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This is your destination for feeling empowered in building your business.
These are the real, raw stories of entrepreneurs and business owners who have built their businesses through the messy middle of $1-20 Million, hosted by serial entrepreneur Matt Tait.
Matt knows what it’s like to scale past the first million, and on this show he’ll be bringing on other serial entrepreneurs and business owners who have been there, done that (or, are currently in it) to share what’s worked, what hasn’t, and what’s next.
Joe Woodard [00:00:00]:
If you own a practice, your job is to lead teams and manage your business. It is not to produce your product. That mindset will be everything.
Matt Tait [00:00:12]:
Hi, I'm Matt Tait, Founder of Decimal and host of After the First Million podcast. And like you, I've taken the leap not just to start a business, but to scale and grow it. I've hustled from zero to that first million, and now I'm building for the next 50. I know firsthand what the messy middle looks like. And we need more than just numbers. We need strategy, we need community, and we need real conversations about what growth takes. In our line of work, scaling beyond a million means going beyond the spreadsheet. This is where you learn how to grow.
Matt Tait [00:00:48]:
This is After the First Million. All right, welcome to today's episode of After the First Million. I'm your host, Matt Tait, CEO of Decimal. I couldn't be more excited for today's guest, Joe Woodard. For those of you that don't know Joe, and I think pretty much everybody does, he is the CEO of Woodard. He is also the host of Scaling New Heights, and he's an author, a speaker, and I have to tell you, from personal experience, an all around great guy. Joe, thanks for joining.
Joe Woodard [00:01:14]:
It's always good to be with you, Matt.
Matt Tait [00:01:17]:
Well, I appreciate you popping on because this season of After the First Million, we're really focusing on helping bookkeeping and accounting firms scale and get to that after the first million. And I would say even start with the after the first million mindset. And I know that that is also, in a lot of ways, a big focus of your life, of all of your jobs, of all of your companies, of everything that you do. But before we kind of dive into that, tell me a little bit, give me a little bit more background on you.
Joe Woodard [00:01:49]:
Yes. So the quick answer is my entire career is about empowering small business advisors, or just business advisors of all kinds. And we do it so they can then enrich their business clients. We do it through education, coaching, community resources, and consulting. We host the nation's largest accounting technology showcase every June in Orlando called Scaling New Heights. Big gathering of accountant, CPAs and bookkeepers. And we have a membership organization where we coach firms. And I came into all of this out of the practitioner space.
Joe Woodard [00:02:22]:
I was a practitioner who was very community minded. Had a little side project of maybe doing some training and hosting a summit with my peers. And then that became so large that it overtook my practitioner life. And then eventually I. I sold off the practice in order to just focus on empowering accountants. That's my story.
Matt Tait [00:02:45]:
Well, and I love that because so, so many people that are out there as advisors and helpers to accountants haven't really put the hat on of actually doing it, but you have.
Joe Woodard [00:02:57]:
Walk a mile in their shoes, you'll see it a whole, whole new level.
Matt Tait [00:03:01]:
I want to kind of start at the beginning. When you think about somebody that is starting or they're running an accounting firm and they want to take on that after the first million mindset that hey, I want to scale or I want to have a firm that isn't so hard, what are some of the foundational choices that you think they can make that determine long term success and happiness?
Joe Woodard [00:03:23]:
You've got a starting place that actually has a couple of different launch points and it's not quite chicken and egg as much as it is. You need all the ingredients if you're going to get it solved right. The combination is the client, the service, the price. You put those three ingredients in at the starting place, you define them and, and you engineer to them and you will set yourself up to get that to that million. So I'm just going to break them down very quickly here. Everybody loves to say I'm going to get the ideal price, but without the service or the client, it'll never happen. And then they say, well, I'd really like to have these transformative services and make a difference and enrich business. But without the right client, there's nobody to receive that service.
Joe Woodard [00:04:07]:
So I'm going to start with the most important one to start with. That's the right client. If you do not have a defined client profile, and I don't just mean by niche bigger than that, I mean what's the minimum sized company we're going to take? We only take companies maybe of a certain employee count, certain complexity, create that profile of the kind of businesses you know that intersect your skill sets and your vision and then think about what's the raw material of who I could make better, better of a kind of client where I can not just be a utility for them, but increase their worth and their wealth. And if you think in those terms, plus also just the enjoyment factor. I enjoy working with wholesale manufacturing, I don't enjoy working that much with lawyers. Some people are just the opposite. But don't overweigh the joy factor because there has to be a business case for all your joys. This is a business, not a hobby.
