John Ray, Author at Business RadioX ® Page

Ken Crosson of Piedmont Injury Law

March 5, 2019 by John Ray

North Fulton Business Radio

Ken Crosson of Piedmont Injury Law

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Ken Crosson, Piedmont Injury Law

Ken Crosson is the Founder and Owner of Piedmont Injury Law. Piedmont Injury Law helps good people whose lives and families have been affected by an injury caused by careless driving or some other acts of negligence. Their clients come to them in pain, facing medical bills, loss of income, and fears of a permanent injury. Often they need surgery, lack the resources to find or pay for the care they need.

Piedmont Injury Law helps their clients reach the best possible outcome and getting compensation for the full value of their injury. Their strong and growing record of success has built trust and attracted referrals from all over Georgia. Clients are sent to them by their neighbors, coworkers, friends, and loved ones, and also by their doctors, chiropractors, physical therapists, and other medical providers.

By working hard, being thorough and aggressive, and truly caring about the people we help, Piedmont Injury Law has won millions of dollars in judgment and settlement for their clients.

**John Ray with Ken Crosson and Jen Starks of Piedmont Injury Law**

Decision Vision Episode 4: What Corporate Form Should I Choose? – An Interview with Anita Anand, Brady Ware & Company

February 28, 2019 by John Ray

Decision Vision

Decision Vision Episode 4: What Corporate Form Should I Choose? - An Interview with Anita Anand, Brady Ware & Company

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Choosing the Correct Business Structure

Michael Blake, Director of Brady Ware & Company and Host of the Decision Vision podcast, interviews Anita Anand, Director of Brady Ware & Company on the decision process on a corporate business structure, how recent tax law changes might dictate a change in corporate entity selection, and other questions related to corporate structure.

Anita Anand, Esq., Brady Ware & Company

**Anita Anand, Director, Brady Ware & Company**

Anita Anand, Esq. is a licensed attorney and has over 10 years of experience consulting with businesses to help them align their long-term business and financial objectives with a tax strategy that minimizes their overall exposure. Anita specializes in technical international, federal, state, and local tax research and consulting. She provides taxpayer representation in matters requiring federal and state private letter rulings and is responsible for international, federal, state, and local technical tax support involving a range of clients and industries. Anita works closely with the tax team to provide quality control in all aspects of Brady Ware’s tax division. Anita is also the author of articles and white papers on various subject matters. She has presented at conferences and led training sessions and initiatives. Anita is a graduate of Georgia State University College of Law.

Michael Blake, Brady Ware & Company

Michael Blake is Host of the Decision Vision podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. Mike is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

He has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.

Brady Ware & Company

Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.

Decision Vision Podcast Series

Decision Vision is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the Decision Vision podcast. Past episodes of Decision Vision can be found here. Decision Vision is produced and broadcast by Business RadioX®.

Visit Brady Ware & Company on social media:

LinkedIn: https://www.linkedin.com/company/brady-ware/

Facebook: https://www.facebook.com/bradywareCPAs/

Twitter: https://twitter.com/BradyWare

Instagram: https://www.instagram.com/bradywarecompany/

Show Transcript:

Intro: [00:00:01] Welcome to Decision Vision, a podcast series focusing on critical business decisions brought to you by Brady Ware & Company. Brady Ware is a regional, full-service accounting and advisory firm that helps businesses and entrepreneurs make visions a reality.

Michael Blake: [00:00:22] And welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we’ll be discussing the process of decision making on a different topic. But rather than making strict recommendations because everyone’s circumstances are different, we’re talking to subject matter experts about how they would recommend thinking about that decision.

Michael Blake: [00:00:42] My name is Mike Blake, and I am your host for today’s program. I’m a Director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia, which is where we are recording today. Brady Ware is sponsoring this podcast. If you like this podcast, please subscribe on your favorite podcast aggregator, and please consider leaving a review of the podcast as well.

Michael Blake: [00:01:07] So, today, we’re going to talk a little bit a hard accounting. We haven’t done that yet on the program. We’ll probably do it in a few episodes along the way. And we’re not necessarily going to get that technical, but this just in, you may have heard that the tax law changed radically at the end of last year that has changed the way that businesses are making decisions and making businesses kind of rethink decisions they may have made last year, five years ago, 10 years ago, 20 years ago.

Michael Blake: [00:01:41] And one of those decisions that when businesses, typically, are started – and maybe they changed along the way – is the corporate form. In other words, are you a C Corporation, and S corporation, you’re a limited liability company, and so forth? And there are many reasons or factors that drive that decision initially. But, quite candidly, one of them is what is your tax liability going to be. And depending on your corporate form – if it’s done correctly, and matches up with how your business makes money, and how you make money from your business – that’s going to drive what form of corporation or what corporate form you decide to take.

Michael Blake: [00:02:21] And what we’re finding at Brady Ware is that a lot of clients now and others are coming to us and asking, “Well, given these changes in the law, am I the right corporate form to frankly maximize or optimize my tax liability?” Nobody that I know likes to pay more taxes than than they absolutely have to. I know I’m not tipping the federal government when I write mine out. But, unfortunately, I know almost zero about it other than what I just talked about for the last 30 seconds.

Michael Blake: [00:02:52] So, we’ve brought in a subject matter expert. And I’m joined by my colleague, fellow director, and good friend, Anita Anand. Anita is a Director at Brady Ware, and she’s a licensed attorney and tax director at Brady Ware. She has over 10 years of experience consulting with businesses to help them align their long-term business and financial objectives with a tax strategy that minimizes their overall exposure. She believes it is necessary to take the time to understand what her business clients have done to achieve the success they have and where they plan to go. She, then, uses her broad knowledge of US and international tax laws to develop strategies and the most efficient tax structure to keep clients fully compliant at the lowest expense.

Michael Blake: [00:03:37] Anita has worked with a broad range of companies including technology, manufacturing, renewable energy, construction, real estate, and many other industries. She has helped them craft strategies to deal with federal state and local taxes, as well as inbound and outbound international tax issues. Along with these day-to-day responsibilities, Anita contributes her expertise to a number of local government agencies, industry organizations, and nonprofits. She is a guest lecturer at Georgia State University and the University of Georgia. Anita is also the author of various articles and whitepapers on various subject matters. In fact, I think she’s the most prolific writer in the firm, and she’s always writing something.

Anita Anand: [00:04:14] You’re so sweet, Mike.

Michael Blake: [00:04:15] She is presented at conferences, authored articles, and led training sessions and initiatives. Anita is a graduate of Georgia State University’s College of Law. And on a personal note, Anita was actually the first person that I met outside of the interview process before I joined the firm. And I remember very clearly that she was kind of one of the first to kind of welcome me, and we’ve latched on to each other because the two of us are the two non-CPAs-

Anita Anand: [00:04:39] That is true.

Michael Blake: [00:04:41] … in the firm at the director level., right. And so-

Anita Anand: [00:04:45] Right, very true.

Michael Blake: [00:04:45] And that-.

Anita Anand: [00:04:45] We got to stick together, Mike.

Michael Blake: [00:04:46] We do have to stick together. But that having been said, you studied tax, I have not. So, it’s just delightful to welcome you to the program. We’re going to have some fun today while we help people work through this decision.

Anita Anand: [00:05:00] I look forward to it. Thanks for having me.

Michael Blake: [00:05:02] So, Anita, I’ve given, sort of, this introduction, but I’d like you to kind of humanize a little bit. Talk about what you do at Brady Ware, and how you’re helping clients on a day-to-day basis.

Anita Anand: [00:05:12] Yeah. So, like you, said I’m a director with the firm. I spearhead the international tax practice. And so, because I’m a lawyer by trade and not a CPA by trade, I come at it from a slightly different angle in that tax consulting really is my specialty. So, I work a lot with clients, whether they’re individuals or businesses, here in the US that are wanting to expand their operations or their work in foreign jurisdictions and vice versa, right. So, if we have, let’s say, a company that has already established their business in foreign markets, and, now, they want to expand into the US, helping them understand what US tax rules are, how they work, what the regime is like, and what kind of an impact they’re going to be probably faced with is really what I like to kind of help them plan with.

Anita Anand: [00:06:03] But outside of the international, my foundation is technical tax. That’s what my career has always been. So, I also serve as a resource to others across the firm on technical tax matters, which vary all across the spectrum. So, if there is, let’s say, a client that has maybe a little bit more of a complex issue that requires some more technical tax research, looking into trying to figure out maybe how IRS may interpret a specific set of facts and circumstances, really diving into those types of situations, and then advising the clients appropriately. So, that’s just a very nice way, I think, of saying that I’m a tax nerd, but I enjoy it. I enjoy it. My job is to understand how these tax rules work, and then help explain to clients what it means to them.

Michael Blake: [00:06:53] It’s okay to be a nerd. The nerds rule the world, man.

Anita Anand: [00:06:55] That’s okay. Right, yeah.

Michael Blake: [00:06:56] The nerds are the ones driving Teslas. The nerds are the ones with second and third homes.

Anita Anand: [00:07:00] There you go, right?

Michael Blake: [00:07:01] You know, it’s all good. So, if you’re the nerd that everybody comes to for things tax, I mean, that’s not a bad place to be. So, what does being a tax expert an advisor mean? I mean, you talked a little bit about, sort of, being a tax nerd, but it goes a little bit beyond that, doesn’t it?

Anita Anand: [00:07:18] It does. It does. And, I think, the overarching goal for any tax advisor – and this is the way I view it – is you really are taking what is a complex set of rules that in the federal income tax code, you’re taking the code, you’re taking the regulations associated with it, the guidance IRS has issued along the way, and trying to, number one, keep up with that, understand what that means, interpret it correctly. But then, more importantly, be able to communicate that to a client in a way that they understand, right. It’s no different than, for example if I go to a doctor not feeling well, and they spit out all of these medical terms that have 15-18 syllables to it. Well, he or she could be the most brilliant person on the face of the earth, but they’re not communicating to me in a manner I understand what it means.

Anita Anand: [00:08:09] And so, I kind of take tax advisory in that light where our job is to really take something that the average person probably doesn’t even want to deal with. And it’s our job to make them understand how it impacts their business. But that’s also a loaded job description, right, because that includes that the advisor needs to be keeping up with all these tax law changes, which is constantly in a state of flux, not only on a federal level but international implications, state and local tax implications. So, there’s a lot to always keep up with.

Anita Anand: [00:08:43] But then, I think, what also sets maybe tax advisors apart from just true tax compliance, because I view tax compliance as you’re looking in the rearview mirror, you’re reporting what has already happened; whereas, I think, one of the key aspects of a tax advisor is to have more of a proactive approach, work with clients from the beginning, and more so on the front end, and along the way in terms of, “Hey, how’s the business going? How are we seeing things go? What is the ultimate goal here? What are things you should be aware of? How they’re going to impact you? What are you thinking about? What aren’t you thinking about that you should be thinking about?” That way, we’re making sure that clients are in the best position possible to make the best business decisions understanding tax impacts along the way.

Michael Blake: [00:09:29] I think that’s a very smart comment that you made that I want to highlight because I think it’s that important that it’s worth going off script to do that. There’s a big difference between being an analyst and an advisor, isn’t there?

Anita Anand: [00:09:43] There is.

Michael Blake: [00:09:43] And when you’re an analyst, you often talk about either, “Here’s what happened,” right, or “If A, B. C happened, then, sort of, here’s the flow chart, and here’s what will happen. Here’s kind of what the math says. And here’s what the law clearly says.” The advisor’s job is a lot less comfortable, isn’t it?

Anita Anand: [00:10:04] It is. And you have to be okay with the — You have to get comfortable with the uncomfortable. And that is difficult to do because nobody likes to be in that gray space. And in my experience, and especially in light of tax reform, a lot of tax professionals are stuck in that gray space.

Michael Blake: [00:10:23] And it’s even worse now, right?

Anita Anand: [00:10:25] It is.

Michael Blake: [00:10:25] Because you’re talking about changing rules and changing regulations. As I understand, in many ways, the IRS has not decided or, at least, has not chosen to share with us yet-

Anita Anand: [00:10:35] Correct.

Michael Blake: [00:10:35] … what they’ve decided the rules actually mean, right? So, in a lot of cases, to be perfectly candid, we’re all, not just Brady Ware but every CPA who’s being intellectually honest-

Anita Anand: [00:10:46] Right.

Michael Blake: [00:10:47] … is making a best guess based on available information that could turn out to be wrong.

Anita Anand: [00:10:52] Absolutely. And I think that’s another thing that’s going to set what I believe tax advisors into different buckets is being honest with clients. I understand we have — I’ve had to have these conversations multiple times with clients as clients are expecting an answer. When they come to you, they are expecting an answer on, “Okay, this is my issue. Tell me what I need to do.” And we need to be honest in that we are in this state of flux, and that there is so much that is unknown. But given what we know as it stands right now, this is what we believe to be where we think IRS is going to come out on it, but with the caveat that it could completely change because we just don’t know what we don’t know.

Michael Blake: [00:11:36] And does your legal training help you with that? I mean, the law is the law, but, on the other hand, the law is the law until it gets in front of a judge and jury.

Anita Anand: [00:11:43] Correct. It did, it did. But I also think it’s also experience along the way. The legal training helps you analyze what is already in front of you. It helps you interpret, okay, if you’re looking at, let’s say, 10 tax court cases on a particular issue, and eight have gone a certain way, and two have possibly gone a different way, to kind of help analyze what that really means. So, it has provided the analytical skills that I think I have, but there is still that second part of the equation, which is being okay with communicating your analysis accurately and honestly with a client, which just, I think, comes with experience.

Michael Blake: [00:12:29] So, I want to go out on a limb and say you didn’t necessarily, when you’re eight years old, say, “I want to become a tax advisor.”

Anita Anand: [00:12:37] No.

Michael Blake: [00:12:37] Is that fair?

Anita Anand: [00:12:38] That is a fair statement.

Michael Blake: [00:12:39] Some people have done that. And maybe they go and do, more power to them, you didn’t, and I didn’t grow up saying, “I was going to be a business-” I didn’t know what a business appraiser was until I graduated from business school. So, what got you into tax advisory? What captivated you that you want to make that your career and you wanted to be an expert in tax?

Anita Anand: [00:12:57] It’s really funny that you asked that question because I’ve asked that question of myself a couple of times along the way.

Michael Blake: [00:13:04] During busy seasons?

Anita Anand: [00:13:05] Yeah, yeah, yeah. Every year between that February and April timeframe. So, early on in my career, I never at all thought that I was going to do tax. Honestly, doing my own personal income tax return that one time a year was enough tax I ever needed to be exposed to. But I got a good opportunity in tax and, obviously, in the tax advisory role. And I went in with a certain set of expectations, and I was actually pleasantly surprised. So, I stuck around. And over time, that’s how I built my career.

Anita Anand: [00:13:40] But along the way, obviously, you learn a lot about yourself as an individual and as a professional. And when I look back at really what made me stick around in the tax space is, I think, believe it or not, in a weird way, I think, I like problem solving. And tax advisory is that every day. It’s not necessarily that a client is coming to you, “Hey, I have an IRS audit. Now, please fix this for me.” It’s advising clients along the way and what they’re trying to do. There’s a constant “problem” that business owners are constantly faced with. And so, you’re able to advise them on that.

Anita Anand: [00:14:18] So, it’s problem solving that I enjoy. And then, I enjoy working with people. So, I like getting to know my clients, and understanding what their business is, where their goals lie. And, obviously, building that kind of professional relationship where they believe that you are a valuable member to the team. So, I think all of those things put together have made tax advisory a good fit for me, which is I guess why it’s been working pretty well.

Michael Blake: [00:14:46] It has worked pretty well. You’re a brand director, so.

Anita Anand: [00:14:49] That is right. That is right.

Michael Blake: [00:14:51] Can you think of a neat success story you’ve had with the clients, something you really, really either helped them out of a bind or helped them frankly just save a lot of money that they’re going to be on the hook for?

Anita Anand: [00:15:02] Yeah. I’ve been blessed with quite a few clients’ situations where we were able to get them out of what I’m going to just call a pickle. I had a client that specifically came to me from a prior CPA firm. They were in the midst of a complete reorganization, corporate reorganization. And the amount of dollars that were involved were quite significant. And so, the way the prior CPA firm was advising them to pursue this reorganization was going to be a completely taxable event, and it was going to cost them a lot of money.

