Speaker 2: 0:05

Hello everybody and welcome. This is Accounts 2.0, and today I have with me, as always, ted Williamson, president of Accounts 2.0, and our special guest, joe Gracchi of NSRI. Joe, your firm, jova Ventures and Advisory. I apologize, we are so busy talking and leading up to the beginning of this podcast and excited for the questions we're going to ask, and today's topic is working on as opposed to working in. With regard to your business, Joe, maybe we can start by just talking a little bit about your approach and your business, and then we'll get ready to come to some questions.

Speaker 1: 0:41

Yeah, so I help business owners with uh, with uh growth, scaled up and and exiting their business. I have a lot of experience in that area which we can talk about throughout the podcast. Um, one of the key problems that I get confronted with uh with business owners is spending too much time in the business, in the operations, making all the decisions, uh, looking after all the detail and what I call quality control, and not enough time reflecting on the business and working on key parts to help build, scale and create an owner independent business.

Speaker 3: 1:22

Great, I want to actually jump in here. I want to tell our listeners and our viewers why you should listen to Joe. So, first of all, because there's a lot of advisors out there, a lot of people talking about this type of subject and and and there's a lot of coaches and stuff like that and you and you all know them your accountants, bookkeepers, advisors, tax professionals. Some of you probably advise a lot of the same concepts, but you might be able to get some information or some really good knowledge from Joe. Joe, for one thing, has exited a couple businesses upwards of $100 million. In one instance he actually grew a book of business from zero to $100 million in three years. So you should really talk or you should really listen to Joe and absorb as much as you can. And you know, if you need some backup or you need or a client needs help, definitely reach out. So I just wanted to kind of get that out there first, because I want to make sure that you continue to listen to this podcast. So that's it.

Speaker 1: 2:25

I appreciate the kind words, ted, and you know I think I'm a business operator at heart, so that's sort of always where I'm coming from. I'm coming from the perspective of the operator, the owner, and you know the real challenges on the ground floor that they're confronted with.

Speaker 3: 2:40

That's great because that's the way we operate too. Our tagline is we've been there, so, and it sounds like you have too, so it's perfect that you are our first guest on our podcast and you're living up to the we've been there tagline, so that's awesome. So let's talk about working on your business, working in. Let me I can kind of start with with some of my own experience. Some of my own experience would be my, my accounting firm that I recently exited, so I didn't really know. So I've always been big on working on versus working in your business.

Speaker 3: 3:10

But when I actually sold the firm, there was a lot of like metrics and a lot of things that I wish I would have actually thought of before I sold.

Speaker 3: 3:19

And some of the things like, even though I tried my best to work on instead of in and that's what I do with Accountants 2.0 as well as well, I've got to keep the strategy going and keep, you know, work, working as much as we can, um, but some of the things that like how you report your finances, how you track um, all that even which is, you know, not necessarily working, work, you know, considering working on only, but it's just like a really small example of little things that you need to consider when you're looking at if you're going to exit, what your strategy is in the end versus always working on client work and doing that kind of thing.

Speaker 3: 4:02

So I kind of wanted to see what your thoughts are specifically on working on versus working in. You actually have a white paper that we're actually going to release. As part of this, we'll have a few things here. We're going to release a white paper and this as well, as soon as we actually release this video. So if you could lay it out there, a quick little summary of it, and then we can kind of go into the details a little bit.

Speaker 1: 4:29

Yeah, so thank you for that, ted, and so I'll start with just some of the challenges that are associated with working in the business, right? So I think it's important to sort of nail down what's actually happening on the ground floor and why is it a challenge and an opportunity actually? So one is just around pulling yourself away from the business to work on your vision and mission of the company and that is sort of your North Star and where you want to take it. But a lot of times, as business owners, we know what it is, we keep it in our heads, but a lot of times, you know, as business owners, we know what it is, we keep it in our heads, but it doesn't that sort of tunnel vision that, hey, this is how we've been doing things for the last 20 years, where you know things are moving along and and uh, and whatnot, until you hit a speed bump and then it's like, well, you know what, what's happening, right?

