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Agency Forward explores the future of agencies as tech and AI drive down the cost of tactical deliverables. Topics include building competent teams, developing strategic offers, systemizing your business, and more.
New episodes delivered every Tuesday.
Chris DuBois 0:00
Hey everyone. Today I'm joined by Jody grunden. Jody is a virtual CFO and financial strategist for growing agencies. He is the co founder of Summit CPA group, which is now part of Anders CPAs, where he's helped scale just hundreds of agencies with data driven financial forecasting and CFO insights. Now I wanted to have Jody on because too many agency owners fly blind with their finances, and they miss out on stable, scalable growth. Also, we were table mates at a conference last year, and he's a delightful human being, and when good people are also experts in their craft, I feel this urge to share them with our audience. Okay, so in this episode, we discuss building a 10% cash reserve for long term stability, when to hire a controller or CFO as you scale, how to set pricing to maintain profit margins and more. Lead Gen is the hardest part of running an agency. For most it's unpredictable, it's slow and it's usually expensive. GF flips that. It's the all in one growth platform that turns your existing relationships and client work into a steady pipeline. Gia automates lead gen follow up and content, and it's all from the work you're already doing. You can check it out and get some free bonuses at get gia.ai/dynamic agency, and now. Jody grunden, it's easier than ever to start an agency, but it's only getting harder to stand out and keep it alive. Join me as we explore the strategies agencies are using today to secure a better tomorrow. This is agency forward. What is the number one financial mistake that agencies make early on?
Speaker 1 1:45
Yeah, Chris, kind of funny. Ask that, because I would say the number one mistake is under capitalizing. And so what I mean by that is, you know, a lot of times they're told by their accountant that, hey, we need, don't need to pay any taxes, so let's get rid of all of our money at the end of the year. Pay down as much as we can buy stuff by whatever that might be, and then we'll start the new new year without having to have a big tax burden and kind of go on. And actually, that's probably the biggest mistakes a small agency can do, because the number one KPI that you want to have is your cash, and the number one KPI to determine that's how much taxes you're paying, so if you're paying a lot, lot of taxes. And what I mean by that is not not paying your amount over and above what you need to be paying, but if you're paying taxes, that's a sign that you're actually a healthy company. And so what we tell clients is we say that, Hey, you want to build your tax your cash reserve to be about 10% of your annualized revenue. So when you're starting out, if you're $300,000 in revenue, you should have about 30,000 in the bank at all times you get that million dollar mark, 100,000 and so forth and so on. And it's, it's kind of simple. What does 10% actually mean? Well, if you do the behind the scenes math, it really comes up about two to six months worth of expenses and and I say 10% for two months, 30% if you want to go the six month route, which is, if you want more security, you know you want to make sure you've got maybe multiple partners. There's a lot of different factors that would go into, hey, I need to have more money. Maybe you want to grow fast. But the key there is having that 10% at a minimum, and build the 30% as you take on more risk. And that's what we tell because what happens is they get into situations where they can't really make an informed decision anymore, they make a knee jerk reaction, because guess what? That clients delayed on their payment, and I got to decide really quick what to do. And a lot of times those decisions end up being the wrong decisions, where, if they have that cash, they've got time to make, make that decision, make a really solid decision, you know? And you saw that probably in covid, really. I mean, that was the biggest part. When our clients went through covid, you know, through that that year and a half, you know, where that suit so much uncertainty, those that didn't have the cash reserve, you know, a lot of lot of went out of business, or a lot of them really tons of stress. Those that had the cash reserve, they could kind of sit back. We can meet with them on a regular basis and model things for them make the decisions they meet with them the next week about decision making, and then then make the right decision. And it just really impacted how they grew. And, you know, basically their success.