Anita Anand: [00:15:41] So, when they came to me, we had some certain discussions, and we really to dive in to some of the tax rules in terms of, could they possibly benefit from a tax-free reorganization? So, we worked very closely with our legal team to stay within the parameters of the law and what is allowed. And, in fact, what the tax liability their prior CPA had estimated to them, we were able to completely wipe it out.

Anita Anand: [00:16:08] So, that was one of the success stories that I kind of hold on to quite a bit and it saved them millions of dollars. So, quite significant on their end as well. But my success story is truly where I find the successes when you have a client that achieved success, and you’re a valuable member to the team that helped them do it, and they look at you as being a valuable member to the team. And that in and of itself is success.

Michael Blake: [00:16:35] Yeah, that’s what it’s all about, right? And that is the stimuli.

Anita Anand: [00:16:36] That’s what are in it for everyone.

Michael Blake: [00:16:38] So, all right. So, let’s talk now about entity conversions. Why are people talking about them so much now? Why is there so much chatter about, “I want to convert from C, to S, to SSC, or something else”?

Anita Anand: [00:16:51] Well, it’s this little thing called tax reform that you had alluded to.

Michael Blake: [00:16:54] Oh, yeah, I heard of that.

Anita Anand: [00:16:54] Yeah, that little thing that happened at the end of 2017. The tax cuts and Jobs Act was the tax reform package really. And it was high time for tax reform. If you go back and you think about the last major tax regime overhaul, it was back in 1986. So, the fact that this last one was done in 2017, I mean, you’re talking 30 plus years later. So, it was high time for there to be, I think, a little bit more of a look towards our tax laws, our tax rules, and modify them to be in line with the current marketplace and business realities of our country

Anita Anand: [00:17:32] So, with reform though, we had a number of different changes. And one of the most talked about is the reduced corporate tax rate. So, we went down from 35% to 21%. And, now, that has raised this conversation amongst various taxpayers, “Does it make sense for me to use a traditional corporate structure? Because before, it was going to cost me 35% at the corporate level. Well, now, it’s lower. So, should I be thinking about a conversion?” So, that’s truly what has sparked it, and all the conversations that we’re hearing and reading about.

Michael Blake: [00:18:08] And what are clients converting from and to in order to take advantage of that?

Anita Anand: [00:18:14] So, at this point, a lot of clients are thinking about converting from what’s called a pass-through entity, which is like your traditional partnership as corporation limited liability company or LLC to a C corporation. So, that’s what, I think, the conversation is and that discussion point is right now is I’m taking what — There really is no corporate entity. It’s a pass-through. And does it make sense now for me to convert that pass-through entity to a traditional C corporation?

Michael Blake: [00:18:45] Now, that’s kind of different from, at least, what I’ve encountered maybe that’s because that’s where valuation comes in, but I’m more used to seeing C to S form conversions, right?

Anita Anand: [00:18:58] Right.

Michael Blake: [00:18:58] Is going back the other way more or less complicated than C to S, or about the same?

Anita Anand: [00:19:03] So, it’s very — Okay. I want to caveat this, but it’s simpler to go from a pass-through entity like an S to a C, or a partnership to a C, or LLC to a C. But going the other way is a little bit more difficult. You’ve got a lot more considerations that go into that, and there’s usually some pain and cost associated with it. And so, that’s kind of part of the conversation that we’re having with our clients right now is, sure, we can talk about this conversion. We can do the modeling. We can certainly walk you through it. But just know that as easy as it is to maybe check the box and convert to a C corporation, in the event two years down the road, you wanted to go back, there’s going to be some cost. So, the short answer to your question is it’s really just not that easy to go back once you’ve elected to be a corporation.

Michael Blake: [00:19:59] So, you better be sure?

Anita Anand: [00:20:01] You should be sure.

Michael Blake: [00:20:02] And I mean, again, I’m not an account, but my impression is the IRS generally is not a huge fan of changing corporate forms all the time like share changes-

Anita Anand: [00:20:13] Right.

Michael Blake: [00:20:15] … outfits in a concert-

Anita Anand: [00:20:17] Absolutely.

Michael Blake: [00:20:17] … because you want to optimize your tax rate.

Anita Anand: [00:20:19] Right, right.

Michael Blake: [00:20:20] So, they’re not a huge fan of that.

Anita Anand: [00:20:22] No.

Michael Blake: [00:20:23] So, can we say there’s a bottom line or a blanket statement? Or I’m going to rephrase the question actually. And the question is, what are kind of the criteria that makes a company a good candidate for a pass-through entity conversion to a non-pass-through entity conversion? What’s kind of that checklist look like?

Anita Anand: [00:20:45] Mike, that’s a really good question. But, unfortunately, there is no one-size-fits-all. And the reason I say that is because there were so many different moving pieces in tax reform that there are new benefits that are afforded to those businesses that are operating as a pass-through entity. And, now, there are new benefits that are afforded to those that are operating in a traditional corporate structure.

Anita Anand: [00:21:11] So, it’s kind of hard because you’re not really comparing apples to apples. So, what you really need to look at, I can tell you kind of what maybe the logic should be, and the logic should be taking a closer look in terms of what is your business today; what are your near-term and long-term goals; what type of activities are you engaging in; are you expanding in international markets; are you investing in real estate? What is it? Where is your income coming from? Because those are going to help, I think, really determine whether one particular type of structure is better than others.

Anita Anand: [00:21:49] And then, from there, you really have to do modeling. It’s very easy to speak conceptually and in big picture, but, at the end of the day, what everyone wants to know is the bottom line. It’s, how much is this going to cost me? And the thing is whatever structure you choose, it’s an annual cost. There’s an annual cost associated with it. That’s your tax liability.

Anita Anand: [00:22:10] So, you got to put pen to paper or, in this case, maybe have some intricate and complex spreadsheets, but to really help understand, “Okay. Well, if I do it in a partnership form, could I maybe tap into certain benefits there?” So, for example, like under tax reform, there’s a new deduction that’s afforded to certain qualified business income of qualified trades or businesses that’s afforded in partnership, or S corporation, or even sole proprietorships that is not available to a C corporation. But, now, the C corporation has a lower tax rate. They have other benefits that could potentially be taken advantage of, let’s say, if there’s some exports or something going on.

Anita Anand: [00:22:53] So, you just have to understand what different pieces kind of fit together, and then be able to compare both of them, and see what works out better. In my experience, the conversations that I’ve had with clients, it really has been a toss you kind of go in thinking that, okay, a conversion might actually prove to be beneficial. But then, when you put that pen to paper, you see that maybe not and vice versa. So, it’s really, unfortunately, the facts and circumstances are going to dictate.

Michael Blake: [00:23:22] And, sometimes, the cure is worse than the disease.

Anita Anand: [00:23:25] Correct.

Michael Blake: [00:23:26] Right? So-

Anita Anand: [00:23:26] Yeah.

Michael Blake: [00:23:26] All right. So, I want take a step back for just a second because I’m sure some of our listeners don’t geek out on this accounting stuff. So, I want to take a step back and do a little bit of remedial tax accounting 101. And that is at the outset, generally, why do people check that box they’re going to be a pass-through entity to begin with versus a non-pass-through entity? What generally kind of drives that decision initially?

Anita Anand: [00:23:55] So, I think, first and foremost, the overarching benefit of having a pass-through entity is the fact that you truly get passed through of income loss, credits, deductions, whatever may be generated from the business. So, let’s take a structure. Let’s assume that we’ve got a partnership that owns a business. The business is profitable. And so, whatever income is generated from the business is reported at the partnership entity level.

Anita Anand: [00:24:26] So, the partnership itself will file a tax return, but the partnership itself does not pay an income tax. Instead, the partners get their pro-rata share of income, and all the other items of tax that are allocated to the partners. And then, they report their income on their personal income tax return based on whatever tax bracket they may be in. So, that’s your traditional pass-through. You don’t have the two layers of taxation, but you’re afforded, obviously, limited liability, right, with having a certain type of a limited liability in their partnership or S corporation.

Anita Anand: [00:25:00] Nowadays, like I was mentioning earlier, because of tax reform with this new deduction now, there’s an additional reason or an additional benefit to operate in the form of a pass-through, which is called this qualified business income deduction, which is up to a 20% deduction on certain types of income from certain types of qualified trades or businesses. The thing you need to know about tax is when the I–RS is offering a tax credit or a deduction, they’re qualifying it. So, you need to make sure you truly are eligible. But-

Michael Blake: [00:25:30] You can’t just say, “Hey, it’s all good.”

Anita Anand: [00:25:33] Exactly, right. You can’t just assume you’re going to be eligible for anything. So, there are quite a bit of caveats. And so, you want to make sure you’re eligible for it. But that is another benefit that’s afforded to pass-throughs that isn’t afforded to your traditional corporation.

Anita Anand: [00:25:48] And then, if you kind of go to — Let’s go to like an LLC structure, right. If you have an LLC with just one So, like I set up an LLC, I’m the only one in it, well, I’m afforded the limited liability from a legal standpoint, but for tax purposes, that LLC is treated as a disregarded entity. So, what that means is I don’t even have a compliance requirement at that LLC level, but I still get the benefit of the flow through.

Anita Anand: [00:26:17] So, flow-throughs have quite a bit of benefits, and there’s a little bit more flexibility associated as well with pass-through entities that aren’t necessarily available in the corporate structure. But I think those are kind of, I think, your main points that have had people gravitate towards a pass-through structure as opposed to some others.

Michael Blake: [00:26:38] Okay. Now, a big part of your practice, an increasing part of your practice is international, and you do a lot of work particularly in Latin America, but a bunch of other places too. Is this change in the law, this discussion of corporate form conversion, having an impact in companies doing a lot of international business?

Anita Anand: [00:26:58] It most definitely is. So, if you take a step back and try to understand part of what was going on from the legislative side in tax reform, I think, a lot of what the US was realizing was that US companies are choosing to do business in foreign jurisdictions because of the tax rates in the US. It’s that they were just too high. And so, there was an effort to try to incentivize businesses to bring those operations back into the US.

Anita Anand: [00:27:31] And so, part of it is bringing the corporate tax rate down from 35% to 21%. But then, there were other incentives that were added as part of the tax reform package that are only afforded to corporations that have an international presence that are not afforded to those that are operating through a pass-through entity.

Anita Anand: [00:27:50] So, for example, now, obviously, because the corporate tax rate has come down, it’s making it, (1), just more attractive; but (2), if you have, let’s say, a US company that is providing services or selling goods to an unrelated third-party, that happens to be a foreign person for ultimate foreign use and consumption, they’re eligible to tap into a tax deduction benefit that is only afforded to corporate taxpayers, not afforded to a partnership or an S corporation.

Anita Anand: [00:28:22] So, there’s that benefit that, again, if that’s, kind of, the line of business you’re in, that may tip the scale in the favor of operating in a corporate form. Other types of benefits, especially in the international space, what we have is a lot of US corporations that have ownership and controlled foreign corporations. And so, now, there’s received deduction for those dividends that are truly foreign-sourced. So, that’s an added benefit, again, only to corporate taxpayers.

Anita Anand: [00:28:56] But, also, in light of tax reform, there were also some new taxes that IRS decided, or Congress decided to go ahead and enact. And so, to to help offset the overall tax cost, there are deductions to help, like I said, offset that tax liability, but that deduction is only available to corporations not available to pass-through. So, a couple of those different pieces put together are making an impact, especially for those with an international presence. So, I think, the analysis is slightly different for those with a multinational footprint than those with just a domestic operation.

Michael Blake: [00:29:34] Okay. Let me switch gears here a little bit. I’d like to talk about a topic near and dear to my heart, which is startups. In my experience, most startups — Well, if a startup is going to start — If they think they’re going to raise venture capital, they may start out as a past-through, but they wind up migrating to being a C corporation.

Anita Anand: [00:29:55] Right, right.

Michael Blake: [00:29:55] They do that because, one, it allows them to issue multiple classes of stocks, like preferred shares; and the other is that venture capitalists don’t want to have passed-through gains.

Anita Anand: [00:30:06] Right.

Michael Blake: [00:30:07] They’re profits that they have to pay taxes on.

Anita Anand: [00:30:08] Right.

Michael Blake: [00:30:09] Because it deprives the company of cash. Is that calculus now changing because of the tax law? The tax law, now, driving something else.

Anita Anand: [00:30:20] Yes and no. And, I think, some of the considerations as it relates to startups remain the same. Typically, startups, what we see is that in the first few years, there’s just a lot of losses. And so, a pass-through structure is attractive for the reason that, as a name implies, is you get the pass-through of those losses to the individuals versus that getting trapped at a corporate level, right. So, if they had set it up as a corporation from the beginning, whatever losses are being generated, they get stuck at that corporation level, and they don’t really, or they’re not able to be realized, or benefits are not able to be realized at the individual shareholder level.

Anita Anand: [00:31:04] So, I think that consideration still holds true. But I think, to your point, what we have seen in the past and what we will probably continue to see is, over time, as they get closer to raising capital, there is going to be maybe not necessarily a tax decision that’s the primary driver but more so a business decision to elect to be treated as a C corporation instead, and more so because of the VC money. If the VCs are expecting it to be a corporate structure, they’re the ones that are bringing the money to the table. So, naturally we want to please them, right?

Michael Blake: [00:31:40] Yeah.

Anita Anand: [00:31:40] So, that’s what we’ve seen in the past, and I think we’ll continue to see that. I think, our experience has been that some VCs – and this is maybe where I defer to you – Some VCs, I think, are starting to get maybe a little bit more comfortable than what we used to see 10 years ago with a pass-through entity structure but, still, traditionally, I think, most still expect to see that corporate form in place.

Michael Blake: [00:32:00] Yeah. In my experience, I see Angel investors, particularly if they only have one or two investments, they’re okay with an LLC because when there are pass-through losses, they can actually use them, right, but if you’re an investor, and you’ve got eight of these startups, right, you’ll never be able to use all the losses. They’ll just expire before you’ll be able to use them, right?

Anita Anand: [00:32:24] Right, right.

Michael Blake: [00:32:24] So, you may as well go ahead, at least, in some of these entities, make it a C Corp because you can’t benefit from the past-through losses anyhow.

Anita Anand: [00:32:30] Right, right. The only thing that is just going to make that decision a little bit easier is that, obviously, if you’ve got a company that’s now choosing to be a C Corp because of VC money or whatever other reasons might be associated with it, it’s not that 35% income tax rate that you’re looking at that’s glaring at you with flashing lights and everything. It’s 21%, which seems to be a little bit more tolerable.

Michael Blake: [00:32:55] By the way, I’m going to note something to our listeners. This is the first time in my life I’ve said three correct accounting things in a five-minute period.

Anita Anand: [00:33:01] We’re so proud of you, Mike.

Michael Blake: [00:33:02] Thank you very much.

Anita Anand: [00:33:02] We are so proud of you.

Michael Blake: [00:33:03] Thank you very much. I’m going to give myself a little present at the end of the day. All right. So, this is, obviously, very complex, right? This is not something we can solve for anybody over a 30-minute — I don’t think you could solve with a 30-minute conversation directly with a client, right?

Anita Anand: [00:33:20] Right, right.

Michael Blake: [00:33:20] So, can you provide some guidelines on how to think about this decision, right? At least, some of these interests now piques like, “Gee, I’m a C. Maybe I ought to be a pass-through and start not pay so much in taxes.” What can they think about to make that decision to e-mail you, call you, decide if this is kind of a worthwhile pursuit on their part?

Anita Anand: [00:33:45] Right. I think, first and foremost, I think, you need to really sit down and take a step back. I think a lot of business owners, they kind of know what they’re expecting and what they want out of their business, but because they get involved sometimes in the day-to-day, we don’t necessarily just take a step back and really think about, “What is our strategic goal? What is our strategic vision for the business? What are we doing today? What am I wanting to do tomorrow, 5 years down the road, 10 years down the road?

Anita Anand: [00:34:14] Think of that. Map that part out because talking to your tax advisor or talking to your legal team, they’re not going to be able to give you those answers, right. That needs to be driven by the business owner. But once you have that strategy laid out, then, I think, it’s prudent to go ahead and initiate those conversations with a tax advisor and say, “Hey, you know what. This is kind of where I’m at right now. This is my current structure. This is what I’m expecting to do.”

Anita Anand: [00:34:39] Obviously, we understand we plan, and life a different plan for us. So, we understand that, but I think if you have a roadmap to start with, that, at least, prompts the conversation for discussion and considerations. And then, from there, talk about the benefits of kind of what benefits are they currently realizing versus what are the benefits that they could be realizing under a different structure.

