Who's Really the BOSS? | Evaluating Opportunities with Two Simple Questions

In this episode, Marcus and Rachel discuss two critical questions every business owner should ask when evaluating new opportunities - whether it simplifies their life and increases the value of their business. They dive into practical examples of applying these questions to prospects, software, service lines, and more. Get insights on making decisions that align with your values, increase profitability, and build a business with enduring value.

Chapters

(00:00) - Who's Really The Boss
(01:08) - Podcast Updates and New Recording Home
(03:02) - The Art of Being Quotable in Life and Interviews
(05:32) - Introducing Two Key Questions for Life Opportunities
(20:48) - Evaluation Potential New Clients
(26:51) - Evaluating Software and AI in Business
(36:33) - Exploring New Income Streams and Service Lines
(46:25) - Wrapping Up: Reflecting on Simplification and Value

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Creators & Guests

Host

Marcus Dillon, CPA

Host

Rachel Dillon

What is Who's Really the BOSS??

"Who's Really the BOSS?" highlights the joys and challenges of running a CPA firm with your spouse or family. From hiring and terminating to improving capacity, cash flow, and culture, our conversations cover leadership, operations, and current accounting industry challenges. Our mission is to strengthen families and accounting firms by helping listeners avoid the mistakes we have made, so they can lead and live happily ever after.

There may be errors in spelling, grammar, and accuracy in this machine-generated transcript

Rachel Dillon: Hi, I'm Rachel Dillon, and together with my husband, Marcus Dillon, we lead Who's Really the Boss podcast, where we highlight the joys and challenges of running a business with your spouse or family. Our mission is to strengthen families and businesses by helping listeners avoid the mistakes we have made so they can lead and live happily ever after. Welcome back [00:00:30] to Who's Really the Boss podcast.

Marcus Dillon: Hey, thanks for having me back.

Rachel Dillon: I think maybe we're just talking about anchorman today. Is that correct?

Marcus Dillon: Yeah. Um, so we'll get into that, right? Anchorman, if you're familiar with Will Ferrell and kind of the comedy, uh, there's a lot of quotable lines in that, and I'm moronic and, uh, so non, uh, mature, immature, uh, that I quote those a lot. [00:01:00] So, um, if you just want to know what it's like living with me. There you go. Um, but, yeah, we'll get into anchorman. Did you want to say anything? Like, obviously this is a second recording, uh, in our home, uh, in the studio. So a little bit of a switch there. Um, do you want to say anything about the new home for the podcast and who we're who we're with?

Rachel Dillon: Yeah. So now our recording, a lot of changes have happened. So we posted about that on social media. Um, just to let [00:01:30] people know that they were going to be some changes. So definitely a big change is that episodes will release every other week. So the past two years, I don't know how long we've been doing. Who's really the boss? Um, maybe we're in season three, so maybe we finished two years and are starting our third year of the podcast, but we used to record or release an episode every Monday, and so now we're going to be doing every other week. We are also now using [00:02:00] earmark, so they are helping us with all of our recording, production, release. So a lot of functions of the podcast, but also these episodes should be available for CPE. So that's awesome too. So through earmark you can get CPE for free for listening to podcasts. And so excited about that opportunity for people that they don't just have to struggle through listening to us for nothing, that they actually get [00:02:30] some credit for making it through each episode.

Marcus Dillon: Yeah. So that's why the episode length has now increased, uh, for CPE. And if you don't want to listen to me ramble on for 45 minutes, 50 minutes, then you can always just listen to it a little bit faster and probably guess the answers to the question still. Anyway. So, uh. But yeah, good luck, uh, getting some credit for us. Talk about anchorman and whatever else is going on at DBA or in life. Uh, we figure that's an [00:03:00] easy win for all of our listeners.

Rachel Dillon: So recently, someone told you, like an interviewer or a blogger or somebody who was interviewing you for something, told you that they were excited to interview you because you are so quotable and you really are. Like so many times when we're recording, I'm like, oh, that's really good. And that's hard for me to say because, right, we're we're married and I like to give you a hard time, and it's hard for me to be so complimentary of you. Um, but [00:03:30] she did say that you're so quotable. And I responded with, so as Michael Scott, just to kind of level the field, just to bring you down just one notch.