Speaker 1: 5:38

Another challenge, um, that we often see is is really around dependencies within the organization. So do you have departments of one? Do all decisions and paths lead to the business owner? Is the business owner the primary person leading every sale? Are they also the sales manager. So often there's two spectrums. There's business owners that are way too deep in the sales process and some that are not deep enough and sort of take a bit of a backseat. So that's an important aspect there.

Speaker 1: 6:19

It also applies to business operations and other aspects of the business, and that can lead to burnout. When a business relies so heavily on the business owner to drive it forward and feeling like, hey, I can't miss a day of work or I can't take a proper two-week vacation or something like that, it can cause burnout and we don't realize it until we've actually had that opportunity to pause and actually get away and you realize, oh my God, I've been sleeping for the first three days of this vacation, right. So that's an important challenge that we look at in terms of working in the business. And then, as you know, there's lots of things associated with efficiencies and innovation and making sure that you're attracting and retaining talent, because that's an important function for the business owner, both from a strategic perspective, but also having those systems, processes and people in place that can help attract and retain talent. So there's a lot of unpacking here as it relates to working in the business and some of the challenges that you can experience and some of the symptoms of what could be happening.

Speaker 3: 7:39

So what would you think would be the first step in working on your business? Would be like getting rid of the admin function, getting you out of that or getting you out of sales, like. What do you think would be the first step that somebody would have to take in order to move towards the vision that you see them in having a perfectly exitable business for their lifestyle?

Speaker 1: 8:06

Yeah. So the first two things I hear from business owners when they talk about that is, hey, I need to hire someone to replace me like a general manager, or I need to delegate more, and those are good, sound strategies, but they're not the first thing I would actually do. The first thing I would do is analyze and figure out how am I spending my time in a day, in a week, in a month, and identify that one task or series of tasks under an umbrella that is actually taking up 20 to 30% of your time. And I'm pretty sure, after reflecting and tracking and figuring that out, that you'll identify what that is, and it's typically going to be something quite mundane or administratively oriented or something of that nature. And that's the first thing to tackle is the what. What is it? What theme or what sort of processes or parts of the operation? That's sort of pulling me in and figuring out okay, now what is the solutioning around that?

Speaker 1: 9:27

The other day and he was saying, hey, you know I'm spending way too much time on accounting and those sort of functions, not actually doing the accounting but being involved in reports and pulling things together and working with the bookkeeper and all that, and so you know that's a big one, and so once you've identified it, that's great. Now identify what is the strategy or the solutioning around that. And it may be, you know, technology related. It could be resource related, it could be process flow related, it could be training and development related, or it could be a skill or people issue within the organization. You have to identify the what.

Speaker 3: 10:05

Or it could be that they need to hire a controller or CFO from one of our listeners. Of course, it's very possible yeah.

Speaker 3: 10:13

Yeah, but that's always a possibility we hear that all the time actually where the accounting function is a burden, and that's oftentimes why they actually hire somebody out of the accounting industry or even just a virtual cfo or something like that, to kind of take, take off some of that burden. But uh, that's great, cool, okay. So another question now. So let's see, or let's say, uh, we have a, an accountant or bookkeeper or one of their clients. They're somewhat newer, they're smaller, because you do have a lot of experience in those larger companies working with them.

Speaker 3: 10:47

What kind of advice, I guess, for a smaller company maybe they're a solo, solopreneur or they are, you know, just looking at getting their first hire or something like that where do you see them starting to move into that direction? I know we talked about first step, but this is, I guess, a different scenario where it's like not necessarily, it's not necessarily like I have teams that I can now offload or or start to maneuver into different directions. Now how do I kind of start moving in the direction that I want to as a smaller business, maybe a startup, or or even just I'm a solo, I'm a solo firm owner, you know, at a hundred grand a year and I want to move to a million.

Speaker 1: 11:23

Yeah, and that's, that's a really, that's a really good question. And so again it comes. It comes down to, you know, identifying some of those tasks and finding ways to automate them, identifying some opportunities to bring on fractional resources. They can be very efficient. Virtual assistance there's, there's lots of fractional services available there where you can buy a quarter of a person's time and take that load off.

