Breaking the Mold

Today our guest is Jody Grunden. Jody is a co-founder of Summit CPA group, which was founded in 2002. He actually—he and his partner merged that with Anders CPAs and AAdvisors this past year in 2022. He is author of a couple books, Digital Dollars and Cents and Building the Virtual CFO Firm in the Cloud. Enough of me trying to explain who you are—Jody, welcome to The Unique CPA.

Yeah, thanks, Randy. Appreciate you having me on. 

So a couple things when I was doing the research on you and on Summit, I didn’t get too deep into it, because today—and this will date when this is being recorded, and when it’s being released, which is probably going to have a handful of months in between the USA was playing in the World Cup and was trying to research you and Summit while I was watching soccer today, and so got pretty well into it. But some of the things that I wasn’t mentioned in the intro that I thought were pretty interesting, and I was hoping you could expand on it. 

I saw that Summit and even you personally, have been awarded different titles and awards and digital CPA and everything else. So can you expand on a couple of those? I saw a big one in 2017 and 2022. And it was that a Digital CPA thing or what was that?

Yeah, that’s actually both. So we were awarded the Innovation Award for the Indiana CPA Society, the inaugural one in 2017. In that same year, we were one of the finalists for the DCPA’s Innovation Award, the national award. Unfortunately, didn’t make it, we didn’t win at that time. But three years later, during the pandemic, we ended up winning that award outright. So we’ve won it both at the state level and now at the national level, which is super cool. Yes. And we’re chairing the DCPA event coming up will actually in Austin, this in 2022. So we were able to win that that honor, which I’m super stoked about speaking in front of the DCPA and kind of sharing my journey.

That’s pretty cool. And again, to date ourselves. That’s next week. Right? In Austin, I actually may show up there Sunday night into Austin, I haven’t decided. I am not going to the event. It’s sold out yet. But there’s another event there that I may go show up to. But I was going to reach out to some people and say, “Hey, if you’re in town you want to get together.” I don’t know what kind of outside of the conference events they have. But I may have to reach out to you if there’s something going on. 

That sounds great.

Yeah, I’ll let you know. Alright, so let’s get into this. Enough about me and what I’m going to do! Let’s talk about you. And I want to get into the history of Summit, because I’m intrigued by Summit in multiple ways. One, it’s just the history of how you set up pricing with it, two, it’s the whole building this niche practice, which we’ve done with Tri-Merit, but this niche practice, but also having a niche client base within this practice. So I’m gonna want to get into those eventually—little tease there. But what I want to talk about first is a little just history. I mean, you were in public accounting for years. So give us a little of that. And then give us that how then Summit was born out of that, how, where this idea came from and and how you got it going?

Yeah, no, great question. So right out of college worked for [what] is now BKD Forvis, and then worked there for about a year and a half. And then I moved over to Crowe, moved back to my local town, Fort Wayne, Indiana, and worked for actually Crowe, and then BKD. So I’ve had about three years of public accounting, I decided pretty quickly that public accounting just wasn’t for me—too many hours. It was, it just, there’s a lot of negatives that went along with it. And I was super important to have a strong relationship with my family at that point. I had married with two kids all under three years old, so pretty young, and I had to decide, you know, what we wanted to do. And so I decided, the corporate world is for me, I’m going to move and go into the corporate world. And that’s where I’m going to make my stay. And so I went to the corporate world for about three years and worked in the treasury department of a $250 million manufacturing firm did all the accounting for it, not not accounting, but all the tax work for them. I did all the money management, a lot of great stuff. The only problem, it was like Groundhog Day, it was like the same thing over and over and over. And it was exciting the first year because you’re learning right? Learning something new. But man, in year two, it was really, it was horrible. He was it was I was like looking for things to do and it was like, this really wasn’t, wasn’t for me. And it just happened that we were going through layoffs. And I took the opportunity I was actually part of that committee and took the opportunity to say, “Hey, I’m going to bow out myself. And I’m going to go with this regional firm and start, run their small practice.” And they said, “Perfect, that’d be great. I hate to lose you, but the only stipulation is you’ve got to be able to do our tax return. So take it with you.” I thought that’s great, because that was kind of cool, because it was a $30,000 return at the time, it was a long, 20 years ago, that’s a lot of money. And it was kind of seed money to kind of help get things going. 

And so with this regional practice again, that wasn’t—a lot of great ideas, just wasn’t working out for me. And I thought, you know, “Hey, I just need to go out on my own and do this myself. And ironically, my wife decided—she’s an attorney, she decided that she wanted to go out and do her thing on her own herself, too. So the same month, we both quit our jobs, and started our own businesses. And wow, what a risk that was, we look back at it. And I think, Wow, that was kind of a fool. But it worked out. 

Oh, forgot to tell you, we actually back then, they had the houses that you can buy without having to show your income and stuff. And so I had a brand new house too. 

Oh nice!