Chris DuBois 4:13
Yeah, no, I think I can echo that the during covid, like the agency I was, I was with, we had, we had decent cash reserve, but, like, we depleted it through part of that, and we ended up actually having probably our best year on record because of an offer that came from just necessity, right? Like, we had to do something, and it worked out. But if we hadn't had that cash reserve, we would have been out of business before we could have even gone before we could have even gotten to that plan. So, so, yeah, I think, I mean, it makes complete sense to have it the other, the other piece is, like, I've talked to a lot of agencies who, they know what they need in their business, but then they don't have the money, right? Now, because they're they'd never had a cash reserve to be able to say, like, yeah, I need a coach on this specifically to get me through this problem. And so, like, yeah, I guess. How do you even shift the mentality for agencies to be thinking like that? Because most agencies are pretty reactive, yeah.
Speaker 1 5:18
They don't know how to they know how to get it, you know, I tell them 10% they're like, Yeah, I wish. Or Yeah. How am I gonna look into that? Well, it's, it's really, it's just math, you know, right in it. And I, my first presentation that I ever gave for agencies, that it's probably been 1520, years ago, sat in front of about 30 owners, and we're like, you know, I'm drawing. I can't, I can't do math in my head, which is kind of funny as an accountant, so I have somebody doing the calculator as I'm doing the presentation. And then I did, I did this easel board. I just kind of walked out through, you know, Hey, what should one person fully optimize, you know, generating revenue? And it came out to about $200,000 if I remember, right? And then I asked everybody, you know, hey, if you could, if you could increase your your sales price by $10 would you lose any clients? And no one, no one dropped their hand. I just kept going up and up and up until I started seeing hands drop. And then I'm like, you know, hey, even better, could you actually get $10 more in what you're selling? You know, me being more efficient by that $10 because it's the same thing, whether you increase the price or be more efficient, same thing. And they're like, Oh, absolutely. And so we did the math then for 30 people, just kind of given an agency for 30 people, and it came out, like, $3 million and so it's like, well, how many people 30? You know? How many people have 30? You know, 30 people. And if you raise their hand, are you $3 million no or not. And well, let's see what you could do. And so we said, hey, let's increase that price by 10% and so we are $10 and so we did the math again, and all sudden, it came up to, like, $300,000 which was exactly what they needed for their cash reserve. So it wasn't really, it wasn't, it wasn't rocket science. It was more like, you know, Hey, are you pricing your product properly? You know, more than likely you're not. And that's what happens to a lot of small agencies. They under price because they're there's not used to it. Those that overprice or price to those, those, they do really well. And they're like, Wow, we're, we're geniuses. Your Genius is only because you priced it properly. You know that that's really, that's where it comes down to. And, you know, it was, it's amazing. You know, just that small tweak. You know, whether or not you're, you're realizing that $10 per, you know, per hour, over, over your entire firm, or you're actually, you know, increasing it by $10 you know, just that $10 was is a huge number. It's a small number, but a huge impact on your on your financials, and it allows you to get out of that mindset, because it's hard to get out of that mindset, because you're on that roller coaster ride, you know. And what I tell people all the time is that, now that you've got the goal, you know, now that you've got that, I need that $300,000 in the bank, how am I going to get there? And so that's where that dynamic forecast comes into play. And so you want to create a dynamic forecast that you have control over, reviewing it on a consistent basis. And I say consistency is the key to it, because if you don't, if you only review it when you need it, then you've lost control. You lost sight, whereas, if you're reviewing it on a monthly basis, at a minimum, and showing how does, how did that? How did my actuals actually impact my future? You know, it's amazing how quickly you can get to that goal, or how, you know, whereas before you're going flat, and now you've actually seen an increase on everything from revenue and profits and cash, because now you've got to, you've got that goal in mind, and it's no different than I always give the example with a map. You know, if you've, if you live in Maine, you know, Chris, you live in Maine here, you want to come down to visit me in Florida, please? Yeah, exactly, really nice weather right now. So you're gonna get there, so you're gonna, you're just gonna drive south. You don't need a map. You can drive south. But guess what? You might take a wrong exit, and you might end up in Georgia, or you might end up in Texas, because Texas south so, but you'd eventually figure it out, right. Oh, Texas. Okay, so I need to go eat. I need to go east. And so then you follow it east. And finally you're in Florida. And then you go all the way around Florida, maybe. And now you're in Fort Lauderdale. So you figure out where how to get to me, whereas if you had a map now that's a little bit easier, because now you can kind of see streets. But what's even better is we have that GPS. You know that GPS is, and what it's doing, it's saying, you know, hey, you got a wreck up here. You've got, you know, this, you know, make this tour, you know, let's get down there a little faster. And so that's what that forecast allows you to do. Allows you get it from A to B without having, you know, maybe the straight line is not it. Maybe we got a zigzag a little bit to get there a little faster, and that's what it does. Because life isn't, you know, it's not straight, you know, you create this dynamic forecast. It's not a perfect you're gonna adjust it every single month. That's why it's dynamic. You know, you're gonna realize, Hey, I just landed this big client, how's that gonna impact things? Oh, I need to hire or I lost a big client, how's that gonna impact things? Maybe I need to tighten things up a little bit. And so that's where the dynamic forecast comes in play. It's not a budget where you just throw numbers out there, you know, in November, December and for the whole year, and hope that you hit it. It's actually changes every single month. So it's got to be super you gotta have 100% control of it. And it's mostly the revenue and the cost of sales, you know, revenue and employees. Defense, are your main drivers up there, the rest administration, marketing, those are pretty flat throughout most of it there, so that it makes it super easy to work with.