Joe Woodard [00:05:02]:
But as long as there's an intersection of your joy in the business case, of course, infuse that in and then of course, look at your addressable market, your networking sources, take all of those things in combination. And then once you've defined the ideal client, don't think about services in a vacuum. Think about what kind of services does this specific profile of client need. So if I'm looking at wholesale manufacturing and distribution, my services are going to be focused much more on procurement and purchasing controls than if I'm dealing with a law firm. And you know, with the law firm, I'm going to be focused a lot more on regulatory compliance and the tracking they need. So the client informs the service slate. And then when you get the intersection of those two, then and only then can you actually get to price. Price is not a component of my effort.
Joe Woodard [00:05:58]:
It is a component of my outcomes. The intersection of the services to the right kind of client creates the outcomes I can price.
Matt Tait [00:06:05]:
Well, I really like that because I was just talking to a firm owner the other day. Their primary client base is individual interior designers. And she was saying, I'm really looking forward to doing CFO services. I want to do advisory services. And I said, you have a problem then because you have a client base that is really just focused on paying a couple of bills and taxes. They have no need for CFO services. If you want to do CFO services, you need to find a different client base. And you don't have to do that overnight.
Matt Tait [00:06:39]:
You can merge your way into that. But if that's where you want to get to, you have to think through that Venn diagram that you're kind of talking about, which is you have to have the right services for the right client base. And then you look at how do I price them correctly. One of the things too, and I'm sure you see this a lot. I, I find that a lot of people are better than they think at the first Venn diagram of right services and right client base. But where accountants in particular can really struggle is on the pricing aspect.
Joe Woodard [00:07:11]:
Right.
Matt Tait [00:07:11]:
And for a couple of reasons. One, when you marry any pricing, particularly repeatable stuff, even advisory repetition to billable hours, you're in trouble from the get go. Number two is the value. And they always undercut their own value. How do you see, like really strong scaled accounting firms and bookkeeping firms kind of push out of those two mentalities.
Joe Woodard [00:07:38]:
Yeah. So in order to get out of the mentality, a lot of it is the mindset of utility versus the mindset of wealth generation. I hear it from accountants all the time. And by the way, this is all going to circle back to how to get to the million, because I'm do some math. Once we solve this question and the other question about ideal client, that'll get to the million and make it so much more approachable. But I want to address your concern. They say, I know that I'm worth more than I'm charging, but I also know there are others that do what I'm doing and are charging less. And they tell me as soon as I go up on the price, they're just going to go shopping around and they're going to find somebody else.
Joe Woodard [00:08:21]:
Then I hear the counter to that. I hear the incorrect counter to it. Everybody tries to counter commoditization with quality. Quality is a way to elevate yourself to sort of the top of the pile of the commodity. You could be the best paper towel provider, you know, you could be brawny instead of the, the Costco brand. Quality will only get you to the top of the commodity pile. It still won't break you past the pricing pressure. So be high quality.
Joe Woodard [00:08:56]:
At the end of the day though, the person who's shopping on price is going to still go to the lower priced option even if they endure a lower quality, you know, as part of that journey. By the time they figure out it may be too low of a quality, they're not going to come back around to you, they're just going to come back around to somebody else. You've already lost them. So, yes, you want to have a high quality service, but the key here, the key differentiator, Matt, you must do what others are not doing. And we don't have a visual that we can put up here from the Cobb value curve. But you know, if you want to go Google that, if you're sitting at your desk while you're listening to this podcast, Google Cobb value curve, and you're going to see that your value increases as fewer and fewer people in your space do what you do and as the relative value of what you do goes up. Now, I have a comical way that I like to share the extreme on that x axis that has no relative value. My undergraduate degree is in Classical Greek.
Joe Woodard [00:09:58]:
Long story, don't ask me why, but.
Matt Tait [00:10:00]:
Mine's in History, equally as applicable.
Joe Woodard [00:10:02]:
Yeah, exactly right. At least you can maybe inform your present with it. I don't know what I'm going to do with mine, but if you're looking at the scarcity of the people who can do what I am academically trained to do, I am killing it on the Cobb value curve. They're probably never done the Math. But to be non hyperbolic it's probably 0.0000001% of the human population that can do what I do. Good for me. But then the other part of the Cobb value curve is relative value added. And what can I do with my classical Greek Greek? What can you do with your history degree to actually commodify that? Commodification is good.
Joe Woodard [00:10:43]:
Commoditization is bad. What can I do to commodify my knowledge of Ancient Greek? Nothing. Yeah. At least if it was history, I might be able to commodify that by going into political science or advising somebody who's in politics or something. But nothing can I commodify with classical Greek. So you want to make sure that you're differentiated and you can be in the 20 percentile. You don't have to be in 0001. But what you choose must be wealth generating.
Joe Woodard [00:11:13]:
So I tell bookkeepers, especially bookkeepers and let's call that standalone CAS if we want to get fancy, right? Standalone client advisory services. That's what you all are. Decimal your standalone.