So brand new house, two little kids, and no money. And so the only money I had was actually coming from the manufacturing company that still wanted me to continue doing their corporate tax returns. So I hired my first employee with no clients, no money, and I was off to the races. And, you know, from there, the idea was that, if I do this, I was going to change the way that it was going to work—it wasn’t going to be a traditional accounting firm, it wasn’t going to be work a bazillion hours, it wasn’t gonna be hiring people and their work in busy season, and they’re rotating out every two years, because they’re burned out. I didn’t want that type of type of thing.

Right.

And so I had to kind of figure out how we can do this, and how I can create this thing, a big E-Myth prescriber, you know, and I love that book. And, you know, it talks about processes and stuff, I thought, you know, this is what I’m going to do—I’m going to really make myself invaluable, you know? I mean, anybody could do my job. And so it’s like, so everything we did, we documented the process, we tried to make it so as repeatable and scalable, and we just kind of grew it a little bit at a time. And, you know, we weren’t wearing the suits and ties, like all the businesses, you know, all the CPA firms are doing at the time. Now, there are a lot lax, but that was a requirement when I was in there. And, you know, we were wearing just regular Dockers, you know, golf shirts, you know, whatever. And clients loved it, because they, you know, it was more of them, you know, it wasn’t like we’re talking down to them, we’re more on their level. And they appreciated that a lot. 

And so, you know, so we started, you know, doing the hourly work, you know, doing the tax returns, just like normal. And then I realized quickly not having any money, starting with family and everything, I couldn’t afford to be the bank. So I had to figure out a way to actually, you know, charge these people, but at the same time, not, you know, not have this, and so I decided, hey, let’s just go ahead and build people up front, you know, so how are we going to do that, if we’re billing hourly? So we had to kind of change our philosophy, and we changed it to like a value bill. And so we based it, you know, on, you know, replacement value and all these different things, we came up with different ideas on this value bill. And we’re going to charge them upfront, which was great. Clients thought,”hhis is awesome,” no pushback at all, we thought, well, this is kind of neat. 

And so we thought, you know, let’s, let’s expand this even more. And let’s meet with the clients more often, instead of at the end end of the year, let’s meet with our bigger clients, once a month, we thought this would be great. And so we met with them once a month. And so we thought, “Well, what we’re going to talk about once a month?” and so we ended up talking about financial statements and stuff like that. And it wasn’t really exciting to the client, you know, they came sometimes they didn’t come sometimes it was kind of more of an excuse type of thing. I think they liked me, and they wanted to help me out. 

And so, you know, we thought how can we make this more valuable to the client? We thought, hey, let’s not talk about the past anymore. Let’s talk about the future. You know, clients love talking about the future. And so we flipped our model, and we started talking about forward cash flow, you know, basically cash—next 12 month burn rate, here’s what’s coming in coming out, kind of giving them that view. We started talking about long term forecasting. So even outside of the, you know, the short term, you know, hey, what’s what’s going on? What’s cash gonna look like in November, December, January, February, we’re gonna borrow the line of credit, when we’re going to pay off our debt? You know, all that kind of stuff. The clients loved it, actually, they started coming to the meetings regularly looking forward to it. So much so that they asked us, “Hey, can we do this more frequently? I’d pay if we could do this, if I could meet with you every week.” I’m like, well, of course you can meet with me every week. And so we started meeting every week with about half our clients and they just loved it again, we created meeting topics and we’re gonna talk about financial statements. And we’re gonna talk about forecasting, maybe the next one then maybe for a service based company, a pipeline conversation, you know, maybe maybe about their business development or marketing some of the things that are outside of the, the quote unquote, “accounting scope.” And we just started really kind of helping the client and really, really helping them run their business and they they just loved it so much.

And with that, it became the subscription based model we had because now we had the value-based billing. And we thought, You know what, let’s not invoice the clients anymore, let’s just zap their accounts, you know? Why send them an invoice. You know, that’s kind of silly. No one cares about invoices, and they don’t, you know, they’re always paying late. And they’re always apologizing, while they’re paying it late, and all that kind of stuff. And so we thought, hey, let’s do that. And so we set up where instead of sending invoices, we’re gonna zap their account every Monday morning. So Monday morning is my favorite day of the week. As you can see, went from zero to $10 million today. That’s a big chunk of money coming in every Monday. 

And you know, with that, it’s kind of funny, we never looked back from that. And the subscription based billing just kind of picked up, and, you know, really headed forward, we really focused on that virtual CFO service as our service vertical, and kind of didn’t look back from it. We bundled everything up, packaged it up. Like I said, clients loved it. No pushback on fees ever, in regard to the subscription base, because every new client, that’s just how we do it, and nice, they don’t know anything different, right. And so that’s kind of how we went there. 

Nice. So a couple things based on that, then: When you started this when you left when you and your wife took the risk at the same month and didn’t look back. And I have a question on that. So we’ll come back to that. You were a traditional firm at that point. Right? 

Yep. 

It was just traditional. So how long was that process from traditional to outsourced CFO?