Speaker 1: 11:53

Because at that stage if you're a really small business and you're going for like $1 million and you want to get to 10 million or even 100K to 1 million, you know you have to spend a disproportionate amount of your time on sales and marketing, getting out front and promoting your business right. It takes a significant amount of energy to do that. So if you're also responsible for fulfilling on that from, you know, once you've engaged and onboarded clients like, you really do need that sort of handoff point where you can pass it along to somebody else. Sometimes you can get you know technology to automate a lot of those processes, but chances are you do need to bring on some resources. But there are some really cost-effective ways of doing that. So what you're?

Speaker 3: 12:42

saying so, this kind of self-prom of doing that. So what you're saying, so this kind of kind of self-promotion here, but what you're saying is that sales and accounting, or sales and marketing is a is a burden for those smaller companies. So maybe that's where we come in. We can actually help with that, but anyway, so accountants 2.0 for that. But uh, back and forth on on the self-promotion. All right, so do you have any examples? Like maybe a fun example you can talk about or something that kind of you have encountered in your own, like maybe some what not to do's or some things that you didn't expect to like really, really hit and do you know and help you grow?

Speaker 1: 13:20

Yeah. So I think you know on that point, having gone through the exit process a couple of times really helped me look at a different lens to build my business. Okay, I would definitely go back and build it differently, having gone through the exit process before. That's why I always encourage people to sort of look at exit planning as part of business planning. It really is a function of business planning. It doesn't mean you have to sell your business tomorrow or next year or in 10 years, but going through that exit planning process is going to shed so much more light on your business in terms of building scaling and, more importantly, business in terms of building scaling and, more importantly, increasing your enterprise value, which is a metric that 98% of business owners don't know the value of their business and it's not a metric that they actually measure. So I think understanding that a little bit is really important for building and growing your business, because there's certain levers in your business that you can certainly pull uh, being more tuned to and educated around the exit process and the exit ecosystem and talking to people in that ecosystem, because you learn a lot and so you know, when I exited my first business and I reflect back on it.

Speaker 1: 14:45

I think, yeah, you know what there's there's a few things, there's a few value levers I could have pulled throughout. You know, over the years that I could have implemented and done differently in my business. Maybe I would have made an acquisition or two. Maybe I would have looked at you know a different adjacency that could that at. You know, you know a different adjacency that could that could. That's, you know, growing quickly.

Speaker 1: 15:06

But but it's complimentary to our business and have some, some other subsidiaries to work on. So so there's a lot of creative things that you could do once you've gone through that process. But, like I said, I can only reflect and look back. I don't have regrets about selling my business because it was a positive outcome, but I think you always look back at the game you played and you reflect oh, if I just made that one move, it could have changed the score right. So, being a sports fan, you know I use that analogy. But but that's sort of you know that, that reflection that you can tap into through engaging with other people in the ecosystem and making sure that exit planning is part of your business planning process process.

Speaker 2: 16:03

So, joe, what you're saying is, even if you're not immediately planning on selling your business, the exit strategy or planning is critical, just as a top-down re-evaluation to see where your weak points are and maybe work on improvement on that level.

Speaker 1: 16:13

Absolutely, and I'll actually give you an example. A lot of small businesses struggle with liquidity and finding buyers. That's a reality. You talk to any advisor and a lot of companies get turned away because they're either too small or there's some sort of perceived risk factor in the business that buyers wouldn't be comfortable with. So they actually would turn you down in terms of representing you.

Speaker 1: 16:42

So one of the examples that I have around that is if you know that, hey, one day in your exit planning process again, you're not actually going to exit, but in your exit planning process, part of your business planning you say, hey, you know what Our exit points would actually be, these two or three categories of buyers, right, most likely to be attracted to your business then you can actually start working on forming those partnerships, because most small businesses that actually get sold end up getting sold to someone they know it's a relationship that they had pre-existing, not a friendship, but perhaps it was a friendly competitor in an adjacent area, maybe it was a supplier or a customer or something or a partner, you know, a channel partner in the business it could be. It could be any one of those. So if you think, well, hey, if that's sort of the direction this will end up going, then why not start now? Why not build those relationships? Because there could be some really good business opportunities that come out of it and then eventually they could form part of your exit plan.

Speaker 3: 18:11

That's great. That goes back to my exit and what I had to do. So at one point we were looking at privately exiting, but we found it actually kind of hard. So we looked at different options. After all the planning and everything was in place, we looked at different options as to how to exit. What are we going to do? When we looked at ideas, we weren't necessarily sure if we were even going to do that. So we're looking at private buyers reaching out to friends, family.