Matt Tait [00:11:24]:
Correct.
Joe Woodard [00:11:25]:
It's more fully formed. It's not just record keeping and that's why it's a good term. But if you're trying to venture from being a bookkeeping practice to being a CAS practice and you want to broaden your offering, start with controllership. Because in controllership you're still back office. You haven't had to get into the boardroom and be in that intimidating space where you have to help them set business direction or you're just still in your back office. You're comfortable there. You know that world. There's a tremendous amount of unaddressed need at most organizations.
Joe Woodard [00:12:03]:
Over a million in sales, over five employees that they don't know how to address and they don't even know that they're supposed to address. And if you were to go to these business owners and say I'm putting myself here, I've discovered your unaddressed need. It lives in the arena of your back office where I already am engaged with you, then the business owner is going to see that as germane to your role. They're not going to question why you're coming to them with this. It's a natural upsell. And really get this bookkeepers. Instead of you just recording what happened, you get to protect the client's journey and that's a radical value proposition difference. And you also get to affect what gets recorded because you get to affect how much gets spent through budgets and Spend policies and policy enforcement and purchasing requirements.
Joe Woodard [00:12:58]:
All of that managerial compliance increases the client's bottom line. And when you're only living in the world of the general administrative, it gets a lot less scary. It requires a lot less specialized knowledge. I can help any, anybody reduce their general administrative expenses, even if I don't really understand the whole of their business model. Now let's come full circle. Getting to the million, right? So once we've neutralized commoditization, therefore we've neutralized the pricing pressure and the pricing anchors, even the anchors you've created for yourself because you're coming to them with a new service beyond your bookkeeping, right? Then you can put the value of that client relationship on a couple of different legs. One is internal cost displacement. What would it cost for you to get a part time controller in here to manage this internally? Well, a controller is usually about 100,000 plus.
Joe Woodard [00:13:56]:
Oh yeah, 50,000 for a part time, 30,000. 25,000 for a fractional. Oh yeah, that's right. I'm the third one. I'm a fractional CFO, which means I just jumped my monthly recurring revenue up by about 2 to 3,000 to be the fractional version, not the part time version, not the full time version. Now I've just framed that where the client's saving $75,000 a year over hiring a controller, not spending another 25,000 on me. But there's more, because now as a controller, I can save them back all that money on the bottom line with the expense and cost overruns, I can project that spending out with a little discovery. Let the client impose whatever value they want.
Joe Woodard [00:14:37]:
In the client's mind, I might be saving them back that whole 25,000 or more, or I might be saving 10,000. Either way makes it a lot easier for me to create a new $2,000 upsell to my bookkeeping.
Matt Tait [00:14:50]:
Well, and I think there are two things that stand out in what you said that I think are really important for people to kind of internalize. Number one is my CEO Michael has a really good way of framing it to everybody when he talks about change. He says, let's crawl, walk, run. A lot of people think, I've got to get here, I have to leap forward. No, you just have to take the first step and then the second step and building out that plan. And like you said, building your way from being a recorder to being an enabler, to being an improver, to being an advisor and a protector.
Joe Woodard [00:15:25]:
I love the word protector.
Matt Tait [00:15:27]:
I like protector. I really like that type of mentality, of building yourself up. It also takes the intimidation away from a process. If you look at something as one step at a time, it's easier to walk a mile. If you look at it as I have to get a mile, all of a sudden that can be intimidating.
Joe Woodard [00:15:44]:
So can I make it even more stair stepped? Underneath controllership, you've got three different components. Regulatory compliance, managerial compliance and risk mitigation. Not all people define it that way, but that's how we define it. Those three legs, then you could take each one of those and subdivide it more, create baby steps. Underneath managerial compliance, you have spend management. All right, Underneath spend management, you have general administrative assessment, recurring expenditure, passive expenditure assessment, and you have budgetary controls and purchasing controls. Which means, Matt, someone could take their first step to being a controllership services provider if they do nothing more than analyze recurring spend.
Matt Tait [00:16:28]:
What you've also hit on, and I think it's one of the key problems that I have with accountants in general is a lot of this is really all about reframing the problem and reframing the solution. If you look at it as I've got to get you to pay me more, you are going to lose that battle 99 times out of 100, you're going to luck into one, guaranteed. But if you look at it as, hey, you have this problem, you have this need, I'm going to help you solve that need. Here's what it costs. That is a great reframing. And then if you add to it what you said, which is, and by the way, here's what it will save you and here's what it will get you and here's how it will improve and protect you. All of a sudden you've reframed it into something that they kind of have to do and you are a lighter cost than any of the other alternatives that they have.