Marcus Dillon: Yeah. I think the, you know, you were waiting to deliver that because you knew I'd say, um, something about it as soon as I got off the call. Because, you know, when someone gives you a compliment, you want to make sure that the other side, especially your partner in life, uh, acknowledges that because maybe you just got [00:04:00] yelled at for, um, not washing your dish or leaving something undone. Um, so, you know, that's that's life, but not listening.

Rachel Dillon: Maybe.

Marcus Dillon: Yeah, a lot of that. So, yeah, as soon as the call was up, I was like, did you hear that? You know, did you hear what she said? And sometimes you do overhear or listen and sometimes you just zone out. You may have AirPods on or anything, but in this instance you were listening. And so you came back with the quip, and [00:04:30] you're pretty quick witted. Um, so I wouldn't think anything else. But between Michael Scott, between Will Ferrell movies, uh, you know, there's a lot of quotes in our house, and we have to be careful of what we use on a daily basis in certain situations and settings. And now even our kids, our daughters, both watch all of the same stuff that we grew up with, um, have a lot of the same humor built into their life, uh, that [00:05:00] we do. And I don't know that that's a good thing. You know, I think whenever your kids rewatch The Office for like, the 10th or 13th time, who knows? At this point, we're probably is what awful parent the at the end of the day is I.

Rachel Dillon: Think we would have, um, kept them um, expressed some things in our younger days but yeah valuable appreciate a lot on Ummar we is it like to joke beyond it to laugh and f you we can, you know, ice out a. Movie quote. We [00:05:30] do. All of us in the house. Um, but recently you told me. Okay, I've got it. Two questions that we should be asking every time there's a new opportunity. And so before we share those two questions, um, I just like to give you such a hard time because every time you're like, I've got it. And it's like the solution to all the world's problems, right? Like, every time it's that big of an idea that you're sharing with me. [00:06:00] And so I just threw out 60% of the time. It works every time. So when you say you've got like the answers to everything, it just reminded me of anchorman. What part of anchorman does that?

Marcus Dillon: Oh, man, it's Brian Fantana. Whenever he's, uh, showing the sex panther Cologne and, uh, you know, it's just 60% of the time. It works every time. So it's just one of those things. You hang out with us and you're going to get all kind of nonsense, so.

Rachel Dillon: All right, well, let's go for it. So when new opportunities present [00:06:30] themselves. So, for example, what type of opportunities were you thinking about when you came up with these two mind blowing questions?

Marcus Dillon: Oh, these questions would pertain to anything in life. So that new client, that new team member, that new job opportunity, that, um, you know, new speaking, speaking gig or, you know, additional opportunity that you may see in the market. Um, I think that these two questions can be asked, and [00:07:00] I've even tested them on clients. I'm sure that I'm sure that the person he's listening and I'm sure he's like, I knew it. And, uh, one of those is like, I think some of the stuff that I say sticks with certain people, and then it just rolls off with other people. The part of the people it rolls off with and never comes back is like you and our daughters. Right? So but some people actually take to heart some of those quotable moments, uh, that I have. And I have to be very careful, [00:07:30] uh, on what I say sometimes to people that I have influence with. And so, um, but, yeah, 60% of the time this should work every time. Uh, so these questions are really that good.

Rachel Dillon: All right. Go for it. What are the two questions when a new opportunity presents itself.

Marcus Dillon: Yeah. So the first one is going to be does this make my life easier. And I think that question can pertain to anything right. In life. In business. Does this make my life [00:08:00] easier. And if you ask that question, it doesn't come from a place of we were called to live easy lives, right? So it's one of those where does this add so much complexity or does this make my life draining? Does this add confusion to what my daily goals should be? I think if you boil it all down to and ask yourself any opportunity that comes up, does this make my life easier? That's the first question. And [00:08:30] so whenever you heard that, um, did you have any thoughts? Because that question alone is good. But I think as part of the two questions, it's also important because we could just go through life living very easy lives and then be broke, be on the street. And so I think those are the pieces where these two questions together. But did you have any thoughts on just that question alone?

