Welcome to the Escaping Me Accountants Trap podcast. It's a podcast to help accountants, CPAs and bookkeepers escape what we call the accountants trap. It's where accountants are not getting paid for their value, and are forced to work long hours for high demanding clients with little pay. Well, how do you escape the trap? Well, we've invited one of our members and a lead trainer at the CFO project to help answer that question.

Ryan Kindler. Ryan, welcome to the show. Thank you for having me, Adam. I'm excited to be here and excited to talk about this today. Yeah. So I'm excited, because you are not only a member of the CFO project, but you're a lead trainer in the CFO project. So you have a very unique perspective as you help other members, as they start and scale their journey of starting a CFO or advisory service.

But let me start off, Ryan, why did you want to become an advisor in the first place? Yeah. So I think one of the big things through my career, you know, in the beginning, I was starting my career out doing bookkeeping and general ledger accounting and kind of our end product was producing financials. Right. I'm sure a lot of the listeners can probably relate to that.

And, I had several clients that came to me and, and they were like, you know, we we really like the work that you're doing for us. This is really great. We like getting financials on a regular basis, on a monthly basis that are clean, clear, and we can read them. And they said but what would really be helpful would be if you could tell us a few ways based on these numbers, that we could really improve our business.

And at the time, I was really, really green in my career and just the type of person that I am, right? I've got some curiosity to me. Right. And hi fact find and you know, I want to have the answers. And so that really like just sparked the passion in me right. And really spent the next 2 or 3 years of my career, in my spare time, even sometimes using vacation time to get around people that knew the answers to those kind of questions.

And, really chase mentors. And then when I got on that side of the table and, you know, was able to really provide some answers to that, to those questions and how business owners could better improve their business based on their numbers, then I just fell in love with it, and from there just never turn back. I mean, I knew that that's what I wanted to do and knew that I was providing high value, service to business owners that really needed guidance and really need help in their numbers.

Yeah, I find what you just said to be 100% true, especially in my experience, business owners value their accountant to to do the books, whatever that means, because that's people most business owners don't. No idea what that entails, but they value their accounting to do the books. But they just really want their their financial person. Just tell me what that means.

I am I okay, what do I need to do? Is, is this this is this bad? Is this good? You tell me. You and you understand it for me. And just tell me what to do. And and not not in accounting terms either. Right. They want. They want layman's terms like accounting terms to them is like. You might as well be speaking Chinese, right?

It's like, I know nothing about cars. Nothing. Yeah. So when I go to the mechanic, something's wrong. I have a feeling something's wrong because the dashboard is telling the car. So when I go to the mechanic, I just want to tell him what the what what the solution is. Tell me what's wrong in layman's terms and tell me what the solution is.

And without speaking mechanic language. Yes. Yeah. And I think a lot of times, accountant we as accounting professionals, whether are bookkeeper, CPAs, agents, accountants or whatnot. We are living and breathing this stuff all the time that we just think is obvious. We just think everybody should know how to read a balance sheet and what, you know, what stable a cash flow make.

But to most people, it's not obvious at all. No not no it yeah. It's not at all. I mean yeah I mean to us it's easy right. And I think, you know, through, through my career and through my journey, like I've had the opportunity to be around business owners and kind of listen to them talk about their finances before they have my expertise.

And like it would, it would just a really I think it really amaze your listeners how much business owners don't know. Yeah. If that you know if the, if you really start listening for it and really you know, have that opportunity to kind of be a fly on the wall in some of these rooms. Yeah. I mean, the stuff that's like accounting one on one basics to us is really hard for business owners to grasp sometimes totally.

And the thing is that business owners in most business owners got the business because they're an expert at something like an attorney, which I know is your niche. You focus on attorneys. They're attorneys. They're they're they went to school for that. They passed the bar. They're practicing attorneys. They're not trained in business necessarily. So you could plug in anything for attorneys, dentists, you know, chefs, people that.

Yeah, that they're trained in their craft. They want to practice their craft. And the, the all the other parts of doing business, getting, you know, getting leads and sales and all the marketing, logistics and operations and admin and accounting, all that is just sort of secondary to their craft. And they don't they're not experts in accounting yet. Accounting is the the numbers person that does the accounting is the one person that's sort of touching on the one area that they know is the measures, the, the true success of their business, which is cash, you know, the money.