Chris DuBois 10:09
Yeah, honestly, I think I could probably just hop on the I 95 and it'll probably take me to your ass. Yeah, one of the I feel like there's a stigma around finances period, because people just don't it's like they don't have the financial literacy. Because even when I take a client who says, hey, I want to just hit 83k a month by the end of this year. So if we want to be a million dollar agency, and when we map it out itself, it's like, okay, so you only need to close $1,000 of net new revenue, recurring revenue, every month in order to hit this. The smallest package is 5000 a month. So, like, we're actually going to move through this pretty quick and like, oh, well, this is way more reasonable than than I thought. It's like, yeah, because we just looked at the numbers and, like, I was able to show you it, yeah, there's something. It's like, I don't know if it's because there's like, a fear to that, or because everything you just explained, like, if I had those insights into, like, the, you know, dynamic forecasting of my business, it's like, now I don't need to worry as much. I know which metrics are and, like, which levers are going to move things the most, and I can just pay attention to those and then see how it pans out. So I guess that's like a multi fold thing. But the what metrics, I guess, would you, are you most curious about within someone's forecasting?
Speaker 1 11:33
Yeah, the biggest one is that you never want to forecast against every every other company out there, right? You want to forecast against yourself. You use every other company out there to kind of justify your forecast, meaning that if you've got a bottom line of 50% and everybody else has a bottom line of 25% well there's probably something wrong with my forecast. So let me dig into it and figure that out. That's where you're kind of you're justifying against it, but you're using it against everything else. You're always looking at utilization, average, bill rate, you're looking at the different things that impact your top line revenue. There you might look at your average dollar per producer. You know, me that should be about $200,000 per producer. You know. Do you have that? Are you there? Is it close? You know? Why not? You know. Or why is it significantly higher? That, which is also important to know, because that means you maybe you're pricing things right, or, you know, there's a lot of or maybe you're using using offshore staff, or whatever that might be, but, but it's really important to understand what drives that revenue. So that's where the average bill rate comes in, utilization rates. If you if you're doing that, if you're doing a flat fee type thing, or subscription based, then maybe it's your average client size, your average monthly client fee, how many clients you pick up, how many clients you lose, a client churn and client edition. You know, those might be different things, but then you always tie that back to your average employee cost. So you want to, you want to actually calculate that out and figure what that is. Because, like, I like, I'd mentioned before, if, if you're, if you're charging $125 an hour, that might be plenty, because it because maybe you're offshoring a lot of it. Maybe you're only paying 1520, $30 an hour, the margins there. But if you're paying stateside people a lot more money, that's definitely not going to be enough. Maybe you should be charging 250, 300 something of that nature. So you have to really know what that cost feature is and know what that margin is. And so I would say that you always want to have at least a 50% gross profit margin. That's what I've always driven our accounting firm by 50% gross profit. And that's really consistent with any service based company. So if you're in the way, you calculate that your revenue minus your hard employee costs, which would be, you know, the cost your salaries, plus the burden, burden, meaning the insurance, the taxes, the 401, K, you know, all that kind of stuff gets lumped into there. That should be about 50% if you're if you're there, your bottom line is going to easily work out to about 2520 25% gross profit or net profit margin. And that's where a really healthy agency is going to kind of live right at that 20 25% if it's below 10% it's really not treating enough to make cash. So you want to make it higher than 10% that's kind of like your break even, and then anything above that's going to really help out, but you want to strive to have that bottom line at 25% so I would say those are the those are the key metrics that you would want to look at, both on the production side and that's going to help you build that forecast, as well as the financial side, which is going to help you kind of mirror to other other other agencies make sure that you're you're in the ballpark.