Rachel Dillon: Um, yes, because potentially I might even [00:09:00] word it differently. Uh, just me personally. My think about it differently of does this simplify something in my life rather than does this make my life easier? I think it's easy to get. I think it's very easy to fall into a trap of thinking, if I just get to this next thing, if I just have this, if I could just do this, if I made this amount of money or moved into this house or married this person, my life would be so much easier. So I think [00:09:30] always like looking so forward to the future and forgetting like what you're doing now or what's in the present. Um, also, trying to do things like with an easy button typically doesn't yield the best results. So probably the first time you said it, I was probably rolling my eyes at you thinking like, okay, that either isn't the right question or the not not the right way to say it. Because if it makes it easier, it doesn't necessarily [00:10:00] yield a great result long term. Usually it's a short term gain when something makes your life easier, but long term it's usually not the best choice to make.

Marcus Dillon: So do we need to change that question? Because I haven't used it on that many people. So if I need to change that question and, um, you, you added to it, does this make my life simpler or does this simplify life? I think that's. The other way to ask it. Um, [00:10:30] when I said easier, that's kind of where my mindset was, is does this make my day to day easier, or does this add just so much complexity that it's not worth it to me anymore?

Rachel Dillon: Yeah. So go with the second question.

Marcus Dillon: Yeah. And so this one's aimed at business owners who we spend a lot of time with, whether they own a professional service business, a CPA firm, whatever that could be. This is for the CPA. This is for the business owners. Right. [00:11:00] The second question is does this increase the value of my business. And so when you've got the two questions together, does this make my life easier. And we'll go ahead and scratch that and say does this simplify my life. Um, so does this simplify my life? And does this increase the value of my business. So those are the two questions that I would test and answer in every opportunity that [00:11:30] exists. And um, we'll kind of go through there. So that second question anything to change there before like we start using these across the board.

Rachel Dillon: No, I like that one. I'll let you keep it I'll let you keep it. So I think really what what I started thinking about when you, you know, because you were excited. Right. You have something that you're like, this is going to be so much better if I can measure new opportunities based on the answers to these [00:12:00] questions. And I think what we used to potentially ask, and I think it's common, but I don't know that it's necessarily the right question to ask, does this make me more profitable or even maybe more shortsighted? Does this make me more money? Like, is this income? You know, I think that's very easy, being young and being like a brand new business owner that's really at the forefront of a lot of things. When [00:12:30] you've potentially left, like a W-2 job and you are just starting out, your question might be at first, does this make me money? Full stop? And then yes, go in the direction of what that is. Or, you know, maybe after a year or two, does that does this make me does this opportunity make me more profitable. Um, again, maybe at that point it's full stop. Still trying to become profitable at that point. But where we are in [00:13:00] life with a little maturity, a few years of the business, um, I think coming up on 13. And so does this simplify life and does this increase the value of the business? Are the better questions to ask there.

Marcus Dillon: All right. Well, I'll give you a little bit of credit on that. Whenever I mention those to others.

Rachel Dillon: You know I know you.

Marcus Dillon: I know, I know. So, um, you kind of mentioned it. Does this make me more profitable? And the [00:13:30] situation could easily be you can make you can take advantage of an opportunity just because it brings in more cash flow, just because it increases, uh, profitability in the short term. But you may be forgoing long term value in your business. Uh, a great example of this. We just we just talked about the team member that, um, resigned, effective immediately. If I wanted to add bottom line profit to DBA, I would have just rolled up my sleeves and done [00:14:00] that job. I would have maybe laid off other people that aren't fully utilized and done their job, and that profit would hit the bottom line, and that resulting service would have decreased because I can't do it all and I'm not, um, equipped to do it all like others on our team can, but it would have added profitability in the interim, while the people were still happy as clients until they knew that it was all me screwing stuff up on the other side of it. So [00:14:30] that being said, we also come into contact with clients who may be thinking, I'm not going to hire that person because of growth. I'm just going to work more. And in that situation, what happens is you can't scale. Your business revolves around you even more so, and you can't scale, which then decreases the value of your business. Whenever you go to have a succession event or it burns you out that much faster. [00:15:00] And so I think that's the piece where in my mind it was at one time three questions, right? It was does this simplify my life? Does this make my business more valuable and does this increase profit. But I think that increased profit is kind of a contra account sometimes, or a contra question sometimes, because it could go directly in conflict with the other two. Yeah.