Yeah. Accountants sort of understands it because they're keeping track of it. And so it's no wonder the business owner wants the accountant. Just tell them what to do. But there's a big difference between telling me what to do versus telling me, helping me understand accounting. I don't really want to understand accounting as a business owner. I just want you to tell me what to do because you understand accounting.

Yes, they they want to. They want to know maybe 5 to 10% of accounting as it applies to their business. Right. And the rest, like, they just really just want you to tell them, right. And give them direction. And I think I give a like I think if most business owners had a choice and their accountant could fully keep them out of their financials, just tell me what I need to do in my business to make it better financially.

I think probably 95% of business owners would probably pick that. Absolutely, absolutely. So let me ask you, Ryan, statistics show that most businesses fail. I mean, according to the US Bureau of Labor Statistics, 50% never make it to their fifth birthday. 80% never make it to their 10th birthday. Why do you why do you think that is?

So? You know, I, I think from the perspective that I have I mean, we know that it comes down to they're not able to produce cash flow, right? They're not able to produce positive cash flow. And then eventually it's either you've got to contribute money as an owner or take on debt in order to keep the business going.

But I think beyond that, I think the biggest thing that starts a lot of businesses off the wrong way is just the owner not understanding their numbers, and they don't set up a system or a service that's really covering all of their costs. They're not priced right, they're not covering all their cost, and they're not set up to scale.

And maybe their margins are really thin. And like I get I get a lot of I mean, like to your point, I work with law firms, right. For any service based business, I mean, you know, in my opinion, net income should be 20% or greater. That should be pretty easy to achieve. And I get a lot of law firms that are under that, you know, five, six, 8%, 12%.

And when you have those thin margins and then you try to scale, it takes cash. And sometimes they fall into a trap of running out of cash because they try to grow to quickly. And but it all starts with being profitable to start with having a proven model. Yeah. You know that that's where that's where I believe that it all starts.

Yeah. You should be profitable from day one. And a lot of people, a lot of businesses do fail. I mean, obviously the ultimate reasons because I like cash flow. But one of the reasons that businesses fail is because they don't have a product market fit. Know, or their business is not set up to scale, like you said, like an attorney, you know, a law firm.

If the attorney themselves is the producer, the then they can't scale unless they hire another producer or the or that one producer or the attorney works for hours. But regardless whether it's a, a lot of, a lot of business owners start their business and they don't have a product market fit, meaning the there's not a market for what they sell.

Yep. But cash can solve that. Cash can give you a longer runway to help figure out a product market fit. In the case of the law firms, they were if they want to scale that the attorney doesn't want a job, they want to have a business because, I mean, let's face it, most attorneys have a job they own that they own if they don't want that.

I mean, if they want that, that's great. But if they don't want that, then cash will help them get there. Like you said, they'll help them hire more people and help them scale. And so cash is really the end all be all it is for sure. But it's a it's a fascinating I think that there's, you know, thousands of business books out there and courses and podcasts and everything else.

Yet business owners still struggle. And I'm trying to figure out why why that is. Sure, I have a couple theories, but why do you think that is?

I think that I think that there are not enough advisors working with small business owners. For one, you know, I think the majority of accountants, the majority of CPAs, you know, they end up going into compliance work. Right? And and, you know, I've, I've heard a lot of people say, you know, if you're in the field of accounting and, you know, you've got a degree, you'll never be without a job, right?

Yeah. Because that work is always there. Right? There's so much compliance work there. You know, for I mean, everybody's got to file their taxes, right. And so, you know, I, I think the large majority of accountants, you know, really choose that career path, right? They choose to go to the compliance road, which there's nothing wrong with. Right.

And that but but that does, you know, take up their skills and expertise in the accounting for small business. And not enough of them are on the advisory road. Right. I know a ton of tax accountants that 80, 9000 hour weeks, January to April, they have no time to advise their clients. So you kind of you have to pick right one side or the other.

And and so, you know, you're taking the group of people that their expertise is the numbers and their expertise is cash flow and business success. And the majority of the capacity of those experts, unfortunately, is in the compliance world. Yeah. And, you know, I mean, I, I, I don't know this for a fact, but I would guess, you know, advisors to accountants that are in compliance, we might be 1 to 100.

We might be 5 to 100. I mean, it really is like a slim, slim number, right? Like so. So I think that I think that's part of, you know, the big problem in the marketplace is, is the a lot of the financial experts are tied up with compliance. And I mean that works there. It has to be done.

But you know, I think the way that we really impact and change, you know, the small business world is we've got to get more accountants shifted over to advisory, and and having that be one of their main, if not their only focus. I mean, for me, it is right for, you know, a little bit of background on me.