Chris DuBois 14:25
Yeah, with let me know if it's an off the wall question, but you just got me thinking about this. So we, when I was running an agency, we had raised our rates. We're at about 300 an hour. We're using like a point system and stuff, and we're still selling set packages of 9k 12k or 18k but as our cost per hour kept going up, it meant we could do less within a 9k package, which meant eventually, like I started noticing results were slipping across clients, and so we had to start actually doing some free work. And like things like. That's going to make up for it? Is there? Do you have, like, any general rules of thumb for for the pricing, separate from just what makes like financial like fiscal sense, as well as looking at absolutely
Speaker 1 15:12
because we've been doing flat fee or subscription based billing, really, for 20 years, so a long time, and we've made tons of mistakes, definitely tons of mistakes. We learned from them. But the biggest thing is that when you lock in fees like that, you've got to have annual increases. And so your $9,000 should be 9000 next year it should be 9000 year after that, you know, there should be an automatic increase, and you increase it based on what you're what you're increasing your people's salary. So you know, if salaries go up 8% fees go up 8% if salaries but 5% fees go 5% so the key there is letting clients know that in advance, and so you can't just spring it on them. And so they what I mean by that is, when we close a deal, we always tell clients, you know, hey, here's your here's your year one fee, it's going to be, you know, 1500 bucks a week for the next 52 weeks, and then it will increase between two to 5% or two to 10% we tell them, the typical is about 5% and so then every year we follow that back up, it will increase that fee by that 5% because you're right, because once you lock yourself in, wages are going to automatically go up, and your margin is going to shrink. And you can't have that. You can't have that happen, and especially in the long term contract, you know, like for our contracts, our clients stay with us about four and a half five years. And so with that, that would really kill us if we locked everything in five years ago, rates and we're paying now, because the margins wouldn't be there. And so the key there is making sure that you let them know in advance. You just can't spring it on them. You got to let them know in advance. Hey, our fees go up annually and give them a range, you know, two to 10% I always go 10% just my higher range, and it typically comes in between five to 6% outside of covid. Years, that was a little different. But, you know, and that's what we what will we actually explain that way by? Hey, that's what, whatever we increase our employee fees by our employee salaries by. That's what we typically increase the prices by. Yeah.
Chris DuBois 17:03
So we had a similar like policy set up. I think the issue is that we increase the cost per point or per given hour, but we never change the buckets of like value. So we would still say so like $9,000 when you're doing 100 like $200 a point, versus $9,000 at $300 point means you get, you can fit fewer points in that 9000 so we should have just upgraded those buckets. Yep, but,
Speaker 1 17:31
yeah, similar there, you know, because instead of buckets, we do it when we look at our capacity of our team, we look at by how much they can handle on a reoccurring basis. And so with that, maybe a CFO can handle 15 clients at a $1.8 million book of business. So that's your that's your big bucket right there. And so we do it based on revenue of the book of business. And that really works out well. In the agency world, you can do the same thing if you have reoccurring revenue, figure out what your team can actually manage and then give them full credit for that, whatever that is. And so like, like, one of our engagement we might have a CFO on it, we might have a senior level accountant and maybe a tax person, or something like that. We have three or four people, but everybody on that team gets the same top line bucket, and then we kind of back into what we actually need to be. Need to pay those folks, or incentivize those folks. I think it's super key to do that, because if you don't, then you're going to get into issues there, and you're going to employ just dissatisfaction, because now they're working harder for less less opportunity. You know, there's a lot of negatives that go into it, so you've got to make sure that you understand what how you're incentivizing people, which is a completely different podcast for sure, you know, with that, but you got to make sure that you're doing the right thing. So if you have your flat fee and you're going to increase employee wages, you've got to do something with the other side to equal it all out. Right?