Joe Woodard [00:17:17]:
And the term I like to use is I'm lighter. Like I talked about, I'm a fractional controller, not a part time controller, not a full time controller. So lighter is a good word and contra is a good word. Now, I don't say necessarily use it with your clients because they don't know what it means. But whenever I'm talking to bookkeepers, they get contra expense. And so I tell them, if you are an agent of savings for a client, then you are a contra expense to your own expense line and the light bulbs come on, right? I'm an offset, I'm an organic offset. We've been kind of going all the Way around this question you asked about getting to the million.
Joe Woodard [00:17:52]:
How do bookkeepers get to the million? So I'm going to answer it now that I can answer it, client, service, price. When I was growing up as a kid, cartoons were something that only occurred on Saturday morning. And they only occurred on three different stations that you, you know, came through the airwaves. Nobody watched pbs, that was documentaries on nature. We only went to cbs, abc, NBC, and that was where all the cartoons lived. And on every one of those networks, always interspersed between the cartoons that we would be watching, was this commercial for Tootsie Pop that was absolutely brilliant. You can go Google it, it's on YouTube.
Joe Woodard [00:18:30]:
It's so low budget and it's perfect at the same time. It's this little boy asking the owl, the wise owl, Mr. Owl, how many licks does it take to get to the inside of a Tootsie Pop? And the owl licks it twice, bites it once, which is what everybody does with the Tootsie Pop and says three. Okay, brilliant. Advertisement. Why do I bring it up? Because if you were tuned out in this podcast, I was trying to tune you in with a weird story of an owl so that I can get to this. How many clients does it take to get to a million? Not every client will be 2,500. Some will be more, some will be less.
Joe Woodard [00:19:07]:
But if your average monthly recurring revenue per client in Your portfolio is 2,500, it takes 32 clients per million. What I would like to do is take this idea out of people who may be listening in and say if I'm going to have a million dollar practice, then I have to have a lot of clients, hundreds. I have to have dozens of employees or at least a few. I have to outsource to some other country only to get to a million. I would say if you have the right client at the right price, with the right wealth generating or savings based controllership service offering, you don't even have to be in FP&A yet, just controllership at 2,500 per month. You can have 32 clients with a couple of people or yourself. The right technology and a few outsourced folks and you could be a million dollar practice. Then the question, the really exciting question, Matt, is 320 clients is an eight figure run rate.
Joe Woodard [00:20:08]:
Some people listening here have 300 plus clients and they haven't reached a million yet. I'm telling you that 300 clients should be 10 million if you're priced right with the right offering.
Matt Tait [00:20:19]:
I agree completely. And you know what you hit on, which I think is really important is technology. And I want to bring that into a large kind of contextual. You also brought in offshoring, which I think is really important to the context of this getting to a million when you want to run a firm. I think one of the things that I see people struggling, I'd be interested in your thoughts on this is just running a business. And you and I get this running the businesses that we run or have run. You have to balance a lot of different things. You have to balance clients, you have to balance sales, you have to balance technology.
Matt Tait [00:20:52]:
You have to keep track of a million different things. How do you look at these accountants today and say here's, here's how you get to a million with 32, 33 clients, maybe 10 attrition a year. So you're adding 3. Say you just want to be that you can make 400 grand with a million dollars and three employees. I wonder how many people are listening that actually with a million could say they have that. And I'm going to say very few.
Joe Woodard [00:21:20]:
Because 66% gross profit margin is the target we shoot for. And then everything below that, pay your G and A and yeah, 400 right in that 350 to 400 range is what you should be taking home.
Matt Tait [00:21:32]:
And so if that's what we're striving for, how do you balance all of the different things? How do you look at technology, outsourcing?
Joe Woodard [00:21:39]:
I look at outsourcing at offshoring, we'll call it that because there's offshoring, onshoring, near shoring, there's all this stuff, but we're going to call it offshoring because that's really the model we're looking at. That is a necessity in the horizon of the next 12, 18, 24 months, maybe a little beyond that. You're going to want to take a lot of that work you would normally hire for or do yourself and you want to put it into the, to the capable hands of a well vetted resource provider. In South Africa, the Philippines, South America is becoming actually very popular. Pick your provider and then pick your country. Can do all that all together and make all the considerations. A lot of people listening here have made a hard decision never to do that. And you have reasons for that that have to do with maybe politics or your own viewpoint or maybe your own past experience.
