you know
things like our licensing withthe state that I have to manage
every year, which is on my deskfor this week to do, um, our

(17:43):
renewal.
And or you know even thingsthat I just like to be on top of
is you know the bookkeeping andthe bills and the.
You know the cashflow and allthat stuff.
Um, maybe because I don't feelcomfortable bringing somebody in
to see some of that information, but it could also be, you know
, a control freak.
So I think we all, as businessowners, have to figure out um,
you know it's funny.

(18:03):
I mean I own a payroll company.
I still do our payroll.
You know, on the side everyweek.
You know I'm doing it because Idon't want anyone to see it
right.
You know I'm still in that oldschool mindset.
So I've got to.
I have to let some things gomyself that are very, you know,
replaceable tasks, I guess.
Right, it's not.

(18:25):
My time is better spent workingon the strategy and scaling the
business and thinking what'snext and creating the process
and so forth, rather than doingthe work sometimes.
And that's hard for me as aleader sometimes to like and I'm
sure you've been here too,we've all been there, I know
we're very much alike and if mybusiness partners were listening
to this, they would say, ohyeah, absolutely.

Speaker 2 (18:42):
And my business partners will listen to this.
They would say, oh yeah,absolutely.
And there is a part of it.
There's a part of it.
It's control.
It's a part of it.
You know that you're doing itmaybe fastest and best than
anybody else and there's thatweird thing in the back of your
brain like, oh, it's going totake me so long to document this
and to make it into a processthat someone else can run, and
then I still have to.
But this is turning into like atherapy session.
I like it.
This is a small podcast, smallbusiness.

Speaker 1 (19:06):
So when are you going to let go after?

Speaker 2 (19:07):
this.
Oh, there's a couple of things.
I mean, I'm the CEO of a 75person company.
There's still things that I dothat people would probably be
like you shouldn't be doing.
That I definitely.
I will say over the years Ihave done a lot to let go of
stuff, but each one it was likeprying it out of my hands.

Speaker 1 (19:28):
So I will say one of the things that I've really been
thinking about a lot this yearas we've grown is business
continuity and successionplanning and because if I get
hit by a bus, there are a numberof things that are literally
only in my head.
Only in my head and, of course,like in the break glass for an
emergency file is like my phonepasscode and my password, keeper

(19:49):
password, like go there firstand everyone knows where to find
that.
But it's been really important.
I realize we have thousands ofclients that rely upon us and I
have 20 employees now who relyupon me for a paycheck.
And if I walk out the doorright now and get hit by the bus
, right, there needs to be aplan in place and there needs to

(20:13):
be people that can do thingsthat not just me, right.
So that's been a real bigrevelation for me in our growth
is I can't do it all physicallyanymore, right, but to to be a
good leader and a good businessowner, I have to use my team
because otherwise, again, ifsomething happens to one of my
key players, you know whathappens to, what happens to my

(20:35):
employees, what happens to thebusiness potentially, and that's
been really eye-opening for methis year and that's what's
driven my I'm going to turn intoa saying, because I like saying
something say don't delegate.

Speaker 2 (20:56):
You have a dot right.
People delegate, so just do itthis way.
I'll show you how to do it.
Every time we dealt delegatedsomething, we would provide very
good documentation around howthat thing happens, because
you're not just delegating once,like you said.
You're delegating it forwhoever takes over that task.
So just training one person onhow to do it isn't the right

(21:18):
thing to do.
Delegate it with gooddocumentation that everybody can
refer to is actually, you know,is the better way to go.
So document a lot.
I'd say I wrote it down asdocument your processes.
So I know it's painful and mostpeople don't like to document
anything.
It's like what's the last thingin the world you want to do
besides the colonoscopy isdocument things?