Anita Anand: [00:35:04] And then, you really have to do the modeling. You really do. I would go on record and say that, I think, any type of a conversion without modeling is a little scary because, again, you’ve got to put the pen to paper and really see how it all shakes out. So, do the modeling. And then, once you kind of know how the numbers shake out, then, I think, there’s still a second layer of considerations in terms of, okay, now, administratively, what is the cost of conversion? What are going to be my legal fees? What are going to be my tax fees? Other non-tax considerations for example.

Anita Anand: [00:35:41] So, if you have a client that’s got a partnership, and modeling the C corporation might be a more advantageous tax structure. Okay. Now, you’ve got to think about corporate formalities, articles of incorporation. Do I need to have annual shareholder meetings? How are my minutes going to be recorded? So, there’s other stuff to think about that’s not necessarily just tax considerations. And so, the conversation needs to be not only with your tax advisor but also your legal team because all these pieces need to fit together like a proper puzzle.

Michael Blake: [00:36:14] And to be clear, when you say modeling, we’re not talking about getting on a runway and strutting down, but rather, it’s doing the math, right?

Anita Anand: [00:36:22] Absolutely.

Michael Blake: [00:36:23] Opening up a spreadsheet. And just, at some point in business, there’s just no substitute for grinding out the number, right?

Anita Anand: [00:36:31] Right, right.

Michael Blake: [00:36:32] And one of the things that you guys are doing, and we do, is we help you grind through the numbers.

Anita Anand: [00:36:36] Absolutely.

Michael Blake: [00:36:36] So, if somebody wants to — If someone’s not sure, the listener to this podcast who think, “I’m not sure, but I don’t want to waste Anita’s time. She seems really nice and busy,” can they just sort of call you and get kind of a consultation to see if it makes sense.

Anita Anand: [00:36:53] Oh, absolutely, absolutely. I mean, that’s what we’re doing for so many. And, honestly, I would encourage it because as a business owner, you should be thinking about it. At least, ask the question. The answer may be you’re absolutely fine, but be thinking about it, and have these conversations. And I will say that I don’t believe that this conversation is going to be a one conversation and be done with it because as we’ve spoken about earlier in this conversation is there’s still so much to be learned in light of tax reform. We’re still waiting on more guidance to come out.

Anita Anand: [00:37:26] So, the conversation may actually be more of a continuing conversation because, again, ultimately, you want to be making the best decision for you out of a position of being in possession of as much knowledge as you’ve had.

Michael Blake: [00:37:41] Being informed, right?

Anita Anand: [00:37:41] Right. You want to be informed. You want to be educated. And, like I said, if you convert you can’t really go back without there being some tax pain and cost associated with it. So, you want to be really sure. And then, also, weigh the fact that some people are talking about, what’s the certainty? Will tax law change again? Okay, if we go ahead and convert, down the road, now, the rules are completely different, then what happens? And that is a risk, that is a factor, but you’ve got to weigh that with maybe some of these other considerations and really see how the scale tips.

Michael Blake: [00:38:16] That sounds cool. Somebody got to really do a podcast about making informed decisions. Well, never mind.

Anita Anand: [00:38:21] Yeah.

Michael Blake: [00:38:23] So, if someone wants to ask you, if someone wants to reach out to you and pursue this, how can somebody get a hold of you?

Anita Anand: [00:38:29] Well, the good thing is I think I’m pretty flexible. People call all the time, e-mail all the time, LinkedIn, Facebook. I mean, I’ve got clients that reach out to me a form of different ways. And so, I would encourage anyone to reach out in however they feel fit. Email, call, and want to schedule an in-person meeting, happy to do that as well. But I would encourage that conversation with someone, whether it’s me or whoever, just people you feel comfortable with but, at least, be having that conversation with your tax advisor because I think it is high time. And if they haven’t brought it up to you, you should probably bring it up to them.

Michael Blake: [00:39:07] And what’s your e-mail address?

Anita Anand: [00:39:08] It’s aanand@bradyware.com. So, aanand@Brady.com.

Michael Blake: [00:39:17] All right. So, there you have it. Everything that you want to know about corporate form conversion but may or may not have been afraid to ask. But you shouldn’t be afraid asking more because Anita really knows her stuff, and she’s pretty cool too. So, do ask.

Anita Anand: [00:39:28] Thanks, Mike.

Michael Blake: [00:39:28] Do ask to ask her about it.

Anita Anand: [00:39:31] Happy to help.

Michael Blake: [00:39:33] So, I’m going to thank Anita for coming on. This is great. This is, literally, thousands of dollars of free advice that you’ve just given. So, that’s awesome. And that’s going to wrap it up for this program. I’d like to thank Anita so much for joining us and sharing her expertise with us.

Michael Blake: [00:39:33] We’ll be exploring a new topic each week so please tune in. So, when you’re faced with your next business decision, you have clear vision when making it. If you enjoy these podcasts, please consider leaving your review with your favorite podcast aggregator. It helps people find us, so that we can help them. Once again, this is Mike Blake. Our sponsor is Brady Ware & Company, and this has been the Decision Vision Podcast.

To Your Health With Dr. Jim Morrow: Episode 3, The Truth About Statins

February 27, 2019 by John Ray

North Fulton Studio

To Your Health With Dr. Jim Morrow: Episode 3, The Truth About Statins

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**Dr. Jim Morrow, Morrow Family Medicine**

Dr. Morrow’s Show Notes on Statins

Before talking about statins, we should talk about high cholesterol.
What qualifies as high cholesterol?
- Has changed a lot over the years.
- Now, it is LDL > 130 or HDL < 40 if you have no family history of heart disease.
- It is an LDL > about 75 if you do have a family history.
Hard to raise your HDL. No matter what you do.
United States Preventive Services Task Force (USPSTF) recommends that adults without a history of cardiovascular disease (CVD) use a low to moderate dose statin for the prevention of CVD events and mortality when all the following criteria are met:
- (1) they are aged 40 to 75 years;
- (2) they have 1 or more risk factors (i.e., high cholesterol, diabetes, high blood pressure, or smoking) ; and
- (3) they have a calculated 10-year risk of a cardiovascular event of 10% or greater
So, to determine whether a patient is a candidate for medical treatment, clinicians must first determine the patient’s risk of having a future cardiovascular event.
Task Force found adequate evidence that the risk of statins in adults aged 40 to 75 years is small

What are “Statins”?

Statins are prescription medications that lower cholesterol to prevent cardiovascular disease (heart attack or stroke), which is the leading cause of death in the United States.
These are medicines you have probably heard of, or more likely Googled, like Zocor, Lipitor or Crestor.
First line of therapy should be lifestyle changes. Try lifestyle changes for a few months, then on to the meds.
Statins can reduce the risk of stroke, heart attack and even death by 25 percent or more.

Side Effects

There are two side effects that actually happen from statins.
- Myalgia (muscle aches or weakness) is a commonly reported adverse effect of statins,
- Liver irritation or inflammation can occur. Need to have lab work before starting and then regularly when taking them. Not smart to give a year’s supply.

Myths about statins

Myth #1: Taking Statin Drugs Leads to Diabetes Out of the Blue
- Truth: In clinical trials, statins appear to accelerate a diagnosis of adult-onset diabetes because they cause a slight elevation in blood sugar.
- However, people impacted by this side effect already have higher than normal blood sugar.
- For those who are borderline diabetic, the mild increase in blood sugar can lead to a diabetes diagnosis about five weeks earlier than it would be otherwise.
- Fact: Research indicates that statin drugs do not induce diabetes in someone who isn’t already nearing a diabetes diagnosis.
- Additionally, the benefits of reducing cardiac events in someone who has prediabetes or is a diabetic greatly outweigh the mild increase that might occur in their blood sugar.
Myth #2: Statins Frequently Cause Memory Loss
- Truth: In 2012, the FDA changed statin drug labels to include information that some people had experienced memory loss and confusion while taking the medications.
- Unfortunately, that change was based on some poor-quality studies and evidence. People became seriously concerned that lower cholesterol levels could affect the brain’s function. But in fact, the brain makes its own cholesterol. It doesn’t depend on the cholesterol in the blood.
- The most rigorous studies show that statins do not commonly cause memory loss. If anything, long-term use of statins might have a beneficial effect on the brain since they help prevent strokes and protect the health of arteries in the brain.
Myth #3: You Could Get Cataracts from Taking Statin Drugs
- Truth: Some studies have indicated that there may be a relationship between statin drugs and an increased risk for developing cataracts. However, these investigations have been either conducted in animals or in less-than-rigorous studies.
- The best evidence we have comes from high-quality clinical trials in humans, which showed that statin drugs do not increase risk of cataract formation. In fact, some studies even performed eye exams in people over time and showed no difference in eye health between those taking and not taking statins.

The Truth About Statins

Statins are safe
Statins save lives
Statins are affordable
If you do get side effects, there is a good chance that you can tolerate a different statin or a different dose
If all else fails and you are in a high-risk group due to your cholesterol, there are alternatives
- Red yeast rice – less effective and still could cause same side effects
- Fish oil or krill oil, etc. – less effective
- Diet and exercise
- Praluent or Repatha –monoclonal antibodies that promotes removal of LDL cholesterol from circulation, thereby lowering cholesterol in the blood

If your statin does what we want it to do, you will never know it. It’s one of the mysteries of medicines. People who have benefited from statins are not sitting at home posting online about side effects that in most cases are not even related to statin therapy.

So… You can take cholesterol medicine, or you can wait and take heart attack medicine – but the ironic thing is: they are the SAME MEDICINE!

About Morrow Family Medicine and Dr. Jim Morrow

Morrow Family Medicine is an award-winning, state-of-the-art family practice with offices in Cumming and Milton, Georgia. The practice combines healthcare information technology with old-fashioned care to provide the type of care that many are in search of today. Two physicians, three physician assistants and two nurse practitioners are supported by a knowledgeable and friendly staff to make your visit to Morrow Family Medicine one that will remind you of the way healthcare should be. At Morrow Family Medicine, we like to say we are “bringing the care back to healthcare!” Morrow Family Medicine has been named the “Best of Forsyth” in Family Medicine in all five years of the award, is a three-time consecutive winner of the “Best of North Atlanta” by readers of Appen Media, and the 2019 winner of “Best of Life” in North Fulton County.

Dr. Jim Morrow is the founder and CEO of Morrow Family Medicine. He has been a trailblazer and evangelist in the area of healthcare information technology, was named Physician IT Leader of the Year by HIMSS, a HIMSS Davies Award Winner, the Cumming-Forsyth Chamber of Commerce Steve Bloom Award Winner as Entrepreneur of the Year and he received a Phoenix Award as Community Leader of the Year from the Metro Atlanta Chamber of Commerce. He is married to Peggie Morrow and together they founded the Forsyth BYOT Benefit, a charity in Forsyth County to support students in need of technology and devices. They have two Goldendoodles, a gaggle of grandchildren and enjoy life on and around Lake Lanier.

Facebook: https://www.facebook.com/MorrowFamMed/

LinkedIn: https://www.linkedin.com/company/7788088/admin/

Twitter: https://twitter.com/toyourhealthMD

Gayle Ely, Total Life Leadership

February 26, 2019 by John Ray

North Fulton Business Radio

Gayle Ely, Total Life Leadership

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Gayle Ely, Total Life Leadership

Gayle Ely is an executive coach and leadership development specialist focused on helping entrepreneurs, senior leaders and their teams perform more effectively so they and their businesses can thrive.

Gayle’s firm, Total Life Leadership, is dedicated to working with business leaders who get that the tone they set in their business creates a chain reaction all the way down to the bottom line. Total Life Leadership helps these leaders answer the question, “How Do I Become a More Effective Leader?” Total Life Leadership offers individual and team coaching, leadership and team development, as well as change management services designed to allow leaders to gain clarity so they can take action to achieve results.

ATL Developments with Geoff Smith: Al Nash, Development Authority of Fulton County, and Phil Houston, Realty Associates of Atlanta

February 25, 2019 by John Ray

North Fulton Business Radio

ATL Developments with Geoff Smith: Al Nash, Development Authority of Fulton County, and Phil Houston, Realty Associates of Atlanta

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**Al Nash, Geoff Smith, and Phil Houston**

Geoff Smith, Host of ATL Developments with Geoff Smith

Geoff Smith is the host of “ATL Developments with Geoff Smith” and a mortgage banker with Assurance Financial. Possessed with a strong passion for helping his community, Geoff works closely with people and their families so they may live comfortably in fantastic homes and neighborhoods in the booming Atlanta area.

Geoff is an active member of his community serving on the Board of Directors of the Greater North Fulton Chamber of Commerce, as well as holding the position of chairman for the Chamber’s Education Committee. He is also Secretary of the Roswell Youth Baseball Association and coaches his sons in football, baseball and basketball. Geoff enjoys golf, camping and traveling with his wife and two sons. He is a graduate of the University of Georgia.

Al Nash, Development Authority of Fulton County

Al Nash is the Executive Director of the Development Authority of Fulton County.

Nash’s more than 40 years of experience in real estate, business growth, job creation and public policy concerning economic development brings additional expertise to the North Fulton CID. Nash also serves on the board of directors for the Council of Quality Growth and previously served as the executive director for Progress Partners, an economic development initiative by the Greater North Fulton Chamber of Commerce. Nash is currently a board member of the Georgia Regional Transportation Authority, the Greater North Fulton Chamber of Commerce, and the North Fulton Community Improvement District.

Phil Houston, Realty Associates of Atlanta

Phil Houston is an associate broker with Realty Associates of Atlanta. I served as the managing broker for RE/MAX Executives for twelve years, from 1991 – 2003. Originally licensed in 1979, I was affiliated with Walter Scott Realty, Buckhead Brokers and RE/MAX Executives before joining Realty Associates of Atlanta.

As a member of the DeKalb Association of Realtors, Phil is a Life Member of the Pinnacle Club, a top ten agent in several years, most recently 2009, and a Gold Phoenix Award winner. Phil holds CRS, CRB and E-Pro 500 designations from the National Association of Realtors and was a member of the RE/MAX Hall of Fame and the 100% Club during his affiliation with RE/MAX Executives. He has also served on several committees for the DeKalb Association of Realtors.

Decision Vision Episode 3: Should Our Firm Have an App? – An Interview with Scott Burkett, Incursus

February 21, 2019 by John Ray

Decision Vision

Decision Vision Episode 3: Should Our Firm Have an App? - An Interview with Scott Burkett, Incursus

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Should Our Firm Have an App?

Michael Blake, Director of Brady Ware & Company and Host of the Decision Vision podcast, interviews Scott Burkett on the decision process for building an app, understanding the business problems an app will solve, working with an app developer, and more.

Scott Burkett, Incursus

Scott Burkett is the Founder & CEO of Incursus.

Demonstrating a passion and commitment to quality and process improvement, Scott holds a certification in Six Sigma, and is a former director on the Board of the Carnegie-Mellon sponsored Software Process Improvement Network (SPIN). He played an instrumental role in a key client (AT&T Universal Card Services) winning the Malcolm Baldrige National Quality Award, as well as a 2,000+ person consulting firm achieving Ford Motor Company’s Q1 Quality Certification. An original contributor to the Linux kernel, Scott co-authored The Linux Programmer’s Guide, The New Linux Book, and Linux Programming Whitepapers. He was also a key contributor to the now legendary comp.lang.c USENET group.

Scott has been featured, quoted, or published in Money Magazine, The Wall Street Journal, Computerworld, TechJournal South, Datamation, WebSmith Magazine, The Linux Journal, and TechLINKS. He has been featured as a lecturer/speaker at events sponsored by such organizations as Georgia Institute of Technology (Georgia Tech), The University of Georgia, ATDC, Draper-Fisher Jurveston, NASAGA, APRA, ACPI, The Kettering Executive Network, ExecuNet, 400 Technology Connection, and i-Compass.

Incursus, Inc. is a boutique creative-design and open-source software solutions studio headquartered in Atlanta, Georgia. In short, “We Create Thingz®,” as they like to say! The Incursus team focuses on four key areas: creative design, custom application development, managed cloud services, and technical due diligence. Additionally, they have a program for startup companies aimed to help them affordably satisfy their technology needs.

They do not aspire to be the biggest provider of these services in the world. They simply aim to be the best. Period.