Two years. So once we, after two years, we thought, you know, let’s, let’s do it. 2004 is when we actually decided, hey, what’s the verb plus do this, let’s do a virtual CFO we didn’t know we didn’t have a name for it—we did a dictionary search. We did a Google. We couldn’t find anything but outsourced CFO at the time. 

Right.

And we didn’t want to do that, because it sounded like was coming from India, or, or a different country or something like that. And so we thought, hey, let’s change the name of it. And we did “virtual.” Nobody on the internet was doing “virtual” at that time. And so we we did it. years later, we found out there was a few firms doing virtual way before us, but just wasn’t using the net to, to advertise it. And we just continued to call it virtual CFO services. Now, a lot of the accounting firms across the nation, you’ll see that name, which is kind of nice. And oh, it’s not my name, but it’s the name we used to start the service off. So yeah, took two years to convert. But it basically converted everybody pretty quickly, it was within about a year once we started converting them. 

So does that mean that you stopped doing tax returns then? Or were you were you still doing tax returns?

So the tax return will be included. Tax is part of the service, We actually lead taxes first, you know.

Okay.

Meaning that the whole idea was we’re going to provide this forecasting model so that you, the taxpayer is going to know exactly what your tax return is going to be in April. And there’ll be no surprises, because we’re going to give you forecasts all the way through, you’re going to have a great idea, you’re going to be able to save the money up in advance, we can do all of our tax planning ahead of time. And then at that point, you’ve already got the money for the year, paying it, and there’s no issues. 

Because again, that’s when we started off, we got a lot of our clients, because they had a big tax surprise in April. And they’re like, Oh, they’re looking for a new tax preparer. And it’s not the tax preparer’s fault. They’re just the messenger in that regard, nor is their tax payers fault when they get a big refund. But that’s not how clients look at it a lot of times, and so we thought, hey, let’s eliminate that. And let’s make that take that to our advantage. And so that’s, that’s what we did. 

Well, and you said, it’s not the tax preparer’s fault, and it’s not, but they also could be more proactive, like you are. And it’s the taxpayers just waiting for the numbers at the end of each year, which I don’t think they should be doing—and that was the conference you and I were at was a tax advisory conference—they need to change that mindset, because clients don’t want that anyways. Clients want what you’re doing. You just started doing it twenty years ago, when a lot of people are just getting to that point. Now we’re realizing that this not even just client accounting services, client advisory services, but tax advisory services is an important aspect.

Wouldn’t it be cool, Randy, if all the business owners had exactly the amount of taxes they need in their bank account by the end of December? Cutting that check, because it’s a separate check all by themselves? Well, that’s kind of what our clients do now.

Yeah! That’s great. No surprises. They know. They’re not surprised. You don’t come March 15, or April 15 or September 15 or October 15, and say okay, yeah, “Well, we did everything you can and you still owe $222,000.” And then they’re not happy. No, they know you’ve done everything because you view you’ve informed them monthly, even weekly now with some. 

So let’s go to the pricing then. I mean, there’s so many ways I can go, because what you’re doing right now is things that I love talking about because this is so important with tax preparers. And it’s so important, I think, as we continue to grow in our profession, which we need to continue to grow in our profession. But let’s go back a little bit to when you switched the pricing model. 

Yeah, sure. 

That was, I mean, I don’t know when did when did Ron Baker first come out with his value billion book?

Oh it was way before me, that’s for sure. Yeah, I mean, I read his book. That was one of the big things that sparked the idea. His was a little different. He was value billing based on the tax savings and savings that the client received. And I went into the value bill based on what we’re going to replace. 

Okay.

So my value is never proven, I didn’t have an ROI every year to actually hold up to you. Because my mind is more, Hey, who are you replacing, we’re replacing an accountant, you know, so maybe a quarter of an accountant. So you’re, you’re talking to me, $15,000, they’re placing the CFO, maybe half a CFO or whatever. And so there’s another $100,000 there, and so forth. And that’s kind of how we built our pricing structure. Initially, we didn’t—we billed it on profit margin and stuff like that. And that never worked, because we screwed it up, we could never get it to where we actually did over, over provides as opposed to under provide, and we almost went out of business, the way that we actually were approaching it that way. So when we actually reverse roled it and said, hey, we’re gonna be valuable based on what we’re replacing, it was so much easier. And you know, the competition wasn’t there at all we had, there was nobody out there doing what we were doing back then. So it was we’re always up against, you know, a warm body. And that was, that was a very easy sale.