(21:38):
It's like oh, I hate it, but Ican look back on documents.
I wrote 15 years ago same thingwe're doing today, and if
someone needs to go pick it up,what I would suggest to people
around you or business partnersis make you take a vacation for
more than two weeks and say,okay, anything that you're going
to do in this two-week process,or maybe you take a virtual
vacation, anything you're doingthis two-week process, you need

(22:02):
to document what it is, becausethat'll prove right.
If things could just run 100without you for two weeks and no
, you didn't have any manualintervention, well then you
don't need to be around anyway.
So that's fine.
No, but like if you know itforces you into that position
where, like, okay, yes, in thenext two weeks if I were to go,
you know, on safari in Africa,these seven things, I'd actually

(22:24):
need somebody else to do thoseand they can't just be put on
hold.
And so that's a great way tostop.
And my business partners saidit to me because I was running a
lot of the business they'relike, hey, what happens?
You get by a bus.
Oh, my god, don't worry aboutit.
Like, could you please documentall the thing?

Speaker 1 (22:39):
do you know you live in new york city how many buses
there are?
Buses what I live in, maine.
There's no bus.
We got school buses.
It's a real threat.

Speaker 2 (22:50):
It's a real threat.
So but that documentation andand having you know a side, you
know a tip on top of a tip or ameta tip is come up with a good
standard for how you document,where you document, where you
leave things um, that will holdyou very true going forward.
I find people if they just kindof do you know, oh, just throw

(23:10):
anything anywhere, you'llanything anywhere, you'll end up
in a lot of bad space.
We picked some really goodstandards for like here's how
we're going to document, here'swhere we're going to put things,
here's how we're going to putthings in the folders, and those
things still exist today.
So I said do things that don'tscale, pick things that will.
We picked sort of standards forhow to our naming convention

(23:34):
and picked our foldering systemand how we handle our client
data, all that which has scaledvery, very well.
Still the same exact system weused when we had one client.
Then only 800 clients only didone project to 2,600 projects.
Now things have changed in themiddle, but literally like
here's where you put this andhere's where you put that same

(23:55):
system.
Some ways, if you come up withsomething, you come to the
process, you document it and youthink about it.
Right, you think like, okay,you do have to think like well,
will this last when there's 600of these?
You know, oh no, that won'twork so well.
So what's the thing I can do tochange that process so it will
scale.
So I know it's.

Speaker 1 (24:15):
So I like the vacation analogy because it's
funny.
A few months ago we did apodcast with somebody else,
basically about building avaluable and sellable business,
and one of his pieces of advicewas go on vacation for a month
If the business, if the businesscan run without you for a month
, you're ready to sell yourbusiness at its maximum value.
Right, Because people arebuying, not you.

(24:37):
they're not buying you becauseyou want to retire right, you
want to get out of the business,but guess what?
And the same kind of thingrelates to being scalable as
well.
I think if your team can dowhat you can do, then you can
focus as a leader on all thereally important things to scale
and grow and find new revenuewherever you're going to get it

(24:57):
Right.
That's so, talking aboutfinding new revenue, we kind of
we, we skirted around thechicken or the egg, right, but
you said delegate when it'spainful.
How have you done that?
Uh, you know, have you hiredafter it's painful?
Or do you pre-hire knowing abig project's coming in?
How have you managed?
You know, cause labor is yourmost expensive expense, mine as

(25:21):
well.
Uh, and most businesses, youknow our people are.
What are expensive in ourbusinesses?
Uh, you know, and that's alwayswhen do you hire?
Is is always the challenge thatwe've had.
I tend to be a little too farahead, I think sometimes I I
probably am a little tooconservative when I'm hiring,
cause I think it's going to takelonger to train somebody.
What if you know and I've beencaught with my pants down where

(25:45):
we've wrote a lot and I've I'vewe've either lost clients
because we screwed up, becausewe couldn't handle it or
whatever.
So I'm a little gun shy now.
But how have you managed that?
I mean you said, gosh, itdoubled in one year.
First, where'd the revenue comefrom?
How'd you get it?
Did you get it first?

(26:06):
Did you get it out?

Speaker 2 (26:07):
So in my business, the services business,
everything we do is servicingour clients.
As a services business,everything we do is servicing
our clients on an hourly basis,so it's a very like the person's
here.

Speaker 1 (26:18):
It's a one-to-one.