Speaker 3: 18:45

We ended up actually going with a broker which actually got us a lot more for it, and that broker kind of helped us with understanding exactly what it was we needed to prepare for in order for that exit. So that really helped. And then the working on the business also made it more attractive for people to buy, to purchase the firm, because they knew that their time wasn't going to be so sucked up by that business, especially if it was a competitor or a complimentary type service that just wanted to add it in. Uh, so it actually was really really it was really really great in in planning, having a little bit of planning and having some of that already in place. Uh, you know, sadly I didn't work with you or maybe I would have got a lot more money and built it up even more or whatever.

Speaker 3: 19:32

It might have been right. But um, that's, that's for another day. Maybe we'll talk about this, let's never know. And but yeah, that's just as an example of how important it is. Looking at that exit, and from my own experience as well, it's definitely important to make sure that you're not like critical function for that business to operate before you even consider exiting, really like I I think, well, not before you consider, but before you actually taking act, take action on exiting yeah, I mean, you certainly don't want to create any single points of failure in your business, so a lot of times it rests on the business owner.

Speaker 1: 20:08

But you know, there's, like I mentioned earlier, there's there's, uh, you know, companies with one person, departments that are holding on to that one person in that department and hoping and praying that they never leave one day.

Speaker 1: 20:22

And that is uncomfortable.

Speaker 1: 20:23

That is part of, you know, business ownership.

Speaker 1: 20:27

That causes, you know, lost sleep at night, especially when somebody is at risk of leaving or going away night, especially when somebody is at risk of leaving or going away, or maybe they, you know, maybe just their own personal circumstances are causing them not to continue and so, and so what I sort of look at is okay, what are those single points of dependence?

Speaker 1: 20:48

Because I had them in my last business and the way I addressed that was actually looking at and building partnerships with third party firms or service providers that had bigger teams but were specialized in that area. So if you have a one person you know department, whether it's, you know, marketing or it could be accounting or some other areas, is, you know, I would look for specialists that were bigger businesses that had already, you know that have. You know, the technology, the efficient processes to manage things. They have backup and redundancy. You know, on a dollar for dollar basis, of the things that you want to make sure you're doing is removing any perceived risk that if any one person leaves in the company, that things are going to implode, and so that's a really, really, really important part of the working on aspect of the business.

Speaker 3: 21:53

That's great. So can you tell us? I know, like you have your white paper on working on versus working, in which everybody can read after they see this, and actually it's got some very, very good information. But what else can they look forward to Say if they were starting to work with you, or even just if they started to follow you and get into to to really get some good information? What else? So? So we talked about exit planning, working on versus working in, so what other things can they actually see some sort of benefit in working with you?

Speaker 1: 22:26

Yeah. So you know I help with professionalizing a business Right. So again, it could apply in different situations. Whether you think you'll be going for growth capital and I talk to lenders all the time and one of the biggest turndowns is, hey, this business has some things we're uncomfortable with. It's a good business, they're growing, they're in a good space, but we're just not sure the business can support the funding that they're looking for right. So professionalizing your business for growth capital, for scale-up purposes, to make sure that you can actually support that growth that you're planning for. And then, finally, the exit planning process.

Speaker 1: 23:11

It's really important to have a professionalized business and that actually, according to McKinsey, they did a study that companies that had a structured management approach or professionalize their business were two and a half times more likely to be successful than their peers. So again, it takes an investment to work with someone and identify those areas that do need to be professionalized and to implement some of those strategies. But over that medium to longer term, there's going to be a huge payoff, even for your own personal reasons Just having more work-life balance in your life and not having your business overtake your entire life. And that's a really important aspect too. There is a deep personal motivation too, for some of the clients that I work with, around professionalizing your business. A lot of times it's around growth, exit-minded growth planning.