The only difference was back then we were a brick and mortar company. And so we actually went out to the clients, they came to us, we were face to face, the video stuff didn’t exist at the time. And it wasn’t until probably, I would say 2009, 2010, that we actually started using the video because that’s when actually the lips and the words and everything actually matched up. And we started using that. But it was still people locally. And it wasn’t till we actually got our first creative agency, which we eventually became our niche. They’re in Rhode Island, we’re like, you know, hey, they asked us if we could be their CFO, we’re in Indiana. And we’re like, Sure, why couldn’t we be? And they’re like, well, do you have to come out and talk to us? And they go, well, do you need us to come out and talk to you? Like, no, we could probably do it over the phone or whatever. Like, exactly, that’s exactly how we’re going to do it. And from there on, it was like, we were not going to another client and clients were going to come to us anymore. So we kind of cut that off right away, and went to the complete virtual model in the way that we actually provided the service. 

And then it wasn’t until two years later, because we learned so much from this client, because this client was actually fully remote. You know, back in 2011—

They were remote.

Totally remote, yeah, they were remote.

Okay. 

100%. 60 folks on their team all across the United States, Canada, and they had a few in other countries. 

Wow.

It was like, this is pretty cool model. And, you know, two years later, I thought, You know what, we can do this. I’ve learned everything from them, what works, what doesn’t work. And we decided to do the remote thing in 2013. And we had 18 people at the time, we weren’t really large or anything. We had a building of the office that we worked in, I thought this is perfect, I’ll rent it out to somebody else. This is great. And I went to the team and said, Hey, we’re gonna go fully remote. And they just looked at me like a deer in the headlights. “We are not doing that. You’re off your rocker.” We always started with a joke. That’s how we started meetings, and they thought that was the joke. It was not the joke. I was just so excited about it. And then they beat me up so bad. And all the different excuses they had. And I thought, you know, I can’t lose my team. And so I thought, well, I’ll just do the remote thing with the clients, and I’ll have our brick and mortar office. And so I thought I’m going to remodel the office, and so I truly remodeled it—I kicked everybody out of the office, we gutted it completely. Construction companies tore walls down, they made this thing look pretty cool. And we built it for about 30 people thinking that, hey, within about ten years, we’ll probably get to that 30 person mark, hopefully, fingers crossed. 

And you know, with that, it was about six weeks into the end of the deal. They all had to work from home because we we’re doing the remodeling and stuff. One by one, they all came to me and was like, hey, I’d love this work thing. Do you mind if I work from home? And it was like it was it was kind of funny. At first I was like, Yeah, sure. Go ahead. And then after like, the 15th person came to me. It’s like, wait a minute team meeting, hold on. And they decided, you know, they loved it. They figured out all the issues, kind of like fast forward to COVID, you know? Everybody figured out how to do it. It was really, it was tough at first but after six weeks in the US you figured you got the rhythm you figured it out. And they say hey, let’s do it. And I thought you know what, this is a it was a great investment. I spent 100 grand on a building that I’ll never use, and I could have went and took everybody Hawaii and had a great time.

Yeah, exactly. 

Yeah. And we went from right from there on and so so we were providing a virtual CFO service. And I hired people all across the United States. So we’re providing it completely remote to people in different cities across the US which is really kind of a cool concept. And when you think about it, I could have four people on the call, and they could all four from different states.

Oh yeah.

And they loved it. And that’s when things started really picking up when we did that. And because that was our first creative agency, they loved our services so well, they’re still a client today. And as they refer clients to us left and right, we started really picking up, you know, three or four of these agencies that we had about 10 agencies under our belt with like, oh, this is pretty cool, pretty cool thing. And then it was, we’re kind of fortunate because we were in San Diego at a remote conference conference. Now, keep in mind, in 2013, there was maybe 100 of us out there.

Right. 

And Forbes, we were listed in Forbes as one of the first 125 firms ever to go remote. 

Really!

Yeah, and the first financial firm. Now, who knows if that’s true, but that’s what Forbes listed us as at the time. And, you know, with that, you know, we’re like, you know, this is kind of cool. We’re learning for all these companies what to do right, what to do wrong. And a creative agency owner that basically ran leadership camps for creative agencies approached us, just happened to be at the conference there, and said, you know, “Hey, would you be interested in going to New Orleans and teaching, you know, creative agencies how to be profitable? We’ve  got this accountant right now, and he’s got, like, you know, pocket protector and calculator and all that kind of stuff, and he’s really not connecting with the leaders there.” And I’m like, yeah, I’d be happy to do that. And I thought, yeah, let’s, let’s try it, you know.

And they’re like, When can you do this, and I keep my eye at that point in my career, I had no money. You know, scraping along, trying to figure it out, you know, we’d have some success. And we’d be back to failure, success, failure, success, failure. And, you know, I talked to my wife into going to San Diego at this remote conference without her. You know, I’m in Indiana, nice weather. And now I’ve got to figure out how I’m going to explain it to her that I’m going to New Orleans in two weeks. So I did—she was excited about it—went to New Orleans in two weeks, you know, with that, had no idea what I was going to prepare. 

I happened to pull a nerve in my neck, get the time if you’ve ever done that. It’s horrible. 

Yeah, yeah.