Speaker 2 (26:20):
They're here to do the work or they're not here to
do the work.
I would say it's probably themost difficult part of running a
services business is this model, because there's and I thought
what this says is pendulum.
This is pendulum between salesand delivery.
So delivery is the people whodo the work, sales is the people
who sell the work and you haveto keep this pendulum as it goes
back and forth.
There's been times when thependulum's like sales is out

(26:43):
there selling, but they'reoutselling.
Delivery, meaning they'reselling things but we don't have
enough people to deliver.
That that's bad.
You don't want to do that.
You don't want to be like oh,we can't do that work because
then the clients are unhappy orour partners are unhappy, or
sales is unhappy because theycan't sell.
The other pendulum is the otherway.
You don't want to have tons andtons of people sitting on the

(27:04):
bench doing nothing and salesisn't selling enough for them to
do.
You don't want that.
That's revenue, that's margins,right.
So you want this perfect.
You want the pendulum to sitright in the middle.
Of course, it never does, justbecause of the market or because
of clients or because of whereyou are as a growing company.

(27:25):
I would say we're a verydata-driven company.
We use a great CRM they're mythird plug for Salesforce and so
we spend a lot of time watchingit and paying attention to
where is our capacity levels,where are people and what do we
see in the future.
Right, if you have a good CRMand you can do forecasting and
look in the future, you can say,oh, I don't think we have

(27:48):
enough to do that.
That being said, you also haveto look at your onboarding and
your training product.
Right?
If I could get someone in oneday and hire them on Monday and
put them work on Tuesday, wellthen it's not a big deal.
I can literally backfill fromsales easily.
That's not our case.
We have somewhere between a 30and 90-day training program to

(28:09):
get people up to running, 90-daytraining program to get people
up to running.
So I kind of have to bethinking 90 days.
So now, as I know that weactually track metrics on how
fast people come in, how fastthey get to our onboarding, we
call it first to book and so,like their first hour that they
book when that happens in theprocess, and so we're constantly

(28:31):
monitoring that and going okayif we see all this stuff coming
up in the future.
Right, we need people to dothat work and so we'll start to
hire in, you know, somewherebetween 30 to 60 days out.
It's not perfect.
There's no, you know, perfectscience to it, because you're
looking at things that haven'thappened, right, and you also
have the unknowns, the unknownsof the world.

(28:52):
You and you also have theunknowns, the unknowns of the
world.
You could think we're going tohave a great third quarter and
then go into third quarter andsomething can happen and that
quarter just goes away.
So I would say we try not tooverhire.
I'd rather be a little bit onthe, I'd rather be the wanted
commodity.
That is like in every business.
If someone comes to you andsays, hey, I want to sign up

(29:13):
with you, and you're like, hey,we're super busy right now, like
, come back in a month, youprobably go oh, wow, they must
be really good at it, right?
If you try to go to arestaurant tonight and you see
two restaurants and one there's,you walk in and they're like,
oh, we're booked, you can bookthis in six months.
The next one's like have anempty tables.
What would you say?
You'd think, well, thisrestaurant's not very good, so I

(29:33):
want to be at the point whereI'm not like oh yeah, I can
start anything at any moment.
There has to be some sort ofprocess there.
But I also don't want to tellour clients they have to wait
for years.

Speaker 1 (29:43):
So we are pretty fortunate, like you are.
We know our pipeline where myoperations teams, my sales team,
meet every week to talk aboutpipeline.
What's in the pipeline?
Who do we think you know what'sthe probability it's going to
close?
Where are we going to put thatwork when it walks in the door?
Hopefully you know, and soforth, and how hard is it going

(30:04):
to be to get them onboarded andall those kinds of things?
So we have, and we have been ina position, same way, where we
say I mean, we have clients thatwe've been dealing with for two
or three months already thatwon't start until after the
first of the year, because maybewe're saying we can't handle it
until after the first of theyear or it's the best time to do
it or whatever.
So it's, you know, pushing.
I would rather be in thatposition, like you said, of

