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Inspiring Women, Episode 15: Being Politically Savvy

November 16, 2019 by John Ray

Inspiring Women with Betty Collins album cover
Inspiring Women PodCast with Betty Collins
Inspiring Women, Episode 15: Being Politically Savvy
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Inspiring Women with Betty Collins album cover

Being Politically Savvy

How do you successfully navigate office politics? On this edition of “Inspiring Women,” host Betty Collins discusses the skills needed to be politically savvy. “Inspiring Women” is presented by Brady Ware & Company.

Betty Collins, CPA, Brady Ware & Company and Host of the “Inspiring Women” Podcast

Betty Collins, Brady Ware & Company

Betty Collins is the Office Lead for Brady Ware’s Columbus office and a Shareholder in the firm. Betty joined Brady Ware & Company in 2012 through a merger with Nipps, Brown, Collins & Associates. She started her career in public accounting in 1988. Betty is co-leader of the Long Term Care service team, which helps providers of services to Individuals with Intellectual and Developmental Disabilities and nursing centers establish effective operational models that also maximize available funding. She consults with other small businesses, helping them prosper with advice on general operations management, cash flow optimization, and tax minimization strategies.

In addition, Betty serves on the Board of Directors for Brady Ware and Company. She leads Brady Ware’s Women’s Initiative, a program designed to empower female employees, allowing them to tap into unique resources and unleash their full potential.  Betty helps her colleagues create a work/life balance while inspiring them to set and reach personal and professional goals. The Women’s Initiative promotes women-to-women business relationships for clients and holds an annual conference that supports women business owners, women leaders, and other women who want to succeed. Betty actively participates in women-oriented conferences through speaking engagements and board activity.

Betty is a member of the National Association of Women Business Owners (NAWBO) and she is the President-elect for the Columbus Chapter. Brady Ware also partners with the Women’s Small Business Accelerator (WSBA), an organization designed to help female business owners develop and implement a strong business strategy through education and mentorship, and Betty participates in their mentor match program. She is passionate about WSBA because she believes in their acceleration program and matching women with the right advisors to help them achieve their business ownership goals. Betty supports the WSBA and NAWBO because these organizations deliver resources that help other women-owned and managed businesses thrive.

Betty is a graduate of Mount Vernon Nazarene College, a member of the American Institute of Certified Public Accountants, and a member of the Ohio Society of Certified Public Accountants. Betty is also the Board Chairwoman for the Gahanna Area Chamber of Commerce, and she serves on the Board of the Community Improvement Corporation of Gahanna as Treasurer.

“Inspiring Women” Podcast Series

“Inspiring Women” is THE podcast that advances women toward economic, social and political achievement. The show is hosted by Betty Collins, CPA, and presented by Brady Ware and Company. Brady Ware is committed to empowering women to go their distance in the workplace and at home. Other episodes of “Inspiring Women” can be found here.

Show Transcript

[00:00:01] So today I’ve chosen kind of an interesting topic. Maybe when you hear the title, you’ll understand politically savvy. Oh, yes. Politics. You know, today it’s always had a negative tone. But in today’s environment. Wow. Just not good, right? But, you know, if you take politics in in politically correct or just say politically savvy, maybe I’ll get you to listen. Politically savvy. The why and the how. I will tell you, is it really necessary? Because some people really don’t like that idea of that. I’m going to say a firm. Yes. If you truly want to get where you want to go, you’ve got a you’ve got to learn the art of being politically savvy. So let me set the stage. The term politics is based on words, Polly, and ticks. Poly meaning many and ticks, meaning blood-sucking parasites, totally fits in today’s environment, right? It’s why we don’t like it maybe I don’t know. But whenever people’s priority, their values and their interests come together, chances are some type of politicking is going to take place. So where are your priorities right now? Can you easily define those values? Hopefully it should be quick, you know. What are your interests? So, yeah, you know, it’s necessary if you’re going to make sure that those priorities, values and interests are really going to become reality. Being politically savvy just might have to be in order.

[00:01:36] But no matter where, you know, your office, family, maybe you maybe you volunteer a nonprofit, you’re involved in your local community, talk about politics or politics, politicking. It’s just inevitable. And they involve intentional acts to you and by you to influence and enhance, you know, protect those priorities and those values and interests. So we’re going to talk about today. So, yeah, it’s necessary to be politically savvy to have as the best desired outcomes that you’re looking for. I think the major intention of office politics is about. It’s about positioning yourself. It’s about vested rights that can be dangerous, maybe resources and careers, influence and power. And when all those things are done the right way, it can be really amai amazing. And when it’s done the wrong way with wrong motives, though, it can be pretty dangerous. So be careful when you’re talking in wanting to position yourself, investing yourself and tapping into resources, advancing your career, which can all lead to some good influence and power. Political savvy is the only way to go and it’s a positive connotation. Necessary, my opinion totally the true secret to being politically savvy is that it’s a secret skill. To be successful if the best it’s the best trader ability you have that’s just kind of natural and and you don’t talk about being politically savvy and nobody talks about it.

[00:03:07] e-justice. It’s who you. It’s it’s who you are. It’s how you can can work the room and work the situation to do what you need to do. Navigating an office or, you know, an organization, even your own household. You know, you got to get comfortable with and then duty, you know, those unknowns. Right? You’ve got to get comfortable with some alliances. Not everyone is easy to align with and be authentic with. That’s why you got to be political savvy. By the way, you know, the thing that we don’t really see a lot in today’s politics is, is those things that people are trying to come together with. But with practice, you know, you can decipher what is often unspeakable and not easy. If you decide the right course of action and just a side note, authenticity is not telling the truth without spilling every single. Your gut every single time. That’s not an authenticity. But truth always wins and it doesn’t have to be dramatic. So as we talk about political competence today and being politically savvy. Really, political competence is the ability to understand what you can and cannot control. You’ve got to know when you take action. And you’ve got to figure out who’s going to resist your agenda.

[00:04:25] I remember it being in a class once for CPE and it was a long, long time ago in my career and she was such a dynamic speaker. If you can imagine, all of us really love talking about managing compilations. OK. Not an exciting subject, but she or I never have forgotten this for her. She said Always figure out who’s going to resist what you want to do when you’re managing. Always figure out and be prepared for it because it will happen. So I’ve always remember that advice from this woman. I couldn’t tell you who it is on compilations of how exciting. You have to know who’s on your side. Absolutely. You know, there is that saying out there, keep your friends close, keep your enemies closer. So there’s some truth in that. But you really do have to know who’s on your side, who’s in that circle that will help you through it. And then you have to know about how to navigate through that, the map, the political terrain where you are to get others on your side. So, you know, I’ve said a lot of things that you probably already knew, but being politically savvy is really, you know, for me, I’ve got to make sure that if I’m going to get what I want or I’m going to get what I think the organization needs or do what’s best and align my values and all those things, I’ve just got to learn this skill set. So how do I do that? I’m going to give you some Howse today. Here’s the number one think before you speak. Let me say that again. Think before you speak. You know, to be truly politically skilled. You’ve got to have some impulse control even over this past weekend. I had a situation where I got a a face book message, p_m_, whatever it’s called.

[00:06:01] And it was a very I could have taken that message a hundred ways, but I stepped back and said, nope, I’m going to think about this and try to not hash it over all weekend. But before I speak, I’m going to take my time. It kind of paid off because when I actually had the conversation and step back and wait for a real conversation, not text, it turned into something different.

[00:06:24] So you need to choose your organizational battles wisely. You know, those conversations that size things up before you decide how you’re going to present to others. You have to consider whether or not to voice a thought or a feeling. And timing is everything. Have you ever seen someone try to get something done because they’re passionate. They want to do it. They’re ready. They’re prepared. It’s just not the right time because the person maybe or the situation they’re trying to change. It’s not time. It’s not a good time. You’ve got to think before you speak and you’ve got to think there’s going to be a time when I can do this.

[00:06:58] You have to consider that your communication of yourself, your ideas, your opinions, sometimes look back and see where you said something. And in that prior time, it worked and learned from that. Probably it was the circumstance and the timing that made it work.

[00:07:17] The result that you can have can be pretty ideal if you wait and think before you speak. And chances are you’re probably not going to go off and be real rogue or this situation goes rogue. And you definitely are politicking at that point, but the results are likely be more positive when you think before you speak. Especially when it’s not something simple, especially when it’s something that could be controversial or it could go either way in. So be careful too. You got to manage up to some point. When you are savvy, you must be able to skillfully communicate with the layers above you.

[00:07:52] What does layers mean then? Sound very fun, does it? But it’s your boss, the supervisor. Sometimes I’m referring to even higher up decision makers. Your boss might not be the decision maker, but then you have to look at that layer and say, boy, if I go to his boss or her boss, is that going to be good? So you’ve got to figure out how to manage up to a point. I was just in a meeting where there were two people with the same position and they both had such different approaches. They both managed up, but two to one really did it to the wrong person and one did it to the right person and that person who knew skillfully enough to go, Hey. Think before you say say it, well, that person was making such more headway than the other person over here thinking, I’ve chosen the right person, I’m going to work the room over here and I’m going to. I’m gonna be savvy on this side on the right person to be savvy with. So you have to think about those things.

[00:08:48] Also, political skill involves maintaining good relationships with people, though, in the entire organization. Nearly as good as that team around you. We always hear that.

[00:08:57] So I’m not saying put all your all your energy and your resource in layers above you, because if you don’t have the layer below you, that makes it all work as well. You may end up neglecting that entire team around you. So, you know, when you’re trying to be politically savvy, trying to work through your family organization, your church, your community office, your careers. Think before you speak and manage up to a point. Make sure everyone around you that’s involved is treated well, because those people may they may one day rise up above you. You never know. You have to practice influence. How do you do that? I mean, what does that really mean? Because my next podcast is on influence and becoming that so effective influencers. They build strong interpersonal communication and relationships and they have good rapport with other people. When you are skilled, politically, politically savvy, people are comfortable with those interpersonal communications and skillsets that can be somebody that’s very intimate setting. It can be something that’s one on one. But you have to practice that influence. There’s a really good saying that sometimes influences like a savings account. The more you don’t draw out, the more you have.

[00:10:13] So sometimes throwing influence around doesn’t help you. I really got to witness somebody who’s very good at influence and being politically savvy and having really good impact. And that would be Caroline Warley. She’s an attorney in Columbus, Ohio. She has helped tremendous amounts of women’s organizations start from scratch, get them going. And what she really does well with those things is she connects people to the right people because she is a very connected person. She practices her influence. But you don’t even know it. You know, she’s bringing those people in and she’s she’s making sure that they are connected to the right thing for the greater good, not for Caroline morally necessarily. It’s okay that sometimes it’s for Caroline Worthy. Right. But she practices that influence in all kinds of situations and areas in her life. People who practice influence, they tend to have some good judgment about when they assert themselves and that results in cooperative relationships around them. So skilled influences are not always overly political. They just know how to play the game. Don’t you hate that? But it’s true. There are people out there who really know how to do that.

[00:11:26] Number four, this could be an entire podcast. Hone your power of perception. Don’t you love the person in the room that has no, I dieser just. They think they do, but they don’t. So I love number four. What a statement. Really, it’s an action or trait that is key to being skillfully politically savvy. You have to understand that.

[00:11:52] That when you can know what’s going on and be perceptive, there is power in that can, that’s an entire podcast. One day I was in a meeting and room full of great people and I walk in and they said, Here’s your meeting. I sat down and. And I’m pretty personable. So I start talking to everyone because, you know, I think I am in the right meeting. I have no idea that I’m completely in the wrong meeting until I realized and I said out loud, I’m in the wrong meeting.

[00:12:23] Everybody laughed because there’s a dozen people, but they were very entertained. But it didn’t dawn on me till probably three to five minutes into this meeting. I had no idea I was in the wrong meeting, too. I really then started seeing these people had no clue. I’m hitting out my cards to everybody. The funny part of that story was two years later, somebody hired me from that meeting because I handled it so well. Wish them all a good day. Walked out of there completely humiliated, but I laughed all the way out the door.

[00:12:51] So having the ability to understand now, that was a funny situation, obviously, but people who can hone in and have that perception have some. There’s power in it. And you understand you’ve got to. It’s a skill. This is really a natural characteristic in somebody. I think it’s a hard skill to learn. If you can’t see it, you just can’t. And so if you really have that problem where you’re not being able to work a room, well, get someone to help you with that. You’ve got to know who is around you and what this what the circumstances is. But it really is part of being really good savvy. That’s for sure. You got to learn to network. There’s networking and then there’s networking. Right. Actually, my friend Betty Clark at CPM Media says all the time there’s networking and then there’s connecting. So I could go to lunch three times a day. Sometimes I feel like I have or there’s really where you’re connecting with somebody. And so when you’re being savvy, if you are a person who helps small business, but you are meeting with big time, the large client, middle market bankers, that’s that’s networking. It’s not connecting. So you have to learn the difference a little bit and get in there. And of course, it’s not who you are. It’s who you know. That’s just a fact in life. Effective networking goes well beyond passing out your business cards and smoothing. You know, people who possess a strong networking ability, they build friendships and they see that going to be beneficial for both of you. It’s not about networking with a big name. So you can say you networking the big name. What can you do for them and what can they do for you? Skilled networkers know when to call on others and they’re willing to reciprocate.

[00:14:41] There has to be benefit between the two. The relationships have to benefit. Otherwise, it truly is just having lunch. It’s not networking connecting. So you have to invest in them and they will invest in you. Those are just various things that you can do to get that good politically savvy people are. They think before they speak. They manage up to they manage up to a point, but then they practice influence, they hone the power of perception and then they learn to network. Those are things that you have to take those five subject matters and dive into where you don’t have strength. But really, those who demonstrate political intelligence, they probably have a basic strategy. Of course, I’m a CPA and I’m a practical person. So strategy is great. I love it. If it sits down, if it’s in a book that sits on a shelf, it doesn’t really mean anything.

[00:15:33] So when I talk about they demonstrate political intelligence, they’re actually doing something with this strategy. But these are the things that they do. They partner with their boss. Unless you have a unique and irreplaceable knowledge or skill, which very few people do, actually your boss has much more power than you do. Probably your manager has much more access to those key decision makers. So it’s better to have a boss as a cheerleader than as an adversary. And again, I go back to managing up and you find those relationships. If you really want to get to the CEO of a company or a vice president level. You’re probably not going to find that by partnering with the accounts payable clerk of the company. You know, you’ve got to understand partnering with whether it’s a customer or a prospect or in your own company, partner with the boss. The person who’s up. The person who is the decision person. But at the same time, you’ve got to be a team, a 360 team player, which, you know, what does that really mean? I think it means it’s full circle. You must have a wide network of relationships with in your organization. Missy Heimer, who is a director at Brady, where when she first came to Brady, where which is probably 13, 14 years ago, she was a staff accountant. She kind of had started her career later in life.

[00:16:46] But she was very adamant of wanting to be a director and own a company one day. And one of the people gave her great advice. Young, you know, when she became a senior, she started seeing things happen. Get to know every director of Brady where and not just in the office you work in, but in other offices, because one day you’re in need, all those relationships around you. And so, you know, when it came time to vote for her to be a director, she knew everybody shouldn’t work for them necessarily. She she didn’t have that much interaction, but she definitely had this full circle. And on top of that, she made sure all the managers around staff, everyone, she was a kind of a hub centralized person. The other reason had to be a 360 team player and know kind of everyone within your organization. I mean, our Columbus office has 30 people in it. The more you know and have relationships in and work those rooms, guess what? You’re going a better understand what’s going on in the Columbus office. You’re going to know the things that are happening. And you won’t be maybe surprised then when you get those circles in those teams all collaborating. You can do anything. And that’s part of being politically savvy for sure. Then you have to understand the power map. Organizations are pop power hierarchies, right. And from time to time, those things shift.

[00:18:08] So you might have had the relationship with this person for ever and ever thinking that would hold you there. Well, what happens when that person goes? I learned this early on in my career as I was, you know, trying to know more and more people. And I loved one of my partners, which was with the payroll company. And this person gave me a lot of business and I gave them a lot of business. It was great until all the sudden three into three years. Guess what? They go on to something else, like selling medical something. Well, I had no other contacts at that point to refer to me or me refer to them. And so you have to kind of understand that at sometimes, no, that’s not a hierarchy person, but everywhere you have to. I if I would have known his boss, the boss would’ve probably brought me out one of his better reps if I wouldn’t. You know, CEOs come and go, accountants come and go. And you’re in. Really, you’re working for the owner of the company, not the CFO. You have to make sure that your understanding that power map of who has the influence, where you are and where you want to be and making sure that you will always leverage that things could change. So I’ve got to be able to change along with it.

[00:19:16] Then you have to practice subtle self-promotion. That would not be Betty Collins. I tell people on my podcast all the time. And really, if I don’t mean why wouldn’t I promote that? I mean, I work hard at it. It takes time to do. I was at a lunch and we were with a table, people we didn’t know. And so we’re going around introducing ourselves.

[00:19:38] And so one of the women said, oh, ah. I asked her, actually, I said, so how do you like being in the Narva organization? And she goes, Oh, I love it. And so the person next to her said, Oh, you’re with norvo. And I said, Yeah, you know, I’m on the board and I’m involved. And everyone started laughing at the table that was with me. They said, she’s the president of norvo. I don’t know why she’s not telling you that. And they all kind of laughed about it, you know. But the person I was across the table from actually was a really great connection. And so now I have kind of something she’s going to remember buying. I gave her my card and we talked. I could have just said, yeah, I’m very involved. I love the organization and so much so that I’m on the board and I’m the president right now, blah, blah, blah. And go on into those things. So sometimes you have to do those things and we don’t always do that well. Of course, there are those people that do it way too often and it’s very annoying.

[00:20:29] So politically savvy people can share their information, but chances are they’re going to self-promote and no-one’s. It’s not going to be obnoxious. People are gonna be good with it. OK. Here’s one. And you’ll go, why did you put this in here? Connect with the power people. Well, the big decisions about your career, you know, your company or even in the community will be made by people who endorse you. It’s just true. I mean, it can actually other day with someone because I was a link. She’s a LinkedIn friend. You know, we run in circles, but I’ve never done a business with her until she. She. Person who was trying to get her business said, well, we have a common person that I know. And can you call her? And she will give me a reference. I’m not going to tell her that I’m calling. And she said, we made this connection. And these were pretty high up. Well, I we consider high a powerful people. I up now having. Thank you for giving me a good reference. And by the way, here’s a client for you, because now I learn more about you and the person who I’d really like to get declined that she knows. Now, we had a great conversation about just business in general vs. other things that that I usually talk with her about. So those decision-maker people who endorse you.

[00:21:49] People who will make you happen. That was just a simple thing. But in the case of your company, maybe it’s your boss, you know, in your business, maybe it’s getting to that bigger client or smaller ones. You know, I’d rather have 10 big clients than 100 smaller ones. It depends on what you do. But in your community, you know, it’s one thing to note city council members. It’s another thing to know the mayor. You’re probably going to get a lot more done when you know the mayor. You may not know the mayor to, you know, council, though. So you have to look at both of those politically savvy people. Enjoy talking to folks who have the power, of course. It’s not like sucking up and using their coattails to drag along, but the people who are endorsed, you know, they’re going to help you be politically savvy. Again, remember memory, I started this podcast. I said you don’t really want to be seen as politically savvy. Just wanted to have it be happening. And then you got to commit to the business of the day that you do the passion that you’re doing, the organization that you’re in. Nobody likes an apathetic attitude. No one has ever press with, well, you know, I like the commercial that’s out right now where they say, yeah, my French is just okay. And of course, they interpret French as completely wrong.

[00:22:56] So if you want decision makers to think well of you, you need to be pretty interested and excited in what you do and false cheer will get you. So it will only get you so far. So you have to have some politically savvy. You really got to have the why and the what so that the what is simple in your life. But you’ve got to be committed to whatever it is you’re trying to politically savvy navigate through. So knowing the rules of this unwritten, invisible world politically savviness that no one wants to talk about because no one wants to say they’re political. It will help you gain recognition. It will help you get promotion in. It will get you where you probably want to go. Here’s some other things where you can think of. I’m going to be politically savvy, not sleazy. Right. You find the geek gatekeepers. Keep your eyes and ears open. Who are the real people of influence? Who do you need to get to? Who’s going to really make the difference? Often it’s just like any game you need to connect with the person who shuffles the cards. You have to be careful in that, too, because you can’t just try to get to the top first. I had a very interesting person in my my district ran for mayor. Anybody can run for mayor, but the person had never been on council.

[00:24:04] They’d never even been in the chamber. They had never been in CVB volunteering throughout the city. It was really kind of strange. So politically savvy, you know, when we’re talking about a find the gatekeeper. Sometimes you got a fine before you get there. You got to listen. Listed the coffeemaker. Gossip is a bad thing, right? It’s hard. It should be anyways. But tidbits of information sometimes can get you right to the right person. So sometimes just again, listening, kind of when I talked in the beginning of think before you speak. Right. Know when to be quiet. Tom Cruise is the perfect example of this in Jerry Maguire. So in the beginning, he has this epiphany, right? He writes this big story. Right. He goes in and gives everybody the story. And the whole place is quiet and within, you know, an hour of entering that office. Guess what? He was walking out of that office, had a really lot of good things to say and passion that he wanted to do and influence and change. But, man, he just didn’t know when to be quiet. Really blew it as far as I was concerned. And then building strategic alliances. You know, it’s not all about numbers. It’s not about how many people like you on Facebook. It really is probably gathering up your own board of directors.

[00:25:17] That is about your agenda. Whatever it is to politically savvy, savvy, navigate through. That’s better than well, I know all these people now and you don’t really know them. And they’re liking something good for you.

[00:25:30] And then trust your instincts. You know, learn what pushes your buttons and do it. Do something about it. Navigating office politics means getting comfortable with that ambiguity, the unknowns, alliances and authenticity, I talked about that at first and with practice you can decipher was often pretty unspeakable and decide the right course of action. So gonna end with this statement to be human is to be political. Inspired people help you build the right required skills to navigate, navigate politically in organization. And so make sure that as you start this venture of I’m going to become politically savvy, take hard. Get the transcript, because I just gave you a ton of information about trying to navigate through through being politically savvy, it’s not easy to do, but it’s necessary in the world you live in, probably. I’m Betty Collins. Thanks for listening today.

Tagged With: CPa, CPA firm, Dayton accounting, Dayton business advisory, Dayton CPA, Dayton CPA firm, Influencers, Inspiring Women, Inspiring Women podcast, organizational culture, perception, politically savvy, politics, power hierarchies, power map, woman owned business, women entrepreneurs, Women in Business, women-owned businesses

Decision Vision Episode 40: Should I Align My Business with a Cause? – An Interview with Mollye Rhea, For Momentum

November 15, 2019 by John Ray

Decision Vision
Decision Vision
Decision Vision Episode 40: Should I Align My Business with a Cause? - An Interview with Mollye Rhea, For Momentum
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Mike Blake and Mollye Rhea

Decision Vision Episode 40: Should I Align My Business with a Cause? – An Interview with Mollye Rhea, For Momentum

Does cause marketing really help my business? What factors should I consider in selecting a cause to align with? Answers to these questions and much more come from Mollye Rhea, For Momentum, on this edition of “Decision Vision.” Mike Blake is the host of “Decision Vision,” presented by Brady Ware & Company.

Mollye Rhea, For Momentum

For Momentum unites companies and brands with nonprofits in a way that benefits both organizations. Benefits include enhanced visibility, high-touch relationships with employees, customers and donors and significant social impact. Within the industry, this is referred to broadly as corporate social responsibility (CSR) or more concisely as cause marketing. At For Momentum®, they call these carefully designed partnerships strategic cause alliances.

Mollye Rhea

Founded in 2003 by corporate marketing and nonprofit executive Mollye Rhea, For Momentum has emerged as a leading cause marketing agency that helps companies and nonprofits prosper through partnership. Corporate Responsibility Magazine has recognized For Momentum as one of the top five cause marketing firms in the United States. Their work has been featured in the books Cause Marketing for Dummies and Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause as well as in numerous other industry publications.

While many factors set For Momentum apart from other cause marketing firms, these are the top five unique selling points (USPs) mentioned most often by their clients and industry experts. For Momentum is 100 percent focused on strategic cause alliances versus offering cause marketing as one service among many public relations, marketing and advertising options.

For Momentum’s accomplished cause marketing consultants possess a deep understanding of national/local dynamics—both corporate HQ/franchise and national nonprofit/chapter affiliate relationships.

For Momentum maintains a hiring criterion that each staff member has experience in both nonprofit and corporate environments, which equips them to provide valuable “translator” skills. Experience on both sides of the table allows them to link shared values and mutual challenges cohesively and meaningfully, leading to strategic, integrated cause marketing programs that achieve nonprofit mission objectives while delivering marketing, sales and PR benefits to the corporation.

No other cause marketing agency offers For Momentum’s proven system of identifying partnership prospects, conducting partner outreach and negotiating corporate partnerships. They customize each strategy and cultivate each pipeline for the specific client or project. With For Momentum, you won’t find cookie cutter plans, stale templates or impersonal outreach using the same tired list of prospects.

For Momentum provides a fresh, outsider perspective to help clients realize strategic priorities and adds a depth of experience and actionable plans that enable agencies, companies and nonprofits to meet their goals more quickly and efficiently.

For more information and to access resources mentioned in the show, go to the For Momentum website.

Michael Blake, Brady Ware & Company

Mike Blake, Host of “Decision Vision”

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. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike 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 the North Fulton studio of 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

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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: [00:00:20] And welcome to the Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic, rather than making recommendations because everyone’s circumstances are different. We talk to subject matter experts about how they would recommend thinking about that decision. My name is Mike Blake and I’m your host for today’s program.

Michael Blake: [00:00:41] 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 also consider leaving a review of the podcast as well.

Michael Blake: [00:01:02] So, our topic today is should my business align with a cause? And I was brought to thinking about this topic because it was in the late last year, early this year, I think it was late last year, you know, I observed Nike pretty much going all in with the Colin Kaepernick scenario with the NFL. And I’m not going to comment specifically on that matter, but I did make an observation on social media that, it struck me that if I were a shareholder of Nike, I would at least like to know in advance if a company in which I was invested was going to take a polarizing or potentially polarizing position like that.

Michael Blake: [00:01:52] And I think I was kind of motivated in that viewpoint by the fact that there was a pretty demonstrative response by what turned out to be a very small minority of customers. I know that the massive response is everything from burning shoes to tearing up sweatshirts and wherever it is else that Nike sells. And, you know, quite frankly, most people who looked at that on social media said, “Blake, you’re dead wrong.” And I said, “We’ll see.”.

Michael Blake: [00:02:28] And you know, to a couple of my friends’ credit, they actually went out and bought Nike stock. So I got to give them credit, they put their money where their mouth was. And, well, you can see the history for yourself. Nike is still around. They are doing fantastically. Their stock has never been at a higher level, I believe. I think they had one of their best years ever in terms of return on that stock.

Michael Blake: [00:02:51] And clearly, I was wrong about that. And I owned up on that on social media. Imagine that, somebody saying they were wrong on social media. But, you know, the facts are the facts. And as Bill Gates likes to say, “Success is a lousy teacher.” So I had a great teacher in failure there. But it led me to sort of think about, you know, what goes into the process of a Nike when they decide that they’re going to support, in their case, a polarizing cause?