Joe Woodard [00:22:29]:
I would ask you to take a fresh look at all of those things. We are in a global economy, so the political views of 10 years ago should be questioned by the global economics of today. And then the nature of the way that a lot of people are saying, well, I'm not going to pay 12 bucks an hour for somebody to do this work who's a chartered accountant in India, because I feel like I'm taking advantage of them. And I want you to know that if you're paying 12 to $15 an hour, you are giving them an amazing livelihood as compared to their peers. You're helping the folks in India. So there's relative wealth between nations that you can't superimpose a salary here versus salary there's. I've heard that objection. But whatever you need to do to investigate that and make peace with it, make peace with it because you've got to get that leg work into the hands of people who are capable of handling it and manage to that.
Joe Woodard [00:23:28]:
But Matt, you know better than anybody because you just did this big bold move with puzzle that everybody listening knows about that the artificial intelligence is going to increasingly displace the need for this offshoring if we think of it not so much as replacing the listeners of this podcast. If you're the business owner doesn't replace you. It replaces how much you would need to go to the offshoring to get the work done. And maybe if you're still doing a lot of the actual mechanics, the bank recs and the coding, it replaces that part of your desk as well. In 18 to 24 months. I see it tipping toward AI as opposed to the lion share of your spend and your effort being offshore. Those two things in combination and riding that tipping point so that you're already in both worlds, offshoring and AI. Then you're going to position yourself to be able to do the 32 clients per million just fine.
Matt Tait [00:24:29]:
You know, the way I look at it is when you look at your US staff and when you look at yourself, everything has a cost and it has a value. I try to look at value first and cost second. The best value of my US team is spending time with my clients is doing the higher level work, the strategy, the protection, the enablement. That's where my US team is best suited. It's not doing the bank recs, it's not doing the bookkeeping. It's not closing the books, it's doing the final quality. Let's make sure everything's great. And then hey client, we want to make your life better.
Matt Tait [00:25:08]:
Here's what we noticed. Here's how we can improve your life. Here's what we see, here's what you should be worried about. It's pushing the cost structure down. Also, it's pushing the value. If you are using your US staff to also do the work, it's limiting their value because they only have a finite amount of time. What I also see with outsourcing, and I remember when we started decimal five years ago, a lot of it was, it's not going to be safe, it's not going to be secure. The reality is that is a solved problem.
Matt Tait [00:25:37]:
You have the exact same problem over there as you have here.
Joe Woodard [00:25:40]:
Yes.
Matt Tait [00:25:41]:
So that's a solved problem. The other thing that I would hear is I just can't train them and teach them well. And if you unpack that, what I almost always 100% of the time find is people will put in. Let's just use around number 10 hours of new training for a new US employee and 30 minutes for a new employee in the Philippines. If that's your training imbalance, you are not setting yourself up for success.
Joe Woodard [00:26:08]:
You still have to consider the resource as having the same learning curve as someone in the U.S. and then, you know, what we haven't talked about yet in this episode is the critical role of process. Because it is client, service, price that lays the foundation. It is process and technology that scale. And we go to these outsourcing providers with no process, with no coherent technology stack, and we think they have some magic wand that they're going to magically produce our books. They don't have a magic wand. They need to follow a process just like any team member would need to do.
Matt Tait [00:26:43]:
And you need to look holistically at process. You need to look at how do you build a process for quality and accountability for your team in the Philippines? Or let's just make it easy, your team doing the work. You then need to build a process for your team talking to clients or yourself. And then you need to also build a process on how those two communicate together. I would argue you should never have the same person doing the work as communicating with a client. The cost structure is totally unbalanced. But I think that process you get to is so important. And what's interesting to me is I think so many people that run and start accounting firms and bookkeeping shops, and I think it happens in all professional services.
Matt Tait [00:27:28]:
They're so good at doing the work, which is why they start the business or the firm and then they keep doing the work instead of running the business. How do you advise people on making that transition? Because I actually think that's one of the key transition.
Joe Woodard [00:27:45]:
There are two different things you're going to have to lay down to make this work. You're going to have to lay down your core passion because you got into many of you tax preparation and bookkeeping and financial reporting because you love it. And you're going to have to give up what you love in order to scale your vision. I'm living that out where I want to be because my background is for manufacturing, wholesale and distribution, where I would rather be no other place than a warehouse, walking around analyzing what's happening with the organization, that warehouse, and transforming the way that that business operates. If I ever do retire, that'll be my retirement job, is to go do that. And we helped to reorganize the warehouse operations for Elf on the Shelf. We really did a lot of this warehouse transformation work for notable brands, very scaled companies, very rewarding. And I don't get to do it anymore.
Joe Woodard [00:28:39]:
Even when I had a company that did warehouse transformation, which we only divested 14 months ago, I never got to step into a warehouse. I had to give up the thing I loved in order to lead the people who get to do what I love, right? And I get to be hot mic with you here today. And I get to to share with folks. Only about 10% of what I get to do in any given day is speaking and teaching and educating and coaching. Because if I do too much of that, then I've stopped leading a company that does that. So give up what you love. All right? And the second thing is embrace the imperfection. When somebody else is doing the work you used to be doing, they won't do it like you did it.