(30:25):
being in demand, managing thepipeline.
And you know, the last thinganyone, any client wants, any
customer wants, is for you togive them bad service.
So I think, if you're moretransparent with them, to say,
listen, we can't handle youtoday, or if you're a restaurant
tonight, right, gosh, let's,let's book you for two weeks
from now or something, gosh, wemight miss the special
anniversary if it's, you know, arestaurant, but um, but we

(30:48):
always are trying to betransparent with our clients
about service delivery and whenit's going to be effective and
you know, and so forth.
So managing managing the growthis been something that we've
really focused on, really justto to try to make sure that.
But same things happen to us,gosh, I mean we had a great
pipeline, to be honest with youlast year.
In our business kind of Januaryone is when we take on a lot of

(31:10):
new clients and going intoSeptember, october, last year
the pipeline was super full forJanuary and then all of a sudden
, like the contracts never getsigned, for whatever reason.
This fell apart.
That fell apart and we cameinto January and like we still
had a good January but it wasn't.
I mean, I was hiring people inanticipation of a really really
good January that nevertranspired.

(31:32):
Now we made it up the rest ofthe year.
Things have kicked down theroad and we're having a great
year, but sometimes that happensand that's real right.

Speaker 2 (31:40):
I mean, it's the hard part of being in services,
because we do have this issue.
Obviously, it's not foreverybody.
There's different types ofbusinesses that don't have these
ebbs and flows.
And knowing your cycle of youryear have these ebbs and flows.
And knowing your cycle of youryear as you get bigger.
The nice thing is that the sizeof a deal doesn't impact you as

(32:02):
much, right so, when we werevery small and three of us and
we didn't land one deal, thatwas massively impactful.
Now, with hundreds of deals onthe table, we're running 200
projects.
Right now, the ebb and flow ofa couple projects isn't as
impactful, whereas back then,just like one person leaving.

(32:22):
I remember when we lost ourfirst employee.
It was brutal.
It was like there was three ofus, four of us doing a job and
one person leaves.

Speaker 1 (32:31):
The math you lost 25% of your capacity.

Speaker 2 (32:34):
And you just have to make it up.
Now it's getting easier andeasier.
It's still.
Obviously we don't want to haveanybody leave, but it does
happen.
But it's a much easier processand it's not as devastating.
I mean, we lost sleep at thatpoint, but that's in the
services industry, where this isthe industry we decided to get
into.

Speaker 1 (32:53):
So what about?
You've had change in yourleadership right?

Speaker 2 (32:57):
Larry stepped away from it right, and Jeff Yep both
that.
Oh, Justin's got a net too.
Just me, I'm the last man.

Speaker 1 (33:03):
on that, you're the lone survivor, right?
So of the three amigos we gotone left.
So how has that impacted thegrowth of your business?
I mean again, I think for us,for me, it's like gosh, if I
lost it.
You lost a key team player.
How did you?
I mean, I'm sure those wereplanned, it wasn't like they
just ripped out the door.
You know how do you plan forsuccession, for change and in

(33:25):
that growth, right, because,like you said, you lose one
person in the beginning, that'sreally hard to make up.
But you know, even if you losea key player now, that's hard to
make up and knowing who thoseplayers are.

Speaker 2 (33:36):
Knowing, you know, staying on top of people, I
would say as a CEO, you know oneof the biggest.
We talked about it almostentirely this time.
You know the people.
Part of things is extremelyimportant Recruiting your
employees, staying on top ofthat extremely important.
The succession is I'm justgoing to be different for
everybody.
I think when you're lookingback on starting a couple

(34:06):
companies and running some bymyself and then ending up
running this one by myself,definitely pros and cons of
doing that right.
Having three people or twoother people to run a business
to delegate out to you, havethree bodies to start, the time
you need to hire is even fartherdown, because you can do
everything and everybody canshare the workload right.
When you're one person, well,you're going to be out of

(34:27):
capacity very quickly.
But then there's the other sideof it, which is decision making
is harder, right.
You're in a three headed thing,like if you get two to disagree
on what you want to do, youalso have three mouths to feed,
right, so it's a splitting upthe profits or the revenues,
especially early on.
So you kind of have to makemore.