Michael Blake: [00:03:18] Not all causes are polarizing. There are many cause we can all get behind, whether it’s the United States Olympic movement, whether it is fighting cancer, whether it is stopping human trafficking, right? Not every single cause that people believe in is a polarizing one. But nevertheless, there is also a viewpoint, and Warren Buffet, I think, would agree with us because he’s written about this, that, you know, it’s really not company’s business to engage in causes at all, that business should be in the business of generating return for its shareholders.

Michael Blake: [00:03:51] And if shareholders then want to take their returns and use that to support a cause, then they should do that. And that’s how the economics should work. And again, I’m not going to necessarily debate that directly, but I want to put that out there that that is a widely held view by a person who’s been pretty successful at this whole business thing. And so, that kind of sets the stage as a platform for today’s discussion, because my bringing this on social media showed me very clearly that there’s, you know, something more that I can understand.

Michael Blake: [00:04:22] And many of you who are in business may be thinking the same thing about, you know, is there an opportunity for me to align with a cause, an organization of some kind? Is that the right thing to do? How do I kind of figure that out? And I’m not qualified to talk about that, but I have somebody here in the studio who is very qualified to talk about that. And joining us today is Mollye Rhea, founder and president of For Momentum, a cause marketing agency here in Atlanta.

Michael Blake: [00:04:54] When Mollye founded For Momentum in 2003, she recognized that she was leading one of very few agencies that specialized in cause marketing. I think that’s still true today. Since then, as cause-related marketing and corporate social responsibility have grown to a $2.6-billion industry, For Momentum has grown into one of the leading cause marketing firms in the United States. And they’re doing fantastic.

Michael Blake: [00:05:18] Through work in nonprofit development, brand marketing, and cause marketing, Mollye has acquired a unique 360-degree perspective of what fosters success and strategic cause partnerships. In her over 25 years in the field, she has created and executed cause engagement and marketing programs, strategic fundraising campaigns and organizational development strategies with dozens of nonprofit organizations and hundreds of brands, including the American Cancer Society, Boys & Girls Clubs of America, Habitat for Humanity, International—InterContinental Hotels Group, Lane Bryant, and Novartis to name a few.

Michael Blake: [00:05:53] She is a graduate of the Leadership Atlanta Class of 2012. And by the way, that’s the second best class ever. You had to be an insider of Leadership Atlanta to get that joke, but I was class of 2014. And I did not know that about you. She sits on a bunch of nonprofit boards and holds a bachelor’s degree in economics and psychology from William & Mary. Mollye, thanks so much for coming on the program.

Mollye Rhea: [00:06:18] Well, thanks so much for having me, Michael. I’m excited to be here. And wow, what a provocative promotion you started the discussion with.

Michael Blake: [00:06:26] Well, yeah, you know, you got to do something attention-grabbing to get attention on social media, right?

Mollye Rhea: [00:06:31] Right.

Michael Blake: [00:06:32] And what’s nice about that is that I learned something and it made me think more about this topic. So, thanks for coming in to talk. I don’t think I’m the only person that’s thinking about this question, right? The fact that you have the thriving business you have, I think, is Exhibit A that this is a topic that’s of a lot of interests, but it’s not a cut and dried one. So, why don’t we dive into it? So, what I like to do with a podcast is to sort of set our vocabulary. When we talk about cause marketing, what does that mean?

Mollye Rhea: [00:07:05] Well, I’m really glad you started with that, because so many people, in my experience, come to that term with a different point of view. And so, I think it’s really important to lay that groundwork right from the get go. So, I’ve been doing this type of work for a very, very long time. And back in the olden days, it was called corporate relations or something like that. And it’s really the practice by which a company is supporting a nonprofit as a part of their business practices.

Mollye Rhea: [00:07:35] And I really encourage the listeners today to take a more open-minded viewpoint to realize that that can bring many different—that can come to life in many different ways. So, some of the terminology that you hear, you know, bandied about, you know, corporate relations, community relations, cause marketing, strategic philanthropy. But these days, a really popular term, which kind of plays off of the story you told is social impact marketing. And so, companies today are looking to really engage in generating impact into our society as a side part of their business, but as a primary part of their business as well.

Mollye Rhea: [00:08:18] So, some people think of cause marketing as, you know, I’m going to buy this bottle of water and 10 cents is going to go to a charity. That is one type of cause marketing. It’s a very specific type called commercial co-venture. And we can talk about that more later. But also, different types of cause marketing, I would argue, would be, you know, the Nike program that you talked about. Other campaigns, even in employee engagement these days, in terms of really getting your employees involved in making a difference on a social issue. So, it’s a very broad landscape that we’re talking about.

Michael Blake: [00:08:54] So a question comes up, and I apologize, I’m going off the script right away, but I think it’s—I just got to get your answer on this, because I think it’s so interesting. You know, in recent months, we’ve seen a number of companies pull back in terms of their willingness to sell firearms and firearm ammunition supplies, and so forth. Is that a kind of cause marketing in your mind?

Mollye Rhea: [00:09:21] In my mind, yes.

Michael Blake: [00:09:22] Okay.

Mollye Rhea: [00:09:22] I mean, I put those into the same landscape.

Michael Blake: [00:09:27] Okay.

Mollye Rhea: [00:09:27] Right? So, again, cause marketing itself might be one term within this landscape, but it’s the most commonly used term.

Michael Blake: [00:09:35] Okay.

Mollye Rhea: [00:09:35] So, I think, in fact, I was going to bring up that example based on what you said, you know, about the Colin Kaepernick Nike campaign. You know, there are a variety of societal issues where companies are starting to make a difference through their business decisions, whether to sell something. There’s a local firm called Kabbage that makes business loans and they will no longer loan to anybody who’s in ammunitions-

Michael Blake: [00:10:01] Oh, really? Okay.

Mollye Rhea: [00:10:03] … type of business.

Michael Blake: [00:10:03] Okay.

Mollye Rhea: [00:10:04] So, there’s things like that. So, I think those sorts of deep integrated business decisions are more of the recent trend we’re seeing in this landscape, but you do have to be very careful. And I want to say that I think that we can continue to use this Nike example as a grounding case study, if you will. They did lose a segment of their customers. You know, their overall numbers went up, but there was a segment, just like there was a strong segment who spoke out against it and burned-

Michael Blake: [00:10:34] Yeah.

Mollye Rhea: [00:10:35] … things. And then, there was, you know, on the other end, strong, you know, affiliation with it. You have to really understand your customer base and not make those decisions based on your personal opinions, but really take into account the community that you serve if you want to make sure that you aren’t having that, you know, the tail wag the dog, so to speak, you know.

Michael Blake: [00:10:57] Yeah. And that’s a great point that I think we’re going to get back to. But it does it does bear emphasizing that, you know, cause marketing for its own sake may or may not be a great thing, but it sounds like an integral part of that notion is make sure you understand who your target market is, right?

Mollye Rhea: [00:11:15] Right.

Michael Blake: [00:11:16] And it may not be necessarily the target market that I, as a CEO or board or a decision maker, chief marketing officer, thinks as the right cause, right?

Mollye Rhea: [00:11:25] Mm hmm. That’s right.

Michael Blake: [00:11:26] So, again, using the Nike sort of the platform for this discussion, there was some risk there, I think. That turned out well for Nike, great for them, right? But, you know, because of that risk, why should a company consider taking that risk in embarking on a cause marketing campaign?

Mollye Rhea: [00:11:47] Yeah. And you know what? I think I want to interject here a different example, because I don’t want the listener to think of that as the guiding light of an example-

Michael Blake: [00:11:57] Yeah, please.

Mollye Rhea: [00:11:57] … because it’s an extreme example.

Michael Blake: [00:11:59] Yeah, please.

Mollye Rhea: [00:12:00] So, you know, there are many, many ways that companies can support nonprofit’s, you know, strict sponsorship of events or activities, things like that. They can get behind a campaign that is going to raise funds or awareness for an issue that isn’t controversial. And it doesn’t change their business model, but it’s more of a programmatic way that they can support. So, let’s talk about some of those more standardized types of campaigns, because I don’t want the listener to be frightened that, oh, it’s got to be this big extreme-

Michael Blake: [00:12:33] Yeah, good.

Mollye Rhea: [00:12:33] … you know, thing. So, let’s talk about the business benefits of a company supporting a social impact or a nonprofit mission. You know, either space. Often, they’re very interlinked. There are clear and documented benefits to a company for this type of marketing behavior. And they are things like increased sales, heightened PR, heightened awareness of the company and positive awareness of a company. So, there are a lot of great business benefits. But what I also want listeners to know is that, you know, in the trends in this space, an increasingly important target audience is your employee base. Because today our unemployment rates are very, very low.

Mollye Rhea: [00:13:21] The cost of finding a good candidate and retaining a good employee are real cost that we have to be very careful about. And there’s a mounting amount of evidence that cause marketing or a company’s support of the local community is a positive differentiator for job selection. And that when employees join a company that they feel is doing good things in the community, they’re more likely to be engaged and they’re more likely to stay employed with that company. So, why should a company consider cause marketing? Lots of different reasons. It could be PR, it could be HR.

Michael Blake: [00:13:58] You know, and I want to underscore that point as well. You know, marketing, when many of us think of marketing, frankly, myself included, we think about an outward message, right? How do we get more customers? How do we get the customers we have to love us more, buy more from us, and so forth. But you’re right, there is a marketing element internally, right, to make your employees and your associates feel great about where they are. Because at the end of the day, raising salaries can only take you so far.

Mollye Rhea: [00:14:30] That’s right. Yeah. You know, part of the overall compensation package is psychic income, right? And so, you want to feel good about the work you’re doing and you want to feel good about the company that you’re working for. And this is becoming—you know, we hear a lot about millennials, you know, we’re starting to hear now more statistics from the Gen Z population.

Michael Blake: [00:14:51] Yeah.

Mollye Rhea: [00:14:53] But these younger cohorts are absolutely motivated by community impact. And so, you know, it’s becoming more and more important as companies want to attract those younger talent.

Michael Blake: [00:15:07] And that’s been something of an adaptation for Gen X’ers like myself, right? The Gen X’ers are the, I think, last of the kind of the old school workforce where just put your head down, getting your hours, do your thing, and, you know, get in and get out. And that’s an adaptation outlook that my generation has had to change, right? Because if we try to treat our workforce in a Gen X way, we’re not going to have a workforce very long or at least not one with which we’re very happy.

Mollye Rhea: [00:15:44] Mm hmm. I think that’s right.

Michael Blake: [00:15:45] So, it sounds like you’ve segued again very nicely into the next question, which is it sounds like there’s evidence that cause marketing does have a positive impact on company performance.

Mollye Rhea: [00:15:55] Absolutely. You know, there are an increasing number of studies out there. The most common are from an agency called Cone, C-O-N-E. And if readers are interested, you can certainly Google that and you will find all sorts of different studies on this topic. But I like to cite more resources than just the primary one, because I think sometimes we can get into a rut or a routine and I think their work is fantastic. I’m not dissing that at all.

Michael Blake: [00:16:23] Right.

Mollye Rhea: [00:16:24] I follow that. But, you know, we’ve been able to find many, many other sources of information that point to the validity of this notion. I also want to point out that there are increasing numbers of corporate associations focused on this topic. One of those is the Committee to Encourage Corporate Philanthropy, CECP. And they are a group of CEOs of large organizations that very much track the benefits of this type of investment, because this is not just a, you know, flash in the pan idea.

Mollye Rhea: [00:16:59] This is something they realized they have to pay a lot of attention to. And according to CECP, 87 percent of companies are now measuring and tracking societal outcomes and using that data to inform their program development. And 80 percent of those same corporate leaders think that, they believe, it is enhancing customer loyalty and 89 percent of them feel that it’s enhancing collective purpose amongst their employees.

Mollye Rhea: [00:17:27] So, those are just some of the types of statistics. I could go on and on. I don’t want to do that because probably, a lot of your listeners are driving. And I don’t want them to fall asleep. But, you know, on our website, at For Momentum, we have a variety of resources. We compile this type of research all the time because we’re in it, you know, 365. So, free downloadable tidbits are there if your listeners want to go and download those.

Michael Blake: [00:17:53] Well, yeah, perfect. It’s all about data nowadays. So, let’s shift gears in a little bit. So, let’s say that one of those driving listeners now is saying, “You know what, this cause marketing thing is something I ought to pay more attention to.” I think the next obvious question to my mind is, is my company a good fit for it, right? Is there a profile of a company that has a good or a best fit for cause marketing as opposed to maybe a company that isn’t as good with that?

Mollye Rhea: [00:18:22] Yes and no. I mean, I think that there are some companies that, you know, have an easier footprint into the community. So, like a retailer, you know, where they can really, you know, engage, “Would you like to add a dollar? Would you like to make a donation and get a bounce back coupon?” Things like that. They have a natural affinity. But what I like to say is that when you, whoever you are as a company, are looking at putting your toe in the water on this, think about what companies—or what nonprofits, rather, what social impact mission is going to advance your business and what is the right footprint for you.

Mollye Rhea: [00:18:59] So, if I am a local company based in Atlanta, Georgia and my footprint is 100 percent Atlanta, Georgia, I probably want to pick a comparative nonprofit that impacts that same geographic space. So, you know, I need to find someone who’s like-minded, like-sized, you know, and find the right match for me. So, I’m not, as my company is not going to compete with what Nike is doing.

Michael Blake: [00:19:28] Right.

Mollye Rhea: [00:19:29] Because I don’t have the same profile or footprint.

Michael Blake: [00:19:31] Right.

Mollye Rhea: [00:19:33] So, I really think it can be any type of company, but with the right connection to a cause that makes sense. And another thing I want to point out about that is that sometimes, companies fall into a natural rut, where they just want to pick something that they care about individually. So, you know, I’m going to support, you know, something that matters to me individually, but it has no tie to their brand, whatsoever.

Mollye Rhea: [00:19:58] That’s confusing to the consumer and confusing to the employees, frankly, because it needs to be a charitable choice that matches, I call it, the three-second rule. It’s like, “Oh, I understand why this restaurant is supporting hunger issues because they’re both about food”, you know, or something basic like that. But that can really enhance the validity of the campaign when there’s a natural fit between the brands.

Michael Blake: [00:20:23] It’s almost like a joke. The second you have to explain it, you’re done.

Mollye Rhea: [00:20:26] Right.

Michael Blake: [00:20:27] Right? The joke is just never going to have the impact.

Mollye Rhea: [00:20:30] That’s right.

Michael Blake: [00:20:31] So, one thing that kind of strikes me about cause marketing is that you’re trying to find a partner. You need a partner, probably, in some constraints. I guess you could have a completely unidirectional cause marketing campaign, but I don’t think that’s what you’re all about. What is the role of the partner, the nonprofit or philanthropic partner in the cause marketing relationship?

Mollye Rhea: [00:20:56] Yeah. So, actually, I want to go back and talk about what you’ve just said.

Michael Blake: [00:20:59] Okay.

Mollye Rhea: [00:21:00] Which is that, you know, it doesn’t make sense for it to be unidirectional, but in fact, that is one of the trends we’re seeing, which I am really sad about. You know, I think there are a lot of companies that have decided to do their own—they’ve picked their own issue and they’re going to create their own solution to it. You know, and some companies can do that. I mean, they have enough wherewithal to really, you know, go in there.

Mollye Rhea: [00:21:25] I’m a big proponent that if there is a nonprofit that is working in that issue space, find a way to work with them because it does help to bring multiple voices to an issue and not later get maybe accused of self-dealing or, you know, something that’s self-serving. There are many, many benefits that the nonprofit can bring to the partnership table. And you have to have a really robust business discussion about that. So, it’s really important to find a partner who is going to match your business objectives.

Mollye Rhea: [00:22:02] So, for example, the nonprofit partner brings, first of all, an expertise into the issue space that you are wanting to address. They live in this space 24/7, so they should be bringing some special expertise. With that comes connections with stakeholders and opinion leaders in the space. They bring a level of awareness, a level of authenticity. They can bring marketing benefits. They have followers and they may have social media following or they may have, you know, donors, constituents. So, they do have their own audience that they can bring to the marketing equation.

Michael Blake: [00:22:39] You know, that unilateral element brings to mind something that just came up in the news. Apple just announced they’re going to put, I think, $2 billion into building housing in Silicon Valley because California has a massive housing problem. Basically, their own employees cannot afford to live in the state.

Mollye Rhea: [00:22:57] Right.

Michael Blake: [00:22:58] Facebook is doing something similar. And what struck me about that was, you know, I don’t know that necessarily building houses is the answer. And I hope—it wasn’t clear from what I read that they’re partnering with anybody. But, you know, perhaps, they should be. I certainly hope that they are, because Apple is not in the multi-family real estate business, as far as I’m aware, right? And simply building houses may not be the issue, right?

Michael Blake: [00:23:28] In my view, I think the issue is most likely zoning or something of that nature that prevents homes from being built where they ought to be built. And it would be interesting to see how the Apple initiative unfolds, right? Because they’re clearly targeting a cause somewhat self-serving. But that’s okay, because there is a collateral good that’s coming out of it. But it would be interesting to see if that winds up being part of a partnership or not. Right now, it’s not clear.

Mollye Rhea: [00:23:55] Yeah. And I don’t know because I haven’t studied that particular topic. But I do know of many nonprofit players that could be excellent in that space. You know, I think it’s called Community Enterprise Partners that we did some work with few years ago, whose mission is to talk about the fact with the increasing amounts of rent in key cities and how people can’t afford to live in the places where we need them to.

Mollye Rhea: [00:24:19] So, they obviously are working in this space 24/7 and at least could bring thought leadership to that process. So, that’s a great example, Michael, where I hope that whatever the issue is, I think it’s imperative that companies look to others in the space to see what they can learn before they go running down a path, you know, without all the information available.

Michael Blake: [00:24:42] So, let’s say we go through some process, we identified that nonprofit partner, you know, what are some of the typical contributions a nonprofit partner makes to that relationship?

Mollye Rhea: [00:24:53] So, again, it depends on the nature of the relationship. It can be extremely directed. It could be that the company is funding a specific project of the nonprofit and they are literally delivering, you know, the project. But many times, nonprofits can bring—you know, as I was saying earlier, people are aware of the nonprofits, so they’re bringing awareness to the topic. They are bringing constituency. They are bringing, you know, increase. I’ll give you an example. So, one of our clients is Habitat for Humanity, and they do a program called Home is the Key. And they’re a variety of corporate partners that engage in that campaign.

Mollye Rhea: [00:25:35] And in that case, what Habitat is bringing to it is, you know, obviously, the expertise on the issue. But they are also bringing celebrities to the floor, right? So, the Property Brothers are celebrity spokespeople for this event. They are investing in a big PR campaign that then the companies receive the spotlight of as a part of that initiative. So, instead of building the whole program from scratch on the corporate shoulders, the corporate can engage in a program that the nonprofit is bringing to the marketplace. And they are tremendous amounts of marketing and sales benefits, you know.

Michael Blake: [00:26:11] Okay. So, often, the nonprofit brings their own infrastructure-

Mollye Rhea: [00:26:15] Yes.

Michael Blake: [00:26:15] … basically. And the benefit there is, yeah, you could do it unilaterally, but why are we reinventing the wheel, right?

Mollye Rhea: [00:26:21] Right.

Michael Blake: [00:26:22] And especially in that case, you know, they’ve got celebrities, which, you know, most companies want to line with and so forth. And it sounds like—and I appreciate that it sort of depends. You know, it could be as simple also as simply using, you know, doing co-branding logos, trademarks, things of that nature.

Mollye Rhea: [00:26:41] Absolutely.

Michael Blake: [00:26:41] So, as I understand it, there’s really a sort of a whole spectrum of the sky’s the limit. And of course, another function of that is going to be, you know, how big the nonprofit itself is, right?

Mollye Rhea: [00:26:50] Yes.

Michael Blake: [00:26:50] The united way can do more than, say, you know, the local Chamblee chapter of St. Vincent de Paul, which is a thrift store that, you know, helps people in poverty in the Chamblee area.

Mollye Rhea: [00:27:04] Yeah, but that’s a good example of if I am a company based in Chamblee, you know-

Michael Blake: [00:27:10] Yeah.

Mollye Rhea: [00:27:10] … St. Vincent de Paul is gonna be more attractive to me-

Michael Blake: [00:27:12] Yeah.

Mollye Rhea: [00:27:13] … because there is an authentic connection between my business and that nonprofit’s mission. So, just to kind of tie that back to what I was saying earlier about, you know, finding the right partner, don’t forget those local ones-

Michael Blake: [00:27:27] Yeah.

Mollye Rhea: [00:27:27] … if you’re a local company.

Michael Blake: [00:27:27] Is it hard to mix the for profit and nonprofit cultures? Are there any issues with them sort of having being able to talk the same language? Because there are probably cases where their goals are not 100 percent aligned all the time.

Mollye Rhea: [00:27:43] Yes, absolutely. 100 percent of the time, they are not 100 percent aligned.

Michael Blake: [00:27:48] Okay.

Mollye Rhea: [00:27:49] I can tell you that. They may come together for a common objective in, you know, a particular program or initiative. But it’s very important to take into account the respective needs of each of the partners and their business realities, their business resource mixes, their stakeholders and who they’re reporting to. I would say that you could make the same argument in any business to business relationship building. Whenever you bring two partners together, they’re going to have different goals and different missions. But I will say the nonprofit environment is more starkly different from a corporate environment, you know, just given the fact that it’s a nonprofit.

Mollye Rhea: [00:28:28] However, where you can really bridge that gap is by having very straightforward communication and collaborative planning and really authentic clear conversations. So, you know, Business A wants this set of benefits and the nonprofit needs be able to say, this is what I can do and this is what I can’t. And some of those are regulatory-related. You know, like, for example, a nonprofit can’t overly promote a corporate entity or it becomes unrelated business income tax. There are implications for EBIT. So, you know, the company needs to respect the nonprofit’s, you know, boundaries and vice versa.

Michael Blake: [00:29:08] Okay. And to that end, I believe that some companies will actually create a role inside the company for somebody to be their, in effect, cause marketing ambassador, their person that represents the company for the nonprofits with whom they cooperate. And I suspect that model can work well because then, that person is fluent in both languages, basically, if you will. Is that a necessity in your mind? Is that best practices? Can you live without it? Can you talk a little bit about, you know, how important that role is?

Mollye Rhea: [00:29:43] Yeah. So, I don’t think it needs to be someone’s full time job, but there needs to be someone who’s put in charge, if you will, of managing the relationships. And so, I guess I want to answer this in a couple of different way. So, it doesn’t have to be—you know, I don’t want to dissuade companies that can’t afford a full-time position because you can certainly do this. You can have effective partnerships without it being a full-time role.

Mollye Rhea: [00:30:08] In fact, some of the largest companies that we work with as customers only have a couple of people and they’re doing billions of dollars, sometimes, of good. So, you don’t have to have a full-time person to get engaged in cause. The other thing I want to say is that we’ve been doing a piece of research. We’ve now completed our third cycle of this research with corporate partnership decision makers. And, you know, in the trends and in the way that the landscape changes, there came a time where there was this individual who was responsible. And what we’re seeing now is that that’s not the case, that it’s actually a shared responsibility across many different departments.

Mollye Rhea: [00:30:50] And so, we asked the question in our research, who from your corporate structure is involved in the decision making? And we found marketing, PR, HR, Community Relations, C-suite and sometimes, a special committee. So, I think that the company needs to make those decisions about where the most natural fits are and don’t work in a silo. Recognize that you need to engage counterparts from all those departments that I just mentioned in your planning process or you will end up with a silo, and that’s not good.

Michael Blake: [00:31:24] Okay. So, I want to switch gears a little bit. What are some trends you’re seeing out there that are, for lack of a better term, hot in terms of cause marketing? What are some emerging things that a lot of companies are looking to do? Whether it’s practices, nature of the cause themselves. What are you seeing out there?

Mollye Rhea: [00:31:40] So, let’s go back to your first topic of the morning, which was the, you know, Colin Kaepernick, you know, taking on a social issue. That is a trend. It’s not for everyone. It’s for a select few of brands that have an avant-garde element to their brand personality. But increasingly, we are seeing some companies taking this very strong stance on a particular social impact issue. So, that is a trend. And we actually have some resources on that, if anyone’s interested. But sort of to the more broad-based approach, actually, a trend is that the United Nations came out with some sustainable development goals. And I think it was 18 different areas of impact, where, you know, United Nations members from around the globe identified 18 common areas that any country needs to be sustainable.

Mollye Rhea: [00:32:34] So, poverty, education, hunger, water, you know, et cetera, and health. And what I’m seeing is an increasing trend as that companies are identifying from these sustainable business goals, development goals from the United Nations, they’re identifying we’re going to impact, you know, area 2, 8, and 12, whatever their numbers are that they pick. And companies are starting to speak in lingo, in that lingo of, “Well, in, you know, goal 12, we’re making this, you know, headway, this much headway. So, it’s a way of really working collaboratively across different corporate segments towards mutually beneficial goals. Does that make sense?

Michael Blake: [00:33:19] Yeah.

Mollye Rhea: [00:33:19] And so, that’s a trend. And then, the other trend that I want to highlight sort of as a top three trend is the increasing incidence of digital. So, as our society becomes more and more digitally focused, we are seeing lots more partnership activations in the digital realm.

Michael Blake: [00:33:39] Okay. And actually, to that end, is there a risk to defy, embark on cause marketing? And, you know, I’m not doing it yet. Is there a risk of it being somehow disruptive to my existing conventional marketing efforts? I imagine there must be some integration issues because I think that’s the expertise that you lend. So, if that is true, can you talk about kind of what some of those challenges might be?

Mollye Rhea: [00:34:08] So, how cause could be disruptive to the rest of your business plan?

Michael Blake: [00:34:12] Yeah, or, you know, cause marketing is a different kind of marketing, just like digital marketing has become disruptive to more conventional analog methods, right? I guess I’m posing a hypothesis that cause marketing has the potential to be similarly disruptive because I think the way you have to go about, the skill sets required, the stakeholders are different, right? And so, I guess my question is, is it fair to characterize this cause marketing as somewhat disruptive? And if so, is that something that needs to be actively thought about, managed by a company that is thinking of pursuing it?

Mollye Rhea: [00:34:52] So, I guess where this takes my mindset, Michael, is to think about, you know, all good things in moderation, right? So, if you were to abandon, if a company was to abandon some of their traditional marketing methods toward strictly cause, I think they could lose themselves, frankly, in it, because they need to—it needs to be a piece of your overall communications or employment objectives, not the only thing you do.

Mollye Rhea: [00:35:22] So, that’s something that I think you have to like integrate it into a bigger plan as opposed to, like, for instance, if a company suddenly went 100 percent digital and forgot all their other kinds of marketing, those repercussions will be clear. I think anybody can understand that analogy. So, I’m saying the same thing would happen if you went too top-heavy in cause. And maybe I’m honestly just a little too close to it, but I don’t see it as a risk, in general.

Michael Blake: [00:35:53] Yeah.

Mollye Rhea: [00:35:53] Here’s another example of where it could be risky. It could’ve been risky with Nike. You know, if they don’t understand their audience or if they choose a cause activity that doesn’t resonate with their target audience. That could become disruptive because they’ve suddenly changed their brand personality, probably unintentionally.