The Latin word Incursus — which can be translated into “raid”, “attack”, or “invasion” — represents their attitude towards their work — with swift forward movement into projects to get them done efficiently with skill and finesse.

Michael Blake, Brady Ware & Company

Brady Ware & Company

Decision Vision Podcast Series

Visit Brady Ware & Company on social media:

LinkedIn: https://www.linkedin.com/company/brady-ware/

Facebook: https://www.facebook.com/bradywareCPAs/

Twitter: https://twitter.com/BradyWare

Instagram: https://www.instagram.com/bradywarecompany/

Show Transcript:

Intro: [00:00:02] Welcome to Decision Vision, a podcast series focusing on critical business decisions brought to you by Brady Ware & Company. Brady Ware is a regional full-service accounting and advisory firm that helps businesses and entrepreneurs make visions a reality.

Michael Blake: [00:00:22] And welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we’re discussing the process of making decisions on a different topic, rather than making recommendations because everyone’s circumstances are different. We will talk it to subject matter experts about how they would recommend thinking about that decision.

Michael Blake: [00:00:40] My name is Mike Blake, and I’m your host for today’s program. I’m a director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia, which is where we are recording today. Brady Ware is sponsoring this podcast. If you like this podcast, please subscribe on iTunes, and please consider leaving a review of the podcast as well.

Michael Blake: [00:01:02] So, today we’re going to talk about building an app, and not just the process of building an app. We, probably, won’t talk a lot about the process at all, but rather a decision of getting an app. So, lots of companies, now, are thinking that they’re kind of left out. They’re not in the cool kids club anymore if they don’t have an app. And so, everybody kind of wants one. But is that really the right — Is that the right decision? Is that the right place to put management time? Is that the right place to make investment? And is it really all it’s cracked up to be?

Michael Blake: [00:01:34] So, how do we go about making that decision? And to help us with that decision, I’ve invited my good friend, Scott Burkett. Scott is a 30-year veteran of the technology industry. He’s the Founder and Chief Executive Officer of Incursus Inc., a boutique creative design and open source software solutions studio headquartered in Atlanta. Incursus focuses on four key areas: creative design, custom application development, managed cloud services, and technical due diligence. Team Incursus, also, recently launched ticketburner.com, a web-based platform that focuses on customer service delivery by helping companies automate their business processes.

Michael Blake: [00:02:14] Prior to founding Incursus and TicketBurner, Scott served as a Chief Technology Officer for several companies, including MFG.com and Apto Solutions. Scott was also the founder of wwetcanvas.com, a large online community for visual artists, which is now owned by F+W Publishing, one of the largest privately-owned media groups in the country. Additionally, Scott has been very involved in the Atlanta area startup community for the past 15 years and was a Co-Founder of startuplounge.com, one of the early advocates for fast-growth entrepreneurship in the southeast. So, it’s my great pleasure to welcome to the program and recently released from prison-

Scott Burkett: [00:02:52] That’s right.

Michael Blake: [00:02:52] … Scott Burkett.

Scott Burkett: [00:02:53] Thank you. Thanks for — Thanks for being here, Mike.

Michael Blake: [00:02:56] Well, I’m [crosstalk].

Scott Burkett: [00:02:56] But the StartupLounge is here when we had our podcast.

Michael Blake: [00:02:59] This is sort of a role reversal. We did that podcast, you sort of drove this, and I was the foil. So-

Scott Burkett: [00:03:04] Well, that’s okay.

Michael Blake: [00:03:06] How does it feel to be Dean Martin now?

Scott Burkett: [00:03:08] Weird. I’m like Dean Martin without the drink.

Michael Blake: [00:03:11] Well, if you say so.

Scott Burkett: [00:03:13] Yeah, exactly.

Michael Blake: [00:03:15] So, let’s talk about, even the word “app” is kind of a new term in the English language, right?

Scott Burkett: [00:03:20] Right, yeah.

Michael Blake: [00:03:20] So, let’s make sure we have the right vocabulary when we start. What is an app? And when you think of an app or one of your clients thinks of an app, what are we talking about here?

Scott Burkett: [00:03:28] Well, generally speaking, when you hear someone use the word “app,” they tend to be referring to mobile devices, right. Your smartphone, download this app, download that app, or whatever, or maybe even your tablet or something like that. But I’m a software engineer by trade, so it kind of irks me when I hear app only being used that way. A lot of folks will refer to an app that way, but an app can be anything. It can be a web-based software product. It can be a desktop app, an application for your desktop. So, it’s a pretty broad term, but, yeah, it tends to get more love on the mobile side these days.

Michael Blake: [00:04:03] And so, is that where that’s now headed? Is every app a mobile app, or-

Scott Burkett: [00:04:07] No, not at all.

Michael Blake: [00:04:08] … do you see that there’s not an end for apps on a more conventional sense?

Scott Burkett: [00:04:11] I think, it’s hard to argue that the growth of mobile hasn’t played a role in this, right. I mean, there’s more mobile devices, phones, laptops, whatever, tablets than there are desktops. Just people aren’t buying desktop. They’d rather buy a smartphone and a tablet than buy a desktop. Unlike I’m a hardcore gamer, as you are as well.

Michael Blake: [00:04:31] You’re more of a game historian, I think, at this point. It’s true.

Scott Burkett: [00:04:34] But I still play them.

Michael Blake: [00:04:35] Long live Atari, baby.

Scott Burkett: [00:04:36] Exactly, but I’ll still have a high-end gaming rig at home and use desktop stuff, but most of the work that we do is on laptops or mobile devices these days. So, that’s a big shift.

Michael Blake: [00:04:48] So, when somebody comes to you and says, “We think we want to have an app for our company,” did you kind of walk them through the process? Is that the right path for them to go? Or how do you find the clients who are thinking about that? What does that decision tree look like?

Scott Burkett: [00:05:04] Well, it’s complicated because every situation is different, right. The first thing that we try to do at Incursus is dig into what the business problem is they’re trying to solve with it, right. We were talking at lunch here earlier about the cool factor behind apps. And that’s certainly out there, but the reality is 99.9% of our clients are going to come to us and say, “We need to build something to solve this particular set of problems.” And it could be to extend a web application to the mobile device, or it could be just greenfield app itself on a mobile device.

Scott Burkett: [00:05:37] So, you want to understand those business problems, right. And once those things line up, then you can kind of dive into what’s the next step. How do we prioritize these? How do we dig into them? And to make sure that their understanding of what a return on that investment is going to be is the same as your understanding of it because, at the end of the day, it has to drive some sort of value and trying to put that-

Michael Blake: [00:05:57] You’d like to [crosstalk]-

Scott Burkett: [00:05:58] Yeah, back to the-

Michael Blake: [00:05:59] Although it is cool just to have my logo on my phone.

Scott Burkett: [00:06:02] You have the light saber app, don’t you?

Michael Blake: [00:06:03] I do.

Scott Burkett: [00:06:04] I do, yeah. Hey, it’s at sword fight mode. We could actually-

Michael Blake: [00:06:06] We could, but it doesn’t work as well as audio.

Scott Burkett: [00:06:08] Yeah. I was going to make a bad crossing swords joke, but I’m not-

Michael Blake: [00:06:11] That’s all right.

Scott Burkett: [00:06:11] Did I just make a bad crossing swords joke?

Michael Blake: [00:06:12] It’s not that kind of podcast.

Scott Burkett: [00:06:14] That’s right. Family-friendly.

Michael Blake: [00:06:17] So, every sort of situation is different, which is kind of what we expect. So, is it fair to say that there are kind of two categories of apps? One is kind of outward-facing. You’re trying to have an app that is client-focused, client-facing, maybe let clients interface with your company a different way. And then, kind of, an internal app, something that makes the way your company works or operates more effective and more efficient. Is that a fair distinction?

Scott Burkett: [00:06:44] That is fair. The thing with the App Store is it’s a public utility effectively at this point, right. You go into it, and you find what you want. You pay for it or you get it for free. You download it. Most companies are probably not going to want you to download their internal applications from the app store, but we do see both. We do see both.

Scott Burkett: [00:07:01] I think, the biggest trend over probably the past, I’d say, the best decade, really, as the shift to mobile happened was you had successful web applications like Facebook, for instance, or LinkedIn, those kinds of sites, social media type sites in general that didn’t, initially, have a mobile app. And the mobile adoption is a lot greater now than it was when those companies were founded.

Scott Burkett: [00:07:22] So, the mobile strategy kind of came in later for them, but that became a way to interface with a larger platform on the desktop effectively. It’s the same product, right, but you’re limited to a certain set of features and certain experience on a mobile device that’s a little smaller in footprint than what you’d get on a desktop, for instance, right. But, yeah, that shift is definitely there.

Michael Blake: [00:07:44] Are we at a point now where you can realistically have an app that doesn’t have a mobile companion?

Scott Burkett: [00:07:50] Well, in that context do, we talked about web applications, right. On the B2B side, if you’re successful, you need to have a mobile app. It’s just your users are going to demand it. In fact, if you don’t eventually have a mobile app in your B2B type web application, your customers are going to go find another solution somewhere else because mobile’s that important in the enterprise now, right.

Scott Burkett: [00:08:13] My UPS guy who comes to the house and drops off packages, first thing he does is he pulls out his mobile device, and he’s got access to all this back in functionality at UPS that he’s like flipping around and doing all this stuff. I try to sign my name, it looks like my kindergartener signs it when I do my finger, but all that functionality is all on a mobile device. That’s a great example of an enterprise application on a mobile device right there. Not something you can download from the app store, but they have it. So, yeah.

Michael Blake: [00:08:39] So, apps, I mean, back in the old days, we used to call them software applications or programs. So, the words changed, but what we’re creating is largely the same. Does an app have to be something grandiose, like PowerPoint or Microsoft Word? Is this something that can be fairly slim? Walk us through that. Does an app have to be big, and hairy, and complex to be valuable? Are there ways to do something relatively quick and painless?

Scott Burkett: [00:09:10] I can tell you that 99% of the stuff that’s on my smartphone, my iPhone here, was put there by my kids. And the vast majority of things that are on there are simple silly things that add zero value to my life. So, the short answer is it doesn’t really matter, right. There’s an app for anything these days, you want to track your weight loss or whatever. And you’re still doing all the work, by the way. It’s not like you stand on the iPhone-

Michael Blake: [00:09:34] I don’t need an app for that by the way, but the math there is not that complicated or fast.

Scott Burkett: [00:09:37] You don’t stand on your iPhone. I want to write a trick app that it’s a scale for your iPhone, and you just stand on your iPhone, and I wonder how many people would do that. But there are apps for everything, small, large whatever. I don’t think people have to have a vision of something being grandiose or lightweight. I think they have to have a vision that their app — And I’m speaking more in a business context here — solves some kind of problem or fulfill some sort of need in a marketplace, right.

Scott Burkett: [00:10:06] So, it could be a game. It could be just pure entertainment or just a boredom breaker kind of a thing. And those things tend to be kind of lightweight. But when we start talking about business-to-business enterprise type integration, those things tend to lean towards the hairy side just by their very nature, right.

Michael Blake: [00:10:22] Got it.

Scott Burkett: [00:10:22] So, yeah.

Michael Blake: [00:10:23] All right. So, somebody comes to you and says, “Scott, we think we want an app. We’d like to have you build it.” Open the hood a little bit, what does that process kind of look like?

Scott Burkett: [00:10:33] Well, the first thing I do is I get out my incense burner. No, I’m kidding.

Michael Blake: [00:10:38] No, that’s what we do in valuation.

Scott Burkett: [00:10:39] no. The interesting thing about technology is that while technology has changed a lot over the past 20 years – let’s just say 20 years. It’s really longer than that. About 30 years, I guess, at this point. God, we’re getting old – the process by which you build it has nominally changed, right? Certainly, we have faster tools we have better tools, and libraries, and integrated environments that we can build all these great things in.

Scott Burkett: [00:11:04] And that’s condensed the timeframe for delivery of building something like that, but the process is still largely the same. You got to understand the requirements. Are there requirements? What are you trying to build? If you just have an idea you’ve got a lot more work to do. You could come to me with an idea, that’s great. I’m happy to help you walk through kind of flashing that out.

Scott Burkett: [00:11:21] But, at some point, you’ve got to put pen to paper, or well, we used to do that, but put your fingers on the keyboard, as it were, and type up your requirements. Well, what are the problems it’s going to solve? How is it going to solve? What are the benefits to the user? What are they going to reap by using this particular application? And it doesn’t matter if it’s on the web, or if it’s on a desktop, or if it’s a mobile app, the same principles still apply.

Michael Blake: [00:11:41] Now, having known you as long as I have, I know you’re a very creative guy. You’ve done-

Scott Burkett: [00:11:45] A few things, I guess.

Michael Blake: [00:11:47] You’ve done literally done art websites.

Scott Burkett: [00:11:50] That’s true, that’s true.

Michael Blake: [00:11:51] So, when you have that conversation or when somebody — I want to depersonalized a little bit. Is it reasonable to expect that if I’m looking for someone to help me develop my app, is the app developer going to, then, maybe interact with me and help flesh out what the business case might actually be, suggest additional functionalities, or is it more like an order-taking process where, “I need an app that does A, B, C, and D,” “Here it is, go”?

Scott Burkett: [00:12:17] Well, to the latter, there’s a million people that can do that, right? You can go to upwork.com, find a freelancer offshore somewhere, send them a bulleted list of stuff that you want to build, and they’ll build exactly that.

Michael Blake: [00:12:31] Okay.

Scott Burkett: [00:12:31] Okay. And it will be cheaper. By and large, it will be cheaper to do that. The problem is if your development team isn’t completely aligned with your business drivers, and in those sessions, and on the white board, and trying to understand how your business is evolving, and not just in a bulleted list, these are the things that are important to us, but understanding your customers and what they want. You’re going to paint yourself into a corner as a founder. You’re making an investment. Ostensibly, it’s a chunk of your savings, or you’ve raised some money maybe in a seed round or something like that, and you’re trying to build something. The last thing you want to do is know that you just wasted $100,000, or $50,000, or whatever it is by giving somebody a bulleted list because you think you’ve got all the answers, and you think that’s all they need. There’s always more to it than that.

Scott Burkett: [00:13:18] If I took a pile of building supplies and dropped them off on a lot that you owned, and said, “We’re going to build a house.” And you came to me and you said, “Okay. Here’s what I want. I want three bedrooms, and I want two baths, and I want a sunken den. That’s all it. That’s my main thing. I just got to have these things.” We’ll build it. We’ll build the house. It will have three bedrooms, two baths, and a sunken den. And then, you’re going to realize that you wanted brick, and you wanted one bedroom upstairs, and not all three. You didn’t want a ranch house, right? So, the house is still built. I did my job, right?

Michael Blake: [00:13:46] Yeah, yeah.

Scott Burkett: [00:13:48] And so, you run into situations like that. And more importantly, you run into situations where you realize you can’t add an extra room to your house because of the way the house was initially built, right? It wasn’t built to be extensible. We took up all of the real estate on that lot by building this house, right?

Michael Blake: [00:14:02] If we add here, that’s a support thing.

Scott Burkett: [00:14:04] That’s right, that’s right. That’s a load-bearing wall. We can’t take that down. So, you think about that from a development standpoint, developers, there’s something called technical debt, which may come up later in the show here. But technical debt is one of those things where it’s the — You’re familiar with monetary debt, right?

Michael Blake: [00:14:20] Of course.

Scott Burkett: [00:14:21] So, it’s financial debt, right? It’s very akin to that. When you’re building an application, and a developer takes the easy route, if you give me a bulleted list, I’m taking the easy route and implementing all this because I don’t know what you’re going to want to do a year from now or two years from now because I’m not in line with your business. So, I’m going to build those things, and I’m going to take the easiest fastest way for me to accomplish those tasks, and I’m going to do it. Okay.

Michael Blake: [00:14:43] Just satisfy the statement of work.

Scott Burkett: [00:14:44] That’s right, just satisfy the statement of work. So, fast forward a year from now, your business is pivoting, or you’re changing, you’re getting into a new market, you got a new partner that you want to integrate with or something like that. And all of a sudden, you realize you can’t do that because you have technical debt. You have to now re-factor, and take all the easy stuff out, and do it the right way where you can open those doors into integration with other companies and things like that in your code.

Scott Burkett: [00:15:07] So, when you think about giving someone a bulleted list, if anybody’s listening to this that is in that mode, don’t do that. Don’t give someone a bulleted list and a check and say, “Let me know when you’re done.” That’s absolutely the worst possible thing you could do.