(34:47):
I think if you're in asituation where you're more than
one founder and I think thestudies show that more than one
founder actually is moresuccessful, and that's the ones
I've read that sole founders arenot as successful as multiples,
just for those reasons also.
There is the companionship.
It's a very I've run companiesby myself and it's very lonely,

(35:09):
like you can't come home andhigh five yourself, or or when
you're having a bad day, I losea client, or have a bad sales
call, you know there's no one totalk to, can't go to anybody
and say, hey, I just had.
But when you have a couple ofpartners, or one or two, you can
, you can always have thatconversation.
One can be down, one can be up,so, uh, but when you're in that
situation, I think it's thesame thing.

(35:31):
It's it's just go as far as youcan and work as hard as you can
and make sure everybody isreally aligned to what you're
trying to do, until that momentthat you say, okay, now we need
to next person.
Right, we're at that scalepoint and you'll sense it
because you'll be under, you'llbe overwhelmed, hopefully.
I mean this is the point ofbusiness hopefully we have too
much business.
I now need to bring it and andfiguring out that next person

(35:55):
for us it was always delivery.
We had to bring in delivery,delivery, delivery, until
there's a point where like, okay, we got, we have enough
delivery people.
Now we need to scale the salesside.
And so, you know, matching that, matching to that, that number
of like okay, how manysalespeople do I need to bring
in this much delivery hours?
Um, always became challenge,but we just got to a certain
point like, okay, there's thisone salesperson can't do
everything, so we have to bringin this much delivery hours.
Always became a challenge, butwe just got to a certain point

(36:15):
like, okay, this one salespersoncan't do everything, so we have
to bring in somebody else.
And then succession.
I think, having the rightagreement about what happens,
you have to change it up,because a lot of your agreements
in the beginning are we allwork at this company, we all do
this, this is our full-time job.
So I think, just being veryclear and transparent around

(36:37):
what changes are, how, thechange is the structure of the
agreement, because it's going tochange and so you have to
really talk about it and workthrough it In theory, if I were
to do it again.
So here's my advice from havingdone it.
I would build into ourshareholder agreement what this
looks like now.

(36:58):
We never built into ouragreement that what was going to
happen in 15 years.
And if someone had pointed tothis and said, hey, but at what
point does one person want to godo something else, what is
their option?
It wasn't one of the options inthe shareholder agreement, so
we kind of had to change it up.
But that would be something.
If you're starting a business,look at it, say yes, we're all

(37:19):
in right now, or we're bothdoing this right now, or all
three of us or five of us,doesn't matter.
But at what point?
When someone wants to leave,what does that look like and how
does that work?
And is everybody okay with itright now?

Speaker 1 (37:31):
That's the time to agree to things, not I'm saying
it's a lot easier to have thatconversation when there's no
money on the table versus 15years later when there's a lot
of money on the table and that's.

Speaker 2 (37:41):
Here's another thing that'll scale.
You're this, that will.
That doesn't scale.
Well, is that right?
Your agreements when it's whenyou have.
You know, I think our firstyear we had nine thousand
dollars in sales.
You know, okay, it doesn'tmatter.
When it gets big and andthere's big, you know big
numbers on the table.
Yeah, things change up and yourlifestyle is built around it.

(38:01):
Or you run a company for 10, 15years and you're commitment
level to it.
You know, one of the things thatwe would do every year and
again, I would say pros and consto this but one of the things
we do every year is meet as thethree founders and we would get
together, uh, in some place.
Earlier it was like, just finda restaurant in new york or

(38:22):
starbucks.
Later we're like, oh, let'streat ourselves and go someplace
nice.
But we would meet and we wouldjust say, hey, you want to do
this another year, you ready,let's go.
And in that way it was greatbecause we could.
Then we'd re-say yes, we wantto work together, we want to do
this.
The downside to that and thething that I learned since, is

(38:45):
that we were kind of on ayear-to-year lease with each
other.
Right, that we could only say,hey, let's do this for another
year or two.
Sometimes we would look longer,but for the most part we would
only kind of look a year aheadIn business, and I have this in
my notes to talk about too.
I believe in plans, I believe inplanning something out, having

(39:07):
roadmaps, strategies, all that,but you don't have to be
beholden to it.
So my advice is get that plan,make it, do the thing, have it,
write it down, whatever.
But then go, run the business.
Don't sit every day and look atyour plan, your business plan
or whatever, and are we matchingto that?
Because so much changes so fast.
Yeah, you don't want to bechanging the plan all the time.