Rachel Dillon: For. Sure. I know certainly in the accounting [00:15:30] industry. Right. Certainly in accounting, if the owner can have the highest production in the firm, they're going to be more profitable. However, the value by an outsider wanting to purchase the business doesn't necessarily want to work seven days a week and, you know, hundreds of hours certain times of year. Uh, so they're going to have to hire help. So the amount they're willing to pay [00:16:00] you for that book of business is different. If it's an outsider who's not going to do much production or any at all, they certainly don't see the value, because now they're realizing they're going to have to hire someone with a lot of technical experience and knowledge, but they're probably going to have to hire like three someones, because if those people aren't owners, they're not willing to put in that same amount of time that maybe an owner did. So it really just [00:16:30] starts limiting options of what you can do. As far as succession events, people in your firm that see you working like that. So say you do have 2 or 3 other team members working with you, but they see you in the way that you work. They're not going to raise their hand and say, I want to take over this business, or I want to pay you for this business because they see what it's done to your life, potentially only at certain times of the year. [00:17:00] But there's so there's fewer people now that are willing to work that way. So the more time that passes, the more flexibility that we have, from remote environments to flexible working schedules to technology, doing things and not requiring as many, um, human inputs, people just don't have to. I mean, you can go be an influencer. Um, you don't you don't have to work like that and make a lot more money. So it's not the same as it [00:17:30] used to be. Which I thinks I that asking only question does this make me more profitable? We have not the only question you should be asking from as a business owner.

Marcus Dillon: Yeah, and I think, I think the word value probably in today's market, um, it, it goes back to profitability is a part of it. Right. You have to be profitable to be the they do. So it's kind of inherent in that view of the human question. Be um, valuable also means is and we like scalable. Is [00:18:00] it stable. Is it going to live any time any one person. And if throw were to replace the the valuable question with only the profit question, you may build a business where you have to go with the business as an employee. And most of the people that I know that will sell their business or their firm in the future are hesitant to go just be an employee or such a [00:18:30] partial owner in the next business. Um, because they started for a reason and they have that entrepreneurial spirit. So whenever we speak to value and I've had this conversation with non CPA firm clients, uh, owners of businesses, and you look at the value of even this business and maybe you have scaled, maybe you have made this business as profitable as it needs to be in your whole portfolio [00:19:00] of businesses. And so I know we come into this with DBA. Like, we could continue to improve our house and never get that back as far as resale value, if you're beyond the nicest house in the neighborhood. And so I think whenever you look at your business as an asset in your portfolio, maybe there's a bigger ROI outside of your business, maybe there's an opportunity to hedge. And I think that also kind of weaves into that value question. And maybe [00:19:30] it's also the simplify life, because if you can maximize value of your CPA firm, let's say, and you've simplified your life where you don't, you don't work in that firm or you don't work fully in that firm, why would you do things to go back in it just to get a few more dollars of profit? And why wouldn't you just maintain what you've built? Because it's operating smoothly. Probably better without you in it on a on a daily or so [00:20:00] heavy basis.

Rachel Dillon: Yeah, absolutely. And of course, this too takes into account, like our values and how we like to spend our time, live our lives. So spending time with our family, with friends, um, spending time outside of the business, doing other things, serving in the community, other things that we do, uh, I don't know, laying on the couch and doing nothing. All of those things also come into this where the business isn't [00:20:30] both like our livelihood and our form of entertainment. So also, you know, different there. So, you know, maybe maybe these questions don't fit every application. Um, but I do want to test you on some specific things. With these questions. So let's go. So when evaluating the opportunity let's say it's a new client or a prospect. How would you use those questions if evaluating [00:21:00] a new prospect.

Marcus Dillon: Yeah. So great example. Um prospect comes in if you're already removed or you like the balance of your life, or maybe if you don't like the balance of your life, you're probably not the one that needs to be working on that client or that prospect. So if that prospect is coming to the business to only work with you, that's probably not going to make your life more simple or simplify your life. And it's probably not going to increase your value of your business at the end of the day. [00:21:30] So we would only bring on prospects to clients if it was going to be served by a team approach, right. Being able to be delegated to where any one person, including the owner, isn't the full service provider for that client. Is the dollar value of the services provided profitable enough? Right. We've we've added that in they have to be profitable services. And is it a long [00:22:00] term engagement or opportunity that adds value to the business. It can't be a one and done. And I think we saw this with, um, something as simple as boy reporting, um, this kind of came to a head. A lot of CPAs were asking, do I do it, do I not? And it's just if you ask these two questions, is it going to simplify your life or is it going to make your business more valuable? Boy is not going to say yes to either of those questions. And so even not preparing, boy, we've [00:22:30] had to help clients identify all their entities to go back to their attorney that set up some of those entities or not. And then it's such a commodity of a service, and it's a one time service at that. So it's got zero value for the future owner of your business, or you as the owner of your business beyond this year. And so for that, it's an easy answer. Like, boy, that prospect who wants a one and done it's going to be easy. No on both sides.