Michael Blake: [00:15:23] So, one of the decision points, then, is do I, as a person who wants the app, do I have enough time myself to engage in this process, so that I get what I want? When you put an addition in your house, a great way to make sure you’re unhappy is just send the contractor off.

Scott Burkett: [00:15:39] That’s right. That’s right.

Michael Blake: [00:15:40] Not oversee the work, not get progress updates.

Scott Burkett: [00:15:41] That’s right.

Michael Blake: [00:15:41] It’s sounds like it’s the same thing there. You can’t just throw it over a wall.

Scott Burkett: [00:15:42] There’s basically there — I guess, three ways of looking at building an app, or three reasons, or drivers behind it. One is you’re writing something for yourself, which happens a lot with techies. Us, geeks, like to write tools that we use, and we think are cool. And that’s fine. You’re the only user of it, and you’re happy. That’s a success, right? Or you’re trying to monetize it, and actually grow business out of it, and turn it into something that’s a little bit more longer lasting than just you using a tool. And then the third one is the hobby market. You’re making something for other developers to use or other tool builders to use as a part of their applications.

Scott Burkett: [00:16:21] When you look at the second one, that example that you just gave about, “Am I going to have time to engage in this?” Well, if you’re writing it for yourself, and you don’t have time to engage in it, then I don’t even know what’s going on there. The third one is a hobby. It kind of falls back to the first one, which if you’re not willing-

Michael Blake: [00:16:35] You either do it or you don’t.

Scott Burkett: [00:16:36] Either do it or you don’t. If you’re trying to monetize it and build a business around it, you either find the time or you don’t. And if you don’t find the time, you’re just wasting your money.

Michael Blake: [00:16:43] Okay.

Scott Burkett: [00:16:44] Right? You have to engage. I think you absolutely have to engage with your developer. IT people and techies are not the same as they were even 20 years ago. They have business degrees now. They understand sales and marketing. They understand how companies work, at least, on the surface, right? They can understand those business drivers and apply them to how are we going to integrate with those partners in our app down the road. Things like that are going to open up for them. So, I think you absolutely have to find the time to engage with your development team no matter what you’re building.

Michael Blake: [00:17:12] Okay. So, I mean, apps sound great. It’s the way of the future. It’s all cool. Why doesn’t everybody have one?

Scott Burkett: [00:17:20] A lot of people don’t have a mobile strategy upfront. And we’re seeing this is a little bit different now because, I think, mobile strategy is one of the first things an investor is going to ask you, especially if you’re in the business-to-business side or building a web application that’s going to have a lot of users. What’s your integration strategy? What’s your mobile strategy? That’s one of the things they’re going to want to know. And if you don’t have one it’s going to be a strike against you. You’re not thinking big enough. You’re not thinking outright.

Michael Blake: [00:17:44] Right, because that’s where most of the devices are.

Scott Burkett: [00:17:47] Exactly. And that’s how we consume content, by and large, these days. I mean, I get my news from my smartphone. I don’t watch the news at night. Who does that anymore?

Michael Blake: [00:17:53] I can’t remember the last time I watched the news.

Scott Burkett: [00:17:55] Exactly.

Michael Blake: [00:17:55] Do you even do that anymore?

Scott Burkett: [00:17:56] Is Walter Cronkite still alive. No. Yeah, right. That’s the last news that I saw, right?

Michael Blake: [00:18:01] Right.

Scott Burkett: [00:18:02] Paul Harvey and Walter Cronkite, right? So, yeah. Someone’s listening to this going, “They’re Googling Walter Cronkite right now.”

Michael Blake: [00:18:08] Exactly.

Scott Burkett: [00:18:09] “Who is Walter Cronkite?”

Michael Blake: [00:18:09] Exactly. Going to the biography channel.

Scott Burkett: [00:18:09] How do you spell his name? Yeah. So, no, and people consume content on their mobile devices. So, mobile strategy is important. I think maybe a decade ago, 15 years ago, mobile was — I don’t want to say it was optional, but it was sort of like gravy. In fact, a lot of investors back then probably we’ll look at you and say you’re thinking too big. What’s this mobile thing? I mean, the world has changed. Obviously, it’s evolved. So, if they don’t have an app, then there’s either one of couple of obvious reasons for it. One is they don’t want to fund it. That can happen, right?

Michael Blake: [00:18:40] Yeah.

Scott Burkett: [00:18:41] They don’t see the value, in which case you want to short their stock, I think, at this point, right?

Michael Blake: [00:18:45] Got it.

Scott Burkett: [00:18:45] Certainly, if it’s an enterprise type company. And on the social side, I think any sort of social media app these days, application on the web is going to have a mobile component. If not designed kind of in counterpart with the web platform, it’s going to be built like shortly thereafter once they get all their integration points and everything is sort of in place where the mobile devic can communicate to the web app.

Scott Burkett: [00:19:06] So, I mean, when LinkedIn and Facebook first launched, they didn’t have mobile apps. This came along later. So, I don’t know how Facebook is now, but it’s probably 15 years old or something like that maybe.

Michael Blake: [00:19:18] It’s something like that, yeah.

Scott Burkett: [00:19:19] Something like that.

Michael Blake: [00:19:20] I mean they went public in — Went public in — Actually fairly recently. It went public in like ’13 or something. So, looking around 2006.

Scott Burkett: [00:19:28] Right. So, yeah. Yeah. So, there you go.

Michael Blake: [00:19:32] So, is there kind of a tale to this? It’s one thing to sort of build an app, but I have a feeling an app is not something you just buy once and put away, right?

Scott Burkett: [00:19:42] That’s right.

Michael Blake: [00:19:43] You put it online, and you’ve got to maintain it. Apps tend to get updated if they’re going to be around for long. So, is that the case that when budgeting and figuring out if an app is right for you? Do you have to think about six months from now, a year from now, kind of, what long-term commitment you’re going to make to it?

Scott Burkett: [00:20:00] Any business has to think about that. It doesn’t matter what your business is, you have to think about, “Okay, I know I’m going to raise this much money, maybe nothing. And I know that whatever I have is going to get me to a certain point at which, hopefully, I’ll have a product.” And there’s a revenue ramp. And at some point, your revenue is going to go up and then you can afford to pay the bills.

Scott Burkett: [00:20:21] What a lot of young entrepreneurs tend to do – and I see this unfortunately more often than I want to admit – they just assumed that once they get that revenue ramp going that it’s just cruise control from there. And they just basically are printing money. And that never works. It never works. When’s the last time-

Michael Blake: [00:20:40] It’s not that easy to become a billionaire?

Scott Burkett: [00:20:42] No, it’s not.

Michael Blake: [00:20:42] Oh, shocks.

Scott Burkett: [00:20:43] It’s absolutely not, but think about your — My iPhone, I turn it on. Every day, there’s updates to my apps, right. The ones that don’t get updated are going to become deprecated over time. Users are going to abandon them, and this could be mobile, but it could also be on the web as well. It could be on the desktop as well. I mean Word Perfect went under. Remember Word Perfect?

Michael Blake: [00:21:02] Sure.

Scott Burkett: [00:21:02] Yeah, it was great. It was great. Well, Microsoft Office came along with its auto updates, and then everybody said, “Hey, this is great. They’re adding new features to this incrementally. It’s getting better. It’s improving.” Word Perfect went the way of the dinosaur and had a horrible interface. They never did anything to fix it. It’s an antiquated analogy, but, still, it’s one of the examples.

Michael Blake: [00:21:20] No, it’s true. Once the old lawyers died out, that-

Scott Burkett: [00:21:21] That’s right.

Michael Blake: [00:21:22] Because the lawyers were the last stronghold-

Scott Burkett: [00:21:24] And they loved it, that’s right.

Michael Blake: [00:21:25] … for Word Perfect. And once they died out and retired, the new generation grew up with Microsoft Office or, now, Google Docs.

Scott Burkett: [00:21:31] That’s right.

Michael Blake: [00:21:32] That’s what they’re using, right?

Scott Burkett: [00:21:32] Users are going to demand a couple of things. They’re going to demand that the bugs get fixed. And there’s always bugs in software. It’s written by humans. Right? So, we’re going to have those problems. Bugs get addressed in a timely fashion. The product evolves. As new opportunities and new technologies arrive in the marketplace, your product, if it’s applicable, has to be in a position to take advantage of those things and incorporate those into your application as well.

Scott Burkett: [00:22:00] I’m just thinking out loud here, but I just bought a device called the AirServer, which is a little embedded device that allows me to stream Chromecast, and AirPlay, and Miracast from a PC, a Mac, a Smartphone. Any sort of device, I can screen cast directly to my TV. Well, before I learned about this product, you had to have the right laptop. You had to have the right TV.

Michael Blake: [00:22:24] Apple with AirPlay.

Scott Burkett: [00:22:25] That’s right, that’s right.

Michael Blake: [00:22:25] Apple TV.

Scott Burkett: [00:22:26] Exactly, right. So, something better came along. And it’s one of those things that something better is always coming along in this day and age. I mean, my Twitter feed is full of it. Every day, it’s just 20 new things that are launching that didn’t exist yesterday. And some of those things are going to fall out by the wayside. It’s just law of averages, right? But the ones that make it, the ones that have long-lasting ability in the marketplace are the ones you have to take advantage of. And how do I integrate with it?

Scott Burkett: [00:22:51] It may not be applicable to everyone, but when certain things come along — Like single sign-on is another great example of that, right. Interfacing with single sign-on, does your app want to take advantage of that? You see apps now that lets you login with Google or Facebook, right? Easy. You just click the button and you’re done, right?

Michael Blake: [00:23:06] Thank God.

Scott Burkett: [00:23:07] It’s great.

Michael Blake: [00:23:07] Just typing all those things with my fingers on the phone, it’s a nightmare.

Scott Burkett: [00:23:11] And it takes you eight times to get your password right. Then, you locked yourself out.

Michael Blake: [00:23:14] Exactly.

Scott Burkett: [00:23:14] But it’s one of those things that — Just think about this, if your product was in the marketplace, and you didn’t have that capability, it’s a seemingly inane feature. Okay. It shouldn’t be a make or break decision, but I can guarantee you, people will say, “Why do I have to keep logging into this when I can just — Why can’t I just click on the Facebook button and authenticate me that way?”

Michael Blake: [00:23:32] Especially if it’s just a subscription to Reuters. I don’t care if somebody pirates that account.

Scott Burkett: [00:23:37] That’s right. That’s right. You don’t really care.

Michael Blake: [00:23:38] I’m not paying anything. I can’t post anything. It’s not a high-leverage discussion.

Scott Burkett: [00:23:43] Absolutely right. So, I think you have to — Getting back to the question, I think, as a founder, you’ve got a budget for the incremental advancement and evolution of your app, okay. Be it on the desktop, the web, mobile device, it doesn’t matter, you have to constantly be thinking, how is this going to get better? Because that’s what makes your business better at the end of the day anyway. How are you going to evolve as a business? Well, that involves dragging your product along, hopefully, right?

Michael Blake: [00:24:05] Yeah.

Scott Burkett: [00:24:06] So, there you go.

Michael Blake: [00:24:07] All right. So now, It’s the time in the program to go negative.

Scott Burkett: [00:24:11] Uh-oh.

Michael Blake: [00:24:11] And what I mean by going negative is I like to talk about times when people and customers or, not even customers, companies have built apps that have just failed.

Scott Burkett: [00:24:21] Okay, sure.

Michael Blake: [00:24:22] Why do apps fail? And what can we learn from that where maybe it’s just not a good decision on the part of that company to commission the app in the first place?

Scott Burkett: [00:24:33] Well, we’re speaking here, obviously, in the business context. If you’re writing it for yourself, and it fails that you don’t even use your own tool, then that’s your problem. That’s not a world problem. But there’s a couple of things that it comes down to. If a company’s generating or building an app, we’ll just use a mobile app in this particular case, and maybe it mirrors their web application, right? They’re not seeing the adoption rate, for instance, going up.

Scott Burkett: [00:24:58] Now, if you’re web app is successful, and your mobile app is not, that’s a different problem, okay. That tells you that the core product that you have is valuable, and people are using it on the web, but they’re not using your mobile app. Maybe the interface stinks, maybe the usability stinks, it’s not worth it, there could be bugs, things like that that need to be addressed.

Scott Burkett: [00:25:18] But it all comes down, at the end of the day, to outreach and marketing, getting your app on the mobile side, the same exposure that your web application is getting in that particular instance. And when we say a business context, that’s generally what we’re talking about. It’s Facebook with a website or a web application, and they’ve got a mobile component to it as well, that type of pattern. So, they’ve got to look hard in the mirror and ask themselves why it’s not working, why it’s not getting the adoption.

Michael Blake: [00:25:44] And that’s true on the internal side too, right?

Scott Burkett: [00:25:46] That’s right.

Michael Blake: [00:25:46] If you want your app for internal use, you got to make sure people know about it.

Scott Burkett: [00:25:49] That’s right.

Michael Blake: [00:25:50] There’s got to be an incentive for them to use it.

Scott Burkett: [00:25:51] A policy. Crate a a policy, right?

Michael Blake: [00:25:53] It could be a policy, It could be you remove whatever process there was before, so they’re forced to use it,

Scott Burkett: [00:25:59] Right.

Michael Blake: [00:25:59] But-

Scott Burkett: [00:26:00] The worst thing you could hear as a developer, as s a software engineer, is that people aren’t using your app. They’d rather use email. That’s like the worst thing.

Michael Blake: [00:26:08] Really?

Scott Burkett: [00:26:09] Yeah. It’s too clunky, it does this, it’s too slow, whatever. It’s just easier to send the guy an email. Okay. So, that’s what they do, right?

Michael Blake: [00:26:16] Right.

Scott Burkett: [00:26:16] And email is like — Everybody wants to kill — Everybody has been trying to kill email for 20 years.

Michael Blake: [00:26:22] They have. It’s died more often than Rasputin.

Scott Burkett: [00:26:24] Exactly. I know, right? He’s on his 12th life at this point, right? But the reality is when that’s your fallback, your fallback is, “It’s just easier to send an email,” yeah, you got some issues with your app that you need to sort out.

Michael Blake: [00:26:37] And that brings up — I’m not going to attribute the name. I don’t necessarily have permission, but I was at a conference-

Scott Burkett: [00:26:41] Oh, come on.

Michael Blake: [00:26:43] I was at a conference a couple months ago, and there’s a venture capitalist there. One thing that he said that I’ll never forget, it was a great advice, is that, “Already good will always beat might be better, or good enough will always beat might be better.”

Scott Burkett: [00:27:02] Is there a question in there, or do you want to-

Michael Blake: [00:27:03] No, I’m asking for a reaction. If it’s something you’ve got, like email is already good enough, something that has, now, a learning curve that has some risk to it, if it’s not clearly better, it’s just going to get dumped off on the side of the road. They’ll go back, like you said, the email.

Scott Burkett: [00:27:20] Well, I think any founder would agree that their business plan paints a perfect picture of how things could be better or should be better. No business owner is going to say, “Well, my business plan does a poor job of telling you how great this product is going to be.” They’d probably go too far in that regard, if anything.

Scott Burkett: [00:27:36] I think that’s applicable sometimes. I mean, if it ain’t broke, don’t fix it Kind of mantra, but there’s certainly been plenty of applications that have come along that have made getting tasks done, or achieving certain goals, accomplishing something, adding value in ways that were it was easier than before. Case in point, look at LinkedIn, right. Before LinkedIn, I either knew you or I didn’t. I either could call you on the phone or send you an e-mail because I had that information. And email contacts were closely guarded, like that was your rolodex, right?

Michael Blake: [00:28:12] Yeah.

Scott Burkett: [00:28:12] Like the little black book that we used to have in the ’80s with all the phone numbers written down on. It was the same thing, you guarded your contacts. The business development people made a killing because they would go from one company to the next, and they bring basically their book of business with them because they had all their contacts, right?

Michael Blake: [00:28:26] Yeah.

Scott Burkett: [00:28:27] Well, that’s gone now. By and large, it’s gone. Still relationship-driven and a lot of industries are, but if you think about LinkedIn, if I wanted to connect with someone to ask them a question, or invite them to come on to a panel, or speak at an event, or whatever my reason is for reaching out, I can probably get to them within a day. I can probably get my message in front of them pretty, pretty quickly, right?

Michael Blake: [00:28:49] Sure.