(39:29):
It's better just to kind oflook back at it, whatever it
said, and go, hey, how close weget right.
I mean, are we successful?
Did we get to where we are?
I've looked at plans that webuilt four, five, six, ten years
ago and interesting how closewe nailed it.
But we didn't look at it everyyear to say, you know, are we on
track with this?
We kind of just said, all right, that's great, now let's run
the company, let's move forward.

Speaker 1 (39:50):
Yeah move forward.
Yeah, when you talk aboutstrategic planning, I mean we
have really taken a moredeliberate approach to that
planning in our business and westarted really put our first
kind of real, true plan together, like a year ago, that we've
been trying to hold ourselvesaccountable to, and we just met
this week as a management teamto say, okay, what have we hit

(40:12):
the nail on the head with?
What do we have to zig, what dowe have to zag?
And it's amazing, the thingsthat, like you said, we are spot
on, we got where we wanted tobe, and there's things like, oh,
we dropped the ball on that orthat's never going to happen now
because of this or whatever,right, so you know, it's not a
black and white.
You know running a business isnot a black and white thing, so
that's really important.
You talked about kind of thecompanionship, of having

(40:33):
partners, and I would say thatmy friend circle has become a
lot more of my clients and myyou know, business community
minded folks, because I need, Idon't have a partner, right, so
I need to go have a beer withsomeone and say, okay, this is
the problem I'm having today,right, what have you done about
this?

(40:54):
How have you experienced thisin your business, right?
Not that there's any financialgain to be had there, but they
do the same thing to me, rightLike shit.
I've had a terrible day.
This happened, this happened,this happened, this happened.
How would you deal with that,and a lot of folks will bring in
a business coach or somethinglike that for the same reason,
because you need that soundingboard, because you need to be
able to.

(41:14):
You know, we can't just talk toourselves all day long.
I can but that would.

Speaker 2 (41:22):
For the last couple of years I've been, yeah, I've
been doing.
What you're doing is what Ibuilt a community.
Now it's hard to build acommunity of CEOs or people who
run companies, because it's kindof a rare thing a community of
CEOs or people who run companies, because it's kind of a rare
thing.
But I was when.
The first thing I did when Ibecame CEO of Arcus almost two
years ago was I just went ontomy LinkedIn and I just said
title CEO and I went through my2000 contacts.

(41:44):
I found a ton of them, somethat I'd known for years, some I
didn't know they were CEOs,some that were a CEO but I was
like, oh, that's not what I'mtalking about and I started
reaching out and I really just Istarted to build that network
and I still did today.
I was out at Dreamforce back inSeptember.
I talked to three or fourdifferent business owners and we

(42:05):
do we talk about it, we comparenotes, we do it friendly.
You know sometimes they'recompetitors.
I have my second employeeemployee number two now runs, I
would say semi-competitor and wemeet like once a month.
We get drinks, have dinner, andyou know we're friendly.
We don't meet NDAs, but we havea great time just really

(42:29):
talking about it.
So I find I've now made thatnetwork happen.
There are programs I know thatthey reach out to me every day
to get me to sign on but thereare user groups and there are
special programs and things forpeople in this position that
it's hard to do, this talkingand I think some of them are
very useful.
But for me, I just built thenetwork and there's a lot of

(42:51):
people I have on speed dial thatI can call or talk to and just
say, hey, let's get together andchat about it, and that's very,
very helpful.
I don't mean to do it every day, but having the people that are
kind of going through the samestuff and we can go oh, what's
up with this employee thing?
Oh, me too.
Oh man, what's happening to me?

