Making A Multi-Million Generating Firm In Half A Workweek
Michael Ly returns to Jetpack Workflow to chat with David Cristello about how quickly his cloud-based accounting firm, Reconciled, has grown in the last couple of years. He’s managed to double the size of his company every year, and he plans to continue that trend.
Even though Reconciled is a multiple-seven-figure business, and it’s growing so quickly, Michael only spends about 50% of his weekly working hours on the business. What’s the secret to his growth? How does he restructure the company as it increases in size? And what advice does he have for other firms out there? Continue reading to find out.
- Customer Acquisition
- Company Structure
- The Benefits of a Team-Based Structure
- How to Constantly Grow
- Common Firm Mistakes
- Michael’s Previous Interview
- Michael’s Presentation at Quickbooks Connect last year
Growing a Firm with Michael Ly
How is Michael able to continue to grow his firm, Reconciled, at such an amazing rate and still only spend about 50% of his working time each week on the business? According to him, it all starts with customer acquisition.
Secure and Dependable Customer Acquisition
“If you wanna grow at a modest rate,” Michael tells us, “you need to figure out a way to guarantee customer acquisition.”
This makes sense, doesn’t it? Growth depends on always having plenty of business, and that means ensuring you have a steady flow of new clients.
Michael started with what many of us start with: organic acquisition.
He used common tactics like networking on LinkedIn and other social media platforms. But, Michael tells us, this method isn’t predictable and dependable. This led him to turn to something accounting firms very rarely use: email marketing.
There are very few examples of email marketing for accounting firms. It’s practically unheard of. But Michael took inspiration from the model used by software companies. He ended up using a company called Growbots.
He would send very direct emails explaining the concept of cloud accounting, which is something many people don’t know about. Michael was sure that anyone that responded to such an email was probably looking for a new accounting firm ASAP, making them a red-hot lead.
The responses would lead to calls, which Michael was able to close more than 50% of the time. As a result, they started raising their prices until they were closing only about 30% of the time. This grew his revenue while keeping growth at a manageable rate.
Reconciled’s Company Structure
What structure does Reconciled have? Michael describes it this way:
- Michael’s Assistant
- Director of Revenue Operations (sales)
- Full-time salesperson
- Director of HR
- Director of Operations
- Head of Onboarding
- Head of Small-Business Delivery Services
- Head of Mid-Market
Under each of the three heads, there are team leaders, who are each in charge of a 3-to-4-person team of bookkeepers.
Why does Reconciled use a team-based structure, instead of having each bookkeeper be in charge of a certain number of clients?
Benefits of Team-Based Structure
As Michael explains it, when a firm gets to a certain size, you’ll be dealing with common issues among the bookkeepers on a regular basis.
For example, what if one or more of them get sick? What if one has maternity leave? At Reconciled, two workers had maternity leave in the same month.
With the Bookkeeper-client structure, that would mean a lot of clients that experience a break in their service. Either their account is put on hold when their bookkeeper is sick, or someone else has to step in, not knowing exactly where the other worker left off.
With a team-based structure, each team handles multiple clients. But if any team member is out for the day, the client experience will remain smooth and consistent.
In addition to that, hiring new workers becomes easy. When a bookkeeper has just been hired, you may not be ready to put them in charge of client accounts. With the team-based system, new workers can be trained within a team. They don’t have to be client-facing until they are fully trained.
In the team-based system, the team leader decides how to divvy up work among the other team members.
When to Restructure
Reconciled is constantly growing, which means that restructuring is necessary at different growth points, such as when your company has 5 to 6 employees. You may have to restructure again when the company reaches a dozen or so workers, then again around 20, then around 40 or 50 workers.
When thinking about structure and hiring, think about what position would be a smart hire according to your strengths. Michael wanted to focus on sales, which is a strength for him, so he was interested in hiring an HR person early, as well as a manager because those new hires would cover over Michael’s weak points.
Michael also admits that he hires around cultural fit ahead of specific skills of experience. When it comes to cloud accounting, the concept is so new that almost no one has experience with it. But he looks for people he connects with easily, people that would be a good fit in the culture of the company. He looks for passion above experience.
What mistakes people are making when trying to grow?
Michael has spent a lot of time working with other firms and talking with other firm owners, so what mistakes does he see others making? He shares a few key points.
First, he says, “Decide what you’re trying to build. Is it a scalable business?” Many people think they’re building something scalable but they aren’t.
For example, are you focusing on selling the business or the person in charge of the business? While having a personal brand is a plus, you have to focus on the brand of the business if you want to grow and scale. New clients need to understand that they are hiring the company and not a person.
Also, Michael points out that company owners need to focus on hiring new talent and talking to new talent as much as possible. “Act like you’re hiring, even if you’re not hiring,” he says.
You never know when you’ll need to quickly grow because of a huge influx in business.
All in all, Michael’s interview was full of great tips and concepts for firm owners to chew on, whether they are just starting out or already have a large firm. Make sure to use the above links to check out more about Michael Ly, Reconciled, and the other resources mentioned in the show.
ABOUT THE AUTHOR
Michael Ly is CEO of Reconciled, an online bookkeeping and business advisory practice based in Burlington, VT. Michael launched Reconciled in 2015; the firm has quickly grown to a nationally recognized Firm of the Future. Michael has also served on the Intuit® Accountant’s Council.