Michael Blake: [00:36:15] Right. And another example, we’ve talked about Nike, but Gillette with their “Me too” ad about a-year-and-a-half ago, right? That had some ramifications as well. In some cases, somewhat stronger, I think.

Mollye Rhea: [00:36:26] If you’re thinking of the ad where it was like the gentleman that they were trying to encourage men to be, it wasn’t “Me too.”

Michael Blake: [00:36:37] Well, but they sort of aligned—okay, you’re the marketing expert.

Mollye Rhea: [00:36:42] Yeah.

Michael Blake: [00:36:42] I’m not. I’ve heard it referred to as that.

Mollye Rhea: [00:36:44] Yeah.

Michael Blake: [00:36:45] So if it’s not, then I stand corrected. But I’m referring to the ad where they try to redefine a sense of what it means to be a man.

Mollye Rhea: [00:36:54] Right.

Michael Blake: [00:36:55] Which is a different relationship with women, which is a different relationship with other men, which is different relationships with people who are vulnerable. And I think that—is that a fair characterization?

Mollye Rhea: [00:37:06] Well, you know, it’s interesting. I think that your perception of it is a great example of where it can get dangerous, right?

Michael Blake: [00:37:11] Okay.

Mollye Rhea: [00:37:12] Because the campaign, in its essence, was designed supposedly to educate men to make more responsible choices that consider other people’s feelings more, like, you know, the way they raise their sons or the way that they talk to women or whatever. That is a great example of a campaign that had a really positive and negative reaction in the marketplace. I think they’ve—I haven’t seen it lately, so I don’t know if they’ve withdrawn or gone back to the drawing board or exactly where they stand on that, but I don’t think they expected that big of a reaction on the negative side.

Michael Blake: [00:37:51] Right.

Mollye Rhea: [00:37:52] So, that’s a good example of really needing to understand your target audience. And if a portion of your target audience resonates with that, you know, that could be a strategic decision. It could have been a mistake. And I don’t know because I wasn’t involved. And so, I don’t know the inner workings.

Michael Blake: [00:38:09] Right.

Mollye Rhea: [00:38:10] But I’ll give you another example and I don’t feel comfortable saying who it is because it was a business-to-business conversation.

Michael Blake: [00:38:16] Yeah.

Mollye Rhea: [00:38:17] But it was a, again, company that targets men and they had decided to, in their own way, try to redefine how men relate to their emotions. This was, you know, the stance that this brand took was, “We’re going to teach men that it’s okay to be in touch with their emotions.” And they did some, you know, post-campaign research and their audience didn’t like it. Like, “Don’t tell me how I’m supposed to feel.” So, you really do need to understand your audience. And especially if you’re going for something that’s provocative or brand changing, potentially could have people have a different perception of your brand, those are good examples of where it can be very disruptive. So, what could they have done differently? They could have picked a—those are also cases where there was no cause. There was no nonprofit partner. They’re just stating like, you know-

Michael Blake: [00:39:15] I hadn’t thought about that. Yeah, that sounds exactly right.

Mollye Rhea: [00:39:18] So, if they wanted to generate something, maybe that would have been a good time to find a partner that has a mission that they could say we’re supporting their mission, not we are changing who we are.

Michael Blake: [00:39:29] Interesting. Okay. And to that point about picking partners, I would imagine not all partners are created equal, right? And even if you identify with the partner’s potential cause, they may not be the right partner for you, right?

Mollye Rhea: [00:39:46] That’s true.

Michael Blake: [00:39:48] And sometimes, there can be a size mismatch. You know, an interesting story, you know, one cause I paid some attention to is Lou Gehrig’s disease research, ALS Society—ALS Association. And, you know, as everybody knows, it had the ice bucket campaign, which I did, and boy, ice water’s cold.

Mollye Rhea: [00:40:12] Yeah.

Michael Blake: [00:40:13] But an interesting thing about that was that all of a sudden, the ALS Association of America came into a windfall, about $130 million. They just did not have the infrastructure-

Mollye Rhea: [00:40:23] Right.

Michael Blake: [00:40:25] … to manage that kind of cash, right? Their organization had to completely reorient to make sure that that money was used well, right, and wisely. Can that be an issue in the cause marketing space, too? Maybe there’s a size mismatch or just fundamental characteristics of certain nonprofits that may not make it a good partner, even if you agree with the cause?

Mollye Rhea: [00:40:49] Yeah. So, I just want to go back just to clarify for a moment about the wonderful, fabulous ice bucket challenge phenomenon.

Michael Blake: [00:40:56] Yeah.

Mollye Rhea: [00:40:58] That was not cause marketing.

Michael Blake: [00:40:59] I understand.

Mollye Rhea: [00:40:59] Okay, okay. I just want to make sure your listeners understand that that is an example of a movement that caught wind. And I think every nonprofit in the world dreams of having that problem-

Michael Blake: [00:41:11] True.

Mollye Rhea: [00:41:12] … of creating that magic in a bottle, you know, where they can create something. Another beautiful example of something that was a game changer was cystic fibrosis.

Michael Blake: [00:41:22] Yeah.

Mollye Rhea: [00:41:22] So, they literally invested in research and the research paid off. And so, they became a part-owner of a pharmaceutical product that serves cystic fibrosis. I might not be getting this 100 percent right.

Michael Blake: [00:41:37] I think that sounds right. I’ve read that.

Mollye Rhea: [00:41:39] And it created just a tremendous amount of income. So, I think it’s incumbent on the nonprofit board to be prepared with, “This is our plan and this is our plan if we grow this much and this is our plan if we grow that much”, you know, so that they are strategically staying aligned to their mission and bringing that to life. In terms of a cause program that just has taken off and changes the direction, I think—I can’t think of a real example.

Mollye Rhea: [00:42:07] But I can tell you that, you know, if the nonprofit or if the message of the campaign was focused on a tiny issue and then, you had too much funding and you couldn’t spend all that on the issue, I think it’s really important to make sure that the focus area is broad enough that you’re not going to get into that topic. So, it gives me the chance to say this, many times companies decide that they want to create impact on a particular subset of a bigger issue. And sometimes, it’s better just to help the broader issue and not get so singularly focused on this small little piece.

Michael Blake: [00:42:45] Sure. Yeah. Because even if, say, Coca-Cola decided there is hook of the firehose and dumped, you know, $10 million into that St. Vincent de Paul charity in Chamblee, right? They’d be overwhelmed.

Mollye Rhea: [00:42:58] Right.

Michael Blake: [00:42:58] Most likely. And it wouldn’t work very well for everybody. So-

Mollye Rhea: [00:43:02] Right.

Michael Blake: [00:43:02] … you know, pick not just the cause, there’s a bullet point I want to kind of tease out, I think we’re doing that, is that picking the partner for a match is just as important as picking the cause. Is that fair?

Mollye Rhea: [00:43:14] Picking the partner that is delivering into the mission space that you’re interested in?

Michael Blake: [00:43:21] Correct. That’s right.

Mollye Rhea: [00:43:21] Yes. Yes, I do agree with that. And an example that I wanted to share, you know, when you think about that, so let’s say that your organization, you know, one that many of us know is breast cancer, right?

Michael Blake: [00:43:33] Yeah.

Mollye Rhea: [00:43:33] So, lots of people want to support breast cancer. And, you know, you really need to do homework on your nonprofit partner because, you know, there’s one breast cancer organization that works, let’s say, on funding research. And there’s a different breast cancer organization whose mission is to serve people who currently are dealing with breast cancer and make it easier for them, make it—help them get to their doctor’s appointments or things like that. And yet, a third breast cancer organization is all about prevention messaging and warning signs and things like that. So, really look at what it is you’re trying to accomplish within the mission space and make sure that you’re finding the right partner who will help you with that particular goal.

Michael Blake: [00:44:11] All right.

Mollye Rhea: [00:44:12] Not all nonprofits focus on exactly the same things.

Michael Blake: [00:44:15] Yeah.

Mollye Rhea: [00:44:16] Even if they’re all about, say, breast cancer.

Michael Blake: [00:44:18] Yeah, that’s true. I mean, many of them are new ones and that the cause itself is so big that there are subsectors of that cause and effect.

Mollye Rhea: [00:44:26] That’s right.

Michael Blake: [00:44:27] Well, Mollye, we’re running out of time but this has been great, I’ve learned a lot. And if I’ve learned a lot, I’m confident at least some of our listeners have learned something. So, thank you for doing this. There’s a lot more we could talk about. I’ve only gotten through about half the questions I want to talk about today, but that’s a good thing. How can people contact you if they want to find out more about this and explore maybe this for their own business, their own nonprofit?

Mollye Rhea: [00:44:52] Okay, great. Well, so, you know, I have been working in this space for a very, very long time, so I’m hyper interested in it. And as a part of our return to the community, we conduct research every year into different factors of how to bring a cause partnership to life, what sorts of benefits can you seek and things like that. So, I would hope that some of your listeners might find it of interest to go to our website, to our resource page and download some of our free resources.

Mollye Rhea: [00:45:20] So, that’s For Momentum, formomentum.com/resources. If you have specific questions for us, there’s a Contact Us page. We’d love to hear from you. Be more than happy to help direct you to resources or point—answer questions, things like that. That’s just a part of our giving it back to the industry practices kind of things. But I do want to shout out to a couple of others in the cause landscape that I think produce excellent resources for the listeners. So Engage for Good is the association of people in this profession. And they do a fantastic job of constantly bringing, you know, information to light.

Mollye Rhea: [00:46:00] They have research resources, they have free webinars, they have newsletters for free that listeners can sign up for. And a third one that I would mention is a newsletter called Selfish Giving. And it’s produced by a guy out of Boston named Joe Waters, who’s a pal of mine. And he is really funny. And so, most of his, you know, articles have some entertainment flair to them as well, but really, really great examples. And he tends to focus a lot on small companies. So, you know, some of your listeners, if they’re not the Nikes of the world, but they’re a more moderate-sized company, they might find Joe’s content very realistic.

Michael Blake: [00:46:37] Very good. All right. Well, that’s going to wrap it up for today’s program. I’d like to thank Mollye Rhea so much for joining us and sharing her 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 making it. If you enjoy these podcasts, please consider leaving a 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.

Tagged With: CPa, CPA firm, Dayton accounting, Dayton business advisory, Dayton CPA, Dayton CPA firm, Decision Vision, Employee Engagement, employee retention, Enterprise Community Partners, Facebook, For Momentum, Gen X, Habitat for Humanity, Michael Blake, Mike Blake, millennials, Mollye Rhea, Nike, Non-Profits, social impact, St. Vincent de Paul, sustainable development, United Nations

Decision Vision Episode 39: Should I Write a Book? – An Interview with Bea Wray, Michael Levin Writing Company

November 7, 2019 by John Ray

Decision Vision
Decision Vision
Decision Vision Episode 39: Should I Write a Book? – An Interview with Bea Wray, Michael Levin Writing Company
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Mike Blake and Bea Wray

Decision Vision Episode 39:  Should I Write a Book? – An Interview with Bea Wray, Michael Levin Writing Company

Are books still relevant? How do I get a book out of my head and down on paper? Should I self-publish? The answers to these questions and much more come from this interview with Bea Wray, Michael Levin Writing Company, “Decision Vision” is hosted by Mike Blake and presented by Brady Ware & Company.

Bea Wray, Michael Levin Writing Company

Bea Wray

An innovation expert, Bea Wray helps thought leaders share their stories, passions and knowledge as they invent, launch, and promote new products. As the former Chair of the Entrepreneurship Practice Group at Advantage Media Group, ForbesBooks, Bea further leveraged the wisdom and experience of these innovators through branding, visibility, and marketing efforts substantiated by the ForbesBooks brand name.

Bea is an innovator herself.  She successfully built and eventually sold SourceHarbor Inc.  Along the way, she expanded the company to serve thousands of clients internationally, and has consulted with hundreds of startups. Bea served as the Executive Director of The Creative Coast, a regional non-profit building the innovation economy in Savannah, Georgia where she hosted TEDxCreative Coast and the innovation conference known as GeekEnd. Her years of energy and effort are an immediate benefit to entrepreneurs across 26 countries and throughout the United States.

Bea’s upcoming book, titled What Harvard Taught Me, But My Kids Made Me Learn, is expected to arrive late in 2019. She is looking forward to sharing how her experiences as a mother of three taught her how to negotiate, communicate, and adapt in the business world.

Bea holds an MBA with Distinction from Harvard Business School, is a summa cum laude graduate of Emory University, and is one of South Carolina’s prestigious Liberty Fellows of the Aspen Global Leadership Network. She is a frequent keynote speaker on innovation, entrepreneurship and business growth, and an inspiring contributor to various publications, including Entrepreneur.com, The Grindstone, and The Savannah Morning News.

Michael Blake, Brady Ware & Company

Mike Blake, Host of “Decision Vision”

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. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike 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 the North Fulton studio of 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: [00:00:02] 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 advisory that helps businesses and entrepreneurs make visions a reality.

Michael Blake: [00:00:20] And welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic. Rather than making recommendations because everyone’s circumstances are different, we talk to subject matter experts about how they would recommend thinking about that decision.

Michael Blake: [00:00:38] 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’re recording today. Brady Ware is sponsoring this podcast. If you like this podcast, please subscribe in your favorite podcast aggregator. And please, also, consider leaving a review the of podcast as well.

Michael Blake: [00:01:02] Our topic today is, should I write a book? And this is a topic that is near and dear to my heart because books have become, in some respect, easier to write and circulate than ever before. And I do sort of have this secret desire to get about five or six books out, which surprises a lot of people because they’re a surprise and I learned I could read. But in point of fact, I think that there’s a voice in there that wants to put things down on either dead tree paper or virtual paper.

Michael Blake: [00:01:38] And I think a lot of people are thinking about that as well. And it may be people who are like me that are in the services area that wish to establish and reaffirm our reputations as subject matter experts to the market. It may be people that have an artistic bent and this is, you know, a book is in effect their canvas for self-expression. Or it could be somebody that simply feels like they have a story to tell or a lesson to teach. And a book is their way of of getting that lesson out to the world. That’s sort of their contribution to society. And we all know this proliferation of books out there under various names. They could be books, they could be e-books, they could be something else.

Michael Blake: [00:02:27] And, you know, I think that, you know, as we record today in 2019, this is a topic that really wouldn’t have even mattered 20 years ago. You know, the notion that somebody would just somehow write a book was a much larger undertaking because of the way the industry was structured, because of the way technology worked or didn’t work. And it’s just another one of those signs of the times that technology is enabling us all to put a voice out there in a way that, for good or bad, we simply were not able to.

Michael Blake: [00:03:06] And joining us today is my pal Bea Wray, who is with Michael Levin Writing Company with the awesome tag line, their books make their clients happy, famous, trusted and rich. You have a story to tell, a business case to make, a family history, to capture, your book as the ultimate leave behind on sales calls. And I agree with that. The best way to record the culture of the enterprise you’ve built and your legacy for your family.

Michael Blake: [00:03:31] Bea herself is an innovation expert. And she and I know each other from back in the days when Startup Lounge was active in Savannah, Georgia, and she was the director of—executive director of our partner organization Creative Coast there. And now she’s helping thought leaders share their stories, passions and knowledge as they invent, launch and promote new products. As the former chair of the Entrepreneurship Practice Group and Advantage Media Group, Forbes Books, Bea further leverage the wisdom and experience of those innovators through branding, visibility, marketing efforts substantiated by the Forbes Books brand name.

Michael Blake: [00:04:08] Bea is an innovator herself. She successfully built and eventually sold Source Harbor Incorporated. Along the way, she expanded that company to serve thousands of clients internationally and has consulted with hundreds of startups. She serves as the executive director of the Creative Coast, a regional nonprofit building the innovation community in Savannah, Georgia. By the way, one of those awesome cities anywhere. If you don’t—if you’ve never been there, go. If I can ever afford to retire there, that is where I’m going. She hosted TEDxCreative Coast and the Innovation Conference known as GeekEnd.

Michael Blake: [00:04:40] Her years of energy and effort are an immediate benefit to entrepreneurs across 26 countries and throughout the United States. She holds an MBA with Distinction from Harvard Business School and a summa cum laude graduate of Emory University and a bunch of other good things. And last but not least, I mean, we’ll get to this one. She has written her own book or is in the fit—in the process of putting her own finishing touches on that book. What Harvard taught me but my kids made me learn, which is expected to arrive in 2019. And I know she’s looking forward to sharing how her experiences as a mother of three taught her how to negotiate, communicate and adapt in the business world. And I think there’s a lot that I’m going to learn from that, too, as a father of two who I think already can negotiate better than I can. Bea Wray, thank you so much for being on the program.

Bea Wray: [00:05:30] I’m so happy to be here, Mike. This is wonderful.

Michael Blake: [00:05:33] So, let’s sort of get down to it. You know, normally I start these podcasts with a definition because we’re talking about a fairly technical topic. But I’m just going to go on a limb here and say everybody knows what a book is. So, why would I want to write a book? You know, I don’t have time to even read all the books that I would like to read. Why am I going to take that time and write one instead?

Bea Wray: [00:05:57] Well, the main reason is to—that people want to be known, loved, and trusted and businesses want to hire people that they know love and trust. And more and more businesses are deeper in whomever they’re working with. Whether it’s your accounting firm, your lawyer, even your orthodontist. You know, I helped an orthodontist write a book because he explains that the impact of straightening teeth on a child’s sleep and what was happening in sleep and the ability for that child to do better in school. So, I thought, orthodontia was all about just keeping your smile pretty. Well, it turns out that the fact that this doctor spends more time understanding the numerous impacts, he wrote a book about it.

Bea Wray: [00:06:53] And so, I guess what I’m trying to say is, you introduced the podcast, which was excellent by, you know, this was not something you could have done 20 years ago because technology was different and the distribution was different. That’s very true. I would argue that in addition, the knowledge base was different. And so, one of the reasons fewer and fewer people publish with a traditional publisher is because we are not all reading the same book. You just said yourself, there’s 10 or 12 books you would love to read. Those are probably not the 10 or 12 that are on my list.

Bea Wray: [00:07:35] It’s that we want more specific stories, more connected to our lives. I want to know not what is the most popular book in the country, but I want to relate to someone who’s more like me, who has insights about things that I need. And so, one of the reasons you might write a book is because you have a unique and special experience and perspective that can help some people, thousands of people, tens of thousands of people. Maybe not a few billion people. And yet helping thousands of people is actually a really great thing to do, and sharing your own thoughts in that way is a great endeavor.

Michael Blake: [00:08:23] So, you touched on something that I think I want to jump to, because if you’re—if you really haven’t looked at this and if you’re a people of a certain age such as myself, you think, oh, I need a book, I then need to, I guess, find a way for John Wiley and Sons or McGraw-Hill or, you know, somebody else that’s going to pick this thing up, is that necessarily the case anymore? Is that gateway or that barrier to entry still important?

Bea Wray: [00:08:55] It is not. And I’m a big fan of both of those companies. And working with a traditional publisher can be great and it might not work for you at all. And I have had the privilege of working with hundreds of authors. And what I find is that that industry continues to consolidate and to minimize in such a way that the services one would have gotten in the past, like marketing services are smaller and fewer. And so, it may not be a great experience if you, one, go down that route even if you’re successful. Then the distribution of the book may not be what you’re hoping for.

Bea Wray: [00:09:39] What also can happen is, you know, they’re in the business of selling books. Not in the business of selling you or your company or your idea, which can be great as long as your incentives are aligned with what you want with your book. And so, if they’re not aligned, what can happen is a very specific methodology that maybe it’s something you go over in your consulting practice. It’s a way you use as a business card. It’s what you start talking about and bringing people to your company. Make it watered down in the book that’s trying to be sold to a million people. And so, right off the get go, just the book you envision in your head, depending on what level of control you want, it may be better to self-publish or a hybrid publish than going the traditional route because you lose a lot of control. There’s a lot of talk about how you lose money. You get 40 cents on the book versus $10 on each book sold. But a big problem is, are you actually putting out there the book that is in your heart and mind and soul?

Michael Blake: [00:10:50] And you know, you touched on something there that I want to kind of break from the script a little bit and drill into because I think that’s an important point. You know, the business model of bookselling and the life model of the author may not very—may not be in alignment, right, to sell a book. If you’re going to really do it the way McGraw-Hill put on a bestseller list, that kind of becomes your job, doesn’t it? And maybe you don’t want that to become your job.

Bea Wray: [00:11:18] Absolutely. That’s exactly right. And you know, you mentioned me and my own book. And I’ll just use this as a very specific example. Is—I write not exclusively to women, but sometimes to women, because I’m a mom and I am a woman and I’m a business person. And what I have found is that, we as women, choose to belittle our own experiences in the home and outside of the corporate world, even though they’re very, very relevant to learning about how to deal with people and learning how to negotiate and all those things you said earlier. I never speak from a platform of corporations to conferences or in my book as a victim, or about those bad men who don’t treat me well enough, because that’s not something I think about.

Bea Wray: [00:12:14] However, there is a huge market for that. There is a lot—after the #MeTooMovement, there’s a lot of energy and there’s—I have actually been approached by traditional publishers, write the book in this way because there is a market for, if only men would pay a dollar and a dollar to men and women and the gender pay gap and all this whole language that—those are important factors and there are important things to fight for. But I’m going to fight it from the perspective I know which is I’m going to get better at raising my hand. I’m going to get better at taking risks. I’m going to be better at stepping forward. Not about saying I’m a victim.

Bea Wray: [00:12:55] And the point I’m trying to make here is I have personally been approached, hey, if you change your book to say something that wasn’t in your heart, mind and soul, we can sell it. That’s not been my personal choice. And I know 30 other people who’ve made a similar choice to me because what was more—if you’re going to go through the effort of writing a book, it is a long journey and it sticks with you a long time, my encouragement is make it a book you want it to be.

Michael Blake: [00:13:22] And you know, I would think the thing about a book even by today, it—still, if you compare it to other forms of communication, media, it—a book still has a permanency to it that even a blog doesn’t, a YouTube video, or a Facebook post, whatever, an Instagram, whatever it’s called, a gram, I don’t know. I’m not on histogram, you know, tweet, whatever. A book is still different in that regard, isn’t it, that once it’s out there, either on on dead tree paper or a virtual paper, at some point, I think most people would would have a need to be proud of that out there, because if you’re not, it ain’t going away.

Bea Wray: [00:14:08] Correct. And it is all about—I mean, I love that the word author is part of authority. It is all about establishing your authority. So, be clear on what authority you want to be establishing. Be clear on who you are on that paper because this is where you have your chance to shape it.

Michael Blake: [00:14:30] So, let’s do a close eye role play here. But what I’m really doing is I’m getting free consulting and other guys are giving you a podcast interview opportunity. But I’ve got a book and I’ve got several books in my head that I think I want to write. Do I just start writing? Do I do the Snoopy cartoon thing where I’m on my doghouse, the typewriter and say it was a dark and stormy night? Or how do you—what are the first steps toward that goal?

Bea Wray: [00:15:00] Well, that’s a great question. And you certainly can. Most people start to at least have an outline and a set. The kind of questions you’re thinking is, what is the book I want to write and for whom? And then why? I do recommend being I won’t say selfish but a little bit. Like know your purpose for writing the book because that will help you define your audience and your use. And it will certainly keep you motivated.

Bea Wray: [00:15:34] So, I’ve worked with people who are writing a book because they just hope that one of their grand kids will read it someday, that they don’t want to die without their story somewhere written down. And that’s what they’re going to do. Maybe it will get published in a place and all those people around the world will read it but it was really just about a legacy. That’s a great reason. I’ve helped people write books because their need is to drive business to their company. Now, those kinds of people may be selling $40 gene. Usually, they’re selling a complicated relational relationship kind of product. So, $150,000 on average. Way that leads to consulting, whether it’s for manufacturing or setting up of insurance captive or whatever, where their wisdom and knowledge and the sense to be trusted is so critical. You can’t have that across in a phone call. They want their ideas out and they want to be trusted. And that’s their way that they attract people to their company.

Bea Wray: [00:16:45] Some people want to launch a speaking career. Some people—so, understanding your why. I think it is really, really important before you go too far in writing your book. And then there’s the how. What I will say is I learned over time that the average entrepreneur take around three years to write his or her own book. And unfortunately, fewer than 40 percent of the entrepreneurs to start out on that personal endeavor finish. And that’s why people like the Michael Levin Writing Company exist, is people who are running their own company have—there’s so much at stake every two hours that they spend just writing, not working in the company. And so, it’s constantly the battle that’s most urgent thing and the book never gets done. And so, it becomes a very costly endeavor just an opportunity cost.

Michael Blake: [00:17:54] So, you know, you said another thing. You’re going to make us rip off the script, which is great, because I can do that with you because you’re smarter than I am, empirically. And that is that you say something that kind of runs against what a lot of us, I think almost everybody, is taught and as a hardwired way, which is cater to your audience, cater to your audience, cater to your audience. And while I think you’re acknowledging kind of the existence of the audience, at the end of the day, if you’re going to produce a book that you’re going to feel is worthwhile at the end, it’s really about what you want. It sounds like, correct me if I’m wrong, but what I’m hearing is that it’s really about what you want to put out there to the world. And then if people buy it, buy into and engage cause they’re great. But that’s just kind of the way that it’s got to go.

Bea Wray: [00:18:48] Yes. I mean, one of the first questions we ask people is who is this book for? And what are you going to do for them? And so, in why are they going to do what you want them to do? It may be that they—you want to motivate them to take better care of their health. Great. It may be that you want them to call you to take better care of their health. We don’t know. But one of the very first questions is who are you writing for? So, I do care about the audience.

Bea Wray: [00:19:21] But before that, you have an idea for the book. It really needs to be your idea that’s deep in your heart and your passion connected to the life that you are ready to lead as an author. And so, whether that’s a business person who has a book, whether that is a speaker who has a book, or whether that I’m a grandparent, I’m leaving a legacy that has a book. This book is becoming a part of who you are and you have to have a reason for wanting to write it. And that will help define your audience. And then you can start tailoring to that audience and you have to or otherwise it won’t be a good book. But I—what I don’t recommend is go out, survey the world, and see what book is missing.

Michael Blake: [00:20:12] Interesting, because I’ve actually heard exactly that advice given many times. So tell me more about that. Why? Why is that a bad idea?

Bea Wray: [00:20:23] Because we don’t live in—because, well, we’re going to think I’m an old fuddy duddy, but because we don’t want beaver cleaver on T.V. anymore is basically the reason. And let me explain that. So 40 years ago, you watch, you consume video television, the same—you and every other neighbor were watching the same thing as there were three channel. And we all watched the same thing. We consume information in a certain way. And my guess is you didn’t watch that last night. Am I right?

Michael Blake: [00:20:59] Yeah.

Bea Wray: [00:20:59] And you didn’t watch even the same thing as everyone on your street. And if you’re like most of America, you don’t even watch everything that was the same even if people in your home. So not only is it not consistent. Three options down the street. Most of us watching the same thing and talking about it. And as the water cooler the next day, we are self-selecting and sometimes is independently created content like YouTube videos, TedX Talk, and so on and so forth. So the way we consume information is so totally different than the way it was years ago. At that time, publishing of individual books had certain channels. We need so many mysteries, we need so many adventure stories, we need so many biographies. And we don’t have a recent biography of Abe Lincoln for 10-year-old. We needed to fill that.