Joe Woodard [00:29:27]:
For sure, they probably won't do it as perfectly as you did. And you might mix those two up and say, doing it the way I did it and doing it as perfectly as I did it, those can get conflated, right? But if you can give up the quest for perfection and embrace the messiness of people, your ability to scale the value both within each individual client relationship and across your clientele will be higher, disproportionate to the number of errors you're going to introduce and the number of errors you're going to have to navigate. And that's a solved problem, too. You have producers, you have reviewers. Reviewers are often your account managers until you get to the point where the account manager is different than the reviewer. So you can solve for this, but you have to think of yourself as a navigator of the messy rather than a preventer of the messy. And if you can't ever get in that mindset, you won't let anybody else touch the client work.
Matt Tait [00:30:27]:
I don't know about you, but this is where I actually find that as a business owner, taking a step back and actually writing out a company mission and values can be important. Like for us at decimal, our mission is to make it easier for businesses to just be in business. My job is to enable my team to do that. The way that I impact it isn't hopping in on a day to day basis. Granted, if I tried to do accounting, we're all in trouble. So literally I physically can't do it. But my job is to enable my team to then help these businesses make their lives easier. And if I'm doing my job better, their job is easier.
Matt Tait [00:31:06]:
And it's moving from the trees to the forest. And my job is to plant trees, and grow the forest.
Joe Woodard [00:31:14]:
And watch it at that altitude. And this is where I would encourage anybody who's listening that hasn't read the E Myth by Gerber. I would recommend that you read that book because that's exactly what we're talking about here. It will give you the mindset and the pathway to measure what you're doing in this role. The bottom line is, you know, I'd actually have people say this whenever I'm teaching from the main stage, I'll have them say aloud with me, I am not a bookkeeper. I am a business owner of a business that does bookkeeping. And then I'll just turn right around and say it again. I'm not a tax preparer.
Joe Woodard [00:31:50]:
I own a business that does tax preparation, services, tax. And this is the mindset that Gerber says. And it's the reason the entrepreneurial part is, the myth part is that you can be an entrepreneur, build a business and still do the work of the business. So listen to me, folks. Your job, if you own a practice, your job is to lead teams and manage your business. It is not to produce your product. That mindset will be everything that's so huge.
Matt Tait [00:32:20]:
Taking that business owner mindset. So I want to touch on a touchy subject that I've seen, and I bet you've seen a little bit of it too, as I've looked at other firms, as I've advised firms, as I've looked to acquire firms, one thing I found to be a little bit crazy and very enlightening is how poorly their internal books are or their internal economic processes.
Joe Woodard [00:32:47]:
Yes, the cobbler's kids are very barefoot.
Matt Tait [00:32:50]:
If you want to run a million dollar practice well and make that 350 400,000. That is not going to be possible unless you eat your own dog food.
Joe Woodard [00:33:01]:
Yep.
Matt Tait [00:33:02]:
How do you help people to do that and kind of actually see that? Because it's insane to me that it's so prevalent.
Joe Woodard [00:33:08]:
Yeah. And sometimes they see it, they just don't manage to it. And it's because the cobbler's kids, the barefoot thing, there's so much truth to the old cliche. The way that I get them past the barrier. It's either knowledge or it's, it's attention. And I find it's typically attention. They know these things are bleed out spots. They don't pay attention to them.
Joe Woodard [00:33:29]:
So I, I kill a couple birds here with one stone. I'm trying to show them how to do controllership services and financial planning and and analysis services. I make them their first client and generate some short term wealth within our coach program by basically making them the client of my controllership services that I guide them to race. Then they get inspired, they get excited and then they realize that they can turn around and do this for others. So physician, heal yourself. That old saying, I make them their first patient.
Matt Tait [00:34:06]:
I like that. Take your own medicine, eat your own dog food. Whatever the analogy is. It's so important to understand your own health so that you can understand how to improve.
Joe Woodard [00:34:18]:
And there's something bigger than that even beyond that because they see that and I agree with you 100%. Until they realize that the next step beyond healing themself is a commodified opportunity, that I'm really just using myself as a prototype to go make new money. Then they all of a sudden care about healing themself, but only because they're the prototype. Every time I've tried to get them to do it just solely on the merits of what you've said because it's the right thing to do to be a business owner.
Matt Tait [00:34:51]:
I like that. I like the doorway to opportunity is doing it and improving yourself.
Joe Woodard [00:34:56]:
Yes.