Scott Burkett: [00:28:50] So, before LinkedIn came along, that didn’t exist. That capability didn’t exist. Now, imagine yourself as an investor, and it’s hard now because LinkedIn is just part of the fabric now. Everyone uses it but think about maybe 15-20 years ago as an investor, and some guy, Reid Hoffman, comes to you in California and says, “I’ve got this great idea. We’re going to connect the world on the internet.” “What? Okay. It’s a big idea. I get it, but-”

Michael Blake: [00:29:16] No, you burn them for witchcraft.

Scott Burkett: [00:29:18] Exactly. It’s heresy. “What do you mean? These are my contacts. I’m not going to share them with other people,” and that kind of thing. Well, the world’s changed. So, I think there’s some applicability to what that investor told you, either way though.

Michael Blake: [00:29:29] Yeah. So, a lot of apps are now made offshore. I don’t know if your company uses offshore.

Scott Burkett: [00:29:35] No.

Michael Blake: [00:29:36] Not so relevant to the discussion. But if I go to a shop, and they say that they tend to use a lot of offshore labor, wherever it is, it could be India, it could be Ukraine, it could be Philippines, should I be concerned? Should that in my mind be a disqualifying feature in terms of selecting who my developer should be?

Scott Burkett: [00:30:00] I think, it’s going to come down to one key factor here and that’s money.

Michael Blake: [00:30:04] Okay.

Scott Burkett: [00:30:05] Okay. You can certainly find a country that will build your app, probably off of a bulleted list, like we cautioned about earlier, and you save some good money if you find the right company in the right country. But I will tell you a story not so awful long ago, there was a Japanese software company that had offshored, outsourced some of its development on its key product to China. Okay. Well, China, hopefully, the Chinese politico is not listening to this right now, and they’re going to hunt me down or something, but China doesn’t really have a great track record in not stealing things. I mean, China has-

Michael Blake: [00:30:42] Always since Marco Paul.

Scott Burkett: [00:30:43] That’s right, yes. China has a wee bit of a reputation for reverse engineering things and just outright lifting things.

Michael Blake: [00:30:51] Adopting them as their own.

Scott Burkett: [00:30:52] Adopting them as their own. Look at our new stealth fighter, right. Yeah, right, whatever. So, this Japanese company was so paranoid about China, these developers in China working on their product, they actually had five different Chinese offshore companies, and they gave each one of them a piece of it. They wouldn’t give the entire thing to one company. So, what does that tell you?

Michael Blake: [00:31:12] I think Apple does that, if I’m not mistaken.

Scott Burkett: [00:31:14] They could, they could.

Michael Blake: [00:31:14] They don’t let everybody have the whole formula.

Scott Burkett: [00:31:15] The keys to the kingdom, right?

Michael Blake: [00:31:17] Yeah.

Michael Blake: [00:31:17] And I’m not here to say that all offshore is bad. It’s not. I’ve had some successes with offshore development in the past, and I’ve had some that were not as successful. Ultimately, it came down to the ones that were successful were the ones that were fully engaged with the team, the larger team, the business team throughout the development process. They took the time to understand the drivers behind it, and where we’re we going, and best practices. And there was a liaison on the business team that ensured that the development team were using best practices and things of that nature, so not to paint you into a corner.

Scott Burkett: [00:31:52] So, I think, it goes without saying that you should probably go into it with eyes wide open, if you do it. But to be fair, I would approach it here in the United States as well the same way. I’d do it the same way. I wouldn’t necessarily give it to five different companies to work on like the Japanese company I mentioned did. But I would certainly — Over here, we’re protected by NDAs and other things, IP agreements, and things like that, and, of course, the US Code of Law, which helps a lot.

Michael Blake: [00:32:19] There is that, yeah.

Scott Burkett: [00:32:20] The minute you put it offshore — And I’m not an attorney by any stretch of the imagination. Though, I have given a free legal advice before.

Michael Blake: [00:32:27] Don’t let that stop you.

Scott Burkett: [00:32:28] That’s right. But I think you should probably consult maybe some fellow entrepreneurs that have had successes building things offshore, and maybe kind of learn from them, specifically, who they’re dealing with, and are they reputable. That referrals always going to go a long way.

Michael Blake: [00:32:44] So, a recurring theme we’re hearing here is that the business side of the business has to be very closely involved with the technology side. This is not just something you hand over a bunch of nerds-

Scott Burkett: [00:32:55] That’s right.

Michael Blake: [00:32:55] … and say, “Have us build something.” I mean, you’ll get something.

Scott Burkett: [00:32:57] You’ll get something.

Michael Blake: [00:32:58] It just won’t be what you want most likely.

Scott Burkett: [00:33:00] Or the technical would be off the chart.

Michael Blake: [00:33:02] All right. Well, we’re running out of time, unfortunately. We could talk about this and other things-

Scott Burkett: [00:33:06] That true.

Michael Blake: [00:33:06] … for a long time. So, any concluding comments, anything that I should have asked but didn’t, or something else that our listeners need to know about the app decision process whether to build that app?

Scott Burkett: [00:33:19] I haven’t even got to my belly dancing bit.

Michael Blake: [00:33:22] Probably for the video version of the podcast.

Scott Burkett: [00:33:24] Okay. I think when you decide you want to build something, I think you have to make a commitment to the project. It doesn’t matter if you’re a solo founder, a single founder, or you’re a small team, or you’re a company that’s looking to build an application. Again, it doesn’t matter if it’s a desktop, web, or mobile.

Scott Burkett: [00:33:41] I think you’ve got to apply those fundamental business practices to it, take those practices, and basically force feed the development team with those business drivers because if you don’t, like you said, you’re going to get something back, but it may or may not — it may do everything on the list functionally, but it may or may not solve the problem at hand. And, I think, aligning those things is a very key factor that people should go into it with knowing that, so.

Michael Blake: [00:34:07] Okay. Well, this has been great. I’m sure somebody listening to this this podcast will want to learn more. How do people find you?

Scott Burkett: [00:34:15] Unfortunately, I’m fairly easy to find on the web. So, you can just Google my name, Scott Burkett, I suppose, or just go to scottburkett.com, and all my links are there somewhere. I think so.

Michael Blake: [00:34:27] Yeah. you are not hard to find.

Scott Burkett: [00:34:28] I’m, unfortunately, not hard to find.

Michael Blake: [00:34:30] All right. Well, that’s going to wrap it up for today’s program. I’d like to thank Scott again so much for coming and sharing his expertise.

Scott Burkett: [00:34:36] Thanks for having me.

Michael Blake: [00:34:36] This has been great. I’ve learned a lot. And we’ll be exploring a new topic each week. So, please tune in so that when you are faced with your next business decision, you have a clear vision when you’re making it. Once again, this is Mike Blake. Our sponsor is Brady Ware & Company. And this has been the Decision Vision Podcast.

Karla Brandau, Workplace Power Institute, and Jon Roman, Transworld Business Advisors of North Atlanta

February 19, 2019 by John Ray

North Fulton Business Radio

Karla Brandau, Workplace Power Institute, and Jon Roman, Transworld Business Advisors of North Atlanta

00:00 /

**John Ray, Karla Brandau, and Jon Roman**

Karla Brandau, Workplace Power Institute

Karla Brandau is the CEO of Workplace Power Institute and a leading authority on leadership for a more productive workforce. For over 25 years she has developed customized programs for companies including Motorola, Coca-Cola Enterprises, Panasonic, LexisNexis and BYD America. Government agencies that have benefited from her programs include NIH, NIDA, and the EPA.

Her book, How to Earn the Gift of Discretionary Effort, and the accompanying management certificate, establishes discretionary effort initiatives in companies. These initiatives change the culture of organizations by installing core principles that make earning the gift of discretionary effort from employees a reality.

Karla is a Certified Speaking Professional, a Registered Corporate Coach, a Certified Facilitator, a Certified Professional Motivators Analyst and a Certified Professional Behavioral Analyst. For more information, go to Karla’s website at www.KarlaBrandau.com, call 770-923-0883, or email Karla at Karla@KarlaBrandau.com.

Jon Roman, Transworld Business Advisors of North Atlanta

Jon Roman is the Owner of Transworld Business Advisors of North Atlanta. Established over 40 years ago, Transworld Business Advisors is the world leader in the marketing and sales of businesses, franchises and commercial real estate. Ranked #1 in its category by Entrepreneur Magazine for several years, Transworld maintains an inventory of over 4,000 current and exclusive business listings. They have a network of over 500 brokers and agents, working in 200 offices across the US and throughout the world.

Transworld Business Advisors of North Atlanta is an award-winning team of nine agents, a franchise director, an office manager and a marketing/sales specialist, who will work diligently to help clients sell or franchise their business, or buy a new one. Their experience and professionalism will bring together sellers, buyers and third-party specialists, to successfully close every transaction.

For more information or to contact Jon, go to businessbrokersnorthatlanta.com or call 404-666-4486.

FRAZIER & DEETER’S BUSINESS BEAT: Ken Nester, VSI

February 19, 2019 by John Ray

Business Beat

FRAZIER & DEETER'S BUSINESS BEAT: Ken Nester, VSI

00:00 /

**Roger Lusby, Frazier & Deeter, interviews Ken Nester, VSI**

Ken Nester, VSI (Valve Solutions, Inc.)

Ken Nester is the CFO of VSI. VSI is a privately owned, small business that manufactures a wide range of valves and actuators for the commercial, industrial and municipal market. They currently sell through various distribution and manufacture representative channels throughout North and South America. Since their inception in 1995, VSI has also established several OEM agreements which include Siemens, Belimo, Rotork and Auma. VSI is headquartered in Alpharetta, GA and has recently constructed a facility in Midland, TX to improve product availability for their accounts west of the Mississippi. In addition to having ISO 9001:2015 certification, VSI strives to deliver the highest level of customer service. For further information, visit their website at www.valvesolutions.com or call one of their specialists at 770-740-0800. They are certain to have the ideal “valve solution” for your needs!

Frazier & Deeter

The Alpharetta office of Frazier & Deeter is home to a thriving CPA tax practice and Employee Benefit Plan Services group. CPAs and advisors in the Frazier & Deeter Alpharetta office serve clients across North Georgia and around the country with services such as personal tax planning, estate planning, business tax planning, business tax compliance, state and local tax planning, financial statement reviews, financial statement audits, employee benefit plan audits, internal audit outsourcing, cyber security, data privacy, SOX and other regulatory compliance, mergers and acquisitions and more. Alpharetta CPAs serve clients ranging from business owners and executives to large corporations.

Roger Lusby, host of Frazier & Deeter’s Business Beat, is the Alpharetta Office Managing Partner for Frazier & Deeter.

LinkedIn: https://www.linkedin.com/company/frazier-&-deeter-llc/
Facebook: https://www.facebook.com/FrazierDeeter
Twitter: https://twitter.com/frazierdeeter

Past episodes of Frazier & Deeter’s Business Beat

Decision Vision Episode 2: Should I Fire My Client? – An Interview with Jim DeBetta, DeBetta Enterprises

February 14, 2019 by John Ray

Decision Vision

Decision Vision Episode 2: Should I Fire My Client? - An Interview with Jim DeBetta, DeBetta Enterprises

00:00 /

Should I Fire My Client?

Michael Blake, Director of Brady Ware & Company and Host of the Decision Vision podcast, interviews Jim DeBetta on how to recognize when a client might be a bad fit, why it’s best to part ways, and how to do it gracefully.

Jim DeBetta, DeBetta Enteprises

Jim DeBetta is the Founder and President of DeBetta Enterprises which specializes in coaching and consulting for inventors and consumer products start-up companies. DeBetta Enterprises also assists clients with product development and engineering of consumer products as well as sales and marketing representation to major retailers for our select clients. Recently, Jim was Vice President of Retail Distribution for TV Goods which is owned by Kevin Harrington from the ABC show Shark Tank. I headed up a team of retail specialists that called on the world’s most prestigious retailers and TV shopping networks including HSN and QVC.

Jim is the author of the top-selling book, The Business of Inventing, former Staff Writer for Inventors Digest, and has sold over 100 million dollars of products for product entrepreneurs and inventors alike. His podcast, Get Retail Ready, is a valuable resource for those just starting out or looking to scale their business.

DeBetta Enterprises has formed a solid network of product engineers, factory brokers, angel investment firms, licensing experts, and sales and marketing professionals among many other areas of expertise. The firm works with Fortune 500 companies, celebrities, and individual inventors alike. They specialize in finding factories to produce products, create pricing strategies, marketing and public relations, and selling products to major retailers such as Target, Wal-Mart, Best Buy, Costco, Bed Bath & Beyond, Michaels, Walgreens, HSN, Macy’s, Amazon, and many others.

Prior to forming DeBetta Enterprises, Jim led a successful start up company which produced sport optics such as binoculars and hand held magnifiers. Jim was President and COO as the company grew from insignificant revenue to nearly $50 million dollars in sales in under 8 years.

For more information on Jim DeBetta and DeBetta Enterprises, go to http://www.jimdebetta.com/.

Michael Blake, Brady Ware & Company

Brady Ware & Company

Decision Vision Podcast Series

Visit Brady Ware & Company on social media:

LinkedIn: https://www.linkedin.com/company/brady-ware/

Facebook: https://www.facebook.com/bradywareCPAs/

Twitter: https://twitter.com/BradyWare

Instagram: https://www.instagram.com/bradywarecompany/

Show Transcript:

Intro: [00:00:02] Welcome to Decision Vision, a podcast series focusing on critical business decisions brought to you by Brady Ware & Company. Brady Ware is a regional, full-service accounting and advisory firm that helps businesses and entrepreneurs make visions a reality.

Michael Blake: [00:00:22] Welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we’ll discuss the process of decision making on a different topic rather than making recommendations because everyone’s circumstances are different. We will talk to subject matter experts about how they would recommend thinking about that decision.

Michael Blake: [00:00:41] My name is Mike Blake, and I am your host for today’s program. I’m a Director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia, which is where we are recording today. Brady Ware is sponsoring this podcast. If you like this podcast, please subscribe on iTunes, and also please consider leaving a review of this podcast as well.

Michael Blake: [00:01:03] So, today, we’re going to talk about something that doesn’t get talked about a lot, which is firing a client. And firing a client when you’re in business, and particularly, if you have a sales role is something that just seems wrong. We work so hard to get clients. Clients are not easy to get. They’re not easy to keep. And so, we’re hardwired that every client is precious. And to, a large extent, I think that’s a healthy attitude to have.

Michael Blake: [00:01:33] When you’re not grateful for your clients, bad things happen, your business is not going to survive long. But there is a point where enough is enough. The customer isn’t always right. In fact, sometimes the customer is not the right fit, or they’re just a raving lunatic, or somewhere in between. But the thing about that process is important. If you fire the wrong client, you’ve passed up revenue for no good reason. If you fire the client badly, then your reputation is going to suffer. But if you’ve been in any business long enough, firing a client or firing customer is a fact of life.

Michael Blake: [00:02:09] So, we’re going to talk about that today with Jim DeBetta. Jim is the Founder and President of DeBetta Enterprises, which specializes in coaching and consulting for inventors and consumer products startup companies. His firm also assists clients with product development and engineering of consumer products, as well as sales and marketing representation to major retailers for their select clients.

Michael Blake: [00:02:31] Recently, he was Vice President of Retail Distribution for TV Goods, which is owned by Kevin Harrington from the ABC show, Shark Tank. Jim headed up a team of retail specialists that called on the world’s most prestigious retailers and TV shopping networks, including HSN and QVC.

Michael Blake: [00:02:48] Jim is the author of the top selling book The Business of Inventing, aformer staff writer for Inventors Digest and have sold over $100 million of products for product entrepreneurs and inventors alike. Jim’s podcast, Get Retail Ready, is a valuable resource for those just starting out or looking to scale their business.

Michael Blake: [00:03:07] His firm has formed a solid network of product engineers, factory brokers, Angel investment firms, licensing experts, and sales and marketing professionals among many other areas of expertise. They work with Fortune 500 companies, celebrities, and individual inventors alike. Jim and his team specializes in finding factories to produce products, create pricing strategies, marketing and public relations, and selling products to major retailers such as Target, Walmart, Best Buy, Costco, Bed Bath and Beyond, Michaels, Walgreens, HSN, Macy’s, Amazon, and many others.