Bea Wray: [00:21:56] That is not the way information is consumed today. It’s quite the opposite. We create whether video content or written content as a way of connecting with people. Who do we want to connect with? Is it based on our faith? Is it based on our geography? Is it based on our clients? And so, I want to write a book that helps me be who I want to be and connect with the people I want to connect with. I have a—I have an e-mail today from a friend who went to Harvard Business School who wrote a book about parenting and leveraging Harvard Business School, very, very similar in some ways as my book and not at all similar. And it will be used in the same way. But we became friends because our books were similar. But never did she think, oh, gosh, you’re writing on that topic, I can’t. Or did I think you’re writing on that topic, I can’t.

Michael Blake: [00:23:01] Yeah. And to some extent, right, it probably kind of reaffirms a factor you may be on to something.

Bea Wray: [00:23:07] Yes.

Michael Blake: [00:23:08] If one person, other person thinks it’s worth writing that book, that would tell me there’s 10,000 people that think it’s reading that book.

Bea Wray: [00:23:18] Exactly. But it wouldn’t be the case if there were only one spot on the network or only one spot in the McGraw-Hill sells for this type of book. But that’s not the way books are distributed, written especially today.

Michael Blake: [00:23:36] So—and this actually—this does circle back then to a question I actually had prepared to ask for today, which is, you know, given all of the media that bombards us and is available, you know, I mean, are books on their way out or are books still a real thing?

Bea Wray: [00:23:58] That’s so interesting because many times you also in this podcast talked about, you know, a paper book or an online book. And I believe that not only are books very much relevant today. Funny, I’m looking at a bookshelf right now suddenly filled with books. But I think paper books are still very relevant, even though I’m an audible fan. I listen to books often. And the reason is because they are a way of connecting with people.

Bea Wray: [00:24:30] So more and more people are writing books, more and more people are writing books to connect with their audience. It may not be a billion people. It may not even be 300,000 people. But writing a book—well, take the guy, for example, whose client is $150,000 every time he gets a client. This gentleman wrote a book, put it in the hands of fewer than a thousand people, and his business increased by $5 million in the first year because it didn’t take many people to learn, to know, love, and trust him. Does that make sense?

Michael Blake: [00:25:15] It does. And by the way, as an aside, I have stolen that phrase because I’m familiar with the phrase no like and trust. No love and trust is so much better. So kudos to you.

Bea Wray: [00:25:26] Well, thank you.

Michael Blake: [00:25:26] And if you hear lots of other people that are using that, it’s because I stole it from you and told everybody they can have it.

Bea Wray: [00:25:33] I appreciate that. I was told one time that, you know, the first time you borrow, you give credit. The second time, you know, oh, I was talking and so-and-so said. The next time you say, so and so taught me to say. The third time you forget about so-and-so altogether and you just know it.

Michael Blake: [00:25:52] That’s right. And by the fourth time, it just came to me one day. I don’t know where. But you’re welcome to borrow it if you want.

Bea Wray: [00:26:01] There you go.

Michael Blake: [00:26:01] Yeah. So I do think, you know, there is still some—there is still a mystique around a book. In spite of all the other media that, you know, compete for attention, I give books a lot because I recommend that people read a book and then to guilt them into reading and I’ll often buy it for them and send it to them. So they’ll at least lie to me the next time they see me and say they read it. But, you know, it is a very powerful calling card.

Michael Blake: [00:26:32] And I’ll share my own story. So years ago, I co-authored a book called Entrepreneurship Back to Basics, and it’s one long out of print. But I remember, I was applying for a job and they asked me for a writing sample. I say, okay, if I send you a copy of my book, right, just sort of hear a pin drop at the interview at that point. An extreme case, but still an anecdote of the impact that a book could make.

Bea Wray: [00:27:00] Totally fabulous. And you know, a lot of time it’s okay if someone doesn’t read the whole book. But one of the most powerful sales talk is to say, you know, hey, Michael, it was great to speak with you today. I really appreciated the questions you had on my marketing strategy. Please turn to page 26 in the book that I’ve enclosed.

Michael Blake: [00:27:23] Yeah. And of course, then there’s if you want the benefit of reading the book and I haven’t actually read it, you can just hire me.

Bea Wray: [00:27:31] Precisely.

Michael Blake: [00:27:34] So let’s say we’re well along the way to a book being written or maybe it’s even written. Is it as hard to get a book picked up by Amazon and distributed to Kindle or iBooks or something like that? Is it hard at all or can anybody just sort of do it? How, you know, what’s your assessment of that electronic distribution medium in terms of making it harder or easier to actually get a book out there?

Bea Wray: [00:28:01] Well, I think anybody can do it. Most people need help with how. So certainly making sure the book is a great quality. You know, you do want an excellent manuscript, well-written, but that’s not enough. You definitely have to have someone who’s helping you do the layout, make it look excellent. Pull out images and illustrations and even font type and book jackets. All of that matters.

Bea Wray: [00:28:30] And so, I’ve never met someone who can do all of that him or herself. You know, that usually takes a team who can get that done. And that’s where, you know, hybrid publisher and that’s where, you know, our company helps people find that right team at the Michael Levin Writing Company so that—because what people don’t want to do is finally get this book out of themselves. Finally have this manuscript and then say, now what, and still run into all of the hurdles that they were experiencing before, you know, they took the steps to get the book actually done. That said, you know, Amazon will put a book up, and so you don’t have to go to McGraw-Hill to have—to be a published author. And you still get—and you get to retain much more of the profits of the book, which is excellent.

Bea Wray: [00:29:27] But there’s still a science around how do you get it in the very category? How do you get the ISBN number? How do you make sure that it becomes an Amazon best-seller because Amazon does a great job of creating certain categories. And there’s a system around making sure enough people are voting for you at the time so that you can be a best-seller. And so, there—it’s not that hard. You just, you know—my husband will kill me for saying this. I don’t even change my oil in my car because I don’t know how to do that, right.

Michael Blake: [00:30:03] Right.

Bea Wray: [00:30:03] He does and he knows how to take the radiator out, too. And if he doesn’t, he’ll learn on YouTube. That’s not me. So my philosophy is get the people who are excellent at doing these things for you so that you can feel comfortable and go do the things that you’re excellent at.

Michael Blake: [00:30:25] So you mentioned in passing that assuming the book is finished at all, that it would take an entrepreneur roughly three years to complete a book. Is that reflective of best practices or is that reflective more of that? There have been a bunch of fits and starts and mistakes and restarts. And that’s not really an efficient path. And if you do it kind of the Bea Wray way that it doesn’t necessarily take a full presidential cycle to do that.

Bea Wray: [00:30:55] Now, I think the best practice is 90 to 120 days.

Michael Blake: [00:31:00] So good. Yeah. Because I’m not nearly that patient if I’m going to write my book. So, let’s walk through that. If you’re talking to somebody and they’re serious about writing a book, what—how does that time typically get allocated? Do somebody take 90 days off to write the book and they go to a, you know, a Nepalese monastery where they’re not going to be disturbed? Or do they take one or two days a week or they just sort of locked themselves in an office and do that? Or is it, you know, the method where somebody gets up at 4:00 in the morning and the first two and a half hours a day, they write? How does that typically work?

Bea Wray: [00:31:38] So, what I have experienced in the last few years, both with the Michael Levin Writing Company and the ghostwriting company and when I ran the Forbes book is that they realize they want to buy their—what they’re really doing as CEO of a company is buying his or her own time. They’re saying, I don’t want to delay fits and starts because there’s something about our brains that actually gets ourselves in the way of writing our own book because we want to be perfect. And writing is an imperfect endeavor. We have to get it out and then it needs to be edited and changed and moved around.

Bea Wray: [00:32:18] And so, most people who have not been trained as writers and have 10 years of history as a writer with things that are not emotionally connected to themselves, are not going to be the best at writing their own book. They’re going to be the best at speaking their own books. And so, what they typically do is say, I want to hire a partner to help me with this book. And then, the first thing that happens is there’s a 90-minute phone call where there’s a conversation about who’s the audience, why are you doing the book, and let’s work through what is the book, meaning the outline of the book in the book plan.

Bea Wray: [00:33:00] And then usually the writers will go back and take probably six to eight hours with that 90 minute, listening to it, just writing it, re-listening to it, reshaping it, understanding, doing some research and then deliver back. Sometimes a 10 to 12 fixed, detailed outline, sometimes with holes. This is the way I see the book. Here’s where I sit these stories. What do you think? And so, now we’re working off of a book plan. And from that book plan, sometimes weekly phone calls are scheduled, sometimes every other week, depending on the schedule of the book and whether there is sort of a launch of that. But we need this book to be done by X date. What are we aiming for in order to hopefully get the 90 to 120 days.

Bea Wray: [00:33:51] And oftentimes, the entire book is interviewed. And then the writer goes away and delivers factious the first three chapters, never the whole book. That’s too much to digest for the author. So, the ghostwriter will deliver back the first two or three chapters, are we—did I get the voice right? Are we on the right path? That’s the time to iterate and decide how to shape the next two-thirds of the book. And within 90 days, an excellent ghostwriter, ghostwriting team should be able to deliver to a CEO his or her book written in his or her voice about his or her story.

Michael Blake: [00:34:40] And so, you know, kind of working through that process. And it certainly makes sense to me if you’re retaining a ghostwriter. You know, you’re surely buying back that time. And by the way, I’ve got to assume being a ghostwriter is extremely hard because writing to capture someone else’s voice has—I know is excruciatingly difficult because I’ve tried to work with ghostwriters in just small articles. And it’s never worked very well. And I think it’s something that’s very hard to do. Meaning that if you find somebody like you guys that can do it, you know, that is a precious commodity.

Bea Wray: [00:35:23] I think so. I can’t not do it. So, let me be clear. But the Michael Levin Writing Company has written over 700 books in 25 years. And I’ve been tracking for the last five years, and what I find is there are people who can do it. And interestingly, I spent enough time with them that these actual ghostwriters will say it’s easier for me to write your books than my own because all of those emotional things like that are those blocks that get ourselves in the way, get in our, we put in our own way don’t happen.

Bea Wray: [00:36:07] But it is one reason why the calls are cheap recorded, is there’s a lot of time spent getting that voice correct. Getting even that like (inaudible) of stories correct.

Michael Blake: [00:36:22] So, you touched on something I think is an important definitional point and that is editing and proofreading. I don’t think those are necessarily the same thing. And if you agree with that, can you explain to our audience what the differences between those two steps?

Bea Wray: [00:36:39] Yeah. So, anything—you know, they’re closely related, but editing is this—is a little more thorough and has a little more power. So, there’s ghostwriting. There’s really an overseeing. So, Michael Levin actually does all the book planned and he does the overseeing as a whole company. But there’s dozens of ghostwriters who are very carefully, closely match specifically to the author, but they’re never going to do their editing themselves. And so, then, there’s an overall editor who’s paying attention to tying the written work back to the author,b Back to the transcripts, back to the plan.

Bea Wray: [00:37:24] And then the proofreading is more the very final, you know, fork it out the door.

Michael Blake: [00:37:35] Right. Make sure there are no glaring errors and so forth, as opposed to high level kind of structure elements, I’m guessing.

Bea Wray: [00:37:41] Exactly.

Michael Blake: [00:37:42] Okay.

Bea Wray: [00:37:42] Editing can be—proofreading is making sure what they’re perfect. Editing is making sure we have everything we need there and identifying what’s not there.

Michael Blake: [00:37:57] Yeah. Okay. So, we’ve touched on this next question a little bit, but I don’t want to skim over because I do think it’s important. What’s your opinion of e-books?

Bea Wray: [00:38:11] Well, I think a lot of people that have them need to have them. Personally as a parent driving me crazy that my kids almost only read e-books because they read them on their phone and then there goes the text message, it’s like an invitation for a distraction. So, I don’t think they’re going away but there is a lot lost. I also don’t think—I’m positive they’re not replacing paper books where you can highlight and send and give as a gift and wrap up in a way. That cannot be done as effectively in an e-book.

Michael Blake: [00:38:55] And in terms of impact on a reader, do you think there’s a difference? Do you think that maybe readers look at e-books—and I want to make a distinction. I don’t necessarily mean a formal analog book that also happens to have a Kindle variant, but I’m more referring to kind of the promotional e-books that you see out there and they’re often called an e-book and maybe they’re not even worthy of the name. They should be called something else. But, you know, maybe they’re 15, maybe they’re 50 or 80, 90 pages to be considered almost too short a book to publish in paper format. But you see kind of that genre of book that appears in a digital format. You know what I’m talking about?

Bea Wray: [00:39:36] Yeah, I know exactly what you’re talking about. And, you know, there are certain things that are seen to be shared and they are sort of too short that would never make it as a book that also has an electronic version. I hear what you’re saying. So, I tell people that some of those out, it’s definitely not my specialty and I don’t personally have a big desire, so I don’t know that I have enough experience to say, you know, to have an opinion about them. It makes sense to me that sometimes people have a shorter message to give and a 50 page e-book will get it done.

Michael Blake: [00:40:20] Okay. So, now, I’m curious on your view, and I think our listeners are curious, and it’s an off—it’s an awkward, almost insipid question, but I think it has to be asked and that is, you know, how easy or hard is it to actually produce a book that people are willing to pay for? And, you know, for most people, is that even a realistic or desirable goal?

Bea Wray: [00:40:55] Well, I think that the hardest part is digging deep in your heart. So, I’ve been involved with the publishing of hundreds of books and every one of them has met that bar. They are—some people are paying for them. What I’m not sure is that enough people are paying—the author is getting a million dollars. So, I am not a fan of published—I never say to someone go write a book, you’ll be a millionaire because it’s selling—making money, selling books is hard work. So, it depends. You know, you’re not going to get very far if your book is of bad quality and you can’t find some market who will pay for it.

Bea Wray: [00:41:48] Oftentimes, the way to get to that is you might give it away to other people, but it has to be excellent quality, has to have an excellent work, has to have a brief title, has to know the audience but that’s a big leap from, you know, I sold books at the back of a conference to I became a millionaire selling books. And I say a million dollars because it’s really not worth your time and effort. Probably you’re gonna get a $200,000 but there are easier ways to make a living.

Bea Wray: [00:42:22] And so, that is really hard. And I don’t think it’s about the quality of the book at that point. I think it’s about the quality and the dedication of your marketing and how many—did you run here to get on the radio station? And how many public speaking engagements are you doing and how did you work your way onto The Today Show?

Michael Blake: [00:42:45] So, it’s about the business of the book?

Bea Wray: [00:42:46] Most people don’t want to do all of that work because they don’t need to, that their book is making them a million dollars because it’s tied to a business that they’re doing or it’s tied to some other reason. So, they don’t go through the effort to get on The Today Show.

Michael Blake: [00:43:01] Right. And plus, I mean, it sounds like—I mean, that process, if you want your book itself to be that kind of income generator, the book itself becomes a business and it requires a substantial investment. You know, I don’t think you just sort of write at info@todayshownbc.com, whatever their domain is. Hey, can I come on. I’d really like you to interview me. You know that in itself is a huge financial investment.

Bea Wray: [00:43:27] I used to help software companies sell their software. And what we always said was no matter how great it is, you can’t just cut a hole in the side of the building and hope that people start driving up like Burger King.

Michael Blake: [00:43:40] Darn it.

Bea Wray: [00:43:42] It’s true with books.

Michael Blake: [00:43:44] So, we’re running out of time. Before we do, if it’s okay with you, I’d like to shift gears to your own upcoming book. It’s going to be released later this year. Are you self-publishing that or is that going for a formal publishing house?

Bea Wray: [00:43:57] I am actually self-publishing that and I’m really excited about it. We’re finally getting into the homestretch here.

Michael Blake: [00:44:05] And if it’s not a major state secret, what is the voice of that book and what is the idea that you just had to get out of yourself and into that book?

Bea Wray: [00:44:18] Thank you. So, I had the privilege. I called the company and I had the privilege of taking about six years off of corporate work to raise my children. And I actually did so on a (inaudible) island in South Carolina. Daufuskie Island. So basically it’s exactly next to heaven and it was a perfect experience. But when I went back to work, which was at the Creative Coast, which you’ve already mentioned, I’m terrified. Did I have any skills? What can I do? How could I help them? Could I even find a job? And it was even way worse when I did because then I thought of all the ways I would fail because I had been at home with my children for six years.

Bea Wray: [00:45:00] And what amazed me is I had floods of thank you note. Thank you for that introduction to the venture capitalist. Thank you for this great event that you put on. Thank you for the strategic consulting. And I kept wondering, what were we doing that was helping these people? And then I kept wondering specifically, where did I personally get this skill to help these 300 plus companies? And over and over and over, the answer to that last question was not that I got this skill because I had attended the Harvard Business School. It wasn’t that I got this skill because I had decades of experience as an entrepreneur. Over and over again, the ability that I had to connect people, make people feel comfortable at an event, set out a vision for where we were going I received because I was raising children. So I want to talk about it.

Michael Blake: [00:46:00] And what what is the—is there one lesson that stands out as to the most important or the most obvious that your children taught you?

Bea Wray: [00:46:16] There isn’t one. Well, there’s dozens of them. But I think the main—the overarching lesson is that business is done with people. So people skills matter. So a great way to get people feel—hone your people skills is to try to raise them in your home.

Michael Blake: [00:46:37] Very good.

Bea Wray: [00:46:38] The one to do I have that I hope people walk away with is we, both men and women, belittle on our LinkedIn profile anything to do with parenting. We treat it as like a black mark, especially people who have taken time off. We try to cover it up from our professional experience. And my invitation is to consider not feeling that. And if you consider saying, you know, here’s who I am as a whole person. It’s basically Sheryl Sandberg said, hey, your corporate—your career path is not a corporate ladder. It’s not linear. It’s a jungle gym. And what I’m trying to do with this book is to validate that parenting is a reasonable spot on that corporate jungle gym.

Michael Blake: [00:47:33] Well, I am going to hit you up for a signed copy of that book. I can certainly see where that would fit because you’re right, there’s not just people skills. I think, you know, modern parenting involves tremendous time management requirements. I think obviously there’s economics that are involved. There’s conflict resolution. There’s so many things that actually can take from that. I’ve never thought about that. But the more you talk about it, the more inherent sense it makes to me. So, like I said, I’m going to hit you up for an autographed copy of the book.

Bea Wray: [00:48:10] I can’t wait.

Michael Blake: [00:48:11] So we need to wrap up. I think this is the longest podcast we’ve actually done and this is number 37 or 38, something like that. So I’m not sure if congratulations are in order or not, but it is what it is. If people want to contact you about writing a book or or maybe just figuring out where, you know, what lessons their children should be teaching them, how can they best contact you?

Bea Wray: [00:48:36] So, my personal e-mail is bea, is my name. B like boy, @beawray.com.

Michael Blake: [00:48:47] Okay. And that’s gonna do it for today’s program. I’d like to thank Bea Wray so much for joining us and sharing her expertise with us. We’ll be exploring a new topic each week. So, please tune in, so that when you’re facing your next business decision, you have clear vision when making it. If you enjoy these podcasts, please consider leaving a 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.

Tagged With: connecting with an audience, CPa, CPA firm, Dayton accounting, Dayton business advisory, Dayton CPA, Dayton CPA firm, Decision Vision, Michael Blake, Mike Blake, Parenting, personal brand, personal branding

Decision Vision Episode 38: Should I Outsource My IT? – An Interview with Tony Rushin, Network 1 Consulting

October 31, 2019 by John Ray

Decision Vision
Decision Vision
Decision Vision Episode 38: Should I Outsource My IT? – An Interview with Tony Rushin, Network 1 Consulting
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Mike Blake and Tony Rushin

Decision Vision Episode 38:  Should I Outsource My IT? – An Interview with Tony Rushin, Network 1 Consulting

Will outsourcing my IT increase my cybersecurity? What’s a human firewall and how does a managed services provider help me with this aspect of my IT? In this episode of “Decision Vision,” host Mike Blake explores these questions and much more with Tony Rushin, Network 1 Consulting. “Decision Vision” is presented by Brady Ware & Company.

Tony Rushin, Network 1 Consulting

Tony Rushin

Tony Rushin is a Vice President, Sales & Marketing, with Network 1 Consulting.

Network 1 Consulting is a 21-year-old, IT Support company in Atlanta, GA. They become – or augment – the IT department for law firms, medical practices and real estate & construction companies. Their IT experts can fix computers, but what their clients value most are the industry-specific best practices we bring to their firms. This is especially important with technology, along with regulations and cyber threats, changing so rapidly. They take a proactive approach to helping our clients use technology to gain and keep their competitive advantage.

For more information, go to the Network 1 Consulting website, or contact Tony directly by email.

Michael Blake, Brady Ware & Company

Mike Blake, Host of “Decision Vision”

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. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike 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 the North Fulton studio of 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: [00:00:02] 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 that helps businesses and entrepreneurs make visions a reality.

Michael Blake: [00:00:20] And welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic. Rather than making recommendations because everyone’s circumstances are different, we talk to subject matter experts about how they would recommend thinking about that decision.

Michael Blake: [00:00:37] 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 your favorite podcast aggregator. And also, please, consider leaving a review of the podcast as well.

Michael Blake: [00:01:01] Our topic today is, should I outsource my IT or information technology functions? And you know, I think this is a question that companies wrestle with quite a lot. In fact, I know companies that kind of do the IT two-step where they’ll insource it, and then outsource it for a while then. And then, thrilled to kind of bring it back, and then send it out again. And, you know, it’s really sort of the Texas two-step information technology style. And, you know, having been a business owner myself, I had to face that decision.

Michael Blake: [00:01:32] Now, as an anecdote, when I had my firm for a while, Arpeggio Advisors, our family at that time had started out as a Windows platform family. And then, something like three weeks into my trying to launch my company where my blood pressure was at a fairly high level, all of a sudden, my wife’s computer crashes and my oldest son’s computer crashed. Basically a race time when they can’t do anything and we’ve got to figure it out. And I’ve spent an entire day getting them back up and running, which I eventually did. But I said I’m just never doing that again.

Michael Blake: [00:02:16] So, on Saturday, I don’t know if Apple salespeople work on commission or not. But whoever—if they did, they made a lot of money on me that day because that day all the PCs are out. Macs were in. Never had trouble since. And this is not meant to be an Apple infomercial. I mean I do actually still have Windows machines for some things, but it’s indicative of how IT can be disruptive to a business, even if you’re a sole practitioner or even if you’re a home based business. That when you—when you’re infrastructure doesn’t work well, it is a real pain in the neck. It’s one of those things. It’s kind of like an umpire in baseball. You don’t notice and necessarily they do great. But boy, when they fail, you notice the heck out of them.

Michael Blake: [00:03:02] And IT is like that one. When your technology fails you, I can tell you from my perspective, I feel betrayed when my technology does not work. So, I feel like, you know what? I’m doing my my job. Right. Why is Apple, why is Microsoft, why is whoever not sort of holding up their end of the bargain? And so, the IT function in a company in the 21st century is every bit as important, if not more important than sales, than an accounting product delivery. You know, it’s right up there. But I don’t think that there’s as much controversy or consternation on whether or not to to keep that function or to outsource it or maybe if there’s, you know, identify kind of where that inflection point is, where you should consider that—you should consider that decision.

Michael Blake: [00:03:59] And so, as is often the case, you know, I’m not qualified to advise you on how to make that decision. So, I’ve brought in somebody who is qualified to help you make that decision. And joining us today is my friend Tony Rushin, who is vice president of Network 1 Consulting. Spending 30 years in high technology sales and marketing from IBM to startups, Tony brings his broad experience and business development marketing in IT business strategy to Network 1’s leadership team clients and partners. His passion is to help people achieve greatness and however they define it. And by the way, if your Atlanta Braves fan, you will appreciate this. He does run it out when the ball is hit into the gap in the outfield. Unlike some of our players here.

Michael Blake: [00:04:38] Network 1 delivers I-T managed services exclusively to businesses in Metro Atlanta. Since 1998, Network 1 becomes or augments the IT department for companies. Network 1’s IT experts fix computers for what their clients really values, the industry best practices they bring to the firm. It’s especially important with technology, along with regulations and cyber threats, which are changing rapidly.

Michael Blake: [00:05:02] With over 30 employees, Network 1 has built a culture that attracts and retains network and desktop professionals who know their stuff and have an outstanding desk side. Man, that is not easy to do. They find a fixed root causes instead of putting a Band-Aid on issues. Network 1 delivers proactive planning, so their clients avoid problems and gain competitive advantage. They’re not just a cost function. Network 1 is a fractional chief information officer, a support desk network engineer and everything in between. Tony, welcome to the program.

Tony Rushin: [00:05:32] Well, glad to be here, Mike. Thank you.

Michael Blake: [00:05:34] So many of us encounter outsource support when we need to fix our computer in sort of a robot vacuum. Is outsourced IT support simply hiring day from India. What does that look like?

Tony Rushin: [00:05:49] Well, no offense today from India, but if that’s all outsourced, IT support would be, there wouldn’t be much outsourced IT. So, it’s much more than that. But, you know, it can be confined to that, too. It really runs the gamut as far as what companies need, and then what they go out and get.

Michael Blake: [00:06:08] So, you know, what if a company happens to have a lot of people who are relatively computer uncomfortable, does that change the equation? Not every company necessarily has or needs people who are power users at every desk, right? Does that at all impact the decision on whether or not you should keep that function in-house versus outsourcing it?

Tony Rushin: [00:06:29] Great question. We’ve got 120 clients around Metro Atlanta. And I would say most of the users we support are relatively uncomfortable with technology and yet they still have a job to do. And their threshold for when they need help is much lower than that, power user often. And some of those that are uncomfortable with technology are also in some form the rainmakers. It could be a salesperson. It could be a managing partner in a law firm. And so, we haven’t found any correlation to whether or not you outsource to the how comfortable or uncomfortable people are with technology.

Michael Blake: [00:07:15] So, let’s back up. I probably should have made this the first question but too late. But there’s a term people hear a lot and I’m not sure they understand what it means. What—when we say managed services, what does that mean?

Tony Rushin: [00:07:27] Yeah. Managed services. It can mean something different to different IT support companies. What it means for Network 1, and in general I think we’re aligned with the industry, it’s the ongoing and always up to date services that are delivered by your outsourced IT company. So, what does that mean? And not all outsourced IT is—includes managed services.

Tony Rushin: [00:07:53] But, for instance, basic security. Well, that’s antivirus. Well, making sure it’s the latest version and it’s on everyone’s desktop or laptop. Well, that kind of infers that desktops and laptops need to be monitored to make sure that the latest is on there. It could be advanced security suite that’s got more tools and solutions in there to protect and prevent bad guys from getting in, but also detecting them when they get in. It can be managing a firewall. So, it always has the latest firmware and software involved in the company that is being managed on behalf. Never has to worry about it, never has to buy the hardware, it just gets supplied. So, think of it as baked in.

Michael Blake: [00:08:40] And so, in effect, is it fair to kind of characterize managed services for the most part as just a turnkey solution to some IT operation that needs to happen?