You’re walking around, you can’t really move and being on an airplane is even worse. That’s the that was by far the worst experience. Trying to stay still. And went to New Orleans, and I had no idea was what I was going to talk about, you know. It was like, you know, I had two weeks to prepare this. I had a complete mental blank. He said don’t have a PowerPoint, so I’m like, okay, so I just got to talk, you know what I’m going to, what are we going to talk about? Because he didn’t want me to do the traditional CPA thing. And I’m like, okay, and I go, well, I go give me an easel board. And I’ll see if I can do something on an easel board. And I still had no idea and I got down there and my luggage didn’t show up. It went to Tennessee, I’m in New Orleans and it went to Nashville. And I thought, wow, what do I do now? So I walked over to the mall, I bought some medicine for my Aleve for my neck because my neck was on fire. My phone was dead. So I got a battery, or I got a charger for my phone. I got a bottle of water. And then I’m like okay, now I gotta find some clothes to wear, and with that, right across the street was a Tommy Bahama and I thought that’s kind of different. You know, that’s not a traditional CPA.

Right, right?

We could do that. Plus, it was really close. I was in pain. I thought this will be great. And so I walked into Tommy Bahama, if you ever shopped there before, expensive as heck. Very expensive. And I thought, oh, my wife is going to just kill me now. So I bought two shirts, and two pairs of pants. I didn’t have any clothes. And then I thought, well, now I gotta go get some shoes, and I went to pay for it. And my credit card got denied.

You really didn’t have any money!

I was like, oh no! I’m like, what’s going on here. So I got my other credit card out. And they used that and went through fine. And so then I went to the right next door, which happened to be a shoe store. Guy helped me pick out shoes for this Tommy Bahama and I was pretty stoked about it. Got a couple pairs of shoes, and went up to pay and my second car got denied. I’m like, oh, no, this is not good. So I pulled my debit card out. I’m like, I know I got cash in here. And so I get my debit card, it goes through no problem. And so I’m thinking wow, that was weird. No idea what’s going on. 

But just happened that we had our dinner that we had to attend, kind of like a welcome dinner with all the different owners of the firms coming together as a welcome dinner before the actual conference. And there’s 30 of us there and I’m like you know, hey, this is kind of cool. I’m gonna get everybody’s appetizers. I’m the financial guy, I’ve gotta make a good impression on everybody. And so I go and order appetizers that we’ve got all these kinds of oysters and all different kinds it was it was really cool. And I would have to pay for it. And guess what? My debit card didn’t work.

Oh man!

Oh no! You know, I turned to the guy next to me I’ve only talked to for like maybe an hour. I go “Dude, I have no clue what’s going on.” He goes “You don’t travel much do you?” I go no, not at all. 

Ohh! Protection’s on! 

Yes, I go uh, can you pay for my meal and their appetizers? I’ll get you in the morning. He’s like, no problem. And then I got to the conference and I was like I still didn’t know what to talk about. I led off. I was the very first speaker I’m like, this is gonna really be bad. And so I started off and I uh, I basically start off talking about the experience, you know, going with Aleve and credit cards getting denied and everything. Everybody’s just laughing. And it was a great icebreaker. 

Yep.

It was one of those things, I just did it because why what why am I wearing Tommy Bahama? And then I, then I asked everybody, Hey, if you could raise your prices by 10 bucks with all your clients, I go, would you lose any clients in a raise your hand, if you’re going to hold your hand if you don’t think you’d lose a client, and then I went to 20 bucks, I went to 30 bucks, 40 bucks, hands started falling and stuff. And I go, okay, let’s keep that $10 in mind. And so then I got the easel board out and it hit me right away the Hey, I’m going to show him how to be profitable. 

And so I drew up what utilization—you know, do some stick figures. And I’m not an artist, but stick figures. And I had an I can’t calculate in my head. Admittedly, I’m a CPA that cannot calculate in their head. I had grabbed somebody and go, hey, can you be my calculator? And so they’re participating. And he’s doing the calculations for me and going through utilization, average bill rate, make it super simple. And I broke it down to a one producer should make about $200,000. And I showed how to do it. And I got to make 17 producers. Okay, now we’ve got $3 million. I go. Okay, well, let’s just raise it, now we talked about it. And everybody here said that they could do raise their rates by $10. Right? I go, Well, let’s see. What’s that gonna mount? Because I started the thing off saying that everybody needed to have 10% of their annualized revenue in the bank. So if you’re a $3 million firm, $300,000—I asked everybody, how much if anybody had that, I’d say half had that, half didn’t. And so then I got back and I said, hey, there’s $10. And so, the $10 we redid the formula average door at $10. Miraculously, that came out to $300,000. And they’re like, Wow, this is cool. And it was just like, but I thought I did a horrible job. 

Yeah.

You know, I was like, This is bad. You know, here, I’m doing stick figures. I’m doing all this unprofessional stuff. And, and they just loved it so much that Twitter just kind of blew up.

Really!