Rachel Dillon: Yeah [00:23:00] that would for us in DBA that would really complicate life because the capacity of our team to do that, we wouldn't be able to plan appropriately. We wouldn't know how many people are going to actually take us up on that offer and get that service done by our team, but then it's not a repeatable service. So then if we staffed up or moved around work so people could do that and then it's done and then we have to go [00:23:30] back. So that definitely. And while that might only be one year or still like that's definitely not making um, that's not simplifying the business. I think in that instance too, talking about prospects, I know in our industry, we want to help everyone and I hope everyone can hear me say, we still do my grandma's tax return. We still do your parents tax return, my sister's tax return. So don't hear me when I say but when [00:24:00] other unrelated clients who are very nice. And maybe you do have even just an, um, acquaintance relationship with. And they just want a tax return and they want you to do it because they trust you to do it, and they don't know who else will do it for us. That will not simplify our life.

Rachel Dillon: Again, the annual nature of that tax return and the deadline that is in place, we have to change so many things within [00:24:30] our business to get that done, that it doesn't make sense to say yes to each of those. Um, again, that might increase the value a little bit, but even a lot of times I hear people say, like the little old ladies that they're doing the tax returns for, it's not really increasing the value of your business because those aren't guaranteed. Like, we don't know how much longer those are going to be clients or projects within the firm. And so all the way to something [00:25:00] super complex coming in, like you mentioned, that only the owner or only one team member is going to be able to work on what happens when that person leaves and can no longer work on that. And so those are, I think, definitely when we're looking at prospects, why we've identified ideal clients, why certain people speak to the prospects that call or send messages through the website. And so, um, I [00:25:30] just think that's really important when it comes to thinking about prospects, because in the beginning of a business, it's very easy to say yes to everybody.

Marcus Dillon: Yeah. The last client block sale we had in 2023 had some of our, um, friends in it, right? So like people, we had continued to do their annual tax return for 13 years, and they believed in us in the beginning. And our business just changed over the 13 year life. And that's [00:26:00] where we no longer serve that client. And I definitely did not serve that client the best on our team or in the market. Um, me doing a tax return is probably not the best return on investment for one of our friends. And all of that just goes to you kind of have to know who you are and where you want to go. And when you look at, you know, the service offerings or the individual clients that you work with, I think these two [00:26:30] questions are easy to, to ask. Um, not ask the client. Uh, maybe you ask yourself and maybe if you have a accountability partner in the business or at home, who knows that, um, maybe they can also help you answer these questions. Does it simplify life and does it add value to the business?

Rachel Dillon: Okay, this is a good one. Software. How can you apply these two questions when evaluating software?

Marcus Dillon: Yeah. So, uh, the season [00:27:00] that we're in with software right now, um, we are evaluating software that we already use and how can we use the software that is already a part of our tech stack better and more fully, and the remaining pieces of that tech stack that we may use for only a handful of clients or a handful of processes that could easily be done by another piece of software in that stack, we are removing those from the stack and removing that subscription fee [00:27:30] that that monthly cost. So you ask those questions like, is this piece of software making my life simpler? Am I able to go from 3 or 4 pieces of software down to one? Now that one piece of software may not do everything the same way that each one of those four does, but does it do it good enough? Right? And so does it get the job done? I think those are the pieces that you have to ask yourself is it simplifying life? Is it simplifying the number of logins that you may have, [00:28:00] or the number of subscriptions you may have. And then the other piece is if you're cutting software that's hitting the bottom line, like those dollar amounts are increasing your EBITDA, which then increases your valuation whenever you go to sell. If that's your plan. So why wouldn't you evaluate software the same way with these two questions? What's the what's the simplest path or what's what's making my life simple? And is it adding value to the business? [00:28:30]