I mean, the only thing that I sell a CFO, you know, my, my whole practice is focus on advisory. So. Hey there, Adam here from the Escaping the Accountants Trap podcast, I'd like to personally invite you to a free masterclass that we're conducting this Thursday called How to Start a CFO service. To register, just go to the CFO project.com and click Free Training at the top.

See you then. I think you brought up an interesting point that business owners want somebody that they can trust to help them, and that really only can happen in a in the context of a person helping a person. Because if you think about it, all these business books out there and they're all most of them are great, but the but it's not tailored to them.

So a business owner who is struggling in business reads a business book, and the content may be fantastic, but then they're sort of left at the end with, okay, so what now? What do I what do I do with this information? I don't understand it myself, really. Yet I have all these other things on my plate. I've got to get leads and manage my team and, and, you know, make payroll next Friday.

What do I do? And it's really the, human helping another human understand what to do, I think is our power. Yeah, it really is. I it's just, I mean, I know the times in my life when I needed help, I wanted somebody, a person to help, navigate. And I really think that's. I mean, that's what we're built for as the human race, right?

It's one person using their strength to help someone else in an area where they're weak. Totally. Right. So we're built for. Yeah, I agree. And the reason why I wanted to bring this conversation up is because we as accountants, a lot of times, like you said, we're focused on, you know, compliance or transactional work, the things that have to get done and and we lose focus on the fact that there's this giant mark market out there of people that need help, business owners that need help, and this market is to me way more interesting than doing tax or, you know, bookkeeping or whatnot.

It because you're really having a major impact on your clients lives. Yeah. And not not just your clients lives too, but I, I would throw in, you know, you know, for me, I mean, I'm working with several law firms at one time. All those law firms also have employees. Right. And so it's not just an impact on the client that I'm working with, specifically who's the owner of the business.

But it's also an impact on everybody that works at that business because it's true. You know, if I mean, if the if the company closes in the next year, right, they're all out jobs. Right? It and they would probably be okay. Right. They're going to find their next thing. But you know it has an impact in their life too.

Right. And and so it's yeah I mean you're you're impacting a lot of people at one time. Right. Absolutely. And plus I think also you're having a major impact on the client, your client, the business owners peace of mind because they're. Yeah, I mean, if you put yourself in their shoes, everybody listening, they are overwhelmed. They're nervous. They're scared.

They own this business that they're responsible for. Employees are responsible for their own income. They're responsible for for, for meeting payroll. Everything's rests on their shoulders. And yet a lot of them think of themselves as I'm just a, you know, a chef that opened a restaurant. I'm just an attorney that opened a law firm. I'm just this I'm just a dentist that opened a dental practice, and and they feel ill equipped.

And so somebody like us comes along and says, let me come alongside you and help you. I mean, that's going to do wonders for their peace of mind. Yes. And and when, when we can really, you know, look at the business, pick out the weaknesses and really turn that around for them. And all of a sudden, profit changes, cash flow changes, the amount of money that they have in the bank changes.

I mean, those are those are all things for, you know, helping an owner sleep at night. I mean, yeah, I mean, there's just comfort and security and having more cash in the bank and, and, and really being equipped, you know, have a lot less risk in the business that they own. And, yeah, helps them sleep better at night, for sure.

Yeah. So let me ask you this, Ryan, what is one thing that your CFO or advisory service did for one of your clients that you didn't expect? Yeah. So one of the one of the biggest things most recently, so I was looking at all all the numbers from one of my clients. Right. And this is, this is kind of a case study a little bit.

And the biggest problem, the biggest challenge that we were having was and just for a little bit of background, this is actually a company local to me. And they they're experts at sewer and drain cleaning. So they, they're actually not a law firm. I mean, a lot of my clients are a law firm. That's where I'm niche.

But this is actually one that is not a law firm. And, you know, it's so amazing that when you know, accounting and, you know, numbers, you can still help this business in any industry, not just the one that you're really, really an expert in. Right. And so we're looking at the numbers, looking at the numbers. And, and one of the biggest problems, one of the biggest challenges that me and the business owner kept talking about was, you know, well, my guys are plumbers, right?

They're not good at sales. Right. And they go into houses and and we have these packages and we have these guarantees and we have these warranty, you know, links of, you know, hey, if we're if we're here today, you know, we'll we'll clean out your shirt. You know, I mean any house that they walk into, they've had a sewer backup problem.