Tony Rushin: [00:08:50] Yeah, great, great summary of it. Turnkey and but typically it’s also based on a menu. Hey, I need this, that and the other and I don’t need those other things.

Michael Blake: [00:08:59] Okay. So, I think—in fact, I know a question on a lot of business owners and executives minds. As you know, we both understand the importance of IT to an organization. Right. And when IT doesn’t work, an organization can stop dead. And we’ve seen, we’ve heard of those those things. How do you overcome as an executive this notion or the idea or the fear that if I don’t own my IT department, really own them, right, they’re employees and I can, I don’t know, yell at them or fire or throw rocks at them, whatever, right, that that just leaves me more vulnerable to a disaster?

Tony Rushin: [00:09:42] Yeah. You know, it’s great you do this podcast because you’re getting advisors in here that have some experience and yet some in your audience that own businesses will say, yeah, I hear that but I think I have a better way. And so, we don’t do too much to educate people. We let the marketplace educate them for them. What I mean by that is the common sense of one business owner might be, I need IT in-house and it could be going great because let’s say there are financial advisory company and they’ve got 15 people and they’ve got an IT guy. That’s good. He’s customer-oriented. He’s focused. He runs around. He helps fix issues. And then, he gets sick or he quits or he’s not so good and he’s spotty.

Tony Rushin: [00:10:36] That’s the education of the owner like, oh, wait a minute, he is who he is. And by the way, the dynamic of the marketplaces, if he is really good, and I say he because most of them are guys, then he won’t be satisfied forever at a 15 person financial advisory company. He’ll want colleagues. He’ll want more challenges, whatever it is. And so, if someone chooses to bring it in-house, it could work great. My guess is for a small size business, say under 50 employees, it will bite them in some way, in some form or fashion.

Michael Blake: [00:11:17] You bring up something I want to make sure that I talked about because I do think it’s important. You know what was not intended to create innuendo here, but I think size really does matter. Right? I mean, I think there’s a—is it fair to speculate on my part that there’s maybe a sweet spot where, you know, can an organization get so big that having outsourced IT just isn’t—at least entirely, is no longer practical and maybe even on the small end, right, outsourced IT may kind of even be overkill, right? If you only wanted two people and you know your way around a computer, maybe it should just kind of do that. Is that fair?

Tony Rushin: [00:11:57] It is fair. And I’ll talk in generalities because it’s different depending on the kind of business it is. Some are highly regulated. I use financial advisory as an example and some are less regulated for instance. In the marketplace over time—and Network 1’s 21 years old. I’ve been there almost 10 years. I’ve seen almost a physics of size and when they need certain IT support. And if you’re less than 10 employees or or less than 8, you can often get away with some kind of as needed IT support. So, the opposite of managed services. You simply pick up the phone and call somebody if you need their help, only when you have an issue. And sometimes that can be done internally if you got a smart guy. And hey, I’ll fix it for you, right.

Tony Rushin: [00:12:52] Sometime between 5 and 10 employees, if they’re doing it with a smart person in-house and they’re growing, they might say, hey, wait a minute, it’s better to have Sally get out there and get new clients than fix our computers, and she’s really good at getting new clients, for instance. And so, that’ll happen. And they’ll say, well, let’s get someone that can fix things when they break. Often at about that 10 employees standpoint up to say 50, they’ll say, hey, look, I need—it would be better if there was someone more proactive and all inclusive delivering these services, not just when my hair’s on fire. Because when my hair’s on fire, I need him here now. And you can always get him here now. Whereas if they’re fixing little things along the way, it can avoid the big thing.

Tony Rushin: [00:13:42] So, really, for companies less than 50 employees, but 10 to 50, we don’t find a lot of in-house IT people. They’re outsourcing everything. Somewhere between 50 and 100, typically, we see them get their first IT person and that can actually be worked really well with an outsourced firm. We love working with an internal IT person because no matter how good our support desk is and they’re really good, I mean, they get to every issue within on average, seven minutes.

Michael Blake: [00:14:16] Wow.

Tony Rushin: [00:14:16] But the person on site can beat that every time. Now, not if he’s helping Joe and Susie down the hall needs him at the same time.

Michael Blake: [00:14:26] Right. That just assumes a personal sort of waiting for the phone to ring and that phone lights up and all of a sudden-

Tony Rushin: [00:14:32] Yeah.

Michael Blake: [00:14:32] … you’re rushing up to that person, right?

Tony Rushin: [00:14:34] Yeah. But between that 50 and 100 people, they typically have a person onsite. And then, if they get to that issue where, hey, we have multiple people and you know, our IT guy can’t get to them all, they’ll often bring in someone like us and say, hey, look, is there a way we can streamline, so that they take what they can? But if it’s over their technology knowledge or if they’re flat out, you know, covered up with a couple different issues or you know what, the dang employee wants vacation once in a while, go figure, right. They’ll have a relationship with someone like us, a managed service company, and says, look, we want to escalate or we want to hand off whenever we need to. So, that’s about 50 to 100.

Tony Rushin: [00:15:19] And then, when you get multiple people in I.T., then they have colleagues, then they can internally go on vacation or go to a class and still have someone to back fill. And we find that typically when there’s more than 100 employees.

Michael Blake: [00:15:35] So, I think there’s an important point there that I want to make sure we highlight is that this choice may or may not necessarily be an either or. Right. It very well could be an and, right. You may have, you know, one IT resource that is captive. Right. But then some firm like yours might then be available to augment that. It could be as needed, it could be strategic, whatever. Right. So, maybe in some cases it’s a fault—you can have your cake and eat it, too.

Tony Rushin: [00:16:09] Yeah. Really, it ends up being managing the business risk and managing the ongoing productivity of the employees on a fundamental level. The business risk is I have one IT guy and he gets sick. He leaves, he goes on vacation, whatever. And, of course, Murphy says that’s when the bad things gonna happen. And you need help.

Michael Blake: [00:16:28] Absolutely.

Tony Rushin: [00:16:29] And if you wait till then to have this outsourced relationship, well, the company you bring in doesn’t know your system. And so, they’re doing the best they can. But at best, it’s triage learning the systems. Oh, was it documented? Oh, you don’t even know passwords. Well, then they’re hacking into your system.

Michael Blake: [00:16:48] Right. It’s like an emergency room visit.

Tony Rushin: [00:16:50] Exactly. Whereas if you do it when everything’s quiet, you’ve got your IT person, they’re part of the solution of bringing in the company. They’re actually even getting, hey, what’s my style? What’s the style of the person to work with? Do they work with me well? Then they’re part of the solution. And it works fine for when those emergencies come up.

Michael Blake: [00:17:12] So, you mentioned something else I want to make sure to underline, because I think one of the arguments somebody might have to maintain a captive IT resource is that notion that while I own most of the service, the response time is going to be instantaneous. Right. But, you know, that’s not necessarily the case. And if you work with the right partner, you may very well find that you get, you know, assuming it doesn’t necessarily need to be an onsite because most of these—most computer issues can be addressed remotely now that you aren’t necessarily making that sacrifice of responsiveness that you thought you might.

Tony Rushin: [00:17:47] Yeah, it all depends. It depends a lot on how customer service oriented is the person you hire. And, you know, people can be really good in interviews, and then you get what you get. But let’s say they’re great, you know, and they know their technology and they’re really customer service oriented. You still run into, oh, my gosh, the rainmaker’s on the road and his laptop failed and yet they’re addressing a server down issue in the other part of your company, they can’t do two things at once. But that’s part of the business dynamic. I think companies get there on their own, get their meaning. Oh, we need to augment the current person we have in site simply from enduring enough IT issues that, you know, the person can’t clone themselves.

Michael Blake: [00:18:36] So, I would have to imagine that you’re having many more conversations about cyber security now than you were, say, 10 years ago, 5 years ago, right. So, how does—how do concerns about cyber security impact that decision of outsourcing IT functions? On the one hand, I could see an argument that’s well, again, if I have this captive asset, I own it, it’s ostensibly a closed cycle that should be nominally more secure. On the other hand, maybe it’s by outsourcing your brain and expertise, you could not possibly afford to hire cause cyber security experts are—they’re as well paid as a senior software engineer, if not more, at this point. Where do you kind of fall in that? Where—how do you kind of look at that, that many decision within the decision process?

Tony Rushin: [00:19:27] Yeah, great question. I don’t think overall it really affects the fundamental of do I outsource or do I bring it, have it in-house. What it has done—and really we’ve seen the acceleration rapidly in the last three years, you know, where cyber security, it’s gone from reading about it in the newspaper like, oh, it happened to someone else, to people—oh, it happened in my company or my next door neighbor’s company and I know him personally and I think that’s what’s accelerated it.

Tony Rushin: [00:20:00] You kind of set it up really well with if it’s that single in-house person and you’re keeping them really busy, how much time do they have to do that proactive. Hey, what new solutions are in the marketplace that might protect us better? Do they have colleagues already in-house that they can pick up the phone and just have a brainstorm sounding board conversation about, hey, we got this bad malware, how did you guys prevent it? It’s hard to find that really tactically good computer broke, fix it fast, person. And have that same person be that strategic, always looking forward, hey, what’s on the horizon? What do the bad guys do and what do the good guys do and what solutions should I be looking at? Oh, I should bring it in and vet it and do a pilot on it. Oh, wait a minute, this guy’s computer broke. That’s where I have to spend my time. And that’s the reality of what that single shingle person is involved with. And so, it ends up driving more people, I think driving more outsourced I.T.’s conversations, whether you keep that internal person and if he’s good, you should or whether you simply want to outsource all of it.

Michael Blake: [00:21:15] So many companies now are also using cloud services or putting all their data up in the cloud, whether that’s One Drive, Dropbox, something like that. Does that impact a need to—does that impact at all kind of the decision as to whether or not you outsource versus keep in-house, given that by definition, when you’re putting your data in a cloud, you’re already taking a step to outsource anyway, right?

Tony Rushin: [00:21:41] Yeah. Yeah. And a lot of things that are bundled into that, you know, cloud solution are what a company like us would do if you had it running on a server internally, meaning the servers in that cloud solution if you picked a good one, right. Not one that’s really in someone’s basement, but, you know, Microsoft or, you know, Office 365 or something like-

Michael Blake: [00:22:10] Josvpn.com.

Tony Rushin: [00:22:12] Right. They’re going to have redundancy built in. They’re going to have backups built in. And they’re going to make sure that everything is designed in a way where the application is not going to go down. Or if it goes down, it’s gonna be minutes and, you know, like that, not two days. So, all of that is a real big step up where we find that people—I mean you still need—you still have users and you still have them. I mean, I’ll flip it around, ask you question. Do people still go to the wrong websites?

Michael Blake: [00:22:47] All the time.

Tony Rushin: [00:22:47] Do they still get tricked by that e-mail, that phishing e-mail, and they might click on something?

Michael Blake: [00:22:53] You better believe that.

Tony Rushin: [00:22:55] Do they still forget to run the updates when their computer says run these updates?

Michael Blake: [00:23:00] Especially with Windows, I think many people actively avoid it.

Tony Rushin: [00:23:04] Yeah, because then, you know, you got a reboot or hey, the update might cause a problem.

Michael Blake: [00:23:09] And takes a minute.

Tony Rushin: [00:23:10] Takes a minute. So, it’s the user issues that are still the same. In fact, maybe they’re more complicated because you’re not going to pick up the phone if Office 365’s not working right and call Microsoft and actually get a response.

Michael Blake: [00:23:23] Right. Not unless you’re a really big user.

Tony Rushin: [00:23:25] Right.

Michael Blake: [00:23:26] Or you’ve really paid for their Cadillac plan, which they will sell you. Right. But then are you really saving anything, right?

Tony Rushin: [00:23:31] Right.

Michael Blake: [00:23:32] You know, I want to go back to those questions you just asked because they’re so important. You know, speaking of spear phishing attack, a friend of mine who was a CFO fell prey to a spear phishing attack and lost her job.

Tony Rushin: [00:23:52] Wow.

Michael Blake: [00:23:52] Within two days, gone. Right. Now, I do not believe it was her fault. The organization had never trained her or anybody to recognize spearfishing. There are no policies, rules, procedures, right? Yes, there’s human error. But to me, that was human error that was set up by an organizational failure to be prepared. So, my question for you is, beyond kind of the nuts and bolts of of keeping a machine running and keeping software update and so forth, can an outsourced IT function, if it’s not you, maybe somebody else, also help kind of establish those rules, procedures, create awareness? Because the end of the day, you do still need your end users to be smart about this thing.

Tony Rushin: [00:24:37] Yeah, and it’s interesting. The biggest weakness in any network is still the human firewall.

Michael Blake: [00:24:44] Yeah.

Tony Rushin: [00:24:44] It’s that person. And you hit the nail on the head. Well, how do you make that human firewall more secure? It’s through education. It’s through training. It’s through—and not one time events. Right. It’s like, hey, security is important. And that’s the day that you hired him, and then you never talk about it again. Well, that doesn’t work.

Michael Blake: [00:25:06] Right. This isn’t sensitivity training. OK, just kidding, just kidding, hold your e-mails.

Tony Rushin: [00:25:11] Right. So, the—first of all, we, as the outsourced IT or any outsourced IT can influence the leadership of the company to take security seriously and make it part of their employee handbook, make it part of their regularly ongoing employee training. But at the end of the day, if they don’t—if the leadership doesn’t step up to lead it and say this is important and this is what we’re doing, we can only influence, right.

Tony Rushin: [00:25:51] But let’s say it is a company that they care. It’s like, look, I want this to care. Then, yeah, we can advise. Well, then here are the steps, the processes, the training that you should incorporate into your culture. And here’s the frequency at which you should do it. So, I think most companies that are like us and helping those smaller companies can at least advise, influence, give some examples of processes and procedures to put in place to raise up their security. And solutions are put in place. If they need—if they’re in a regulated industry and they need something more robust than you’ve got those paid as much as a software developer kind of people that are consultants to put whole company assessments in place around security, physical and online security and put, you know, really extensive processes and procedures in place.

Michael Blake: [00:26:53] I mean, that—yeah, and that security space has has evolved into sort of the neurosurgery, I think of the IT world. Partially because I’m glad about the regulations, because, you know, financial statement, audit rules are now directly addressing this. Right. Your data security. In my world now, you know, I am—although badly I am now asking customers, not customer, I’m asking clients, why appraise their business? What are they doing about data security? How many records do they have that are potentially exposed, right, to do business in Europe where GDPR becomes effective or in California where their roles become effective? Because I don’t think that if you’re—if you ignore that, you’re really missing a big potential risk, right?

Tony Rushin: [00:27:38] Yeah.

Michael Blake: [00:27:39] So—but it’s become so specialized that, you know, if you’re a generalist, you just can’t cover it, right. And if you’re really sensitive, if you’ve got high sensitivity, that maybe another IT function that needs to ultimately be outsourced and just part of the cost of doing business. Right?

Tony Rushin: [00:27:56] Yeah. And the good news is. When you look at the tools of the technology that’s available to also help protect and prevent and detect security breaches, in this day and age, they are very affordable for small businesses. And especially if they outsource because what they also get the benefit of, let’s say with us, is a 50 person company pays a 50 person price for whatever licenses they might get of Cisco umbrella that protects them way out on the Internet side, or Huntress Labs, which is a cool piece of software that doesn’t protect you. But it always scans to check and detect if something made it through because something’s going to get through no matter how good your protection is.

Tony Rushin: [00:28:51] Well, those things for a 50 person company might cost them, say, $40 per computer per month. Well, a company like us will buy 2000 nodes for all our clients, and then we’ll offer it to our clients for $10 a computer a month. Plus, by the way, you know, we’ll get an alert when something happens and we’ll dig into it. You don’t even have to know about it. So I wanted to bring in costs because it’s important. These solutions typically start with big companies. And then, over the years, more competition comes in or that same company will develop a price point that is very palatable for small businesses.

Michael Blake: [00:29:37] And interestingly enough, I see the same thing, but from a different angle. I see that also occurring because small companies, most of them at some point would like to be bought by a larger company. And I have seen deals get stopped dead or at least get dragged through the mud and prices go down because the larger acquirer that does have kind of “best practices”, I think they do. Right. And they’re reaching down into this small company that is farther behind. Right. And it’s like trying to buy a house and you realize you’ve got to put a million dollars to get up the code and the deal can fall apart.

Michael Blake: [00:30:18] So, you know, I think a best practice for many companies is to make your IT as best practice as you can afford if you want to be acquired, because an information officer will say, look, this is too risky.

Tony Rushin: [00:30:33] Right.

Michael Blake: [00:30:33] Either they’ve got to go through and get a real grown up IT audit and a clean bill of health from your national firm or it just doesn’t make sense. An Exhibit A was the Verizon Yahoo! deal. Right. I remember when Verizon bought Yahoo! a while ago. And in the middle of that deal, they discovered a breach and it shaved billions of dollars off the acquisition price. I mean that’s an extreme example, but it happens all the time.

Tony Rushin: [00:30:57] Yeah. And I want to play off that a couple different ways. And in your example, it doesn’t mean the small company has to spend big company money. I mean, at the end of the day, you have to be more secure than your neighbor, just like physical security with your house.

Michael Blake: [00:31:13] Run faster than the other guy when you’re running from there.

Tony Rushin: [00:31:16] Exactly. And so, no one’s asking them to, you know, spend what Yahoo! or Verizon spent. In fact, no matter how much they’re spending, they can’t keep themselves safe. So, if the bad guys want to get you, they’re going to get you. What you want to do is button down things, so when they knock on your door from a cyber standpoint, oh, no one’s home. Go to the next. I checked the windows, can’t get in and they quickly go to the next. And so, you don’t have to spend that kind of price. You just have to pay attention to it appropriately.

Tony Rushin: [00:31:51] And going back to outsourcing, if you’re a single small business, you may not know what’s available out there in your price point or what are best practices without overspending for a company that’s 40 people. Whereas a company like us has one hundred and twenty clients that are that size and we work in there all day. And by default then because we earn a living doing this, we understand what best practice is or what’s appropriate and what’s available for that sized company.

Michael Blake: [00:32:23] Now, correct me if I’m wrong. If I’m not mistaken, a lot of your clients are law firms and accounting firms.

Tony Rushin: [00:32:30] They’re law firms and financial advisors.

Michael Blake: [00:32:31] Financial advisors, okay.

Tony Rushin: [00:32:32] Yeah, not quite accounting firms.

Michael Blake: [00:32:34] So, is that because those kinds of firms tend to lend themselves better to outsourced IT than do others? And are there other kinds of firms that say, you know what, this kind of firm probably really needs to just have staff in-house?

Tony Rushin: [00:32:51] So, way back in our history, 21 years, our founder married an attorney and the daughter of an attorney. So, it’s not rocket science why we got law firms at the beginning. We got referred in by people that knew our-

Michael Blake: [00:33:05] Right. Fair enough.

Tony Rushin: [00:33:06] And then, we built enough reputation there for being good. We call it that side manner to be able to explain things to an attorney or their staff that wasn’t tech talk and to be empathetic and to be responsive. And so, we got more law firms and attorneys. So, truth be told. Now, are some better outsourced than others? No, pretty much we find across the board any business can benefit from it. The ones we found actually—I say any. The ones that don’t seem to be quite as good a fit is that technology company that part of their offering is delivered through technology that’s facing for their client.

Tony Rushin: [00:33:52] Think of Amazon when they were really little. Well, when they were really little, they’re structured the same way as they are now and their technology was really client facing. Click here and go on and order a book. Well, if you outsource the IT support for that, you may not—that’s a critical function to their business. Those critical functions or the family jewels, if you will, you typically want to have in-house. So, that’s not quite a fit. But any others, we haven’t seen the correlation.

Michael Blake: [00:34:29] So, what does—what are the economics of outsourcing IT typically look like? And what I mean by that in a more specific way is, is pricing typically done on a monthly retainer? Is it on a per incident basis, done on an hourly basis, some other basis? How does that typically work?

Tony Rushin: [00:34:53] Yeah. Well, the good news for that small business owner is it’s a highly competitive marketplace. In Metro Atlanta alone, there’s over 800 IT support companies.

Michael Blake: [00:35:07] Wow.

Tony Rushin: [00:35:07] Yeah.

Michael Blake: [00:35:08] I thought I had competition.

Tony Rushin: [00:35:09] That’s a real number. And now, granted, 780 of those 800 are one, two or three-man shops. But the good news is that business owner, you brought up examples, you know, is it on a monthly retained basis, is it per incident, is it this or that? The answer’s yes.

Michael Blake: [00:35:26] Got it.

Tony Rushin: [00:35:26] You can find a provider that works with any of those models.

Michael Blake: [00:35:31] And what about you guys? Is it—do you find that you kind of tailor your pricing to the particular needs and wants of that customer as while? Do you sort of have—or do you have kind of a more of a fixed model?

Tony Rushin: [00:35:44] It’s both. We have three different basic plans, and then we have these managed services that, oh, you don’t need the advance security suite in your environment. Okay, don’t get that. Or you don’t need the the backup and recovery with disaster recovery built into it or at least it’s not at your price point. Great, let’s not do that. So, it’s some of both smorgasbord and fixed plans.

Tony Rushin: [00:36:10] We, in particular, won’t take a client that merely wants to call us when their hair’s on fire. That’s the as needed only. However, we’ve been around Atlanta for 21 years. So, if we find someone or if someone’s referred to us and say this is the kind of plan I want, we’ll simply say, well, that doesn’t fit us but we know two people that are really good at that. And would you like their names. Yes, we would. All right. Go call them. We found—we—I’ve been there 10 years. And for the first three years of me being there, we tried to serve both kind of client and we found we simply couldn’t because our monthly retained clients are where we put all our resources. And then, that person with their hair on fire calls and it’s like, do we take this engineer off this client that pays us every month? No, of course, we don’t. And then, we’d never be responsive enough for the hair on fire guy.

Michael Blake: [00:37:00] Right. That makes sense. And it would be like working at, you know, at a car company. And they have this assembly line, that’s their model, and then all of a sudden the CEO wants a custom car built, right? It would break everybody. Right. You wouldn’t get a very good custom car and it would disrupt the entire assembly line, too. Tony, this has been great. We’re running out of time, so we’re gonna need to wrap up. But if somebody wants to contact you with questions about this decision, how can they do that?

Tony Rushin: [00:37:31] Yeah, a lot of ways to contact. It’s trushin, R-U-S-H-I-N, @network1consulting.com. And that’s the numeral 1. So, that’s long the first time you type it. You know, just put me in as a contact. You can find me on LinkedIn, Tony Rushin. We’ve got a website. You know, we do tweet and we do Facebook. Personally, I’m not on those too much cause our—I’m on LinkedIn mostly cause that’s where business people are.

Michael Blake: [00:37:56] Right.

Tony Rushin: [00:37:57] Yeah.

Michael Blake: [00:37:58] Well, good. Well, that’s going to wrap it up for today’s program. I’d like to thank Tony Rushin 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 making it. If you enjoy these podcasts, please consider leaving a review with your favorite podcast aggregator. It helps people find us, so that we can help them. Once again, this is Mike Blake. Our decision—our sponsor is Brady Ware & Company and this has been the Decision Vision podcast.

Tagged With: CPa, CPA firm, Dayton accounting, Dayton business advisory, Dayton CPA, Dayton CPA firm, Decision Vision, firewall, Information technology, information technology strategies, IT managed services, it outsourcing, managed IT services, managed IT support, Managed Service Provider, managed services, Michael Blake, Mike Blake, Network 1 Consulting, outsourced it, outsourced IT services, outsourcing IT, Tony Rushin

Decision Vision Episode 37: Should I Use an Offshore Software Developer? – An Interview with Dave Bernard, The Intellection Group

October 24, 2019 by John Ray

Decision Vision
Decision Vision
Decision Vision Episode 37: Should I Use an Offshore Software Developer? – An Interview with Dave Bernard, The Intellection Group
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Mike Blake and Dave Bernard

Decision Vision Episode 37:  Should I Use an Offshore Software Developer? – An Interview with Dave Bernard, The Intellection Group

What countries should I consider for offshore software development? How should I manage an offshore software development project? The answer to these questions and much more come in this in-depth, frank interview with Dave Bernard of The Intellection Group. “Decision Vision” is hosted by Mike Blake and is presented by Brady Ware & Company.

Dave Bernard, The Intellection Group

Dave Bernard

Dave Bernard is the CEO and Co-Founder of The Intellection Group. He is a serial entrepreneur, technologist, investor, inventor.

The Intellection Group specializes in rapidly building sophisticated, high-quality and innovative technology solutions that deliver breakthrough business results.

No matter where you are in the world, if your company or government agency is a market leader in your niche that requires highly-custom systems to maintain your leadership position and invent further marketplace advantages, they can help. The company’s specialty is complex (and often, award-winning) SaaS projects, and they’ve become well-known as the “vendor of last resort” for many of their clients.

The Intellection Group applies their versatile and deep technology and project management skills to solve problems in areas like developing database architectures that ensure effective data mining, integrated disparate information systems through service oriented architectures and loosely-coupled techniques, applying advanced techniques in data presentation, often an important selling point and differentiator, and rescuing complex technology projects that threaten to derail business plans.

The Intellection Group also has special expertise in emerging technologies, including voice recognition, text-to-speech, location services (GPS, RFID), natural language processing and search (supported by their patent portfolio.)

They like nothing better than for you to count on us to bring new and exciting ideas to the table that enable you to succeed in a tough and complex marketplace.

The Intellection Group delivers technology solutions which get results, like

  • A comprehensive portfolio management program for a world-leading private equity firm
  • A flexible data interchange application for one of the world’s largest vehicle transporters
  • A complex human resources system for a European defense ministry
  • A sales force productivity management system used by Microsoft, Symantec and Computer Associates
  • The most advanced online education delivery platform available.

The Intellection Group’s work has won awards such as the TAG (Technology Association of Georgia) Excalibur Award, the TAG Top 40 Most Innovative Company Award, and the Virginia Governor’s Technology Award.

To contact Dave, you can find him on LinkedIn or you can email him directly.

Michael Blake, Brady Ware & Company

Mike Blake, Host of “Decision Vision“

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. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike 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 the North Fulton studio of 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: [00:00:02] 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 vision a reality.

Michael Blake: [00:00:20] Welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic. Rather than making recommendations because everyone’s circumstances are different, we talk to subject matter experts about how they would recommend thinking about that decision.

Michael Blake: [00:00:38] 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 your favorite podcast aggregator. And please, also, consider leaving a review of the podcast as well.

Michael Blake: [00:01:02] Our topic today is, should I have software developed offshore? And for those of you who either know me in real life or have follow the podcast, and if you have followed the podcast, thank you very much for doing that. It’s a small but growing club I’m sure. You know that I have a background working with emerging technology companies, even matured technology companies. And in working with such companies, there are a few universal truths that I hear about how somebody is going to grow and scale their company. One, they say, well, we’re gonna have viral marketing and that’s a whole—that’s a different animal that we’ll tackle at some point. But if you know how to reliably produce viral marketing, you don’t need to raise money. Somebody will pay you $10 million a year to do it. But I digress.