And like I said, I had no idea. I wasn’t even on Twitter at the time. So it was like, I had no clue what was going on. And the owner came up and said, you know what, hey, we’d love for you to do this again, you hit a homerun. I went to apologize to him at first, I go, I am so sorry. Oh, you did really well. And then he asked me to come back. And so I came back, and it was like two weeks later, it was like a two week, two week, two week thing. And he goes, hey, where’s that? And he’s like in Chicago and like, Oh, I’m in Fort Wayne. I can drive to Chicago. My wife won’t care. This’ll be great.

But the funny part about it was I went out and bought Dockers and cool polos with my emblem on it there, a logo and everything. And I brought my one of my CFOs there, he had the same thing. We show up at the conference, de catches me in the meeting room and he goes, he goes, dude, what do you do? I go, Well, you mean what did I do? He goes, where’s your Hawaiian shirts? I go, what do you mean? He goes, well, that’s what set you apart. You were so different than everybody else, right? I’m like, “Oh, God.” So in that half hour, I went down Chicago. And I came back with Hawaiian shirts. And now, all the time and every conference everywhere, you can kind of pick me out because of the Hawaiian shirt for the most part.

Oh, yeah. No, no. You have a caricature that is you in a Hawaiian shirt. And I actually wrote on my notes here to talk to you about your Tommy Bahama shirt. So see, I know you as that already!

Yeah, exactly. And that’s where the niche started coming from. And so we started doing these conferences, and I’ll be honest with ya, we did them for about three months and didn’t pick up a client. 

Okay. 

But the whole idea is I did that same conference, I basically broke it down, showed them how to be profitable. Nothing about sales, I was never once asking for it. And never talking about it. We had a great introduction, they introduced me as a virtual CFO, blah, blah, blah. But it was never a sales pitch whatsoever. 

Mmm hmm.

And they loved it, because they would call me ask me questions and all this kind of stuff, but no clients. And then it was probably after, I would say maybe—I’d have to go back and look—maybe fourth or fifth one I did in about a nine month period, I got my first call. That first call ended up being 11 calls within about a month, and we ended up picking up 11 calls in one month, in the month of November, 6 in the month of December. It was like four or five in the month of January. I thought, “Oh no. This isn’t good. This isn’t good at all, because I don’t have people to actually service all this!” 

Right.

You know, what am I going to do? I can only do so many of these clients. And that’s when the Forbes article hit. And all of a sudden I got resumes, unbelievable resumes, 2,000 resumes within about a day. It was unreal. And I thought it now it’s just a matter of going through and trying to opening them up and get them all you know for who is going to be what. But we actually went through a bunch of them and we figured it out. We were able to hire some CFOs and then we were able to kind of stop the bleeding and really kind of dial in the virtual CFO process and make sure it’s repeatable, and that it wasn’t heavily relied upon me, because it became heavily relied upon me real quick, right? 

Because, you know, I got 11 clients now. 

Yep, yep!

You know, how am I going to handle that type of thing? 

Exactly. 

And so that’s when it blew up. So we actually niched both in, like you had mentioned in a service vertical, as well as an industry vertical. And I’m telling you the power of the niche is huge. 

Oh, it’s, it’s unbelievable. 

Yeah, the virtual CFO, we’d pick up one to four clients a year, and we’d be like, oh, yeah, this is great, just with the vertical niche. 

Right.

And trying hard to pick them up, you know, try and pick up anybody. And it wasn’t until we actually focused on that creative agency niche that we actually started really blowing it up. Now, that’s not saying that we didn’t pick up clients outside of that. 60% of our client base is in that creative agency niche, 40% Is something else. So we marketed strictly towards it. But we could pick up and we can modify our service offering, you know, by the different company. But again, it wasn’t, it wasn’t until then that it just really changed things for us.

Yep. And then so right now you mark it pretty much solely to digital agencies, that’s your deal. But last year you merged in with Anders, who’s a top 100, CPA firm, right? 

Yep.

Out of St. Louis. And I assume that their niche is not digital agencies, are you going to be expanding your service offerings from digital agencies to whatever niche practices they have, then? 

Yeah, so when we, one of the big things was, when they saw me talk at a panel conference called Engage a couple years ago. And with that, they know that we’re there. Let’s look for this virtual CFO, see if we can incorporate that into our service package. I wasn’t looking to sell or merge or anything like that. had really no interest in it. Highly profitable growing it, we’re doubling our size every three years. That’s a very high speed. And our bottom line was about 20, 25%. So it’s like, there’s nothing wrong with this. I’ll keep doing this forever. And then when they came to me, well, a couple companies came to us and said, You know what? I like you, I like how you’re doing things, you guys were like, it was 8 million or whatever, we’re now I go, is there a way to get to 50 million? You know, we’re growing really well, what do you mean? You know, I’m telling you, we’re gonna get to 20 million in three years, you know, they’re like, 50 million. Like gee, so we thought about it, it’s like, you know, what would it take for us to do that, it’s like, well, it would take, it would take capital, we’d have to have capital, because we’d have to, you know, when you grow that fast, it’s really hard to be profitable. And so we’d have to hire ahead, you know, expect attrition, you know, get training, really dial a lot of our processes in. And, you know, and we thought we could, we could do it, if we had the right thing and just happened the right partnership came by with Anders, they courted us in October and by actually, April 1, we actually had the deal signed. So it was a very quick courtship.