Right. So most of the time there's like there's water in their basement. Right. And so they had a real problem with, you know, just they're just they're technicians not feeling like they were worthy enough to sell the higher end packages. Right. And so their pricing was really, really lagging or kind of on the low end staying on the low end.

Right. And we wanted to increase their average transaction value. And so I'm looking at the numbers and we start discussing things. And I'm like, you know what if we hired a sales guy straight commission sales guy. Let's look at that opportunity. And again like I'm not you know I'm not a sales guy by any means. Right? I'm not an expert in that side of the business.

And we start looking at the opportunity and and we find out that there's a six figure role here for, for a potential just straight commission sales guy for the volume that they're doing. And it was really a win win because it was going to put, you know, as long as the sales guy could sell these higher end packages, which we believe that they can, the value is there, the warranty is there.

There's about $300,000 of opportunity for the company itself. So just by shifting like this, you know, not adding volume, right? We're not adding volume to the number of houses that they're going to. We're just shifting the packages that they're selling and the price that they're selling them at $300,000. Opportunity for the company, $100,000 opportunity for someone else to have a job.

Right. So we're creating jobs. And, that's something that we are rolling out in 2024 and I'm really excited about. It's an idea that I never thought would come out of, you know, my advisory role. But to have a win win like that, and, and obviously, you know, that providing this pans out, right? I mean, think about creating a $300,000 opportunity for one of your clients.

Yeah. You know, they're going to be happy for a long time. That is most, you know, a very large multiple of what they're paying me a year. We'll just put it that way. Yeah. You know, and so I'm super excited for it. I'm super excited for the company to see them continue to grow. And we're creating jobs.

I mean, it's something that I never expected, but really, really awesome story. Really, really excited about it. And it's going to solve several of our problems in that company. Wow. That's amazing. Imagine the ripple effect in the community. That one one decision will have not only the employees, but the company, the future employees that you hire that they hire.

Yeah. Well, so Ryan, last question. What is the best tip that you have for accountants and bookkeepers to escape the accountants trap? Best tip that I have, is probably I preach this a lot and I do it at my practice. I, I don't take unscheduled phone calls at my practice. Okay. I think, you know, when you're when you're in the compliance world, you know, you get clients that get a letter from the IRS, and they're just freaking out, right?

And they think that it's emergency. And I think one of the best things that you can do at your practice to really free up time and really have an organized schedule to hopefully, you know, let your listeners really shift into some advisory work, is you've got to have a system in place to let your clients. Now, look, this is an emergency Xyzzy is an emergency.

ABC is not right. And the list that's ABC should be really, really long, right? I mean, really the only emergency that I can think of from the compliance side of things is really around payroll, right? If payroll didn't run properly or employees aren't getting paid, I mean, that's an emergency. Yes. You should accept phone calls on that. But everything else can really be booked, like through a calendly software.

And, you know, I've done that at my practice since day one. Even when I had a bookkeeper in general accounting practice, all of my clients book calls with me. And to a lot of accountants, like, this is a kind of a, you know, shaking concept or kind of a shocking concept. They're like, oh my gosh, my clients will be so upset with me now.

They won't write it. It's no different. Like, you don't call your doctor up on the cell on your cell phone and talk to them when you have an emergency, right? You you call the office, they make you an appointment. You go in right. And so, you know, all of my all of my bookings are the soonest a client could book with me is 24 hours out.

And it really helps me organize my day, organize my schedule. Right? Because I know when I end the day, like when I end the day today at 5 p.m., right? My calendar's only open till 5 p.m. tomorrow. I know what calls I'm going to have tomorrow. I know what my schedule looks like. I know what free time that I have to work on client things or.

Or do business development or whatever. I can plan my day and I think that that tip will save your listeners hundreds of hours on the phone. And it also really conditions your client so that you can kind of get away from those clients that think everything's an emergency. They call you up on the phone every week and suck hours of your time.

Right. And so I think that's probably the biggest tip that I could give is to help, to help be organized, help, have a consistent schedule and help free up some time, hopefully to get over into the advisory side of the aisle or advisory work it. I do the same thing. I don't give out my phone number at all.

I do the same thing. Yep. Ryan, thank you so much for being on the show. Of course. Absolutely. I'd love to do it. Yeah, it was awesome. And to everyone listening or watching, thank you so much for spending the last few minutes with us as we discussed how to escape to the trap. Bye for now.