Speaker 1: 24:15

If you're a couple of years away and you have some things in your business that you want to address, you can certainly work on that. Like this is the one big issue I need to tackle. I just need to break away a little bit and so we focus on that for three or four months and work on implementing those strategies. So there's a number of areas that I typically work on, but I would say, under the banner of professionalizing your business is where you would identify those gaps, bottlenecks, blind spots in your business, because that's half the battle for business owners. You don't have, maybe, a deep management team to rely on, so you're making decisions. You're sort of doing it in a vacuum. You may ask some folks, but they don't have that depth of understanding of what's going on in your business and there's other folks that can help you with that. So not being alone in this journey is critically important, whether it's accessing a peer group or a mastermind or bringing on some advisors or coaches to support you on that is going to be really important.

Speaker 3: 25:32

Absolutely. So make sure that you follow Joe and you join the uh. You join our group for growth and operations. Definitely, uh, we can. We can forward you over to him. If, um, if, if you have, if you want to work with joe, that'd be great. So what? How can you? So our listeners and viewers, how could you uh, like, how could they maybe connect with you and or how could you help them? Necessarily, so either our viewers and listeners or their clients, for example, so, like, perhaps their clients might need some help, like, how do they make that happen? Because I know it's not necessarily a promotion that we're trying to do, but after people listen to this, they understand that you're going to be knowledgeable and able to help them or their clients, so they might be really interested. So how exactly would that look?

Speaker 1: 26:22

Yeah, so I share a lot of content, particularly on LinkedIn. So if you follow me on LinkedIn, you'll see three to four posts a week just around these topics. I'll do videos as well instructional videos that you can find on YouTube at Joe Brachi, and I also have a monthly newsletter through LinkedIn that you can subscribe to. So every month I come out with a white paper or article around some aspect of professionalizing your business or topics related to that around growth and scale up and uh and so. So, yeah, feel free to to engage, uh that way or um.

Speaker 1: 27:03

You know I do provide, uh, you know, consultative calls as well. So if there's a a burning, you know question or issue that that you're working on, no obligation we can. We can get on a 15 or 30 minute quick call and just help you sort of navigate through that, and I'm happy to share my network with people. So I'm an open networker. I've made a lot of helpful introductions on LinkedIn to people who should get to know one another without, without, you know, any sort of interest on or personal conflict or interest on my end. I just like connecting people and if I see there's an opportunity that one person should be talking to somebody else. I'll definitely make that connection for you.

Speaker 2: 27:52

Also to thank you, joe. You got me on Alignable, so not only LinkedIn, but Alignable as well, and that's actually been getting a lot of connections along that line. So thank you very much, awesome.

Speaker 3: 28:03

Absolutely so. I guess we're at the 30 minute mark, so is there anything else that you might want to tell the viewers and listeners before we sign off?

Speaker 1: 28:17

Yeah, you know, I think investing in your own professional development as a business owner and that continuous learning is really really important. And so you know again, and a lot of the learning for business owners comes through sharing stories and experiences and situations that come up right. They don't, they're not always readily available in a book or an article or on chat GBT. You actually need to speak to someone else and and, uh, you know about that and and they can provide you with it, with another lens, uh, so, so I always encourage people to, to, to be open networkers, uh to uh, to invest in their own learning and development, and everything else sort of falls into place.

Speaker 1: 29:04

I think when you surround yourself with people that have been there at that stage, before you've entered that stage, really, really important, because there's so many blind spots and areas that you don't know what you don't know. And I've been part of a peer group CEO Global Network for over 12 years it was the first peer group I joined as soon as I got my first role running a company and I haven't looked back since the amount of learning that happens month to month and just understanding people's lens from different industries, from different size companies, from different situations that they've been through before has been immensely helpful. So that's the one thing I would certainly leave with people is make sure you invest in your own learning and development, and it'll get you so much farther in business than trying to do it on your own.

Speaker 2: 30:00

That's great advice actually, uh, joe joe actually painted a great picture with uh, with uh how to engage and also the uh some of the scenarios, so we'll we'll close off for today and again, this is accountants 2.0, and thanks to uh joe Gracchi for his insights and there's so much anyone can gain, so I encourage people to reach out to him on LinkedIn and Alignable and through his other social media links, and the same for us at Accountants 2.0. Like, share, follow and we're on the major podcast platforms as well. And again, I'm Steve Purvich with Ted Williamson and have a great day, have a good day Thank you.

Speaker 2: 30:40

Thank you.

Speaker 1: 30:40

Thanks for having me.