Rachel Dillon: Yeah, and I wasn't calling you out on us cutting out or changing softwares or anything like that. Um, I didn't mean to. Anyway, that wasn't my intent. My thought really. Where my mind went was, you know, when we go to conferences or, my goodness, we get emails from every vendor possible. Um, is really looking at that and kind of believing a lie that this is going to make my life easier. [00:29:00] Like if I just have this piece of software, this is the missing piece and this is going to solve all my problems. And so I think really evaluating that, does this make my life simpler. What does onboarding look like. You know, what does implementation of that. What does the transition or the conversion look like from whatever you're using to that new thing? What is the ongoing support down the road, and will my team or future team be able to use this? [00:29:30] This is not for you know, what we try to stay away from is buying software that's only going to be used by one person. So if there's a need for something like we have to have this. Yes. And it will make that person's life simpler and add value to the business then yes for sure. But looking at the software and thinking, if it's so complex that only one person is ever going to be able to use this, and everybody else is going to always have to go to that one person or calling, [00:30:00] you know, the support or the chat all the time. Maybe that's not the best solution.

Marcus Dillon: Yeah, I think two examples there. We had, um, about 2 or 3 different reporting softwares that were layered on to QuickBooks after the accounting was done. Right. And we would produce really good monthly or quarterly looking reports that we were happy with. Like just like we used to want a high five on that awesome tax return we did. We wanted that same high five. And we presented this awesome looking [00:30:30] quarterly report to these clients. The clients didn't look at them, you know, they could care less like it was their data. The first 1 or 2 times they thought it was neat and they would look at it. But after that they they didn't care. And so where they valued our time more was in conversations and meetings. And instead of spending our time manipulating software, trying to build these reports and some of that now can be automated after the templates set up, the client expressed like, hey, instead [00:31:00] of just sending me this report with 15 minutes of commentary, can we just talk for 15 minutes? Like that's how I would much rather use your time. And so we listen to it and we kind of remove some of those reports. Um, and that software that's that's expensive and hard to learn sometimes and it's constantly updating. So we're constantly having to learn it. So that was an example of, you know, asking this early on. Um, we still provide additional reporting for clients that value it, but if they don't value it like why [00:31:30] do it? Um, it's kind of the, the piece, the other part is talked about a lot. Um, you know, I and so a lot of people talk about AI right now and, um, you know, people are so much more skilled in AI and everything that goes into all the different learning models and how fast that is shaping up to be.

Marcus Dillon: I am not on the forefront of use of AI. Um, I am a not [00:32:00] an early adopter, but I'm a I'm a adopter somewhere in that cycle. I'm not late. And the reason why is I just don't have enough time in the day, or I don't enjoy investigating the use the use of AI in multiple different ways. That doesn't give me joy. That doesn't simplify my life. So I'm going to wait till somebody else figures it out and they can even charge me a fee once they figured it out to use it to the best of my ability. But I'm not going to go do that. Like my time is best spent with our team, our family, our clients. Like [00:32:30] just not playing behind the scenes, trying to write something that I have no idea what I'm doing now. We do use AI today in our firm, but it's very elementary use, probably compared to the very early adopters. Like we'll use it to write notes and emails and memos and produce documents and things like that. And I know other people are using AI in different ways, and that's great for them. I've just got to let a little bit of time go by [00:33:00] before I fully invest, and fully want to learn how I can use this in my daily life or my business. I'm going to go let others make mistakes before me, and then I'm going to get the ROI from that person's mistakes, as opposed to spending my time making mistakes that only maybe I, you know, see a value in.

Rachel Dillon: Yeah. And then going back to that reporting software, I think we were talking about it when we were in Vegas at QuickBooks connect with Leslie. She [00:33:30] was in a session on reporting. And what did they recommend that most clients are happy with you using?

Marcus Dillon: So they had recommended well, they said the statistic was 80% of the time Excel is used. And that's in all forms of F, you know, F and A and levels of controller CFO that um, regardless of the size of the organization, Excel is still used 80% of the time. And I think that [00:34:00] the software companies, uh, want you to think differently. Right. And so it's how quick can you knock that out? How quick can you go through that with your client and then automate it on the back end? Maybe it is fillable or you can, you know, clean it up after you've created it. But, you know, if your client wants a scorecard on how they're doing and you have to pull in data from different places, is it much easier to make that data map in and go, you know, kind of build out this Excel file that's a little bit more robust than spending [00:34:30] hundreds of dollars on a piece of software that you only use one time for a client.