It is, yep.

And with that, it wasn’t a traditional merger, in the sense of merger, where we were gonna get paid out down the road, it was like, the only way that was going to do it is if we got paid out 60% of our value at the date of closing, and then the remaining 40%, five years later, with a guaranteed salary in between. And so I knew that, hey, I can still, with their help, and they loved it, too, because they knew we were there for the long term, and we’re gonna just, you know, you know, sell and leave. But we knew that, hey, with their help, we think we can get to that $50 million mark in that five year period. If it’s six years, high five, if it’s four years, even better, but we knew we could get there versus if we were trying to do it ourselves. 

And so they were willing to take that risk on us, and so that was the big merger there. And so then, the idea is, well, how are we going to do that? You know, are we going to just focus on creative agencies and really tried to get into more? We could, you know, and we’re going to, and we’re going to spend some money and time on that. But we identified a few other verticals that we’d like to go into, and really kind of repeat our processes and repeat what we did in order to, you know, really blow the creative agency space up. 

Makes sense. 

We’ve identified some, you know, thought leaders, and working with that, and really kind of just marketing it up now. So, yeah, so we decided to limit it to five. So we want to have five total verticals within the next five years being our main streams. 

And with verticals, I don’t mean that, like an accounting firm says, oh, yeah, I’ve got five construction companies and eight beauty salons and I’ve got this. Well, yeah, that was just happenstance. 

Right.

You know, verticals are when you actually focus your marketing efforts and everything you become a thought leader in that market, and people then come to you versus you go to them and then that’s how it’s been for us for 10 years. You know, we’ve not spent you know, any money doing outbound marketing. We do all inbound marketing. We’re doing thought leadership all the time, right? The article writing, books. You mentioned earlier, we’re on webinars. This is my third podcast of the day, you know.

What?! I’ve done two in a day. Three would be, I don’t know if I would want even want.

This is the third time I’ve had three in a day within the last three weeks. 

Alright. The most fun thought, right? 

Oh, it’s a blast. You know, this is great. Just sharing the story of teaching people how we do it.

So we I said at the beginning—niche, I just love that. And we’re in a niche, we have a niche service, specialty tax, obviously, niche industries roll off of that just because there’s certain ones that do that. But I just love that because, you just said everything, all the benefits of it. You can be out there you can be educated. And that’s what I do to you and I are almost the same. 

Oh, I know. 

I’m out educating all the time. I you have a podcast, I’m a podcast, you speak at conferences, I speak at conferences, you write, I’m writing a book, it’s starting January 1st. We haven’t got the book. I got the outline set for that. But it’s just you can, big examples. And you’re going to be starting to be one of my examples now. But Josh Lance: craft breweries, they just come to him. Brandon Hall: real estate investors, they just come to him. And he says, I don’t know how many leads he gets a month, but it’s unbelievable. And he’s doing the same thing. He’s educated, and he’s doing the podcast he’s doing. 

And so I think it’s well proven out, I think you’ve done a great job with it. And so I’m gonna be bragging from now on that I know you. I didn’t do it till today, so after today, I’ll start bragging I know, you know. 

Alright. So there’s plenty of things I want to talk about. But I want to go back to a couple of things. And we’re gonna wrap up pretty quick here. And then I’ll ask for some final thoughts. But first, and I think this is an important thing, because you and your wife, and I’m going way back to the beginning here, you and your wife both decided to do this at the same time. And you’ve heard this, I’m sure from people, it’s like, weren’t you afraid? Weren’t you scared? And I think when you’re an entrepreneur, and you have an idea, you just do it, you don’t think about it. I think some people do. I don’t at least it’s just like, hey, there’s an opportunity there. I’m gonna go do it. And I never think, oh, it could fail. And it can, but I don’t think that. Were you the same way?

100% the same way. And failure was never even thought about it, you know, different roadblocks I have, like, okay, now how am I going to get around that? It went from the building, hey, I’m out of money, what do I do? I can continue on, or I can go out of business, or let’s figure out how to get my money quicker. And that was, you know, that that’s innovation there. 

Yep. 

You know, let’s, let’s grow quicker, you know. And believe me, I failed many, many times, you know, every year, it’s like, hey, this next year is going to be the year you know, it’s going to be the year because XYZ,, and then all sudden, ABC showed up, and XYZ is gone. It’s like, well, this isn’t gonna be the year next year is gonna be the year here’s why I’m writing it out and forecasting it out, and it was a constant thing. And it was never that I’m going to fail. You know, it’s like, I’m just gonna have to figure out how to succeed. 