Chris DuBois 18:51
So let's talk hiring a CFO, whether fractional or full time. Is there like a kind of a financial stage that you think is agencies are probably ready to bring on, yeah,
Speaker 1 19:03
I think so, you know, when an agent first, first starts out absolutely not the owner has to actually dig and then figure it out themselves, that, and I say that because they've got to figure out how their company actually works. You know, the accounting side kind of sucks. You know, you might have a bookkeeper to do the paying the bills and doing some of that stuff, but to bring in somebody like a controller or a CFO is complete overkill. And so I would say, once we see that growth, you know, and that growth is starting to really pick up around the $800,000 mark, and then you still don't need one, but you're starting to test yourself, and you're starting to quit. You're starting to actually fill different hats, you know, I mean by hats like now you might wear the production hat, the marketing hat, the sales hat. And you know, all these were hats, right? And so you're starting to give those hats away at the $1 million mark, and at that point, that's when a good controller is important to have. And so it doesn't have to be an in person controller. Can be a virtual controller, save some money on that. And what that, what that person's. Million is owning the financial statements and making sure that all the accounting is done properly, everything is done timely, and you're getting good information so that you can actually make solid decisions. And you're meeting with that controller probably once a month, if it's internally, meeting with them all the time, obviously. But I would say a virtual controller is a great one at that million dollar mark, when you start to get to the $2 million mark, that's when that's, well, actually million, half to $2 million that's when you start to see that a virtual CFO is really, really a big benefit, because at that point you're starting to build that leadership team. You're giving away even more hats. And so now you gotta usually have marketing director, you usually have a, you know, COO, you know, you have all these different, you know, different paths into your, you know your leadership team, and that's where the CFO becomes a big part of that. Because at that point, now we're really diving into, not only you've got the financials all wrapped up because you got that controller, that net CFO, and the controller could be the same person, and so you've got the, maybe the virtual CFO there, and they're providing that insight where they can, you know, now you can look at that forecasting and the projections and and the KPIs, and making sure that, hey, now we've got somebody helping us steer the ship forward. Got everything cleaned up in the back. Now we can, now we can look forward and really see if we can grow this. Because what happens at that point between that two to $5 million mark, that's the black hole stage right, and, and we all know that's the words really tough, because you start growing, but your profits don't, because these people that you're hiring in, they're pretty expensive people, and so you got to be able to manage that really well. And so, you know, that's where the CFO is a really big part of helping you manage that, because you can manage yourself out of business if you have the wrong people in those in those spots. And you never want to do that, obviously. So that's why I say, at that $2 million mark, definitely start looking for it. 3 million, absolutely anything more than 3 million man, if you're if you don't have a CFO in place or virtual CFO, you're probably doing a lot of disservice to your company and taking a lot of unnecessary risks that you'd be taking. Right?
Chris DuBois 21:55
Are there things that you've seen with a so as an agency owner, starts, they should be doing, you know, X, Y and Z, in order to kind of set the company up for success in the long run where, hey, we don't have to, like, redo your books and how you're managing your finances in order to kind of keep you growing your their best practices there,
Speaker 1 22:14
yeah, I'd say best practice just having a solid bookkeeper, accountant in place and with that, you know, And that's early in the earliest stage that could be someone helping out part time. It could be yourself doing it. But the thing there is, you got to be consistent with it. It can't be that, oh, I've not done my books in six months now. Let me catch up. That doesn't help you at all, because the financials and accounting is there to help you make those decisions, and so if you're not consistently looking at them. So I'd say, get in the habit of consistently looking at your stuff. And that's every single week you should be looking at your cash flow. Every single week you should be looking at the next 13 weeks. You should have a nice Excel spreadsheet, a Google sheet, you know, with basically lined up with starting cash inflow, all inflows, that would be revenue, anything that's coming in, any outflows, that's debt that's going out, as well as any expenses at the bottom line, showing your ending cash, and then rinse and repeat the next week, you know, next week starts the beginning, and so forth. And it should go through for 13 weeks. And really, kind of see, you know, hey, what do we expect to come in? You know, how what's coming in here? And then what do we expect going out? You know, do we have our loan payments coming out? Do we have any kind of distributions that we're going to make? Because what happens is, if we, if we get into that really good habit of really managing cash flow, it's amazing, you know what, when you bring in somebody at a higher level, how they can now take that 13 week cash flow and blow it out to three years, or blow it out to five years, or, you know, hey, what's the end story going to look like? Let's see if we can build our company to that $10 million company with that $2.5 million bottom line. You know, that's, that's the, that's the key there. And so I would say, consistently building out that cash flow, but getting somebody in fairly quickly to really kind of make sure you've got somebody that understands the accounting, understands the books, and can manage that for you, makes sense.