Michael Blake: [00:01:59] Second is, all I need is three million dollars and this idea comes to fruition. And the third is we are going to develop software offshore. And we tend to think about this as if it’s something that is just very easily done and very easily executed because we are used to technology now being imported from overseas, whether it’s phones from Korea, whether it’s Macintosh’s or iPhones being made in Taiwan and China, whether it is Facebook memes coming from Volgograd. The fact of the matter is we have a lot of technology that comes from abroad. And of course, everybody is familiar with the meme of Steve from Wichita, who’s actually based over in Mumbai. And so, we’re used to having our technology come from someplace else.

Michael Blake: [00:02:50] And so, at a high level, it’s easy to kind of think about, well, we’ll just have our software developed abroad. These—you know, many of these countries have very strong educational systems and in particular,  very strong in producing engineers, scientists, mathematically oriented people. People are clearly very comfortable with computers. And by the way, you know the story goes that they basically work for peanuts or whatever the Indian equivalent of a peanut is.

Michael Blake: [00:03:20] And that’s fine as far as it goes. But when you sort of dig into it, you know, I’ve discovered that for every success story about well, we’re just going to offshore and outsource our software development, there are few stories that are not as successful. In fact, some of them are just outright tire fires. And so, it’s indicative, I think, of an important notion that software development abroad, really anywhere, but especially offshore doesn’t just happen just because you know that other companies have been able to do it.

Michael Blake: [00:03:55] And so, it’s a decision that needs to be worked through very carefully, because for most companies, getting your software done correctly, getting it done on time and now in a way that makes sure that you’ll have security back doors is not just a financial imperative, it is existential to the firm. And if you get that wrong, you just have no product. Not every firm can just sort of hit the reset button. So, OK, this didn’t work, let’s try it again a second or third time. And so, I think it’s important to kind of understand what exactly is involved in that.

Michael Blake: [00:04:27] And other than what I just told you, this is not a topic I know anything about, but fortunately I have a guy here in front of me who does know a lot about that and he’s going to tell us about it and share that knowledge with us. So, joining us today is Dave Bernard. Dave is a serial entrepreneur, technologist, inventor, and investor living in Atlanta, Georgia, an expert in new and emerging technologies.

Michael Blake: [00:04:48] Dave has co-founded several companies, including the Intellection Group, an innovative technology consulting group that has been recognized as one of Georgia’s most innovative companies. The Intellection Group specializes in building complex award winning-software as a service systems for both commercial and government entities in North America, Europe, and Africa. The Intellection Group specializes in rapidly building sophisticated, high-quality and innovative technology solutions that deliver breakthrough business results. They like nothing better than for you to count on them, to bring new and exciting ideas to the table that enable you to succeed in a tough and complex marketplace.

Michael Blake: [00:05:26] Dave has led and helped create award-winning complex software programs for organizations across many different industries, including healthcare, supply chain, insurance, retail, hospitality. You get the idea, all shapes and sizes from startup to multi-billion dollar enterprises. Dave has also founded a company called BeneVets providing technology solutions to veterans services organizations. Boy, did we ever need that. He’s also led the Intellection Group’s development of a patented technology architecture that unifies web development capabilities with voice recognition, text to speech, natural languages, radio frequency identification, and global positioning system technologies, deliverable to wireless, handheld, and desktop services. And his credentials go on and on but you get the idea. He’s pretty smart. He’s pretty accomplished. Dave, welcome to the program.

Dave Bernard: [00:06:19] Thanks, Mike. That’s quite, quite an intro. I’m really glad to be here, though. Going to have fun with this.

Michael Blake: [00:06:24] We’re going to have fun with this. And I know that we’re going to learn a lot because, you know, do you agree with me that I think you know, I think a lot of people are just sort of take for granted that offshore software development happens, right? And that’s not the case.

Dave Bernard: [00:06:38] They do. And, you know, there’s definitely what I would consider an almost mythology about it. And, you know, I tend to have a bit of a contrarian attitude about a lot of things. I’ve been in this business 40 years. I’ve seen a lot of best thing since sliced bread come and go. And so, I have an increasing skepticism about what that next best thing is.

Dave Bernard: [00:07:03] When we first started our company, our technology company, about 16 years ago, you know, you’re a new company, you want to control costs and make some money coming out of the gate. And I already had a large network of offshore people I have met at conferences over the years. And I just kind of flipped through my Rolodex and started calling some of these people overseas and we actually started establishing a nice little business doing that. And it has been—it has not been a better process. All along we’ve learned a lot through the school of hard knocks. And I’ll tell you, one of the biggest revelations for me in building this up has been that I thought software development is software development, no matter where it’s done, and that meaning that I didn’t think that there were cultural differences that would make a difference. I’ve found that to be diametrically opposite in practice, that cultural differences may matter a lot to how work is done and you have to account for that.

Michael Blake: [00:08:06] Good. So, let’s put a pin in that. So, we are going to get back to that. But speaking about kind of those cultural differences, in your mind and your experiences, you see it sitting here today. What are the countries right now that seem to attract the most interest in terms of being hosts of offshore development exercises?

Dave Bernard: [00:08:24] Yeah, it—I mean, everybody talks about South Asia, India, Pakistan, even Bangladesh. You have the Far East emerging as a very low cost area, Vietnam, Philippines in particular. The Philippines is very attractive because a lot of English speakers there. But there are also an entire half day ahead of you. So, that needs to be—I actually use a virtual assistant of the Philippines. So, I am acutely aware of that.

Dave Bernard: [00:08:52] Other areas that are up and coming, I think of Central America, South America, their values, because there tend to be in about the same time zone we’re in. And you also have to pull in Canada as a nearshore opportunity. But mostly Canada’s been positioning itself as QA technical support type of capability. So, that’s what you hear about. What we have found after going through the school of hard knocks on this is that Eastern Europe for us is the biggest bang for the buck. Best cultural fit. And just—there’s just a lot of stud developers over there.

Michael Blake: [00:09:28] Now, an important sort of nuance. When you say Eastern Europe, do you mean sort of all of the countries east of Germany or do you parse kind of central Europe that has Poland, Czech Republic versus Belarus, Ukraine, Russia? Does that make a difference?

Dave Bernard: [00:09:42] I would say Central and Eastern Europe.

Michael Blake: [00:09:44] OK.

Dave Bernard: [00:09:45] We’ve been—we have a ton of experience with Bulgaria, for example. And I’d like to highlight them because there’s a historical reason why there’s that way, but also a substantial experience in Poland and Belarus. And I know people who work with Serbs, Croats, Romanians, and Hungarians, and Czechs, and they’re all very, very good. It’s a very similar type of approach.

Michael Blake: [00:10:13] You know something about Bulgaria, they produce a ton of academic finance people and economists, for some reason more than any other country. When—you know, in my field, when somebody writes a really new and interesting paper that is super quantitative, like, you know, it takes me an hour and a half to get through the first page basically, Bulgaria seems to produce a lot of people like that. And I think that goes to the culture, right. For whatever reason, their culture, maybe their education system seems to skew towards that way.

Dave Bernard: [00:10:47] Yeah, there’s a very interesting wrinkle in Bulgaria that I did not discover till after I was working there for a few years. And that is that if you recall, the command economy that the Soviet Union ran in the Warsaw Pact, you had countries like Poland that were building aircraft. So, the Soviets would outsource a lot of their aircraft manufacturer to Poland in order for the economy to succeed. So, the Czechs and Hungarians built cars. The Bulgarians built computers. That’s what they did. They built software-

Michael Blake: [00:11:18] That’s right.

Dave Bernard: [00:11:19] … firmware and computers. They’re very well known for that. So, when you do that, your whole education ecosystem is built around that. So, that is still there. That disproportionate focus on the hardware and software side of things is tremendous there. And I think that part of that is informed—you know, a disproportionate amount of their population is in that business. And we just found tremendously talented people there.

Michael Blake: [00:11:48] That’s really interesting. And somewhere in the back of my mind, I was aware of that, but never made that connection until you made it for me. That explains. And I’ll pull the kimono back for just a second. One of my hobbies is retro computers. One of my prized possessions is an Apple IIGS. It actually works, souped up, et cetera, et cetera. But one of the—one thing that I do not have in my collection and I will not because that will be a major fight with my wife that I’m not going to have is a Pravetz computer, which was their knockoff of the Apple II, that their spies basically went into Cupertino, stole the diagram, stole everything, basically, and remade it. And if you look, you can find on eBay once in a while and it looks almost exactly like an Apple IIe, except Apple has been replaced with the Pravetz.

Dave Bernard: [00:12:40] Well, next time, I’ll go see if I dig one up for you.

Michael Blake: [00:12:42] Oh, boy, you do that. You’re my friend forever.

Dave Bernard: [00:12:44] But, you know, there’s one other really interesting thing about this and something that Bulgarians are immensely proud of. And that is the the person who invented the digital computer is widely regarded as a fellow named John Atanasoff out of, I believe, is Iowa State University. Well, at—his name is spelled Atanasoff with two Fs at the end. But I didn’t ever made the connection because I know a lot of Atanasoff in Bulgaria. And sure enough, he’s Bulgarian.

Michael Blake: [00:13:18] Is that right?

Dave Bernard: [00:13:19] And, in fact, when I made that connection, I asked—when I was in Soviet one time, I asked my team, do you know about this? “Oh, yeah. He’s one of our greatest heroes.” And they took me to a large statue in the middle of Soviet that has his figure on it. And I also had a little—another little antidote is that I was actually at a soccer game with my daughter, probably about 12 years ago and standing next to an old friend of mine who also had a daughter in the team. And I had mentioned—so, I must have been talking about going to Bulgaria. And she said, “Oh, my family’s Bulgarian.” Oh, really? No kidding. And she said, “Oh, by the way, my grandfather invented the digital computer.” And I was like, John Atanasoff? “Yeah, that was him.” And actually, a few years later, on his 100th birthday anniversary, they came over, found her, and brought her whole family over for 10 days random around the country and just celebrating his 100th anniversary. It was a big deal there. Big deal.

Michael Blake: [00:14:17] Well, good. So—and by the way, if you’re listening from the Bulgarian Embassy, the commercial attache, feel free to call up and sponsor our program. That’s fascinating. I did not know that. But, you know, getting back to the, you know, the current part of the question is that not all offshore hosts are the same, right? And it’s not just about cost structure but cultural. So, I’m curious. You said that Central and Eastern Europe for, at least for you, seem to have worked the best, maybe for your clients. Why is that?

Dave Bernard: [00:14:49] Yeah, there’s a very definite pattern there. When you’re in a small business like me, you know, I can’t afford to micromanage people. I need to have smart people, knowledge workers you can call them, that could run on their own, take initiative and go solve problems and think for themselves. Otherwise, it doesn’t scale, just doesn’t scale. So, with a lot of countries, there is actually a great cultural barrier to saying no to the boss, you know, or disagreeing with the boss at all. So, you—they’ll just say yes to you all day long, and then you’re just paying them all day long.

Dave Bernard: [00:15:29] With the Bulgarians and with many others in that part of the world, I found a pretty common theme is that they definitely will push back. I mean, it’s great to have those kind of—you know, they’re not tense conversations but they, you know, sharpening the steel. And we’ve had many times, many times when I’ve said for them to do something and they said, “Dave, that’s a really bad idea. And this is why.” And I said, oh, you’re right. Thank you for telling me. And I love that aspect of it with them.

Michael Blake: [00:16:01] And, you know, I’ve found something similar. As you know, I spent a lot of time in Belarus and Ukraine myself. And they are not shy. I mean, they’ve-

Dave Bernard: [00:16:10] They aren’t.

Michael Blake: [00:16:10] And for whatever reason, maybe it’s because for 70 years, they couldn’t say no. Now, they can’t say no fast enough, right. And you’re right, that is a good thing. You’d much rather have that than the passive aggressive, hey, we’ll take your money, right?

Dave Bernard: [00:16:23] Yes.

Michael Blake: [00:16:24] But then you don’t wind up with what you want. I’d much rather be told that I’m not doing the right thing upfront.

Dave Bernard: [00:16:30] And they do appreciate that directness, too. It’s part of their culture. So, if I’m direct with them, they’re direct with me, we all get along great and we get a lot done. So, that’s what—that’s really the big difference for me.

Michael Blake: [00:16:42] Interesting. Okay. So, the obvious driver to move development offshore is cost, at least perceived cost anyway. Are there other things you might want to consider? Is there a reason besides cost to consider offshore development?

Dave Bernard: [00:16:58] Yeah. I mean—and I hope I don’t upset too much of the audience but, you know, I’ve been just underwhelmed by the bang for the buck I get from onshore developers. There’s several problems with onshore developers and I just have chosen not to deal with them. One, I think is they’re grossly overpaid for what they do. And I’ve seen that firsthand with working with developers all over the world. The other thing is I think that even more important—and all these things are kind of tied together. Cost is an issue. Culture is an issue. Work ethic and attitude is an issue. But also there’s this kind of pattern in the U.S. where you job hop. You don’t like your job. You can make 10 bucks an hour or more over there or another 20 grand a year over there. You job hop. That just doesn’t happen. In my world, in Central and Eastern Europe.

Dave Bernard: [00:17:49] We have multiple examples where we’ve had the same small group of developers working on a project for 10, 12, 13 years. And when you have that kind of continuity on a project, all kinds of things happen that you don’t have to worry about. They tend to be a lot better at their work because they can work in the system. They make a lot fewer mistakes. That makes QA and testing a whole different ballgame. Responsiveness goes way through the roof. And I don’t have to have all these processes and plans for when they leave. So, we actually don’t even think about that. Because there’s so much continuity now, we don’t worry about it, you know. And that is so ingrained in the U.S. approach. If you really looked at all the processes and procedures that they put into U.S. based software development, the vast majority of is geared toward that guy walking out the door and screwing us.

Michael Blake: [00:18:46] You know, it’s—you know, actually, you bring up two things that I want to kind of highlight. One is that, yeah, the cost here is higher but it doesn’t sound like that in and of itself is problematic. What’s the value that you get for the cost?

Dave Bernard: [00:18:59] Yeah.

Michael Blake: [00:19:00] Right? You can live with the high cost if the value were there. But-

Dave Bernard: [00:19:03] Yes.

Michael Blake: [00:19:03] … the value was not there.

Dave Bernard: [00:19:05] And I would say too that, you know, we don’t pay the lowest rates that are out there.

Michael Blake: [00:19:09] Right.

Dave Bernard: [00:19:10] And there is a lot of academic work done on programmer productivity. If you look at DeMarco and Lyster and Ed Yordan and some of—and Steve McConnell, you’ll see a lot of academic work. And at the end of it is, is that there’s a wide range of talent in developer community. The difference between a mediocre developer and a top notch stud, it can be 7, 8, 9 10x. So, what we want to do is we want to find the 7 or 8x guy that we can pay 2x, 4. That’s a tremendous bargain. So, a lot of times the $10 and $15 an hour people take four times as long to do something. I could pay somebody $20 or $25 an hour and they do the work of five people. So, there’s a whole different mindset there. It’s economics. It’s math.

Michael Blake: [00:20:01] Yeah.

Dave Bernard: [00:20:01] You know, that’s what it boils down to.

Michael Blake: [00:20:02] And we’ll take a little bit of the finance side tour. As you know, one of the things I do a fair amount of is, is appraising software. Right. Internally developed software. And two of the factors that we consider that plugged directly into the quantitative models we use are how effective are the programmers and what is the turnover. And it’s fascinating because you would think not knowing, and I didn’t know this, not knowing the intricacies of that software development process. The knee jerk reaction would be, oh, turnover is gonna be lower here, especially if they’re kind of in-house people, right. I can pay him. I can keep him.

Michael Blake: [00:20:45] But that’s so not true it sounds like that, in fact, these offshore teams, for whatever reason and maybe that’s cultural, right, tend to stick around for prolonged periods of time. They’re actually more stable than even if you hire people in-house.

Dave Bernard: [00:20:59] They are. And there’s—I think there are some insight that I can add to that. I think software developers in general, having been one for 40 years myself, I think in general they’re a lot like doctors. They’re trained to practice a craft. And that’s what they want to do. They don’t want to run a business. They don’t want to have to deal with insurance companies. They don’t want to have to market themselves. Software developers not that much different. If you could create an environment for them where all they got to do is code and build stuff and be creative, they’re very happy.

Dave Bernard: [00:21:30] So, really our job in the Intellection Group is to find customers and give them work. And when we do that, we make them very happy and they’re not going to go anywhere because they’d be shooting themselves in the foot. I think the other thing we do, because of distance, it’s also very hard to—it’s harder to build relationships with people, even if you get Skype and e-mail and all that. We communicate with our guys constantly. But we also visit them on a regular basis, at least once a year. And we know their kids. We know we—visit their houses. We know their spouses. So, it’s a relationship that’s built on that personal side as well as the commercial side.

Michael Blake: [00:22:14] So you talked about the fact that you’ve found some folks that work really well and you’ve got long-term relationships. Let’s put ourselves in the seat of somebody now as thing on a map, you know, I should think about offshoring. How do you go about making an assessment as to whether or nothing would be a good fit? I mean, it can’t be as simple as finding resumes on Indeed.com or something, you know. And you’ve got the cultural, geographic, distance, how do you do that?

Dave Bernard: [00:22:43] You know, I mean getting introduced to them is probably the hardest part because there’s a lot of them out there to sift through. What I try to do is—and I rarely add new teams, although I did add some new teams the last couple of years in Krakow, in Minsk. And I actually went to visit them before I engaged with them, to see their offices, to see how they run their shops, you know, and look them in the eye. I mean, I—that’s worth the investment because I’m about to bet my company on these guys.

Dave Bernard: [00:23:14] The other thing we’ll do is to test them on some small projects that we don’t pay for. Okay. I learned that a long time ago. Find a 20 or 40 hour project that they’ll do. And almost all them will say, yeah, sure, we’ll be happy to do that. And what you really want to test there is not necessarily their coding ability, but I want to see how well and how they communicate and how responsive they are, because in our business has everything. Our clients want us to be responsive and communicate frequently. They don’t want unknowns. And that’s the same way I want to run my business. So that’s really what I’m looking for. If I see a lag in that, that’s a big red flag for me.

Michael Blake: [00:23:56] And that’s gonna be another differentiator between an offshore market here. I mean you try to get somebody local to take on a project of that scope to test out their capabilities, right.

Dave Bernard: [00:24:08] They’re not going to do it.

Michael Blake: [00:24:09] They’re not going to do it.

Dave Bernard: [00:24:09] Yeah.

Michael Blake: [00:24:10] Right. At best, they will not refuse with extreme prejudice.

Dave Bernard: [00:24:15] Yeah. And that’s part of that whole attitude thing.

Michael Blake: [00:24:18] Yeah.

Dave Bernard: [00:24:18] You know, I actually think there’s a tremendous desire to work with Americans in overseas markets.

Michael Blake: [00:24:25] I think so too.

Dave Bernard: [00:24:26] There’s a cache to that. That’s leverage for you. And if you treat them as equals—you know, the thing I used to hear all the time from some teams—I mean every time I visited, they tell me this. You know, we do work with some other U.S. companies but they don’t let us do cool stuff. You guys let us do stuff that people actually use. They also feel distrusted and disrespected in a lot of ways because oh, well, the Americans know best, but that’s not the case.

Dave Bernard: [00:24:52] And what we try to do, actually, because it’s good for business is to push everything down to the lowest level. We want them to do architecture. We want them to do database design. We want them to do documentation, so that they own the whole thing, and then they learn the business. So, again, that scales. If I get to tell them every little thing to do, that doesn’t scale. So, Mike, I got guys who know—I got guys in Soviet who know more about global private equity than most people in New York. You know, I’ve got people in Minsk who know more about sales, online sales and marketing than most people in California do. That’s because they’ve had to bury themselves in it, in the details and build it and they own it. So, I don’t have to tell them technical specs. I just say the customer wants a report that shows this, this, and this. Four or five sentences, they go build it. They know what to do.

Michael Blake: [00:25:44] So, that brings up another question or two later but the segue works here. It sounds like—and correct me if I’m wrong but it sounds like you’re an advocate of sending entire projects, not necessarily having the offshore developer work on a piece or a part of it and maybe keep it here. Sounds like you think just either you’re going to give them the project or not. Is that fair?

Dave Bernard: [00:26:06] That is fair. I mean the structure we have is we have onshore managers here, but really the delineation is in customer ownership. Who owns relationship? We own the relationship, the Intellection Group, with our customers. The developers rarely talk directly to our customers. We want to be that intermediary who want to own the relationship. And actually, quite frankly, the developers are very happy with that. They don’t wanna talk to customers.

Michael Blake: [00:26:32] I’m sure.

Dave Bernard: [00:26:34] They want to do their thing. So, that works out very, very well. So, we—that model is really important, I think. And that’s actually—I would say it’s our biggest problem is finding good onshore management. That is a—still an Achilles heel for us, because, again, you know, we’re dealing with people who are trying to run by an agile playbook or something like that. And I think if I just put all these processes in place, everything’s going to work. No, you’ve got to get engaged. You’ve got to talk these people everyday. You can’t just e-mail them, you got to get on Skype, look them in the eye. You got to be able to be flexible and move priorities around. These guys are good at that. Make use of it. You know, and I still have a difficulty finding people who will do that.

Michael Blake: [00:27:25] And I think that’s an important point because it’s different to manage an offshore team.

Dave Bernard: [00:27:32] It is.

Michael Blake: [00:27:32] Right. Even if you’ve had 15 years of experience that—pick a company, Cox Communications, right, managing their internal software development processes, it’s just a different skill set, a different animal managing an offshore team, isn’t it?

Dave Bernard: [00:27:48] It is. And we have—I have my own personal philosophy with the hundreds of projects I’ve been involved in in my career. Like agile is not fast enough. Two weeks grumps to me are awful. We drop code every day with our clients. You know, when you do that, you don’t have to give them a status report because the system is the status. It’s always built. It’s always running. It’s always up to date. You want to see where we are? Go look at the system. That’s where we are.

Dave Bernard: [00:28:18] And if you do that every day, mind share is preserved. okay, so that’s where we would hate for a developer to make a change. Wait for two weeks to deploy it. So, the customer tests it. He’s already forgotten after the third day what he did. Customers come back and said, “Oh, there’s something wrong with it.” I don’t know what I did back then. That’s how things really work. We would rather have that very tight velocity and much, much—it’s much better use of mind share for us. And that has worked for me in lots of projects.

Dave Bernard: [00:28:50] So, we call it, for want of a better term, call it super agile. And we’ve gotten that confirmed with some independent third parties who looked over our process and our code. And they—I was actually told by a European firm that just did a large code review, a multi-million line system we’ve been building for 10 or 12 years and they told us they’d never seen a more productive team. And I said, it’s really simple. We just—we deploy a lot and we still do 500 hours of work on that system every month, every single month. It’s never going to end. And so—and they couldn’t—they’ve never seen by with our velocity. But that to me is the only way to build this, to preserve mind share. It’s a knowledge worker business.

Michael Blake: [00:29:36] It’s—even in my field, it’s very hard to start, put down, pick up, down, pick up.

Dave Bernard: [00:29:44] Right.

Michael Blake: [00:29:45] It’s—the creativity gets lost, the time getting up to speed and so forth.

Dave Bernard: [00:29:53] And you know it intuitively, you know.

Michael Blake: [00:29:55] You do. I mean I—you know, I had—not in software, but I was set to be an expert witness in a case that I last touched about four years ago. And I assume the thing had settled. And then, all of a sudden, you know, the attorney e-mails and says, “Hey, this thing looks like it’s going to trial.” Let me see if I can find it. I wish I find can it. But, you know, you’re trying to kind of get back and step back for—you know, thankful it’s settled. So, nobody wanted to be in that case. But the notion of having something that’s sort of still like that, and then try to pick it up and try to do the same quality work that you were doing when you started, boy, that’s the exception rather than the rule, isn’t it?

Dave Bernard: [00:30:39] It is. And, you know, I would—and this discussion is about offshore development, but a lot of things I’m talking about apply to software development in general. And the point I want to make is that the reason we do offshore development is it actually makes some of the other stuff clearer and easier and more predictable to do in a lot of ways. So, that’s—its big advantage.

Michael Blake: [00:31:02] So, talking about kind of where you can get this done and you of all people appreciate this, because I know that there’s something that you’re very involved in studying, is the nature of security, right. There are countries out there that wish the United States ill. And candidly, they realize they cannot defeat us on a conventional battlefield. And so, their battlefield is cyberspace.

Michael Blake: [00:31:28] And there’s concern. And we’ve seen even with the current administration that, you know, we’re not necessarily letting other companies sort of have the run of the place from technology anymore. And I’m curious on, even if it’s not a particularly “sensitive project”, is that something you think about? If you think about, you know, a Russia, if you think about a China being a software developer for us. Maybe they’re not enemies but I’m not sure I’d say they’re friends either. Right. Is that something if you’re in the private sector, should give you pause?

Dave Bernard: [00:31:59] You know, I would say that we let economics drive us and talent. Talent and economics drive us where we’re gonna go. So, I have nothing against working with Russians or Chinese. There may be some other things that give me pause. So, I do pay attention to things like economic sanctions. And that’s a business risk. It’s a business risk if—you know, I was actually working in Bulgaria before the VAT was implemented there, and I had some concern about whether they were going to apply it to services. It turns out they didn’t because that would have changed our business model. That’s a 20 percent tax. So, it’s things like that more that are going to drive me.

Dave Bernard: [00:32:37] I—if you’re talking about intellectual property, I get that asked of me a lot. People will say, well, what if they go and steal our code? And my response to that is a question. What are they going to do with it? I mean, they don’t—by definition, they don’t like marketing or selling. So, they’ve got to have—they would have to package it up and figure out where the market is and go sell and build a business around it. They don’t have time for that. They don’t want to do it. And plus AB, as soon as I found out about it and I would, I’d kill—you know, I’d cut them off.

Michael Blake: [00:33:08] Right.

Dave Bernard: [00:33:08] So, that’s a disincentive. So, I think right now, can you completely bottle that up and make sure it doesn’t happen? No, you can’t. And even if you have NDAs and contracts, they’re worth your ability to defend them, which you want to do.

Michael Blake: [00:33:25] Right.

Dave Bernard: [00:33:26] It’s like a pattern-

Michael Blake: [00:33:26] Which is tough.

Dave Bernard: [00:33:27] So, if you’d not willing to defend it, why go do it? But in our case, we are—we focus on making a relationship very strong and making it a really symbiotic relationship that tends to keep those things at bay. And I’ve never had a problem with that. As far as national security types of aspects of this. Well, that has its own rules. And we have done cleared projects overseas under U.S. Army contract or NATO. And I do some pro bono work on the national security space anyway. So, I have a maybe an extra sensitivity to working with some of those places. And for me, there’s just so much work and so many good people that I can work with. Why risk working with people who are on the fringe? And I might consider right now in the current political climate and economic climate that Russia and China are kind of on the fringe.

Michael Blake: [00:34:20] Got it. So, switching gears a little bit. I’m curious in your experience, are there certain kinds of software applications that are better or worse suited to being developed offshore?

Dave Bernard: [00:34:36] You know, I was giving that some thought because I had your question ahead of time and I just couldn’t think of any pattern one way or the other.

Michael Blake: [00:34:44] Okay.