Yep, nope. And I see that. And part of what I say with that is, There’s opportunities that are out in front of everybody all the time. And some people react to them, or some people act on it, which is great. And some people don’t, which is great. You don’t have to. You don’t have to have that. But it’s not like, you know, you lucked into something, you fell into something and it’s just you saw the opportunity and you went with it. And I think that’s important for people to realize that it’s, you know, just act and you can’t be afraid. You know, you can be cautious or whatever, you cannot take stupid risks. But do it so both of you doing at the same time gives me the idea you both have similar personalities that way.

Yep. Yeah, we do. 34 years of similar personalities.

Alright, yeah. My wife and I just hit 36 years. So again, we are—alright, there you go. Although we’d known each other for seven years before, no, five years before we got married. So we met at 19 years old.

Nice, nice.

So another thing going backwards. Yep. Tommy Bahama. Is that that mall right on the river in New Orleans? Is that the Tommy Bahama? 

Yeah. 

I’ve shopped there plenty of times.

You’ve been there! Okay, yeah. In the fashion mall. 

Yeah, that’s the fashion mall. I bought plenty of clothes there. In fact, Tommy Bahama, I got five Tommy Bahama shirts delivered to my house today. 

Nice!

Just as a pro tip Nordstrom Rack you can actually get some pretty good deals on Tommy Bahama shirts 

Marshalls same way.

Alright! So I just needed to get that in.

Advisory, I wanted to get into that but we’re running out of time because that’s all you doing. Advisory is another hot button topic for me and for you, I think. But the pricing, we could have got further into subscription. I think we’re gonna have to do another podcast because I want to talk about this subscription pricing, I want to talk about the advisory because how important that is, we talked about a little bit but how deep you guys get into that as well. And many other things we could talk about your family, we could talk about your coaching you’ve done with that. But before I get to a couple final questions that aren’t related to what we talked about, anything you want to wrap up on the discussion we had so far today?

You know, the big thing is that, you know, I’m completely open book completely transparent. You know, we open our books completely to our employees, you know, our employees actually know what each other, what everybody makes. So we’re even, we’re even that transparent, it comes to salaries. If you know a salary band, someone’s and you know exactly where they’re at. 

Okay.

We do a lot of cool things with incentives. And so we make everything super transparent. And we open everything up for everyone. So if anybody’s interested, I know it’s kind of throwing it out there. You know, don’t hesitate, just shoot me an email. And I’d be happy to chat with you for an hour and just kind of help you out. I think that’s just the way that the good karma that’s been thrown my way, I can definitely throw back. So just let everybody know that.

No, I appreciate that. And that’s one of my mantras is share your knowledge. 

Yep. 

I try to do that wherever I can. So I was gonna get to that at the end. But what since you just said it, why don’t you tell everybody how they can get a hold of you then if they want to reach out?

Oh, just shoot me an email. Jody@summitcpa.net, not dot com. I didn’t want to spend the money on the dot com stuff. So it dot net. So summitcpa.net, that’s our website. 

So that’s the other thing we had in common. When we started, we were Tri dash Merit dot net—dot com became available about five years ago. And so now we have dot com as well. 

Gotcha. 

Alright. So one final question, then before we wrap up, and I ask this to all the guests, because I think it’s important. We have fun, I think I felt like we have fun here today. Business is fun. But we’d have passions outside of business. We have passions outside of work. I assume you do. And so why don’t you let me know when you’re not working, when you’re not running the business, when you’re not doing CFO services, what are your passions outside of work? What do you enjoy doing?

Mine are completely around my kids. So outside of regular hobbies, like golf, and fishing and stuff like that, we focus our time, you know, going around our kids. One’s in Kansas in med school and the others medical device sales in Florida. And so we try to share, you know, time flying down to Florida or, or whatever. And if we’re if we’re not meeting with the kids, and then we’re doing some traveling, and so we travel a lot. And outside of going to conferences, or speaking all the time, we try to vacation and maybe take the family to, you know, a really nice vacation once a year. And so just spending time with the kids is really our biggest thing, you know. That’s kind of what we’ve created. That’s how we created our company, for the most part we went to work at around our kids. And that’s really never quit.

Are you actually me? I mean, am I talking to myself right now? I just got this thing.

I think so. So that’s why we got along so well.

Alright well Jody, I really do want to do this again, because there’s other things we can go over. But I really appreciate you being here today. It was awesome. I had a great time. I learned a lot. And I mentioned that I’m, January 1st, I’m starting to book you’re going to be mentioned in that book now. Because you taught us so much information. 

Oh sweet, thank you.

If the book ever gets released—I shouldn’t even be talking about the book now because now I’m gonna jinx it, and we’re never gonna finish it. But yeah, thanks again for being here. 

You bet.

Thank you for joining us today on The Unique CPA. You can find the show notes for today’s episode, and learn more about Tri-Merit, at TheUniqueCPA.com. Remember to subscribe and leave a five star rating on your favorite podcasting app. And join us next time as Randy talks to Tina White of Panoramic Academy on The Unique CPA!