Chris DuBois 24:02
So let's talk about risk. How do you like because a lot of our finances really is what lets us accept more risk within our business, right? If we got that cash reserve, we can do some things we might not do if we're still trying to keep the lights on. How are you kind of evaluating investments and different decisions and when, when it comes to growth and just the amount of risk you're willing to accept?
Speaker 1 24:30
Yeah, so it, there's a lot of factors that go into that. So it could be your timeline, timeline, meaning you know how long you're going to be working in this business and what dollar amount you want to get it to. So the narrow that number is, the less risk you're going to take. The wider that is, the more risk you can take. So that's a big thing. If you have multiple partners, that's a big thing too. If you've got one partner less risk, multiple partners more risk. And you think, what do you mean more risk? And it's like, well, because now you got four people making different decisions, you've got to be able to work together. Other, which could be a fatal mistake, and it could eventually tank your company. So you've got to make, make sure that everybody's on the same track there. If you've got, if you got accounts receivable, big risk. If you got reoccurring revenue, it's automatically taken out with no accounts receivable, less risk. And so the risk factor is the big thing there. And if your receivables are giant, if you have, if you, let's say, and what I mean by that is, let's say you've got, you know, a significant amount of revenue coming from one client. And one client could mean it could be like MSN it could be like eight, you know, the NBC network, or whatever. And you got MSNBC, you got that's one client. Even though you got multiple divisions, you still have one client, you can easily lose all of those, you know, with, you know, with, with somebody coming in and making some changes. And so you have to be careful with that. And that's happened to many people where they say, Oh yeah, we're not being worried about and all sudden, you know, they're letting go half their, half their workforce, because they, you know, because if somebody else came in, and the new sheriff came into town, type of thing, and everybody changed roles and so forth. So the risk factors like that are important to understand what they are. And I'm not saying don't have risk like that, because that's silly, but just understand that it is risk, and understand you've got to have that contingency put in place if things happen. And so what I recommend is taking all the different risk factors that you might have, you know, you know, number, you know, everything like that. And it could be, let's just make number of partners. And so it will say, Hey, we've got number of partners. That's just my one, my one column, my risk factor there. And so what happens if one of my partners leave today, and all your partners are together making this decision. So hey, if one of those people leave, what's going to happen? Well, we're going to do we're going to just go ahead and do this. And so we we map it out. What if three partners leave? Well, here's what's going to happen. We'll map it out and pay it. And so then what happens is, five years down the road, one partner leaves. It's not like, emotional because, oh my gosh, I can't believe that person's leaving. Why is she, you know, she was the best person in the world. Now, what are we going to do? It's like, Well, you already mapped it out. Unemotional. We mapped it out. Here's what we all agreed on, boom, we're doing it. And it just takes that emotion out, and it takes that risk, which is a risky thing, having multiple partners, and it lowers that risk. It doesn't remove it, but it lowers it. The same thing with cash. You know, hey, if I've got more than 10% of my money in cash in the bank, that's a risk, because you're not really earning any money on that money. But it's also security, right? So it's, it's making sure that you've got enough money to make those decisions. So what do we do with that extra money? Well, you know, anything over and above that, maybe we sweep that to an investment account that has a, maybe it's a high interest savings account where it's getting 4% on your money, you know, hey, that's, that's a low risk, but that's also, it's put into an account that you can actually get to it without, actually, you know, you know, breaking, you know, breaking everything down to get to it. Or maybe you take that and anything over maybe 15% we move into a Schwab account that's, maybe, has, maybe some, you know, mutual funds, or something really bonds, or a low risk thing where you can actually pull it out, might take a couple days to get it out. You're not penalized by it, but it's actually earning money for you. And so that's taking that risk, you know, having, you know, too much money in your cash to spreading it out and actually earning some money off that money, but not putting it into something like stocks or something like that, you're actually going to just offered accidentally for if the stock market drops. And now stock market drops and you lose a big client same time. Now what do I do? I just amplified my risk. And so I want to make sure that, you want to make sure that, Hey, you look at the different areas there. Those are all buckets, all columns, all the risk factors. And what happens if these things happen? You know, it's basically like a DEF CON chart. You know that if one happens, you know, what do we do? If two happens, what do we do? Three happens, and so forth. But you map it out as a leadership team ahead of time, so there's no emotion when it does happen, right?