Michael Blake: [00:03:39] Prior to forming the DeBetta Enterprises, Jim led a successful startup company that produced support optics, such as binoculars and hand-held magnifier. He was President and Chief Operating Officer and led the company from insignificant revenue to nearly $50 million in sales in under eight years. We welcome Jim DeBetta to the program. Jim, thanks for showing up.

Jim DeBetta: [00:03:59] Hey, thanks Mike. Good to see you again.

Michael Blake: [00:04:01] So, it’s interesting. When I put this topic out there. I really put it out on social media. I’d like somebody to come on and talk about firing clients. And sort of you rose your hand and said that, “I really like to come on and talk about that.” What motivated you to do that? Why is that a subject that is close to your heart?

Jim DeBetta: [00:04:23] Well, I mean, I think, in any business, but particularly my business, inventing is an emotional business. So, when people have a product, it’s not just, “Hey, I have a particular thing, I want to get out there.” But they get very tied to it because it’s like their baby. I mean, it’s something that they created out of a need or because there was a problem, and they couldn’t solve it, or couldn’t find a solution. So, they say, “Well, I got to do this on my own.” And then, they spend years developing it. And then, when they come to me, then I have to see if it’s a good fit for me. And when I saw that, I was like, “Oh, I got to jump in on this one.”

Michael Blake: [00:04:55] I have a little of experience to that myself. As you know, I used to run a nonprofit called StartupLounge, and I’m still at a monthly office hours. And sometimes, an entrepreneur shows up, and they want to run their idea by me. And you have to tell them, “Well, I’m sure your baby’s healthy but it ain’t all that good looking.”

Michael Blake: [00:05:15] And that is something that is not necessarily well-received from somebody that has internalized their problem or their business, I should say, the problem that they’re trying to solve, and they’ve had a lot of people cheer them along the way. So, that’s friends and family, “Go for it. That’s a great idea.” People, by the way, who lose nothing if the business fails, advisors like me that can make money if they start their business, start spending money on advisors. And there’s this feedback loop that just internalizes. And all of a sudden, you can get to a point where you think, “Wow, I’ve got the next iPhone.” It’s just that obvious. Do you encounter that as well?

Jim DeBetta: [00:05:51] Oh yeah. And friends and family are the worst because they they love you or-

Michael Blake: [00:05:55] They really are.

Jim DeBetta: [00:05:55] … they’re supposed to love you, but you’ll always have that obnoxious one that will say, “Oh, that’s crappy,” or “I wouldn’t do that ever.” But most of the time, they’re going to give you support, whether it’s the product’s good or not good in their mind. And that’s what they should do, in a way, but that’s why we don’t want them to say, “Well, my next door neighbor, or my parents, or my kids think this is great.” That’s a red flag to me. What matters is what everybody else in the world thinks objectively, so people can look at it and say, with no vested interest saying, “I would buy this,” or “I don’t like that.” And that’s an important thing.

Jim DeBetta: [00:06:27] But all of this comes down to, which I know we’re going to talk about is managing expectations when people start to work with me. And right off the bat, that’s how I determine if I should take on a client or even move on from a client when things start — when I get that feeling that things aren’t going right.

Michael Blake: [00:06:44] Okay. Well, we’ll come back to that. Let’s start off with, how do you work with a client?

Jim DeBetta: [00:06:50] Well, I mean, usually, people will come to me in all stages. Some people will come to me, and say, “Hey, Jim. I’ve got an idea for something.” And they haven’t really done anything. Maybe they’ve done a patent search, or they just went online, and wanted to see if the product was actually out there. And assuming that they haven’t found what it is that they’re creating, they will come to me, and I basically project manage them through the whole process. So, people will come to me at that stage. And then, people come to me that have multi-million dollar businesses, and they’re already selling some retailers, but they want to go further. They want to scale. They want to get into every retailer they can. They want to be a huge company.

Jim DeBetta: [00:07:24] So, they come to me at all phases and stages. And they come from everywhere, from social media, all over the world from referrals. And because the world’s so digital, people can find me easily, and I get a lot of lead flow, and people just reaching out because they see me out there online.

Michael Blake: [00:07:44] And you’re not hard to find. I mean, you’re a pretty prolific creator of content as well. And, I mean, you always want to give advice. I’m sure that helps. So, doing what you do, and I think I know the answer to this, but I don’t want to assume, what do you think is the hardest part about working with a client in your space? What’s the hardest hurdle you had to get over, the most common challenge?

Jim DeBetta: [00:08:05] It’s that emotional part that they all believe that their product is going to be the next billion-dollar idea. And most aren’t going to be million-dollar ideas. And I always say to people, “It’s okay to be a thousander,” because no inventor that I know invents for a living. They have a day job or a night job. And so, they have a living. They live a normal life, and this is something they do on the side. They do it at their lunch break, on the weekends, at 10:00, 11:00, 12:00 at night. So, for them, it’s a part-time thing, if that makes sense.

Michael Blake: [00:08:37] That’s really interesting. You’re right. I mean, there really is, now, kind of modern day Thomas Edison, right?

Jim DeBetta: [00:08:43] Yeah.

Michael Blake: [00:08:44] Maybe the late Steve Jobs. Maybe he was kind of that, and he had like a whole huge corporation to sort of back that. And maybe the late, I’m sure you’re aware of him. The late Ron Popeil.

Jim DeBetta: [00:08:55] It’s huge.

Michael Blake: [00:08:55] That kind of that guy, right?

Jim DeBetta: [00:08:56] Yeah, absolutely.

Michael Blake: [00:08:57] By the way. I have one of those those Showtime Rotisserie.

Jim DeBetta: [00:08:59] Doesn’t everyone? I think.

Michael Blake: [00:08:59] I got one of those things for Christmas. The damn thing actually works.

Jim DeBetta: [00:09:03] They are good.

Michael Blake: [00:09:04] I can’t believe it. We don’t make a turkey without it now.

Jim DeBetta: [00:09:06] Yeah.

Michael Blake: [00:09:06] I got that thing for Christmas, and I thought, “For sure, this is going in our attic. It’s never coming out again.” And now, I was going to fry a turkey last year, and my son, “Oh, you’re going to fry a turkey?”

Jim DeBetta: [00:09:16] Yes.

Michael Blake: [00:09:17] “I really like the rotisserie one.” So, Ron, if you’re listening buddy, you’ve got one satisfied costumer down here.

Jim DeBetta: [00:09:21] That’s right.

Michael Blake: [00:09:21] But you’re right. Most people do this as a side gig. I hadn’t thought of that. That’s a really interesting.

Jim DeBetta: [00:09:27] Yeah. And they have to because when you start, like you start any business, you’re writing checks, but there’s no money coming in. So, they need to fund the business through whatever it is that they do for a living. Very few people will call me with an inheritance on their hands, or they’ll just max out their cards, but that’s another thing too. I have to kind of temper that. If somebody says to me, “Jim, I’m going to empty my 401(k),” I push back. I don’t want it. I don’t want to feel — because I know it’s a risky business, I don’t want to be the one that takes the money there and leads them down that path. They fail, and now they really have nothing.

Michael Blake: [00:09:58] And that puts a lot of pressure on you.

Jim DeBetta: [00:10:00] Sure.

Michael Blake: [00:10:00] That, for me, would create performance anxiety.

Jim DeBetta: [00:10:05] Right.

Michael Blake: [00:10:05] When somebody comes to me and says, “I’ve just emptied out my 401(k). I’ve leveraged the 529. My wife doesn’t know any of this.”

Jim DeBetta: [00:10:12] I have that too. It’s like, “Don’t tell my wife. Don’t tell my husband.” I’m like, I don’t really want to start off this way. I always say, “Don’t tell me. If it’s something you don’t think I want to hear, don’t even bring it up.”

Michael Blake: [00:10:21] That’s right.

Jim DeBetta: [00:10:23] It’s a scary thing out with people. Because they get so emotionally attached, they will do just about anything to fund it or come up with money for it. And that’s a scary notion sometimes.

Michael Blake: [00:10:33] So, it sounds like part of your job, and I find this in mine too, sometimes, you have to be an amateur therapist.

Jim DeBetta: [00:10:40] You do. I mean, and again, a lot of it comes down to just calming people down. They call me up, “Jim, I’ve got this thing. It’s awesome. I’m so excited. And I’ve been doing this, and I’ve been doing that.” And you have to get them on the phone. You have to say, “All right, look, it’s a business, it’s like any other business. It’s risky.” And I have to almost scare them away because if I don’t let them know the realities of it and that they can fail.

Jim DeBetta: [00:11:01] And some people say, “Well, why do you do that? Why do you scare people away? Why aren’t you being more positive?” I’m like, “Look, I’d rather air on the side of, ‘Okay, I prevented somebody from doing something basically stupid,’ and encourage their misbelief of something than-” You know what I mean? That’s important to me. And I’ve been doing this for you 20 plus years. I think I have a good handle, a good intuition when it comes to how people are with me. And within 30 seconds, I know how they’re going to be.

Michael Blake: [00:11:30] And I think that’s a sign of a strong professional is you know there are some times you shouldn’t take your client on because you could take their money today. In fact, in your case, they’re probably saying, “Shut up and take my money. I got to get this thing on Walmart and Target.” And you make it hard. And I suspect, because I run into this also, when people think that they want their business appraised, I don’t want them at the end of a 30-day, 60-day, one-year process thinking that I had told them that I laid out the yellow brick road for them, and then it didn’t end that way. That’s bad all the way around, right?

Jim DeBetta: [00:12:10] Yeah. And you’ll hear me say this a few times, it’s managing expectations for people. You have to do it for them. They’re not going to do it themselves. They’re excited, right? They’ve got an idea. I mean, they see other people, they watch Shark Tank, they see all the activity out there, and they believe that their product is the next one or it’s better. And they get fooled by that. And so, it is. I have to. I don’t want to.

Jim DeBetta: [00:12:33] I mean, who wants to turn away business, but I have to tell some people, “This is not right. You shouldn’t be doing this,” or “You should slow down,” or there are people that want to hire me, they see the offerings I have in terms of packages and things that I offer. “I want the best. I want-” I’m like “No, no. You’re not ready for that.” “What do you mean I’m not?” They get — I’m like, “Look I could take your money. I’ll send you an invoice. You’ll pay me in five seconds.”.

Jim DeBetta: [00:12:54] But that’s not the right thing to do. The right thing is to get them in a better position to have a better chance at success. And the way to do that is to calm them down, right, and say, “Here’s what’s likely to happen. Here’s the path. It’s not going to take three weeks. It’s going to take three months or six months.” And then, they go back and sleep on it. And then, usually, most people will come back to reality and say, “Okay, I got it. I talked it over with whoever. I appreciate it. I feel good about it. Okay, how do we move forward?”

Michael Blake: [00:13:23] So, do you remember the first time or one of the first times you ever had to fire a client? And if so — Or maybe talk about any time you had to fire a client. What prompted that? And how did somebody get through your gate process, your gate keeping?

Jim DeBetta: [00:13:38] Well, some people, you just can’t get through to. I mean, if somebody is really that excited, you’re not going to stop them. If they don’t go to me, they’re going to find somebody else to do it for them, or they’ll do it themselves, which is scary because they really don’t know what they’re doing. I would always say, “You’re sick, you go to a doctor,” that kind of thing. You can’t be a product designer, a package expert, a factory, an attorney, and all those things. You can’t be, right?

Jim DeBetta: [00:14:01] So, those people will go ahead and try to do it anyway. Who knows who listens to this. Of course, there’ll be no names mentioned, but I have fired a lot of people. And the first time I fired somebody, it was hard for me because it was many years ago. And, again, you’re earlier in your business, and you need all the business you can get, but you still want to have integrity and do the right thing. But you try to justify it in your own mind like, “Should I fire them or can I just — They’ll be OK you know and I’ll still work with them.”

Jim DeBetta: [00:14:29] But I had a woman who, right off the bat, was, “This is the billion idea. And then, it’s going to be great.” You get excited by their enthusiasm. But then, literally, the next day, I’d be getting emails saying, “What’s getting done here? Are you doing this? Are you doing that? How can we ever reach out to one of the chain stores yet?” And I’m like, “We just started yesterday.” And even though I said, “It’s going to take time, this is the process,” I couldn’t calm this person down, ever. And it drove me crazy.

Jim DeBetta: [00:14:58] Then, they get mad because you’re not performing even though you’ve had in writing saying, “This is what it’s going to take.” And you have a phone call, “This is what it’s going to take.” It’s almost like I didn’t say anything. And then, they are like almost going after, and I’m like, “I can’t.” I mean, forget the money. It’s like, “I can’t do this. It’s too stressful. Here’s somebody else you can go talk to.”

Michael Blake: [00:15:20] It’s the kind of client where every time they contact you, it’s never just talk about what a great job you’re doing.

Jim DeBetta: [00:15:26] But you cringe, you see that e-mail in your inbox, or the phone ringing, and you’re like, I don’t want to answer the phone when you call or be happy to get your email. I shouldn’t be working with you.” Over time, you evolve. Right now, I’m really picky. I want to work with people that are fun to work with, that I enjoy talking to. That’s like my biggest criteria now. I mean, a product is product, right? I mean, they’re made of something, they made in a factory, we sell it to the same stores, they’re widgets to me.

Jim DeBetta: [00:15:53] I mean, I get excited and passionate about the products when I go to the retailers, but, at the end of the day, a product is a product. I have to enjoy working with you because if I cringe or even shudder at the thought of hearing from you, who wants to do that? I don’t want to do that, enough for any amount of money really.

Michael Blake: [00:16:10] Yeah. Well-

Jim DeBetta: [00:16:11] Maybe, maybe.

Michael Blake: [00:16:15] So, this is actually segueing nicely into the kind of the next question I want to ask, which is, what are some of those warning signs that this relationship is a mistake and we got to think about ending it?

Jim DeBetta: [00:16:26] Yeah. On their end, they’re overenthusiastic to the point where they’re not being realistic. That’s the number one criteria to me. Number two is somebody that will tell me that they’re on their last dime doing this. And I have people that I start with. So, I’ve hired them, or they’ve hired me rather. And then, I have to fire them because they reveal something like that to me, something personal or something financial, and I’m like, “Look, it’s like building a house. You got to have the money to build the house. Once the architect lays out the plans, what are you going to build? The frame? And then, go out of money,” and I get that kind of scenario.

Jim DeBetta: [00:17:03] Those people, I have to try to help them for free, so to speak, and transition them off of what they’re doing or onto another, like maybe go to licensing versus doing it themselves, and introduce them to those people. But I got to let those people go to because that kind of thing where they reveal something personal to me, I know it’s going to be — Then, yes. There’s that performance pressure. If this thing isn’t a home run, maybe they won’t get mad at me, but I’m going to feel bad and it’s going to be devastating for them.

Michael Blake: [00:17:33] Right. I mean, if you have any sense of integrity, you do feel responsibility for the client outcomes. And yeah, I’m sure some people just want to bring inventions to the market because that’s just a vision they have. But people want to make money. They’re putting a significant financial investment. I get that too. And particularly in the startup space, someone will call me up and say, “I want to get my business appraised because I’m going to raise money.”

Michael Blake: [00:17:55] And one of the first questions I ask them is, “Well, you’re talking to this one investor. If they no, what happens?” “Well, I don’t know. I’m not sure.” “Well, do you have enough money to survive?” “Well, no. I need this investment.” I said, “Well, then my valuation doesn’t matter.” Right?

Jim DeBetta: [00:18:10] Right.

Michael Blake: [00:18:10] If that person walks away, you’re out of business. I’ve taken a check, but I haven’t helped, I really haven’t helped anybody in that process, right?

Jim DeBetta: [00:18:19] Right.

Michael Blake: [00:18:19] And that invention, inventor story sounds very similar to that.

Jim DeBetta: [00:18:24] I think that’s a big part of it. I think because those people that come to us, you hope that they’re coming to us for a reason because they don’t know something, we know something, they need our help. And that’s another reason that I’ve let people go is because people will hire me, and then they tell me everything that I’m supposed to be doing. Even though they have no knowledge, they say, “Jim shouldn’t you do this? And this is how this should be done. No, when you talk to a buyer this is what you should be saying.” I’m like-

Michael Blake: [00:18:48] Oh, that drives me crazy.