Rachel Dillon: And if I remember correctly, because it was a little while back, um, but the conversation was that a lot of times, small business owners, they're not looking for anything real complex. They just want you to simplify some answers to questions that they have. Show them in the most simplified way, like what is the easiest way you can show? They're not asking for some. Some are. Some [00:35:00] are definitely looking for that. Some can figure out the simple and have time to do the simple themselves. Based on the data. You know that our team prepares others want. They want the shiny like they want the big, the fancy, the very detailed. But it just reminded me of this thinking about does this simplify my life? So how can we take the information we're sharing and advising clients on and like put it into [00:35:30] its most simplistic form? That's going to be what they remember. That's going to be what they actually use.

Marcus Dillon: Yeah, I would say a big part of advisory for us is our clients pay us to dumb it down, and they want us to sift through the complexities of running a business, the accounting that goes with and simplify things enough to where they can make decisions in their business. And you don't need expensive pieces of software. You don't need [00:36:00] to flex your brain muscles, if you will, or all the credentials that are at the end of your name. Um, you just need to be present with your client and meet them where they're at. So that goes hand in hand with, uh, does this make my life more simple? And does this increase the value of my business? Because, you know, happier clients will make your business more valuable because they'll stick around.

Rachel Dillon: All right. And then this next one that I want [00:36:30] to ask you about might be the hardest one that I throw at you. So adding different either income streams or service lines. How do these questions, how do you use these questions when evaluating that.

Marcus Dillon: So different income or income streams or service lines. Um, you know, if you go back to that, viewing your business as a portfolio and hedging yourself against a downturn in the industry that you work in, that's always [00:37:00] a good thing to do. Um, you know, we have seen so many people in our lifetime that have not hedged themselves. And then the corporation, they work for turns and goes a different way. And the value of their retirement and everything they've worked for went south. So it's always good to hedge. Whenever you look at service lines. I think part of it is it may not be simplicity today, but is it simplicity on the other side? And um, [00:37:30] with us, you know, tax, take tax for example, and you have a complex tax offering. Maybe you do something that's so industry specific. Let's just say it's, uh, transfer pricing. And I'm not the guy to talk about transfer pricing. If you're listening to this, you know what transfer pricing is, then you're two steps ahead of me. But maybe you do something so technical and specific, such as transfer pricing, that only a small subset of the population even needs. Right. [00:38:00] Um, and are you called to serve them? We are not that that was way too complex and we would never investigate that. But could we come up with a service that 90% of all small businesses need? And so is that basic accounting, payroll, tax services and advisory.

Marcus Dillon: And on the other side of that, is it so simple that you can that you can develop a pitch or whatever to say why 90% of all small businesses need these services. And so [00:38:30] the fact that you're kind of condensing the amount of complexity down and making it more simple, you're not maybe able to do that today. But if you've got a goal to do that a year from now, three years from now, whatever that looks like, then I would say that answers the first question about simplicity, and then it also answers the question about value. Because if you take the on the one hand, the transfer pricing, super technical tax, you're always going to be looking for that next [00:39:00] technical tax person to hire or to help you do those calculations for that prospective client base that you've identified. If you go the simpler route, you probably have a lot more available team members in a pool of applicants that can help you serve 90% of small businesses. And as such, you're not going to probably pay as high a wages as you would to that technical tax person. So you're probably [00:39:30] going to have more inherent profit, which leads to more value at the end of the day.

Rachel Dillon: How would you I'm going to make you squirm like I want to. I want to see you answer this. What would you say about adding, like, financial management services to an accounting firm?

Marcus Dillon: Uh, so like Ria and wealth management? Yeah, yeah. It's great. I mean, a lot of firms are doing this or investigating ways to do it. We've thought about it. Um, you have to [00:40:00] look at who you want to serve long term. So do you want to serve, uh, the masses? Do you want to have a roster full of individual clients and business owners that you can easily offer these ancillary services as kind of a, uh, an addition to your core service offering? And I see that where it works the best, right, where you've got a pool of available customers from the very beginning. Whenever you start this right. For us, we've [00:40:30] evaluated this, um, where it doesn't really align with making our life simpler because I don't want to run it. So I'd have to find somebody that does want to do wealth management or acquire wealth management piece of the firm, a piece of another firm or a wealth manager, which those guys are really expensive right now because private equity has has driven up the price and rightly so. You know, I think it's it's a valuable, uh, business. But we also work with a very small number [00:41:00] of family, family offices. And typically our families already have a very solid financial advisor as part of their team.