Speaker 1 (43:13):
Yeah, we've done the same thing.
I mean, I'm very friendly withfolks in our industry.
There's plenty of business forall of us out there, right, even
my local competitor down thestreet.
We had lunch three weeks ago,right, and it was a good
check-in for us to say, hey,what are you seeing about this?
What's going on with that?
How do you feel about this?
What employee issues are youhaving?
Same kind of thing, right, andwe try to have lunch a couple

(43:35):
times a year.
Same thing.
I've got a guy in Massachusetts.
We'll meet up halfway betweenand have lunch, and, of course,
we see each other at conferencesand we're very friendly and
they all know if they ever needanything they can reach out to
me and vice versa, and I thinkthat type of support,
particularly in your industryagain, like you said, you're not
sharing all your secrets, but Ithink you're getting most

(43:59):
people want to help you, right,so I think we all want to be
successful.
I do have one local competitorthat won't have lunch with me,
which I think is interesting.

Speaker 2 (44:08):
But-.
Better doesn't listen to thispodcast.

Speaker 1 (44:14):
Maybe he'd learn something Just saying but no, I
mean, I think that's reallyimportant is, as you're scaling
things, to really have thatsounding board, having peers
that you can really rely on tohelp drive you, because we all
have our own internal drive.
But I think there are dayswhere I go home and I'm like why
am I a business owner again?

(44:35):
If it was easy, everyone woulddo it right.

Speaker 2 (44:37):
That's what I keep telling myself.
It is very lonely.
And then I do a lot of studying.
I do a lot of I actually Idon't do as much reading because
I find that I still have thattime but I listen to lots of
podcasts, lots of interviews.
I find the leaders who I thinkI trust or like and see, and
then I listen to them and hearfrom them.
I did a lot of masterclasses.

(45:00):
To me it was like just get a lotof information in and then, as
I did, I kind of built out my.
I'd take things from each oneof them.
I'd say, oh, I like that fromthis one or that one I like.
And so if you listen to some ofthe leaders who have been there
and run you know companies,either bigger or whatever, it's
very helpful because they'll besaying something like, yes,

(45:21):
that's right.
Or they'll give a piece ofadvice.
You're like, oh, that's good, Ishould put that into the way I
think about things.
So just even that, I know it'snot the duality of talking to
somebody and getting the advice.
So I would say study the onesthat come before you, because
there's a billion CEOs.
Go find some ones that you likeor respect or think you've done
a good job.

(45:41):
But then, yes, keep a cohort ofpeople who are in your system,
in your industry, or even onesthat are local to you, that
maybe aren't in your industry,because those ones can be good
too.
I've talked a lot of businessowners where I live.
I love talking to them, youknow, just talking about
business and what they're doing.
They could be on a bar, they umrestaurant, uh, they could have

(46:02):
a little insurance shop downthe street.
So, making those connectionstoo, you kind of always find
something, even though theydon't do anything close to what
I do.
But, uh, keeping thatconnections and building those,
those communities, it takeseffort, and you do.
You have to reach out, you haveto take someone out for coffee,
you have to not be forgotten,but it's really, really

(46:22):
impactful.

Speaker 1 (46:25):
My snuff heats when I go on vacation, because every
time someone mentions a book tome, I go and buy it on.
Amazon shows up and it goes onmy stack.
And then when I actually go onvacation and I'm sitting on the
beach somewhere, that's when Ihave time to read because I,
like you, I don't have timenecessarily to do it as much as
I'd like and I'm scribbling downa million notes on my ipad.
And then when I get back likeyou know, I get back on sunday
and I can't write my notes downthen I send this email to my

(46:47):
team and I'm we got to do thisand we got to do this and we got
to.
What about that and what aboutthis?
They eat it.

Speaker 2 (46:53):
I did that.
I was up in Maine, in North ofyou, and I did a week kind of
like cut myself off, and youknow this is also good advice
for small business owners.
Learn to step away from it.
It's not just so you can relax.
It's not, you know, becauseyou're a business owner.
For small business owners,there's never not thinking about

(47:15):
your company, right?
You wake up in the morningthinking about your company.
I dream about my company.
I go to bed thinking about mycompany In the shower.
I think I mean it's just, thereis no stopping to it, so just
relax on that, it's okay.
But taking time away and likeshutting off the communication,
I'm really, really going away.
I did everything right in it,except for I didn't have my team
block me out.