Jim DeBetta: [00:18:49] And look, I’m open here. Look, I’m willing to learn something new. I don’t care where it comes from. I mean, my kids can tell me something, and if I could pick up something, and it helps me to do my job better for them, great. I’m not about, “You hire me, so I tell you everything. You have no say. You have no ability to help.” I always tell people right off the bat, “This is a two-way street. We have to communicate. I need things from you. You need things for me. And if there’s differences, we talk them out. But primarily, you’ve hired me. You’re paying me to do something that you can’t do or don’t know how to do. So, when push comes to shove, you have to make a choice,go with my words because I’ve done this ten thousand times.”

Michael Blake: [00:19:29] Why hire me if you’re not you’re not going to listen to my advice?

Jim DeBetta: [00:19:31] Right. And I’ve let a couple people go in the middle of things because they were so overbearing with them hiring me, but then all of a sudden, they where the expert and I was the client. It shouldn’t be that way. Again, it should be collaborative, but it shouldn’t be where if I pay somebody to come do something for me, I expect that they’re going to be competent, and they’re going to do their job. And I say, “Hey, what about that?” or “Can you maybe look at this?” That’s your right. You’re paying money, but if you’re going to overwhelm, overtake the whole process, then you know what, go do it yourself or find somebody else. And it’s frustrating sometimes.

Michael Blake: [00:20:01] I think that gets a fundamental lack of trust, and not in your trustworthiness, but the client’s inability to trust you. I actually fired a client earlier, it’s now 2019, middle of last year because we did an appraisal for them, sent them a draft. And the client, then, took our drafts, started showing it, and said, “I showed it to my friend who’s an investment banker,” and he says, “Your numbers are wrong.” And I listened very carefully to investment bankers because they’re out in the marketplace. So, many of them are very good experts.

Michael Blake: [00:20:34] So, well. “What did you show them?” “First of all, I showed you the work product.” “So, okay, our engagement, I said, you weren’t supposed to do that, but, okay. What information did you give them besides the work product?” “Nothing, we had a 10-minute conversation.” “All right. So, our teams put in 25 hours on this, but you’re going to show this to one person with a 10-minute conversation, you’re going to decide that their opinion is more valid than mine. I think that you should retain them or somebody else. Let’s settle up and split because if that’s the level of trust you have in this process, I can’t think of what’s going to make it end well.”

Jim DeBetta: [00:21:16] Yeah. And we fight that in my business too. Somebody will immediately go somewhere else, or they’ll try to reach the retail buyers themselves because I haven’t gotten in touch with them quick enough. There’s always going to be those types of people. So, all you can do really is just try to set the table from the beginning, “Here’s how I work. This is what I expect of you. This is what you should expect of me.” We talk about it. We write it out.

Jim DeBetta: [00:21:37] Beyond that, you lose control a little bit. But, again, you can usually — I know I can get a great sense of how somebody is immediately. I could just tell. I could tell their tone. It also depends on how much experience they have. If they’ve been trying to do this on their own, and they’ve failed repeatedly, they’re coming to me at a desperation. They really will then say, “Okay. Jim, you do what you got to do,” because they’re at their end. They don’t have other option. They’ve probably tried other avenues, or tried calling other people, and they aren’t getting satisfaction. So now, I’m the end game for them.

Jim DeBetta: [00:22:08] Those people are a little easier to deal with because they let me do my thing, and they listen better. The ones that, like I said, get very emotional or very connected to their own thought about, “This is not going to fail no matter what,” I’m like, “Well, you need to have a great mindset, this is not going to be an easy road, but I’m telling you right now, the chances of you succeeding, they’re small. And I just want to let you know that right off the bat.” But we get that people will go around you, or talk to a name, or somebody who’s not from the business at all even, and say, “They said that this packaging doesn’t look good or the pricing is wrong.” And I’m like, “Are they buying it? Are they in this business?” I get a lot of that. And it’s easy usually to kind of squash it. But, once in a while, you get somebody who really push the envelope on it.

Michael Blake: [00:22:54] So, how do you tell whether or not there’s a systematically bad fit versus it’s just a bad day, bad week ,bad month for you or the client?

Jim DeBetta: [00:23:03] Yeah. I have people that they are a good fit, and then they’ll have that breakdown because they’re right, they’re spending money, and nothing’s happening yet. They’re not selling. It’s much easier to write a check to get prototypes done or patents done, but to sell a retail, it’s such a long-selling cycle. So, they won’t see money for six months, a year, and it’s hard for them. And so, sometimes people will — It seems like everything is going great, and I get that email that I’m happy to get or that call, but it’s a total flip. They’re like, “Jim, I don’t know what’s going on, and I feel this way, I feel that way.” That’s a bad day. They just need you to encourage them. “Look, this is the business. This is what we talked about. It’s going to be all right. I understand.”

Jim DeBetta: [00:23:46] Nine out of 10 times, they’re good. You talk to them right through, But other times, you get people who are completely the opposite. And, again, I got a pretty good feel, I rarely get it wrong these days. I used to not always get it right, but, now, I’m a much better because I’m even more patient with waiting for people. I don’t look to sign somebody up so quickly anymore. Now, I let people sleep on it, and I sleep on it.

Jim DeBetta: [00:24:12] I had been talking to a woman just yesterday, actually yesterday morning. Long story short, I talked to her a couple of weeks ago. She sent me samples, I looked at them, I thought they were really good. And I took a few days to call her back. I wanted to feel like this was a good fit for me as well. And we got on the phone, and we talked it out, and she understands. And I said, “Well if you’re good,” and then, I followed up with an email and said, “Let me know what you think.” And so, I’m slower in my process, but I think that allows me to have less error in what kind of client I have and how they’re going to be.

Michael Blake: [00:24:46] I tell people, there’s not that much benefit to being older. You get gray hair, and in my case you get two arthritic ankles, but the positive side of that is wisdom.” And realizing that the value of a deep breath, the value of sleeping on things, the value that you don’t have to respond to everything right in the moment because that leads to a bad decision more often than not.

Jim DeBetta: [00:25:15] And I’m not that way. I’m more of the impulsive type. It’s hard for me to sit back and wait. I’m not afraid to lose anything. There’s always businesses. There will always be. As long as there are inventors, I’ll be in business. I never worry about that anymore. But it’s still my nature to want to respond quickly, but I have to actually stop myself and find something else to do. Otherwise, I will be reactive too quickly.

Michael Blake: [00:25:40] Yeah. I mean, you’d love to resolve it, get it off your plate, and not have to worry about it. But again, that’s just growth. That’s the benefit we get for the gray hair. Do you have a preferred kind of method for firing a client? In other words, there’s a passive way to firing a client, which is basically raise your rates, and then they don’t want to work with you anymore. Or there’s that, “It’s not me, it’s you” conversation, even though in your mind you’re saying, “It’s not me, it’s you.” Do you have a preferred method or have you use different techniques based on a different scenario?

Jim DeBetta: [00:26:17] Yeah. When you had written that out about the raise your prices sort of thing, I think I do that naturally only because I know the type of client I want, and I know that will do well, and I know that client has to be financially capable of doing things. I know that there are people who will — I don’t do the free stuff or the 1999 to get them in the door. I don’t like doing those types of things because I know that that client will pay a few dollars to get information, but they probably won’t want to pay a lot more to have the real work done.

Jim DeBetta: [00:26:47] I don’t know if I have a specific way I go about that. I think I just feel it as I go and as things develop. But my criteria is, just like I said, it’s just more instinct than it is anything these days. I just get a sense. I get them on the phone. I won’t do it via email. If I have a problem with somebody, I am a big emailer. I prefer to actually email and text people than to talk all day long. But if I have a problem with somebody, I will call them, and I will say that it’s them. I won’t blame me because I know that I do the same thing for you, that I’ll do for you, that I do for everybody, if that makes sense.

Jim DeBetta: [00:27:24] So, I will let them know that. It’s not tolerable. I can’t work on the — You hired me to help you, and you’re telling me what to do, or you’re unrealistic. And I know this is going to lead to bad things. So, I tell them that either they need to change, and some people will, or they need to understand that we can’t work together anymore. And then I’ll finish up and help them transition, but that’s usually what I would do.

Michael Blake: [00:27:48] Well, that’s good. So, you don’t break up by email, or text, or anything like that.

Jim DeBetta: [00:27:52] No. Not like that.

Michael Blake: [00:27:53] Do it like a professional, right?

Jim DeBetta: [00:27:54] That’s a tough one to do.

Michael Blake: [00:27:55] But the object lesson here is if I ever see you calling, that means you’re going to break up with me.

Jim DeBetta: [00:28:00] That sounds great. I would tell people, “If I call you, and I don’t outbound call a lot of my clients a lot, it’s either something is going on bad, or something is really good, like we get a big purchase order from a retailer, but you’ll like it enough. That’s a fun phone call to get. But if I call you otherwise, something is up. Otherwise, we’re going to email and correspond that way.”

Michael Blake: [00:28:18] Okay. Is there a client you can remember that you should have fired, but didn’t?

Jim DeBetta: [00:28:27] There’s probably a bunch that I probably should have. And again, those with were the early days when I tried to hang on, not necessarily I really needed to, but I felt like I could. I tried to — Like I said, with age comes wisdom. Now I know that I don’t want to wake up tomorrow feeling stressed. I don’t want to go through a month of stress before I let somebody go. If I feel the tension, and I know it because it’s not me, even if I’m wrong, I’m still going to let them go.

Michael Blake: [00:28:57] I found that I cannot think of a time where I’ve ultimately regretted either firing a client or turning one away, but I can tell you for sure the clients that I’ve regretted taking on are not fired.

Jim DeBetta: [00:29:13] Yeah, I agree. I think you remember, if you will, the mistakes more than.

Michael Blake: [00:29:16] That’s right.

Jim DeBetta: [00:29:17] Because we don’t know what would have happened with that the other way. But we know when we keep ones that are difficult, you still try to see it through though, right? I always try to ignore how they get, and I just say, “Just let me do my thing.” If I just keep going on, and they don’t like what I’m doing, they’re going to fire me. So, I almost put it on them. I’m like, “I’m going to keep doing what I’m doing.”

Michael Blake: [00:29:37] Well, you think they’ll fire you, right? But some don’t.

Jim DeBetta: [00:29:39] Yeah. No, you’re right. But then it winds up working out because, then, they see what they hired me for, right. At the end of the day, at the end of the road, look, it worked, or you got your product developed, or hey, you’re selling it on whatever website. Then, they’re happy and appreciative later on.

Michael Blake: [00:29:56] So, that’s interesting. So, I think that’s sort of a lesson. It seems to me like you know pretty early on if it’s a bad fit. It doesn’t sort of sneak up on you necessarily. It’s not like the boiling fraud for example. It sounds like you know pretty early on.

Jim DeBetta: [00:30:09] Yes. Almost every time, I know right away.

Michael Blake: [00:30:12] Really?

Jim DeBetta: [00:30:12] Very quickly.

Michael Blake: [00:30:13] That’s awesome.

Jim DeBetta: [00:30:13] Because I can, again. And I think that a lot of it, it’s just instinct and experience. I’ve done it a million times. There’s only certain ways people can be. It’s not like there’s a thousand different ways people are going to act. It’s just really a handful when I see those that are red flags to me, I know. And like I said, again, even before there is a higher fire, I know how people are going to be. If I can’t manage their expectations immediately, I know that I shouldn’t even begin working with them. Never mind having to fire them, so to speak.

Michael Blake: [00:30:41] Because it’s not going to get better.

Jim DeBetta: [00:30:42] It’s not. I know it’s not going to be.

Michael Blake: [00:30:44] The more ingrained you get, you’re more entrenched, right?

Jim DeBetta: [00:30:46] Yeah. And I don’t need that. I don’t want that.

Michael Blake: [00:30:48] Okay. Has a client ever talked you out of firing them? You’re all set, you’re going to fire them, but then they said, “No, I really want to stick it. Please, Jim. You’re so great. I promise I’ll be better.”

Jim DeBetta: [00:31:03] I don’t know if I’ve had that. I think it’s either it’s cut or dry. I’ve had a few people where I’ve told them they need to calm down. It wasn’t like you’re getting fired. I guess it’s like the warning, right?

Michael Blake: [00:31:15] Yeah.

Jim DeBetta: [00:31:16] You need to chill out, you need to do this, you need to do that, or you’re not communicating well, or you’re going and trying to email a buyer when I told you do not do that. People will go off the script, so to speak. And I’ll warn them. And then, those people will say, “Okay. I’m sorry. I didn’t realize it,” even though they probably knew what they were doing. And then most of the time, they’re good. They turn around because I try to be friendly. I’m not like, get on, I’m trying to be rough with people when I work with them. I’m not trying to dictate. I’m trying to do my job.

Michael Blake: [00:31:43] People hurt themselves when they do that.

Jim DeBetta: [00:31:44] Right. So, it’s kind of like a parent to a kid. Look, you’re doing this wrong, and then you hug him later and it’s fine, and usually that works out.

Michael Blake: [00:31:53] Okay. Any concluding comments? Anything we haven’t covered that you think we should before we wrap up here?

Jim DeBetta: [00:31:59] Well, I think we’ve hit on all the big things. I think you have to — I think, for me, and I think what other people can benefit from is even though you want that client, even though it may be important to you, whether it’s financially or just for your own self to feel like you can obtain clients. I think you have to go with your gut. I think you have to realize that if something just doesn’t feel right, and you feel like it’s overwhelming, or there’s going to be undue pressure, or you can’t manage those expectations, just don’t even do it. Don’t even start. I know it’s easy to say because I’ve been doing this, and I have an established business, but if I could look back at my younger self and do certain things over, I would probably have been a little more patient with the hire, so I didn’t have to worry about the fire.

Michael Blake: [00:32:43] Because hiring the wrong client can actually do more harm than good, right?

Jim DeBetta: [00:32:48] Yeah. And, also, if you get people who are a little off the wall with the way they are, they’re very aggressive, or they’re hotheaded. Then, today, with social media, they could just go online and be reckless in what they say about you.

Michael Blake: [00:33:01] That’s true.

Jim DeBetta: [00:33:01] I’ve been fortunate, I’ve never had anybody do that. Although I’ve not had many people that have gotten upset like that. But, still, it’s so easy. I mean, someone could just comment on this podcast blah, blah, blah. People do whatever they like.

Michael Blake: [00:33:13] You can walk out of here and accuse me of a federal crime.

Jim DeBetta: [00:33:15] Before I even get to my car, right?

Michael Blake: [00:33:17] Absolutely.

Jim DeBetta: [00:33:17] And that’s scary. So, you have to also be cognizant of that, that if you feel like that person is going to be that person. I have people call me up and they say, “Jim,” and they tell me how confrontational they are with other things in their life. And I’m like, “Yikes. Is that the kind of person I want to even work with? If things go south, maybe they’re going to-” If they’re telling me what they’re doing to other people, maybe they’re going to do that to me.

Michael Blake: [00:33:38] Sorry, I was late, I got a ticket for road rage on my first meeting.

Jim DeBetta: [00:33:41] Right, yeah.

Michael Blake: [00:33:41] Not a good sign.

Jim DeBetta: [00:33:43] Well, I’ll call you back tomorrow. We’ll see if we could work together.

Michael Blake: [00:33:46] So, well this has been great. I want to make sure people know how to find you. So, if they want to learn more about this or what you would actually do for a living, how do they find you?

Jim DeBetta: [00:33:55] Well, can you hide anymore these days? I mean, if-

Michael Blake: [00:33:57] I’ve tried, man.

Jim DeBetta: [00:33:59] You can’t. No, not today. Yeah, we push too much out there to be — I would say social media is the best way. I have one of the largest invention groups on Facebook in the world. It’s called We Know Inventing. People could go on there. But if they just go on and Google Jim DeBetta, it will lead them to my websites, which one is my namesake jimdebetta.com. I’m on Facebook, I’m on Instagram, I’m on LinkedIn very heavily, I’m on Twitter. They’ll find me in two seconds. They’ll be able to reach me. And I answer everything. It’s hard to because I get a couple hundred emails a week or messages. And I believe in that. I’ll sit up, and I’ll, at least, say, “Got it. And thanks for reaching out.” So, I respond to people. And I think it’s important to in business to be busy as you get to, at least, acknowledge somebody coming along.

Michael Blake: [00:34:47] Yeah. Well, very good. Well, that’s going to wrap it up for today’s program. I’d like to thank Jim DeBetta so much for joining us and sharing his expertise with us. We’ll be exploring a new topic each week. So, please tune in, so that when you’re faced with your next business decision, you have clear vision when you’re making it. Once again, this is Mike Blake. Our sponsor is Brady Ware & company. And this has been the Decision Vision Podcast.