Marcus Dillon: So we wouldn't want to conflict with that. Um, maybe we would partner with one of those financial advisors if the opportunity came, or we would become a part of another family office that did those services. So I'm not discounting that altogether. But whenever I think through, if I'm if DBA is going to add wealth management. Does that make my life more simplistic? [00:41:30] Probably not in the beginning, because we would maybe have to go out and acquire a different type of client. And those clients that are wealth management clients probably don't need the core service offerings of DBA if they're just wealthy, retired individuals, or they've sold their business and now have this wealth that is sitting there. So that wouldn't make my life simpler. It may add value, but that's why you have to ask both questions. And how much are [00:42:00] you going to go down that path? How long are you going to give yourself before it's evaluated as, hey, this isn't the experiment that we need to continue to pursue. Um, so that's the piece where wealth management, I don't know if I squirmed. Um, I like wealth management. I like what it does, but I don't like the thought of me learning a wealth management business.

Rachel Dillon: I think it's I think it's just relevant right now. I think a lot of people are trying to identify ways to increase the [00:42:30] value of their business. And I think that definitely answers yes. Yes, that would increase the value of your business. But until until DBA or until you and I can figure out how to simplify that process of adding something like that into the business or doing something like that in conjunction with the business, until we can see how to simplify that process, then it's it's a no for now. And so [00:43:00] it's not that it's a no forever, but for right now it definitely would not make our life easier. Um, I don't think it would make our life easier in the short term. And I think even in the long term, it's it doesn't necessarily simplify things. Um, unless you have right partners, right management. Right. A lot of factors that have to go into that. So that's, that's the only thing is that it's not that it's never been discussed. And it's not that it's a no. It's just that it doesn't answer yes to both. And [00:43:30] so potentially it could answer yes to does this make me more money. Does this make me more profitable? Does this make the business more valuable? But at this point where we are, it also needs to simplify or be fairly simplistic to implement, um, and then maintain.

Marcus Dillon: And that's why this works 60% of the time, right?

Rachel Dillon: 60% of the time it works every time. That's right. Yeah.

Marcus Dillon: That's right. Because, you know, DBA is to [00:44:00] the point 13 years in where we kind of know where we're where we're good, uh, what we're skilled at as far as a team and a lot of our clients are very similar. They're mature businesses that we're able to walk alongside those owners. And if we ask these questions of our clients who are businesses or our friends who run CPA firms, a lot of them are mature and have been through life, and so they know what they should be doing. They know that they should be asking themselves this question [00:44:30] like, does this make simplicity or does it make complexity? And if it's going to make complexity, how long and am I okay with that? And so like those are the questions that you would have to ask. And hopefully every decision that is made is made with the hope that it makes your business more valuable. Um, I think you go back to that boy example, and that's a great example, because spending the 2024 year figuring [00:45:00] out boy for $99 in engagement. One time isn't going to make your business any more valuable in 2025 and beyond. And no, no future owner is going to pay you for the services that you provided in 2024 that don't have continued life in the future. And so if you're okay spending your available capacity doing that in [00:45:30] 2024, then that's fine. Like that's an answer you've chosen to go after. But if you're all about simplifying your life and making your portfolio of assets more valuable than these questions could definitely help at least 60% of the time.

Rachel Dillon: And definitely shed light on okay, what are the other alternatives? If I am just looking for more income, more revenue, whatever, what are the other alternatives that hit [00:46:00] these questions? Better than maybe the initial thought? So maybe something has sparked the desire to do something different. Um, and then it's just taking one step to evaluate. Is it going to make my life more simplified? Is it going to increase the value? And if it's not, what else could I do? What are the other opportunities that exist?

Marcus Dillon: Yeah, no it's been a good, good conversation. So yeah.

Rachel Dillon: Absolutely. Thanks for being, uh, open [00:46:30] and transparent, not deflecting any of the questions. It was great. I'll talk to you on the next.

Marcus Dillon: Thanks.

Rachel Dillon: Thanks for hanging with us to the end of another episode. Leave us a review with your thoughts, comments, and feedback on Apple Podcasts or Spotify. Be sure to subscribe to our podcast so you don't miss any future episodes. Join us again next week for another great conversation.