Matt Tait [00:34:57]:
So one of the things that, and you know that I have a huge passion for this, but you and I have talked about it quite a bit even recently is also making sure you're using the right tools. We've talked about people, we've talked about price and value, we've talked about process. Now let's talk about the importance of finding and using the right tools and the right technology. How do you frame and I certainly have a lot of very clear opinions on this and I'm happy. I'll walk through my tech stack in a minute. But how do you walk through with these firm owners how to look at tooling.
Joe Woodard [00:35:33]:
Yeah, well, and that comes out. It depends firm by firm, where we start. First we categorize it into bookkeeping productions category A. If they have a tax arm, then we talk about, you know, streamlining that. But that's usually through GL integration is the way we'd approach that. And the tax organizer modernizing that, making it virtual, putting out in a web interface, but focusing mostly on CAS since that's a more complicated stack, we put it into buckets of this is a production software. This is an operational piece of software. So that might be like contract management proposals, workflow.
Joe Woodard [00:36:12]:
It's administrative in nature. And once we have those two buckets, then we can start to weigh prioritization because everything's about a product development queue. It is the most important thing for me at this moment, not this year, but this moment to administrate my practice better and get my workflows in place and proposals under control and billing under control. Or is the most important thing for me right now to automate my productions. Once they answer that question, we'll know which way to to go. You know, which leg of the stool to build first. If they go down the productions side of it. Typically we don't like to disrupt the GL.
Joe Woodard [00:36:55]:
They're on zero, they're on QBO or now puzzles of an emerging GL whatever platform they might be on Zoho books or intact. We typically unless there's a reason we don't upset that apple cart. What we ask ourselves is what's the first thing we should attach? Almost always that becomes something on the expenditure side. With e-commerce, revenue can be first but outside of that outlier would stripe our merch merchant E Commerce being a massive efficiency generator. It's almost always the expense side. So then we look at that. Is it payables first, is it expense first? Or is it something that has both of them like bill integrating with divvy that they just now called bill expense. We find that most of the efficiencies are created on that disbursement of cash component.
Joe Woodard [00:37:45]:
And then the next domino to fall would be whatever is in the on the client's front end. We see that as a massive barrier to efficiency and it's all over the map. Point of sale, medical billing, warehouse management. If it doesn't already integrate with their GL of choice, then we start looking at zaps or maybe some API coding or something to get all that done.
Matt Tait [00:38:09]:
I think it's a great starting point. I bucket Things kind of like you do into what do we do internally that helps our team improve, have a great life, be better to create a great client experience. And what tools do we let our clients use that also helps improve their experience? So starting on the client side, on the revenue side, we always chose to use QuickBooks as the only ledger that we would work in until we launched our partnership with Puzzle. And earlier we did launch one with Xero. But we said, hey, our teams are all going to work within that ledger and we're going to make sure that every other tool integrates with one of those or all of those ledgers. And we wouldn't work in anything desktop, we wouldn't work in intact or NetSuite. We'd convert everybody or just. I think one of the things we haven't touched on in scaling to a million.
Matt Tait [00:39:01]:
You need to get really good at understanding why. And saying no. Yes, no is one of your most powerful terms. Understand what's good revenue for you and bad revenue for you, because there's a difference and it's always one or the other.
Joe Woodard [00:39:14]:
And say no to tech as well. And if it makes you feel better, say not yet.
Matt Tait [00:39:19]:
So we started with that ledger and then we built in a couple of tools for each that we would work in. And then on the internal side, we looked and we said, hey, we need to find a great workflow management tool for our team. And for that we picked Keeper. We used to be on ClickUp, but we loved Keeper because of two things. One, the team's amazing and they integrate directly onto the gl. And that's a really big thing because what you learn when you have a scaled company is context switching is where you lose money and time. When somebody has to go From Bill to QuickBooks to ramp all over the place, all of a sudden you lose time in between systems. And so having the integration of Keeper on the GL was a big thing for us.
Matt Tait [00:40:03]:
Then we use Front for communications and understanding how we communicate, how we ticket with our clients, putting in SLAs for response times and all of that stuff, but then adding retool as a layer on top of all of it to do reporting on everything. So we have a management layer to understand how our quality of relationships are, how our quality of work is really being able to be managers in a scaled firm.
Joe Woodard [00:40:29]:
Right.
Matt Tait [00:40:30]:
And not everybody needs to get there. But having the basics of those toolings so that you can understand where and why is so important. And then what you do as the business owner is on a regular basis, we look at where are we losing time and money and how do we improve that? And that's where we saw a puzzle as a great opportunity. Because even though our team in the Philippines is very cost effective, if we can get the exact same staff to do 10x the work, because they're now reviewers instead of doers, all of a sudden, that's a huge gain for ourselves and the firms that we help. And so that is how I kind of view each individual addition is number one. Put the framework and the foundation in place and then as a business owner, analyze where are your gaps and then put a change management plan in place for how do I fix each one?