Dave Bernard: [00:34:44] The thing that I could think of the most was if you had a—an application that was such high availability that you needed to have 24/7 engineering support on it and that time zones might cause your problem with that. But other than that, we’ve already built systems used in tens of countries at a time 24/7 around the world and they were all built by the offshore guys. And you know, a lot of our customers in the beginning, they’ll say, well, you know, they’re not available after like 1:00 p.m. Eastern or something like that. And they actually fall into our pattern of following the sun. They love sending me stuff at 11 p.m. And when they get up in the morning, it’s done. So, actually, they’ve all adapted to our pace and our time zone and they actually understand it. You’re going to have a gap somewhere or by sleeps, right. So, all they do is they understand, hey, I can get stuff today late and it’s going to be done while I’m sleeping.

Michael Blake: [00:35:48] It’s interesting you said that. And sometimes I wonder if they sleep, because for a while, I’ve actually used an Indian contractor for my valuation practice. And, you know, it just astounded me. I would send something at 9:00 at night. That’s when I have a bunk bunch of my sort of technical work done and I’m getting a response in 30 minutes. I’m like, dude, you should—what? You should be asleep.

Dave Bernard: [00:36:11] I’ve had that same experience. I tell them the same thing, go to bed.

Michael Blake: [00:36:16] You know, you’re no use to me if you do it, you know, if you’re—but you’re right. They seem to adapt. They seem to be willing and enthusiastic to adapt their body clocks to match our time zone if necessary.

Dave Bernard: [00:36:27] And your customers adapt too.

Michael Blake: [00:36:30] Yeah.

Dave Bernard: [00:36:30] I mean, it’s all kind of the same thing you’ve got to do with them anyway, set expectations. This is the way it works and it’s very effective for them.

Michael Blake: [00:36:41] So, I’m going to show off a word here that our mutual friend, Scott Burkett, who is on podcast number two or three, I think-

Dave Bernard: [00:36:48] Oh, I know Scott.

Michael Blake: [00:36:48] … shared with me and that was technical debt. So, I did not know what that was until about six months ago. Anyway, it is—and for those who don’t know, as I did not six months ago, technical debt is basically the amount of rework you may have to do with a software package to get it done, so that it actually can be expanded upon as opposed to just getting it done in a rigid way to meet a deadline.

Dave Bernard: [00:37:15] Yes.

Michael Blake: [00:37:16] More or less. Right. Also sort of covering-

Dave Bernard: [00:37:18] That’s a good definition.

Michael Blake: [00:37:18] Also, covering obsolescence to a certain extent. Is there a greater risk or a lesser risk of accumulating technical debt when an offshore project is-

Dave Bernard: [00:37:28] The short answer is no, I don’t think so.

Michael Blake: [00:37:29] Okay.

Dave Bernard: [00:37:30] I mean developers—you know, a good developer knows the best way to implement any given task. Now, given that, I’ll just get on my soapbox a little bit about technical debt and I have a really good example, a counter example-

Michael Blake: [00:37:45] Got it.

Dave Bernard: [00:37:45] … for this. It’s actually a little bit of a surprise when I heard it. Like I said earlier, we had had a large system reviewed by European—it took months for them to do the review. Very thorough job. They looked at every bit of our code. And they came out and said, you know, you have a bunch of technical debt in your reports. And this is a system that had been around for a while. We’ve probably built 200 or 300 reports. We’d even retired like 20 of them. And they said you have a tremendous amount of code duplication among these reports. And I said, really? Because I don’t tell the developers how to write stuff. That’s their job.

Dave Bernard: [00:38:21] And I talked to developers and they had a very interesting story to tell me. They had followed my directive exactly. And what I directive to them was this customer is extremely sensitive to accuracy and risk in the code. They just don’t want bugs. So, they took that to heart. And basically the approach they took is whenever a new report request came, they went and found another report that was battle tested, coded and worked, copied the code and worked from that, the one that was closest to what they had to build. So, immediately, they were reducing the risk tremendously, increasing the likelihood of accuracy and reduce the amount of work they had to do. So, responsiveness went through the roof. Accuracy was still really good and risk was low. Exactly what the customer wanted and they’d been doing that for years. Okay.

Dave Bernard: [00:39:10] And so—but these guys who were reviewing said, oh, this has got to be fixed. I said, really? Okay. So, what’s my pitch to the customer here? I’ve got to go burn a whole bunch of time that you’re gonna pay for and I’m gonna refactor this code. So, now, I’ve just instituted a whole lot of risk and I get cussed. I get developers changing code. That’s risk. And then, at the end of the day, it’s all gonna be tested again, which is the bulk of work in software development. And so, at the end—and after all that’s done, then the customer’s got to verify it, which they’ve already done with the existing reports.

Dave Bernard: [00:39:46] And after all that’s done, they had the same thing they started with. So, how do I pitch that to them? And they said, “Oh, I see your point.” Because they were gonna make it a prominent part of their presentation to clients. I said you can do whatever you want but I know what they’re going to say. And so actually, it’s turned into—it was eye opening for me because I love—it was the genius creativity in my mind because the customer doesn’t care how it’s written. They just want it to work and make their business grow. And this is a customer who’s realize billions of dollars of return on this system.

Dave Bernard: [00:40:21] So that’s why there’s a lot of these little things, object-oriented programming, agile development, technical debt, QA processes, you know, test driven development. All this stuff is really to me, they’re red herrings. They’re distractions from serving the customer in the way that best does that. So, I have a similar contrarian attitude about testing as well based on experience. So, you know, I did tell the customer a little bit about this, said you may hear about it, I’m just telling you, just say no, you know, it doesn’t matter. So, that’s my my little soapbox on that.

Michael Blake: [00:41:02] All right. So, let-

Dave Bernard: [00:41:07] And oh, by the way, I would challenge anyone in the audience to counterpoint that. I would love to hear it.

Michael Blake: [00:41:11] Okay. Well, please do also, because the more you challenge something and write about the podcast, the better SVO it gets. So, light it up, everybody. It’s open season for trolls on offshore software development.

Dave Bernard: [00:41:25] There you go.

Michael Blake: [00:41:26] So, I want to ask this. I mean you’ve mentioned several countries in which you work. I’m curious if you’ve ever had different teams in different countries working on the same project or do you kind of allocate kind of one project per team?

Dave Bernard: [00:41:41] Yeah, as a general rule, it’s one team per project. I think it’s—you know, there was a book 50 more years ago by Fred Brooks, the guy who invented the 360 operating system for IBM called The Mythical Man-Month and is still in print. It’s a fabulous book. Every software developer should read it. Basically, one of his famous quotes in there, adding people to a late project makes it later. But his big thing was that  lines of communication expand exponentially as you add people. So. the Google approach is to keep teams very small because the lines of communication are very—are fewer. If you have three people, then you have—you know, I guess it’s a factorial, three factorial lines of communication. And if you add a fourth one, it goes up a lot.

Dave Bernard: [00:42:35] So, if I have to have multiple teams working in different parts of the system at the same time, I have to not only contend with communication, but I also have to contend with different styles and approaches. I have to contend with different velocities because there’s different talent in different places. It’s a nightmare, quite frankly. It’s really, I think, is uncontrollable. I think there are certain—there could be situations where the system can be built in very parallel pieces where you could probably get away with that. But I prefer actually for the mind share to be in one place and not in multiple places. It’s just—that’s just something I’ve not—I’ve found to work much better. And there’s an ownership issue, too, you know. These developers want to own their work. They want to have—it’s their baby. You know, it’s a creative process. It’s not engineering. It’s a craft. So, if you’ve split the craft up between two groups, who owns it? You know, they’ll bid—you get into finger pointing exercises. It becomes a blame game if something goes wrong.

Michael Blake: [00:43:39] Yeah. Okay. So, you’re obviously a big fan of offshore development. So, let me ask you a contrarian question. Are there cases where you have advised clients that offshore development may be not—may not be a great idea?

Dave Bernard: [00:43:57] I think if there—for—there are clients out there or people I’ve talked to who just can’t wrap their head around it. They don’t—it’s a trust issue when you boil it down. They just don’t trust what they can’t see. They want the person in their office. You know, you just can’t get around that. And I would tell them, then we’re not a good fit for you because we don’t work that way. You know, we can’t give you the economies and the performance and velocity of development in that environment because we’re committing to something when we quote our system. And we’re committing to it based on how we do it. You know, if you want to change that, then you got to get a different group of people. So, I think that’s probably the only real time I tell them it’s not going to work for you.

Michael Blake: [00:44:42] Okay.

Dave Bernard: [00:44:42] Other than that, because we tend to deliver very quickly on stuff, it’s almost like they’re there. You know, it just starts. And then, they forget that the person is not there because they’re seeing results. A lot of it is that trust, because I don’t see what’s happening, I don’t see a guy typing at a keyboard and come in at 8:00, leaving at 5:00. But if you see and results, then it doesn’t matter. They quickly get over that. That’s what I would say to them.

Michael Blake: [00:45:09] Okay. Well, Dave, we could easily go another hour on this but we’re running out of time. So, I think what I’d like to do is invite people if they want to learn more about this, if they’re thinking about this for their own companies, how can they contact you to maybe ask a question or two and follow up?

Dave Bernard: [00:45:24] You know, my e-mail address is, I’m always available, dbernard@intellectiongroup.com. You can easily find me on LinkedIn. I get a lot of people communicating with me on LinkedIn. Happy to do that. So, I’m not gonna give out my phone number over the podcast but I can be called too. Once you e-mail me, then you—I’ll allow you to call me.

Michael Blake: [00:45:48] Yeah, you’re not hard—and I mean phones are so 20th century anyway.

Dave Bernard: [00:45:52] My phone number is probably on several websites out there anyway.

Michael Blake: [00:45:54] Probably is.

Dave Bernard: [00:45:55] If you do a search, you’ll find me.

Michael Blake: [00:45:56] Probably is. Well, that’s going to wrap it up for today’s program. I’d like to thank Dave Bernard 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 making your next business decision, you have clear vision when making it. If you enjoy these podcasts, please consider leaving a 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.

Tagged With: CPa, CPA firm, Dave Bernard, Dayton accounting, Dayton business advisory, Dayton CPA, Dayton CPA firm, Decision Vision, Eastern Europe, location services, Michael Blake, Mike Blake, natural language processing, offshore development, offshore software development, Software Developers, software development, Software Development project management, text-to-speech technology, The Intellection Group, voice recognition

Inspiring Women, Episode 14: Lifting Up The Next Generation of Women

October 17, 2019 by John Ray

Inspiring Women PodCast with Betty Collins
Inspiring Women PodCast with Betty Collins
Inspiring Women, Episode 14: Lifting Up The Next Generation of Women
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Lifting Up The Next Generation of Women

On this edition of “Inspiring Women,” host Betty Collins discusses lifting up the next generation of women. How do you create environments for women to thrive? What’s the best way to encourage the next generation of women? Betty discusses these questions and more in this edition of “Inspiring Women,” presented by Brady Ware & Company.

Betty Collins, CPA, Brady Ware & Company and Host of the “Inspiring Women” Podcast

Betty Collins, Brady Ware & Company

Betty Collins is the Office Lead for Brady Ware’s Columbus office and a Shareholder in the firm. Betty joined Brady Ware & Company in 2012 through a merger with Nipps, Brown, Collins & Associates. She started her career in public accounting in 1988. Betty is co-leader of the Long Term Care service team, which helps providers of services to Individuals with Intellectual and Developmental Disabilities and nursing centers establish effective operational models that also maximize available funding. She consults with other small businesses, helping them prosper with advice on general operations management, cash flow optimization, and tax minimization strategies.

In addition, Betty serves on the Board of Directors for Brady Ware and Company. She leads Brady Ware’s Women’s Initiative, a program designed to empower female employees, allowing them to tap into unique resources and unleash their full potential.  Betty helps her colleagues create a work/life balance while inspiring them to set and reach personal and professional goals. The Women’s Initiative promotes women-to-women business relationships for clients and holds an annual conference that supports women business owners, women leaders, and other women who want to succeed. Betty actively participates in women-oriented conferences through speaking engagements and board activity.

Betty is a member of the National Association of Women Business Owners (NAWBO) and she is the President-elect for the Columbus Chapter. Brady Ware also partners with the Women’s Small Business Accelerator (WSBA), an organization designed to help female business owners develop and implement a strong business strategy through education and mentorship, and Betty participates in their mentor match program. She is passionate about WSBA because she believes in their acceleration program and matching women with the right advisors to help them achieve their business ownership goals. Betty supports the WSBA and NAWBO because these organizations deliver resources that help other women-owned and managed businesses thrive.

Betty is a graduate of Mount Vernon Nazarene College, a member of the American Institute of Certified Public Accountants, and a member of the Ohio Society of Certified Public Accountants. Betty is also the Board Chairwoman for the Gahanna Area Chamber of Commerce, and she serves on the Board of the Community Improvement Corporation of Gahanna as Treasurer.

“Inspiring Women” Podcast Series

“Inspiring Women” is THE podcast that advances women toward economic, social and political achievement. The show is hosted by Betty Collins, CPA, and presented by Brady Ware and Company. Brady Ware is committed to empowering women to go their distance in the workplace and at home. Past episodes of “Inspiring Women” can be found here.

Show Transcript

Betty Collins: [00:00:00] Lifting the next generation of women … No, this is not a podcast on millennials. This is not a podcast on the 20-somethings. For me, I’m 56 years of age. I’m a young 56, but I am 56. And all the sudden, the word legacy starts being said out loud, because it’s kind of in your thoughts. It’s on your mind a little bit more. I think that 65 is a long way off. However, it’ll be here before I probably want it. Then what? I will tell you, without reservation, my CPA life will be completed. There is no question. The empowerment and the advancement of women is something I’m passionate about for many reasons, and it’s not just about success, or the rights; it’s just about a life well-lived on their terms. That can look different for everybody.

Betty Collins: [00:00:53] Lifting up the next generation of women is what I want for me to give and to be part of. It’s just part of my DNA, and it’s certainly something I want as part of my legacy, both in business and personal. There’s nothing like the energy of youth. I know, in my Columbus office, in Brady Ware, we have a lot of younger people, and we all love that. Watching from a distance, just the success of those 20-, 30-, and 40-somethings, just the energy, and just watching from a distance, that’s really not enough. Lifting them up – more, I’m going to talk more about the women part of it – is really a movement that I want to be a part of, and there’s no retirement to that. How do you just feed off that energy, maybe, and how do you maybe direct it; help them direct that energy? Then, how do you really get involved by not just being on the outskirts?

Betty Collins: [00:01:51] Again, this is not a podcast on millennials, although they are a part of the next generation. This is not even a podcast on my life, and now that it’s coming to a close, and it’s all ending, and my CPA career – I will never have to do accounting again … It’s not that. It’s just a podcast about having a discussion on how to lift up that next generation of women. Really, it goes beyond more than just sharing your experiences, because you’ve learned along the way, or mentoring. All that is important. It goes beyond even making sure that they don’t make your same mistakes, because they probably are going to make a lot of them. It’s important, obviously, to teach that. It goes really beyond, sure, that you’re not in this to change them, so that they do it your way; although you might know the way …

Betty Collins: [00:02:38] If you really want to uplift that next generation, you must determine what is the uplift; what is it that you want to uplift? Uplifting women in leadership? Is it about their careers? Is it about the potential? Maybe it’s about big choices in life – the significant other who you marry, parenting – maybe you are really good at that; faith, or core values. Whatever those things are, you’ve got to go, “This is what I really want to help that next generation be successful in.”

Betty Collins: [00:03:13] When you do that, you can start focusing in on that. Some of it is maybe you really help with what you are great at, or maybe what you’re not so great at, because that’s the one that you’d learn probably the most lesson from. You us those to uplift and get that next generation excited. Look around your life. What women uplifted you in the past, or are doing it right now? By the way, who are you uplifting? You need to think on that. If you got nothing, start making it part of your life, ASAP.

Betty Collins: [00:03:47] By the way, you don’t have to be 56 to be an uplifter of the next generation. I think we think it’s for gray-hairs, right? I read a really great article on what 30-somethings want 20-somethings to know. Chances are, a 30-something will resonate more with that 20-something than I would. Here are some examples. Be picky who you spend your time with. high school, it’s a popular contest; maybe even college, and then you start … You probably have some time where you need to whittle down some friendships. There’s only so much time in the day. That’s a 30-something telling that to 20s.

Betty Collins: [00:04:25] The 30-something is telling the 20-somethings to take more risk. I find that kind of comical, but that’s what they see. Here’s a good one – they say save more money. Your 401k is important. If I say, at 56, my 401k is important, like to my children, their response usually is, “Well, you have money to do that. You don’t have the bills I have,” and all that. Where a 30-, and 20-something, if a 30-something is starting to have success in that, the 20-something’s going to relate more.

Betty Collins: [00:04:58] Don’t dismiss your wild dreams. Slow down and be positive. Get rid of skinny jeans. I found that one to be funny, because I will tell you, when I see 56-year-old women looking like they’re trying to be 30, it really drives me crazy, so I found that one very interesting. They even said this in their article, “Don’t judge older women for spending money on eye cream.” They also agree that Sheryl Sandberg was right, you’ve got to have a lot of support. She was where she was because she acknowledged she had a great partner in life. I thought it was very interesting that I found more articles on 30-somethings wanting to give advice to 20-somethings. I didn’t find a lot about what you what 50-year-olds want 40s to know or even what 40-year-olds want 30s to know? I found that interesting.

Betty Collins: [00:05:51] Be aware, they may not want you lifting them up. Chances are, they’re not going to seek you out. Step up but be respectful. What inspires you may not inspire them. When I started a women’s initiative in Brady Ware, I thought, “Oh, Brady Ware’s so generous, they’re gonna let me buy books for all the women to read a book a month, or a book a quarter …” They didn’t want to read books. That was not them. I like a hard book with a highlighter. I always read about half of it. That didn’t interest them. It didn’t inspire them to help them.

Betty Collins: [00:06:26] You really have to figure out, then, too, what motivates them. My children are not motivated at the things I was motivated. They don’t care if they ever, really, a buy a house. They’re more into condo living in the downtown. When I was their age, that was the thing – you’ve got to get that 20 percent saved, so you could buy a house. You’ve got to get the house. What motivated maybe you or me, back in the time that they were their age is not probably the same.

Betty Collins: [00:07:00] These are things you have to be aware of. To uplift, you’ve got to be uplifting. You can’t be Debbie Downer, and go, “I’m gonna inspire you!” I remember one of my friends, her mom was really not doing very well; she was getting ready to pass away. She had cancer; they were in the hospital, and they were going around … They were sitting in the lobby just to get out of the room. Her mom was just a negative, negative person. She was not fun to be around at all. She saw somebody in the waiting room, and she leaned over to my friend, her daughter, and said, “I’m going to go help them. They shouldn’t be smoking, because this is what the result is.” She said, “Mom, you’re not gonna go do that,” because she knew that her mom was going to go over and just … It was not going to be a good conversation.

Betty Collins: [00:07:54] To be uplifting, man, you’ve got to be uplifting. It’s not about making you feel better. It’s about them. I’ll use this illustration – this may not make sense to you – there are preachers who are very preachy, fire and brimstone, and teach you, and tell you, and go on. Then there’s somebody who’s got a pastor’s heart. They’re that caregiver. They have compassion. Those are two different things. You’ve got to know the difference. Yeah, you can figure out what you want to uplift, because you’ve been good at it or you’ve been bad at it, but you’ve got to be aware of those things.

Betty Collins: [00:08:31] Then, you’ve got to be generous. Your mistakes, your barriers, your regrets – figure out a way to teach your life lessons to the next generation and learn from them. I know, with my kids, I was very determined that they were not going to work as much as I worked. They were not going to have to take care of things financially, like I had to do. That was my own little … I’m going to teach them that, man, life is good, and these are the things you can really aspire for, but I’m going to pay for all that and do that. They really kind of missed out on figuring out finances in life, like they should have. It took them a little time to do that, because I didn’t let them experience that. Instead, I was trying to take my mistakes and my barriers that I thought I had and just remove them from their life. Not a good thing.

Betty Collins: [00:09:20] Then, patience is required. You ever had that person in your life, you’ve got to be really patient with? Then, one day, they turn the corner, right? Being a mentor, and sponsoring someone, all those are important, but the informal, sometimes … Just that informal, day-to-day, shoot from the hip … Figure out what motivates them;  figure out what they need; figure out how to communicate to them – you might be surprised. I will tell you, I wish I would have known these things over the last 30 years. I wish I would have had some people in my life that said, “This next generation, man, Betty Collins probably could use this …” but these are things I really wish I would have known more of.

Betty Collins: [00:09:59] Cultivate the right attitude, no matter what you’re seeking. Sometimes, it was just I have to do this because I have to do this. Really? Or, I want to do this because I want to do this. Having that right attitude; that’s just one example of attitude, that I always did the “right” thing. I just always did what I was supposed to, instead of maybe this is what I really would like to do.

Betty Collins: [00:10:25] When all else fails, a plan is a good thing, but it may not always be reality. I was a big five-year planner in some of my years that I could have been a little more freer. Plans are good, and they probably are needed more in today … I see today’s generation behind me, and they really just go from thing to thing, but … Plans are good.

Betty Collins: [00:10:47] I did not learn this til later in life, and no one ever talked to me about it, or inspired me, but passion and the why are first, and then your how and your what. That’s been a big topic. Simon Sinek is big on it. I wish I would have known more about why I do things, or someone would have asked me those questions a little bit more, but they didn’t.

Betty Collins: [00:11:09] Mistakes are fruitful. If you’re not making mistakes, then you’re not doing anything. Okay, this is not my quote – it’s President Theodore Roosevelt – but it really is true. Sometimes, we’re buried in mistakes and just think, “Oh my goodness, how can I go on?” I was that way, and I didn’t want to go further. I would kind of hibernate a little bit more, instead of moving on, or learning from it. I wish, over the last 30 years, someone said, “If you want something, sometimes you gotta ask.” You’re not asking, so why should you … Other people around you are asking, so guess what they’re getting? Whatever that is. I just didn’t do it. I always thought, if you accept everything, accept your stuff around you, accept the position, accept the money, accept the status quo, then it’s a much more peaceful, good road. That’s not always the case. Questions are good. You know why? Because there’s going to be answers, probably, behind them. I wish I would have known that over the last 30 years.

Betty Collins: [00:12:11] Safety and security is awesome. It’s comfortable. It’s the safety net. I’ve never have to worry. There’s nothing to me like a full refrigerator, okay? But reckless, and that thing I call unruly, in my last … It’s not always a bad thing. Sometimes, hot dogs on fire at the last minute are just awesome. I’ve kind of learned to shake it up a little bit more with various things in my life. When I was 40 and went through things that changed a lot in my life, I ended up doing a tremendous amount of traveling from the age 40 to 50.

Betty Collins: [00:12:46] Man, I’m glad I did that. I’m so glad I said, “We’re gonna do this regardless.” We didn’t put as much money in a 401k. We didn’t do as much debt reduction on the house. But I probably can’t do a lot of the things I did, physically, for sure, on those trips and keep up. I’m just glad I was part of … Someone in my life, my husband, who said, “No, let’s go on an adventure. Let’s do something. We work hard all year. Let’s play hard.” Grateful for that. Most of my life, I didn’t ever hear those things. I’ve been married, and I’ve been divorced. I wish someone really would have emphasized the importance of that significant other, that spouse in your life.

Betty Collins: [00:13:32] Those are things that, over my last 30 years, when I was trying to figure out how would I help the next generation, these were things that matter to me now. These are things I would have never seen along the way. Hindsight’s really easy, but I’ve got to know that maybe someone doesn’t want to be married. So, finding your support to be your biggest fan isn’t going to help them. That’s why I go back to being aware in the different things I’ve talked about.

Betty Collins: [00:13:58] These are some things to think about when you’re wanting to uplift other women. Remember, surely, our seasons are all different. Your 20s are not your 30s, which are … Those are very different from your 40s; not to mention your 50s. Not sure what 60 holds, because I’m not 60. I’ve not been there, but I’m sure it’s different. The other thing about those different seasons are you may need to shift who you are being uplifted by or getting help from, because they are different. The 20-somethings can help the 55-year-old. It doesn’t always need to be, “Well, we’ve already been through this generation; we are helping here.” A lot of times, we can learn tremendously from them. It’s not a one-way thing.

Betty Collins: [00:14:44] Be aware of the women in your life that are around you. Start at home, in your extended family. Just sit and go, “Who is not making it? Who is not maybe living out their potential? Who could really use a friend, which can lead to help?” You can’t just go in with help, not knowing somebody. You have to have the relationship there. Be more intentional of it, and then keep it simple.

Betty Collins: [00:15:11] My previous podcast on building up women around you, I talked about that. Simple gestures; how you conduct yourself. Those familiar little simple random acts of kindness. Now, they have a hundred books on that. We live in a tough world with constant challenge; a lot of negativity; a lot of how are we ever going to do this? You’ve got to seize the opportunity now to uplift others. They really are intentional. They’re insightful about pleasure is a daily thing, because you don’t always have tomorrow. It’s not just for special occasions – fun, and pleasure, and contentment – it’s not just for holidays and weekends. Only two weeks out of the year is your vacation. You’ve got 50 other to do. Uplifting in a tough world right now is something that is so needed, and guiding that next generation, getting them where they need to be, even if they don’t know that they … Even if they don’t know that they need you.

Betty Collins: [00:16:07] I’m going to close this with some great sayings, because when I was out there on uplifting, a lot of times when I do podcasts, I Google certain words just to get ideas. Here are some things that you … I’m going to try to uplift you at the end here. “Do not dim your light for anybody. Darkness is no place to live.” I just  the way that quote sounded. This is a Betty Collins quote, by the way, “Leverage your uniqueness in life, but, remember, if you want to be funny and no one is laughing, you probably need to change what you are leveraging. Be aware.” “Today, you could be drinking the wine. Tomorrow, you could be picking the grapes.” You probably need to expect that to happen, so be ready, and learn, and try to enjoy both seasons. “There is power in purpose. Stuff is just stuff, for the sake of stuff.” We need to accept that we won’t always make right decisions, that we will screw up royally, sometimes; understanding that failure is not the opposite of success, it’s part of it.

Betty Collins: [00:17:11] Today, I hope you sit back and think, “Who can I help in that next generation? Who can I uplift, especially women I’m passionate about, if anyone?” Really sit and go, “How can I help, and be effective, and have that impact?” I’m Betty Collins, and I hope you enjoyed today. Thank you.

 

Tagged With: CPa, CPA firm, Dayton accounting, Dayton business advisory, Dayton CPA, Dayton CPA firm, Inspiring Women, Inspiring Women podcast, woman owned business, women entrepreneurs, Women in Business, women-owned businesses

Decision Vision Episode 36: How Do I Recession Proof My Business? – An Interview with Wes Gipe, Aileron

October 17, 2019 by John Ray

Decision Vision
Decision Vision
Decision Vision Episode 36: How Do I Recession Proof My Business? – An Interview with Wes Gipe, Aileron
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Host Mike Blake and Wes Gipe, Aileron

Decision Vision Episode 35:  How Do I Recession Proof My Business? – An Interview with Wes Gipe, Aileron

How do I manage my business so it’s able to withstand (and maybe even thrive in) a recession? In the edition of “Decision Vision,” host Mike Blake discusses this question with Wes Gipe of Aileron. “Decision Vision” is presented by Brady Ware & Company.