Chris DuBois 29:06
That was a, it felt almost like a rant with like, the like you've, you've had this before where you're like, Man, I wish people would do this.
Speaker 1 29:17
I wish I've learned a lot of this just because I made all these mistakes. You know, it's like, you know, it's, you know, heck, 20 some years in business, nothing's perfect. You know, you grow from $0 to, you know, right now we'll probably do about 16, $17 million in revenue. You make mistakes along the way. This doesn't happen. You know, there's been years we've had high growth and no profit. What do we do? You know? What did we do? You know, it's like, what did we do wrong? Well, we relied on emotion a lot of times, and that caused some, you know, bad decisions. So we had to figure out how to, how can we take this emotion now? Because, you know, you know, my partner's not emotional, I'm high emotion. So what you know, how does that work? You know, that's a big dynamic that we got to figure out, right? And so all those things. Come into play. And so it's important to figure it out when it's not happening, you know, and you know, and then deal with it when it does no different than when you get a line of credit. You get a line of credit when you're doing really well, not when the brows is burning down, because you won't get it when that happens. So you get it now. You set it for a couple years, and that gives you that opportunity, so that when you do need it, it's there and available doesn't mean you have to use doesn't mean you have to use it. Just means that it's there. It's an insurance
Chris DuBois 30:25
policy for you, right on just the Yeah, that ability to prepare for making decisions. Poker players are are good at this. Actually, the stock market really good at this, where, if they if they make a bad decision. But if they went back through and, like, with the data that I had, I would make the same decision then, like, you can't beat yourself up afterwards. Like, I've met so many agency owners, like, it's months after something went wrong, and they're like, Yeah, I should have done this. Should have done that. It's like, yeah. But if you had prepared for this and said, like, hey, if this type of situation comes up, here's my process for deciding. It makes it a lot easier to even if it's just to stomach it like you might still make the same mistake, but then you can at least tweak your process, not,
Speaker 1 31:07
yeah, making mistakes because you're going to, it's going to happen. I mean, you know, it's some big mistakes. You have big mistakes in there, and that's just part of an entrepreneur. That's a part of a business owner. Business owner should be willing to make those mistakes in order to learn from them, to grow the company. Cheers.
Chris DuBois 31:25
I mean, even the small stuff. So like last year, I still, I still ran on a cash basis. Yep, I'm like, Man, I need to get into accrual account. Like I'm making enough that I need to use accrual accounting here. And it was just a pain all year. And so, so like, this year I'm already, I'm set, but I didn't listen to myself in tax preparation from last year. And so this year I'm still, like, going to find certain documents and doing all this stuff. And it's like, just learn the lesson. Like, but again, it's the finance piece. And so like, I like seeing the numbers go up. I don't like doing anything else with it. Let me spend it, earn it, spend it. And that's about it. You take
Speaker 1 32:01
those big distributions out of the back. That's kind of how that's not the entrepreneurial
Chris DuBois 32:06
way for the most people.