Joe Woodard [00:41:25]:
Yes, with prioritization, of course, because not all gaps. So I like how you introduced the client experience piece because the buckets of what do I take to run my business? What do I do to produce my product? They do have an intersection point with the client at the client experience side. And the client experience can intersect the workflow, which could be my production software or my, my management software. They could also intersect my production software. They could approve a bill queue for payment in an AP solution. So, yes, all of the above. But I will tell you that a stack is a stack, meaning you can build it piece by piece. But if you're not building it to a plan and you don't understand how it fits into the larger hole, then you're just sort of chasing shiny objects.
Matt Tait [00:42:15]:
Build a robot, not a Frankenstein.
Joe Woodard [00:42:17]:
Exactly. Thank you.
Matt Tait [00:42:19]:
And so many people have that problem where they just do and then they keep doing and then they look and all of a sudden they have a Frankenstein that doesn't work. But you're right. If in so many ways your tech stack, your processes, your work life balance, your firm, if you really sit down and take the time to design out what the end state should look like, then you can build to it and also give yourself a grace and understanding that it's going to change. And that's okay. Everybody's life and stuff changes. So, Joe, as we're kind of winding down, I put out there on LinkedIn a couple of weeks ago that I think this is the single most exciting time to be in the accounting industry, period. I think with where we are in terms of globalization of workforce, with where we are in terms of technology in general, I think this is an amazing and exciting time. But so much of what I hear right now is fear.
Matt Tait [00:43:19]:
What camp are you sitting in right now? The hope and excitement or the fear?
Joe Woodard [00:43:23]:
I'm sitting in the hope and excitement with a caution if you're not proactive, then this positive disruption, that will become a negative disruption for you. So you can't do nothing and expect to receive the positive side of it. As a matter of fact, it's worse than that. You do nothing and you should be afraid. But the positive message is there is a path. There is, there are actions you can take. There is an adoption curve with the right kind of plan. Follow the example of Decimal.
Joe Woodard [00:43:57]:
They're well-researched, they're super smart people. Follow our ideal practice model. Get involved with Woodard and let our coaches guide you through this process. Because if you embrace the opportunity, Matt, you're absolutely right. It's the brightest day for you as a practice. Ignore it. It's going to be your darkest day.
Matt Tait [00:44:16]:
Well, and I think there's so much. And one of the ways that you and I have bonded over the last couple of months and years is you've always had a passion for helping these firm owners. I started with a passion to just help businesses and grow Decimal, but that's expanding now to also helping try to make it easier for people to run their own practice. And I think there are so many people out there that are willing to help. Finding the ones that are credible, like Joe, who have actually run a firm is a really important thing. Joe, if people want to find out how to get help from you and your team, where can they go?
Joe Woodard [00:44:50]:
It's really easy. My last name Woodard with one W. Not Woodward. Woodard. So just go to woodard.com and you'll find out everything about our national conference, our coaching program, our ideal practice model, and also the Woodard Report, which is free for everyone to read.
Matt Tait [00:45:08]:
Now, in addition to that, you also have Scaling New Heights. And as you and I were talking before we popped on, Sasha Orloff, CEO of Puzzle, and I are going to hop on the main stage and talk about AI and practice, and Puzzle in particular. But if people want to go and learn more over a very condensed period. Tell me more about scaling.
Joe Woodard [00:45:25]:
Yeah. So you could also find this@mylastname.com woodard.com and just go to our annual conference pages. It's called Scaling New Heights. We're in our 17th year and as I alluded to earlier, it is the largest accounting technology showcase in the United States. It is the third largest conference. The only two conferences that are larger than ours in the country are AICPA Engage and Intuit Connect. And that puts us in pretty good company with the multi billion dollar organizations. It's largely a CAS conference, but we do have an entire track for tax preparers too, especially if you're interested in representation and analysis work.
Joe Woodard [00:46:01]:
We're not your tax update show but you want to expand your services and offer value over the top of preparation. We've got a track for the tax advisors as well.
Matt Tait [00:46:11]:
Well, I love it. And Joe, I think this is gonna be huge for people that are thinking I'm looking at the future and how do I ride the wave, how do I get into it, how do I improve? So I really appreciate the time today and and Joe, I really appreciate you.
Joe Woodard [00:46:26]:
Enjoyed being here Matt, thank you.
Matt Tait [00:46:27]:
Thank you. Thanks so much for listening. After the first million is presented by Decimal. To listen to more episodes and find tips to help make running a business easier, visit decimal.com afm Want to join the conversation? Reach out to me on LinkedIn and let's explore the messy middle.