(47:35):
I turned off email.
I shut down Slack.
I turned.
I ripped them off my my desktopand off my phone.
Just move them to the sides.
I couldn't get into them.
I should have had them and Iwill next year.
I'll have them shut me out ofSalesforce, literally just
freeze my account so I can't getin.
But it was great.
It's not like I didn't thinkabout my company.
I came home with a stack ofnotes, I read books and the same

(47:57):
thing.
I do try to process them for acouple of days not to overwhelm
my team, but it was great.
It's a great way just to stepaway.
Look out at a lake up in Mainein the fall and, yeah, I have
great ideas.
Some of them I'm just going tothrow away because they weren't
great.
You know they're not as greatnow we're up in Maine.
But taking that time away issuper important.

(48:17):
It's not just for the typicalreasons we talked about.
One good reason is like beingable to delegate a thing out,
but also just to take a stepback from your company I think
you'll have.
The day-to-day keeps you verymuch involved in the day-to-day
and if you can stop for a secondthen you can have those bigger
thoughts I've come back with.
You know bigger plans andbigger things and longer-term

(48:39):
objectives that I found, youknow staring at the lake, than I
would not have found if I'msitting here.
You know doing all the thingsI'm doing.

Speaker 1 (48:49):
I mean that's.
I think that's really greatadvice to close things up on.
I did the same thing last fall.
I knew we were doing strategicplanning.
I don't have time in my normalday to stop and think about
things because I'm just doingall day long.
I actually went, I bookedmyself a hotel in Boston.
I drove to Boston, I literallyshacked up in this hotel room
for the weekend and I waswriting thoughts down about

(49:13):
where I want to take us, whatour vision is, where we're going
, because I just didn't havetime to do it and I needed to
detach myself to do that.
I think, as you're trying togrow and scale, I think that's
really important to take timefor yourself, because it does
breed great results and it'sokay to be always on People.

Speaker 2 (49:32):
You know people ask me like well, can't you just
step away and stop thinkingabout your company?
I'm like not really.
I mean, I think there's like acouple times during the week
that I don't ones, when I'mwatching my terrible jets get
beat like that.
I'm not thinking about mycompany, but other than that
it's just 24 7 um, and that'sokay too.
Right, it's okay to okay to dothat and just know when you take

(49:53):
a break and let it go, becauseit is that impactful.

Speaker 1 (49:59):
Well, good, well, this was a great conversation.
I think we touched on a lot,which is good.
Hopefully, folks got sometidbits to take away.
So thank you so much, jason.
Feel free.
How do people get in touch withyou if they want to?
How do people get in touch withyou if they want to?

Speaker 2 (50:10):
Sure, well, you can hit me up on the only two social
networks I'm on, which is X andLinkedIn at Jason M Atwood.
It's the same.
After you can find me, you cansearch for me.
You can head to the website ofArcus, which is
A-R-K-U-S-I-N-Ccom.
There's lots of informationthere and, other than that, you
can send me an email I don'tmind, jasonatwood at ArcusInccom

(50:34):
should be an email and I mightreply no, I probably won't.

Speaker 1 (50:37):
Absolutely.
And, of course, if any of ourlisteners have any questions for
us or for Jason or any of ourguests, you can always email us
at podcast at Faber-Charlescom.
Don't forget to like follow,share rate review anywhere you
get your content rate reviewanywhere you get your content.
I'm just going to talk contentbecause we get a lot of it out
there and otherwise we will seeyou next week, thanks everybody.
Thanks for listening to thisweek's episode of Small Business

(50:57):
Big World.
This podcast is a production ofPaper Trails.
We are a payroll and HR companybased in Kennebunk, maine, and
we serve small and mid-sizedbusinesses across New England
and the country.
If you found this podcasthelpful, don't forget to follow
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As a reminder, the views,opinions and thoughts expressed
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The material presented in thispodcast is for general

(51:19):
information purposes only andshould not be considered legal
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By inviting this guest to ourpodcast, paper Trails does not
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