Speaker 1 32:09
Was key. We did the distributions and did all that negative stuff that you take out, and you zap stuff out and but then once we had that 10% rule, man, it changed. It was like, hey, yeah, we have a million bucks sitting in the bank. That's kind of that was pretty cool. Million dollars sitting in the bank. Sitting and then, you know, we, then we take out, you know, you know, almost a million dollars each at that one point. It was like, That's cool, you know. And it felt and it was not a big deal. It was that was a normal thing. It wasn't like, Oh, I'm gonna kill the company. No, that was normal, you know, maybe, maybe take a salary of $500,000 at that point, or whatever, and you're like, this is kind of cool. That's not a bad thing. You know? That's a good thing, because you got that security in there, and you got to, you got less growth,
Chris DuBois 32:50
yeah, yeah, just the confidence. I think all entrepreneurs, some are feeling like, what? What if this all just goes away tomorrow? When you got that cash in the bank, like, it's it could go away tomorrow, and I have a plan and so, like, exactly, yeah. So as we wind down here, I got two more questions for you. The first one being, what book do you recommend every agency owner should read? Yeah?
Speaker 1 33:16
So books, I would say, selfishly, digital dollars and cents, a book that I wrote that really, kind of talks about all the metrics, and really, it really kind of breaks down what an agency is. You can get it right on Amazon. Highly recommend that that's kind of a selfish thing. How I started my company, though, and I would say the reason why my company has grown the way it has is developing solid processes that are repeatable, meaning that when I started the company, I couldn't be, you know, I couldn't be snow flaky on providing CFO services. I had to be able to put it into processes so that Adam, my partner, could eventually become that person. Then and then Jake, my next partner could eventually become that person. You know, it had to be a repeatable process. And I got that through E Myth revisited. It's a book that I've read over and over again, great book, a lot of great stories in it. And McDonald's is a big one there. You know, you think about that, that's a repeatable process, right? Putting McDonald's up, you're gonna get the same hamburger no matter where. You know that that type of thing, you have to still you get the same shakes that always break down. You know, it's the same repeatable process, though, and that's really, that's really key to really growing any company is having something repeatable so you as a business owner, can actually move out of the business and it not impact anything in the business. And that's when I say, when you become worthless to the business. You're the most valuable to the business. And that's that's really key. And that's what kind of the E Myth is. Is all about talking about that, and then we kind of take one step further with digital dollars and cents, and kind of work through that. And if anybody wants a copy of that, you don't have to go out and Amazon buy just let me know, and I'll be happy to share it with you. That's not, not a big deal.
Chris DuBois 34:54
Awesome. I think I got my signed copy. Is still upstairs, so. Last question is, where can people find you?
Speaker 1 35:03
Oh, it's easy to find me. You know, I'm on Google. I'm on YouTube, anywhere in there. We give away a lot of information for free. We want to get that information out there to really help everybody and, you know, and grow. And we put a lot of videos, a lot of workshops on YouTube. So you can definitely reach out there. Just google my name. Jody grunden, if you want to reach out to me directly, feel free. It's Jay grunden, g r, u n, d e n, at Anders, C P, a.com, so it's a n, d, e r, s, c p, a.com, that is my email address. Feel free to email me. I'd be happy to do a one hour consultation with you to answer any questions. Help. Maybe you know, it doesn't have to be anything related to sales type thing. Can be anything you want, you know, hey, how what are you seeing in business? It could be just some chat. I'm super cool with that. I'd be happy to, happy to sit down as you know, Chris, we've chatted many times, so you know, it's, you know, not, not a big deal. I'm an open book when it comes to that information, so feel free to take advantage of that.
Chris DuBois 36:02
Awesome. Yeah, we'll get that linked up in the show notes as well. So, but awesome. Jody, thanks for joining.
Unknown Speaker 36:07
Yeah, thanks Chris for having me. This has been pretty
Chris DuBois 36:12
fun. That's the show everyone. You can leave a rating and review, or you can do something that benefits. You click the link in the show notes to subscribe to agency forward on sub stack, you'll get weekly content resources and links from around the internet to help you drive your agency forward. You.
Transcribed by https://otter.ai