Wes Gipe, Aileron

Wes Gipe

Wes Gipe works with business owners and their teams as a trusted facilitator, business advisor and coach. Known for his enthusiasm and high-energy approach, Wes’s willingness to boldly approach tough issues and go the extra mile have gained him loyal clients who look to him for help with strategic planning, leadership and culture development, and conflict resolution.

Wes started his journey as an Aileron client in 2008. After applying Aileron’s Professional Management principles to build a self-managing company, he now spends much of his time helping other organizations—big and small—build a strategy that endures. Through this work, he has logged over 9,000 coaching hours with more than 500 individuals throughout North America and Europe. His work has been featured in Forbes as well as other national media outlets. Wes resides in Miami County, OH with his wife and three rambunctious boys.

For more information, go to the Aileron website.

Michael Blake, Brady Ware & Company

Mike Blake, Host of “Decision Vision”

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. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike 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 the North Fulton studio of Business RadioX®.

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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 vision a reality.

Michael Blake: [00:00:21] And welcome to Decision Vision, the podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic. Rather than making recommendations because everyone’s circumstances are different, we talk to subject matter experts about how they would recommend thinking about that decision.

Michael Blake: [00:00:38] My name is Mike Blake, and I’m your host for today’s podcast. 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 in your favorite podcast aggregator. And please, also, consider leaving a review of the podcast as well.

Michael Blake: [00:01:03] So, our topic today is how can I recession proof my business? And, you know, in one respect, recession proofing sounds like the holy grail. It sounds like something that’s so great that it can’t possibly be done. I think we’re going to dispel that myth fairly quickly today. But you know that as business owners and business leaders, we are so involved in the day to day granular nature of our operations. And if you happen to be a business owner or a leader that truly can take a big picture view as often as you would like, congratulations. Let me know. I’d like to have you on the podcast. You can tell the rest of us how you do it.

Michael Blake: [00:01:44] But for most of us, you know where we’re—you know, for most of us, a week ahead of our calendars, the other side of our lives. And the fact of the matter is that our economy is not recession proof. Now, I think the data would show that our periods of expansion appear to be getting longer. And it’s unclear yet as to whether or not that means that when our recessions do happen, there’ll be that much more severe or if ’08, ’09 was simply an aberration.

Michael Blake: [00:02:14] But we do know that just as in gravity, whatever goes up must come down. And so, having a business that is able to weather a downturn that may be somewhat prolonged is an important way to establish that company’s value. Because if it’ s only viable during good times, then by definition, you know that your runway is finite. So, I think everybody is going to find this a fascinating and useful topic.

Michael Blake: [00:02:39] And joining us today to talk about this by phone is Wes Gipe of Aileron, a management consulting firm at Tipp City, Ohio. Wes works with business owners and their teams of trusted facilitator, business advisor and coach. Known for his enthusiasm and high energy approach, Wes’ willingness to boldly approach tough issues and go the extra mile have gained him loyal clients who look to him for help with strategic planning, leadership, and culture development, and conflict resolution.

Michael Blake: [00:03:07] Wes started his journey as an Aileron client in 2008. So, I guess he’s like Victor Kiam. He liked the Razor so much; he bought the company. After applying Aileron’s professional management principles to build a self-managing company, he now spends much of his time helping other organizations, big and small, build a strategy that endures through. Through this work, he has logged over 9000 coaching hours as one in 500 individuals throughout North America and Europe. His work has been featured in Forbes as well as other national media outlets. Wes resides in Miami County, Ohio with his wife and three rambunctious boys. Wes, welcome to the program. And rambunctious and boys sounds kind of redundant, doesn’t it?

Wes Gipe: [00:03:47] It does. It’s a loud house.

Michael Blake: [00:03:48] Loud house and probably with with increasingly unbreakable things.

Wes Gipe: [00:03:57] Indeed. Indeed. We just—we’ll have nice things sometime in the future.

Michael Blake: [00:04:02] So let’s jump into it and let’s talk about, you know, when you talk about a recession proof business, what does that mean? What—and is any business truly recession proof?

Wes Gipe: [00:04:16] Well, you know, a mentor of mine said that there’s no normal environment, only the one that you’re in and the one that you should be preparing for. So, I think there’s no one who looks up and says, gosh, my business is just totally recession proof. And if you do, I would suggest you take stock of where you really are. But there are those who do a good job of recognizing that things will not always be as they are today, whether they’re experiencing good times or challenging ones. And there is still work to be done if they are to adequately prepare for that next environment. I don’t think it’s as much about a destination as it is a continual awareness of the weaknesses and the strengths of the businesses and a reaction to that.

Michael Blake: [00:05:00] So, when a business owner thinks about, let’s call it being recession ready.

Wes Gipe: [00:05:06] Yeah.

Michael Blake: [00:05:06] Does that mean for most business owners, surviving a recession, just sort of making it to the next expansion limiting the damage of a recession or maybe even in some cases thriving in a recession?

Wes Gipe: [00:05:19] Yeah, it’s a great question because—and I think the answer is somewhat subjective. I think it depends, which is, of course, any consultant’s best answer, it depends. There are certainly-

Michael Blake: [00:05:32] Talking about business code.

Wes Gipe: [00:05:33] Right, yeah. And so—but what the observation I’ll make is there are certainly kinds of businesses that take harder hits than others when the economy changes. I mean, for example, the automotive market responds very different than the healthcare market, but both respond at the end of the day.

Wes Gipe: [00:05:52] And the good news is in that reality that all of your competitors that are in the same space as you are experiencing the exact same thing. You can’t control it. What you do control, though, is what you do while you wait for those external factors to recover. I think there’s always opportunity in a recession because everything goes on sale. People go on sale. Property goes on sale. Equipment goes on sale. Services go on sale. Nearly everything can be had at a discount and sometimes a huge discount. So, the question becomes, you know, what should we and can’t—what can we and should we buy now? What should we invest in that would be difficult or expensive to buy during the recovery?

Michael Blake: [00:06:32] So why aren’t all businesses making those kinds of plans? I mean why doesn’t every business kind of have that mentality?

Wes Gipe: [00:06:42] Well, I think it’s interesting. Well, the first thing I might point out that comes to mind is that some businesses actually boom with a recession. You know, we don’t necessarily think that way, but quick service restaurants, for example, what we might call fast food, they generally will see revenue growth during a recession because people are re-prioritizing their dollars. They have less disposable income. That sort of thing. So, I think, it depends. In some cases, things are pretty good when things are going well and they’re great when things go south.

Wes Gipe: [00:07:20] But I think while there are certainly outliers like that, I think those who endure the greatest harm from recession are those who acted as if the good times would last forever. If you know what I mean. The killer in a recession is not necessarily revenue decline, but it’s a failure to build a cost structure that’s able to scale down as a revenue declines without compromising the core competency of the business. Cutting fat but not muscle, if you will. And that kind of planning, I would point out, is far easier to do and is done with far more clarity when the economy is strong. Those are way to plan that way until we start to see the turn and we have the stress of revenue decline. We have the stress of those difficult conversations with our people and with our customers are far more susceptible to emotional and therefore far more risky decision making.

Michael Blake: [00:08:15] You know, essentially, you bring up McDonald’s. You know that’s a classic example of an economist would call so-called inferior good, that when the economy is doing badly, that the customers switch from whatever higher end restaurants, which they used to dine, you know, to a fast food kind of place. And interestingly, I credited the ’08, ’09 recession with launching the electric vehicle market, because back then the notion that you could drive without having to fill your car with gas, that was extremely attractive. And as we’ve emerged from that recession, you know, environmental concerns, whether you believe or not, they’ve not changed. But what has changed is now you know I was concerned about filling up your Ford F-150 with 25 bucks of gas or 25 gallons of gas.

Wes Gipe: [00:09:03] Yeah, yeah, it is fascinating to me as well, because I think we all see—to some degree we’re programmed to see the downside to something that the media and economists would paint a really negative light. I would go so far as to say that economists exist so that weatherman can be proud of their profession. I don’t think that they know anything more about where our economy going—is going than a business owner that’s got his or her head—ear to the ground and head—looking out ahead.

Wes Gipe: [00:09:38] But there is some truth to that. There are opportunities created. The truth that is perhaps not as obvious when it’s happening but no less true is that there are real opportunities created during recessions. You know, I focused earlier on the cost control and investment in things when they go on sale. But the other reality is that the business opportunities are created. Interestingly enough, my own journey in 2008, when 2008 hit, I had a mentor that came to me and said, you know, what you need to do here is spend while others are scared. And it was sort of a different take on Warren Buffet’s perspective in his letter to the shareholders some years ago, where we would do well to be cautious when others are greedy and greedy when others are cautious or something to that effect.

Wes Gipe: [00:10:34] And you know, what was interesting is we took that advice. And fortunately, in my case, we had a number of outsiders that were committed to being part of a board of advisors. And so, they helped me to maintain a focus on investing wisely during that time. And what was fascinating is that customer account grew. Consistently, revenue shrunk. And so you start looking at those numbers and most of this with any sort of rational thinking ability would say this is a terrible situation. But what was also true is people were spending emotionally. And so, there was pent up demand that was being created, particularly in the businesses that I was in that had to be released eventually. And so, that wave of revenue came but it didn’t come for two years after we spent the money, the time, and the effort on capturing those customers while they were being ignored by our competitors.

Michael Blake: [00:11:32] Well, yes, because when your competitors retrench, right, they’re leaving a vacuum in the market. And you know, you’re right. If you have kind of that dry powder, there’s tremendous opportunity to capture market share, to capture mind share, frankly, and also attract great talent because not just the employment, unemployment being higher, but also, you know, don’t you want to work for the company that’s on offense? Playing defense stinks is why we admire teams that do it. Playing offense and scoring is always more fun. So, if you’re playing offense in a defensive environment, you know I think that tends to attract aggressive, more successful business people.

Wes Gipe: [00:12:12] Yeah, I think that’s true. I think it’s also true, though, that it is very difficult to endure two years of that and just trust that the wind is going to come. And I think that’s where I found the outside board to be tremendously helpful. People that weren’t emotionally attached to the decision making, people that were older, wiser, had seen a few more cycles like that than I had, I think that’s what gave me the confidence to continue on when it seemed like we had done this for a really long time and I’m just trusting that this is all going to work out. But in the end, it does, because you’re caring for customers in a way that maybe your competitors can’t.

Michael Blake: [00:12:53] So, you know, let’s talk about the good old recession. It’s hard for me to believe it’s been over 10 years now since Lehman Brothers collapse.

Wes Gipe: [00:13:01] I know right.

Michael Blake: [00:13:01] Seems like two days ago. But it sounds like you’re of the mind that you know companies can position themselves to be successful even in a recession that was pretty profound. Not just financially but I think from a psyche perspective.

Wes Gipe: [00:13:18] Yeah. Yeah. So, I think they can. I think they can. There are certainly—now, what I don’t want to discount is there are certainly industries that just got decimated with that recession and through no fault of their own. I mean, the best laid plans and there were industries that just got hit so hard that it was very, very difficult, if not impossible, to recover. But those really, if you step back and look at the full picture of the economy, those were really, in my opinion, the exception rather than the rule. Most of the folks—there was a prediction made here at Aileron, interestingly enough, when we were in the throes of like I’ll say early ’09. And that was that we believed that there would be more companies actually fail on the upswing or in the recovery than did in the recession itself.

Wes Gipe: [00:14:11] And the reason for that thinking was that most people cut bone. They cut too far out of fear and out of emotional decision making. Or perhaps they cut just a little further than they should, failed to cast a vision, and the real talent and the best customers get nervous and leave. And that is—we saw some version of that come true. I won’t say that was universally true but we did see some version of that come true that we saw a lot of people, if not fail outright, really suffer. And I’ll say grow in fits and spurts as a result of having to rebuild core infrastructure before they could even think about scaling the business to take advantage of the recovery. So, I do think all that to today, I do think there’s a tremendous opportunity when the chips are down to think rationally and in an intellectually honest way about the business and look for opportunities.

Michael Blake: [00:15:11] You know what? One industry that comes to mind that really took it on the chin and serves I think as a missing object lesson is the legal industry.

Wes Gipe: [00:15:21] Yeah.

Michael Blake: [00:15:21] You know. For the first time that anybody can remember, firms on mass are not just cutting staff. They were cutting partners and even equity partners.

Wes Gipe: [00:15:31] Yeah, right. Yeah, long time. Yeah.

Michael Blake: [00:15:31] They certainly (inaudible) bone. And what’s happened since then is the fundamental business of law has changed in that, you know, now there’s a recognition that every lawyer who’s an equity partner must be a revenue generator in a profit center. If you’re not, you’re just never going to be a partner that’s going to be cut the next recession in the first place. So what they’ve done is although they’ve de-emphasize a technician and that’s been a tough pill to swallow for the technician because that work is becoming commoditized, the business of law itself is probably more resilient to the next recession because their model now is able to scale up and down much more easily than it did 10 years ago.

Wes Gipe: [00:16:16] Yeah, yeah. Well, and I think—I mean that’s sort of what I was referring to when I said that—when I made the comment about the issue not being declining revenue but the inability to scale cost with that change in revenue. And, you know, I think in law firms, that’s a labor heavy model. It’s a model that needed innovating. And what’s interesting, I was just sitting here thinking, as you were talking about the law space, I was thinking about Thomas Friedman in The World is Flat. I think that book was written in roughly 2000, something like that.

Wes Gipe: [00:16:55] And it’s interesting to me that it’s only now becoming really, really true. You know, we’ve now seen real examples of what he was positing back in 2000 that, you know, if you’re the middle accountant that never has any contact with customers, you’re in real danger of finding yourself outsourced versus if you’re in the business of relationship management or something that’s much more difficult to outsource to a nameless, faceless entity somewhere else in the world, that your job is not only going to be secure, it’s going to actually grow in value. And I think that’s what we saw in that industry and we’ve seen it in a lot of industries otherwise as well.

Michael Blake: [00:17:37] So let’s start talking at a more micro level. You know, in your experience, what are typically—what are companies typically lacking that makes them more recession vulnerable? And why do they need help from somebody like you to help them remediate those issues?

Wes Gipe: [00:17:56] Well, I often say, you know, [indiscernible], here is a client. And what I got at Aileron that I was unable to get anywhere else was the truth. The objective, they’re hard, harsh truth. Someone to look me in the eye and really challenge my thinking, not—of course accountants are good for this. Attorneys are good for this. But there are limits to the truth that they’re going to give you. And candidly, there are limits to what the scope of the sort of issues that they’re going to typically approach.

Wes Gipe: [00:18:38] And so what I got here at Aileron was not a replacement for any of those things but really someone to look me in the eye and help me think about my business and the decisions that I was making in an intellectually honest way. And I think those who are lacking something that makes it difficult to recession proof themselves, most often what I see is they lack the ability to be intellectually honest. They lie. And that only comes in my experience with an outsider that only has your best interests at heart. And so that’s what I got here. I’ve had this distinct memory of leaning against a post in the cafe, downers, coffee and snacks. And my business adviser sort of looked me in the eye and he said, how much money are you willing to spend to prove that you’re right?

Michael Blake: [00:19:37] That’s a question. That certainly puts your cards on the table kind of question, isn’t it?

Wes Gipe: [00:19:43] Oh, wow. Right. And I remember thinking after I considered running out of the building, what—where else could I get that? You know, they’re one of the precious, precious things that you learn. One of the things that you learn is very precious as a leader is those few people whom you deeply respect that are willing to look you in the eye and challenge the best of, even the best of your ideas. And some do it. You know, sometimes some do it in a very direct way. They call the baby ugly. Other cases, I’ve had situations where people were really good at pointing out all the pretty babies around mine and by virtue of that, letting me draw my own conclusions.

Wes Gipe: [00:20:30] And—but the net of it is it’s the truth, right. And you look at someone like Blockbuster, right. Man, I mean I would love to have been a fly on the wall in that boardroom, in the conversations that must have unfolded as that whole model was changing around them and they just doubled down on what they had already done.

Michael Blake: [00:20:58] That quote or that conversation reminds me one of my favorite quotes from an economist, John Maynard Keynes, who’s one of the architects of modern economics and was also, in his own right, one of the fathers of modern investment management as well. And he said that the market can remain irrational longer than you can stay solvent.

Wes Gipe: [00:21:21] Oh, that’s profound.

Michael Blake: [00:21:22] Isn’t it though?

Wes Gipe: [00:21:23] That’s just profound, right. And in—the other thing that’s true about that, what I love about that is there is always margin. Regardless of the economic reality, there is always margin where there is mystery. Always.

Michael Blake: [00:21:43] Yes.

Wes Gipe: [00:21:43] And yet what we tend to do when things get uncertain is to control the things we can and just hunker down and make ourselves unique just like everybody else. And so that’s profound. I haven’t heard that quote before but I love it.

Michael Blake: [00:22:00] Well, I wish I had said it, but all I can do is parrot it too. But—so when we look at recession proofing or making companies recession resilient, in your experience, is that more often involve making maybe a small number of massive changes or maybe a larger number of smaller changes? Or is there some other way to kind of think about the scope and depth of change that needs to occur in order to achieve that recession resistant property?

Wes Gipe: [00:22:32] Yeah, yeah, I think it is, again, I’ll use my favorite answer, it depends. I think it is somewhat situational. But in more cases than not, the big changes are simply changes that should have happened in most cases a long time ago. And the only reason they’re evident now is because we’ve got no choice. You know, sales growth causes—it covers a multitude of sins. And you want to—and so when that stops, particularly high growth, when that revenue curve inverts or leveled off plateaus, since they weren’t visible before become visible very quickly.

Wes Gipe: [00:23:19] Businesses that we’re in that we have no business being in, lines of business or customer relationships that are just plain unprofitable. Some of those are really big decisions like we got to get out of the line of business. Some of those are—or even perhaps part ways with a large client that we thought was more profitable than they were. Many of them, though, are small decisions. So, I would say the majority, the big decisions are just decisions that I have to make and should have, you know, a year, five years or maybe even longer ago. And they’re only now visible.

Wes Gipe: [00:23:57] But the things—and those have to happen to stop the bleeding, to keep the company solvent, that sort of thing. The path to recovery, though, often is a series of very small, intentional, low risk experiments, all of which, if coordinated appropriately, add up to meaningful and sustainable change.

Michael Blake: [00:24:20] So, it sounds like that, you know, for the most part, the changes a company makes are not sort of one-time fixes, but there are things that need to be consistent. I guess the way to best describe it would be of a structural nature.

Wes Gipe: [00:24:35] Yeah.

Michael Blake: [00:24:36] That’s superficial and cosmetic, but they’re really fundamental to how the company does businesses or even makes decisions.

Wes Gipe: [00:24:43] Yes, certainly. And I think the, you know, because you’ll get a couple of big wins. I mean, with any recession, things will stand out. Revenue curve inverts, things will stand out that have never—that haven’t stood out in the face of revenue, you know, significant revenue growth. But the things that, you know, those come and go pretty quickly and you get the win. The things that keep on giving are the things that make a $500 a month difference here, and $100 a month difference there, and $70. I mean many times, it’s really a lot of really, really small things that add up to monumental differences.

Wes Gipe: [00:25:24] And I think that’s hard to—it’s hard to remain disciplined in looking for those things when the world around is crumbling. And that, again, is where I would just really encourage people to think about, well, how can I surround myself with people who are not as emotionally attached to this thing as I am?

Michael Blake: [00:25:45] So, it’s sort of seeing sort of a psycho-graphic profile sort of coalesce here that, you know, being able to be cold and calculating is kind of critical to making the right decision in a high stress environment. So, I guess, in retrospect, it makes sense. But like so many things, when you’re, kind of, in the weeds, you don’t necessarily see the entire picture.

Wes Gipe: [00:26:08] Yeah. Yeah.

Michael Blake: [00:26:09] So are there businesses and certain kinds of industries that are easier to make recession proof than others? You know, for example, I would imagine the companies that have high operating leverage really would struggle because like you said, they just can’t scale the way that, ultimately, you’d like to. They’re kind of built—they’re built entirely to capture upside.

Wes Gipe: [00:26:32] Yeah. You know, it’s interesting. But even in those scenarios, there is substantial opportunity if you’re willing to step back and think logically and rationally and think about all right, where’s the margin? Where’s the mystery? And therefore, there’s got to be margin there. And how can I leverage that margin? Even if it’s something I’d rather not do in the long term, how can I leverage that margin to cover that high fixed cost if you are high capital cost, depreciation cost?

Wes Gipe: [00:27:00] What do I got to do to make it work to get through the other side of this thing? So, an example I might give you is I worked for a number of years with one of the largest egg producers in the world, 15, 16 million chickens, which is hard to even get your head around to begin with. And every one of these things lays an egg every 26 hours. Things you don’t think about unless you’re in this business, right? And so that’s 15 million eggs a day that come whether you want them or not. And 90—or excuse me. I think it’s a high 70 percent, 80 percent of the cost of that egg is in feed but yet you’ve got animals. It is a very complex industry and it is a feast and famine industry. You know, you’ll make a killing one year and then you’ll just lose your shorts for a couple of years. It’s an industry that takes a tremendous amount of resilience to be in.

Wes Gipe: [00:27:58] And so if you’ll recall, some number of years ago, we had the avian influenza epidemic and so bird flu hits. I mean, it’s something it’s—totally beyond your control. You can’t cover every pan. If you get 15 million chickens, you can’t physically enclose them. And so, duck flies by, goose flies by with AI, with avian influenza, lands in a flock, infects that flock. That flock comes into contact with the other flock. And pretty soon, you can find yourself in a situation, in this case, they lost half of their production in a series of very short period, around a couple of months. So, we go from, all of a sudden, 15, 16 million chickens to 8, right. So, we got all this incredible capital overhead.

Wes Gipe: [00:28:50] Now, you don’t just run down to the true value and say, hey, I’d like to order eight million, you know, layers. That’s just not how that works, right. So, all of a sudden, now, we’ve got rid of what we got in a safe way. We’ve got to sanitize all these environments. Now we’ve got to think about where do we get eight million birds and very quickly, because the bills keep coming, regardless of whether we have eggs to pay for them or not. And very, very, very difficult time.

Wes Gipe: [00:29:21] Fascinating. This leader at one of the best I’ve come into contact with just refused to see that as anything other than an inconvenience. And as a result, for a period of time, they actually became a government contractor that went to their egg, cleaned up their own mess, you know, euthanize the birds, turned them into actually, you know, product, either fertilizers, some other product that was actually salable. And they did so for their competitors.

Wes Gipe: [00:29:53] So while their competitors were freaking out over what are we going to do, they had pivoted. And was it pretty? No. Was it difficult? Absolutely. Was it stressful? It was ridiculously stressful. But you know what? They didn’t lay anybody off. And so, after they got over the hump, gotten, you know, they contracted with somebody to raise eight million more birds and got things cleaned up, they were back at it before their competitors were. So, they saw—again, they just refused to look at that as anything other than an inconvenience. It’s a factor. It’s not an excuse. And I think it’s that mindset, you know, that makes someone recession proof or recession resilient rather than any one thing that you can do.

Michael Blake: [00:30:40] So, you know, this segues nicely to the next question then, which is, I’m curious if you have a view, what’s harder about addressing or confronting a recession, knowing what to do or actually carrying it out?

Wes Gipe: [00:30:54] Yeah. Gosh. Yogi Bear, I love, gosh, I love that guy. If there’s somebody I could go back in history and beat, it would be—there’s a couple of people. I think him, Mark Twain, some other folks. But he famously quipped, you know, if you don’t know where you’re going, you’ll end up somewhere else. And so, I think they’re both hard. But if you don’t know what to do, chances are you’ll do something else. And the best time to decide what to do is not after the economy shift, it’s now. But I got to say, I think—I like to poke fun at economists, but I think there’s a fair consistency in the belief that the recession is not going to happen in the next three months.

Wes Gipe: [00:31:43] And I don’t think anybody believes it’s going to be on the order, the magnitude of 2008 barring some major world event or something to that effect. So, we’ve got some time. That’s the good news. And so, my incursion, we do something with that time. Don’t just sit here and think about it. You know, I think about even people like, oh, remember Captain Sully Sullenberger?

Michael Blake: [00:32:11] Sure.

Wes Gipe: [00:32:11] That guy saved 155 lives when he successfully landed a disabled plane on the Hudson. And I’ll guarantee you that he did not wait until that bird strike to start planning for the emergency. He already knew what to do. It’s just a matter of remaining calm and executing a plan. He had practiced that over and over and over and over. What are the chances that you lose two jet engines with some of the most reliable machines in the world that have ever been invented? You lose two of them that soon after takeoff, but nonetheless, remain disciplined. All right. No normal environment, there’s one I’m in, there’s one I should be preparing for. And he knew in that phase of flight that he should be preparing for that reality. So, he knew what to do. It’s just a matter of remaining calm executing the plan. And in keeping with that analogy, the best possible scenario if people listen to this podcast and don’t need it, right, they know what to do and they never even have to do it.

Michael Blake: [00:33:09] So, you know, I’m glad you brought up kind of this time because there’s a growing belief that a recession is likely between now and the end of next year. And so, you know, if that’s the case and let’s say I’m listening to this podcast and I’m convinced that A, recession proof is feasible and B, it’s something I should do. Is there enough time to do things and execute them for most businesses that, you know, can make a difference? Or do they kind of have to wait until the recession after that to really gain benefit?

Wes Gipe: [00:33:38] Oh, I absolutely think there’s plenty of time. And again, barring, you know, something major happening, some world event, or something that just wasn’t on the radar. I think there’s more than enough time, you know. And if you want to start to think that way, just take some real disciplined time, time that we would probably argue in this employment environment and just how hard it is to operate right now that we don’t have and model a scenario where you lose 20, 30, 40 percent of your revenue in a short time.

Wes Gipe: [00:34:10] Model that avian influenza, you know, your version of that avian influenza plan, could you survive? Would you still make money? If not, why not? And those questions are a great place to start, both to identify, as we were talking about earlier, you know, the big one hit things that might be really painful but, gosh, they provide a lot of, you know, a lot of benefit as well as you have a list of prioritized items that we would do. Again, all of which we might not enjoy, but build on those plans. Now, I think if you just model some sort of revenue correction that will reveal, start to reveal where you should start, I don’t think it has to be any more complicated than that.

Wes Gipe: [00:34:54] Because I will say—I’ll go there for just a second. I see people that get fixated and driven by fear. And I would just offer that that’s counterproductive. There’s these plans that I’m talking about, you know, as you build plans for what you might do in the case of emergency are, you know, a matter of a page or two or three maybe. We’re not talking about some, you know, a full execution manual or anything to that effect just because the reality around us is changing all the time. And so, if you try to make this too precise, chances are, you know, it will just end in frustration.

Michael Blake: [00:35:44] So let me ask this, just one or two more questions and we’ll let you get back to what you’re doing.

Wes Gipe: [00:35:50] Sure.

Michael Blake: [00:35:50] But can recessions offer kind of an—I guess we kind of talked about this a little bit, but I want to hit upon it because that fear that you talked about, I think is really important to master because I’ve read that people’s decision making, their effective IQ, decreases by as much as 30 percent when they’re in a state of fear, right, as they react to crisis. I don’t know if you read anything similar to that, but the benefit of having some sort of recession proofing is I think that it puts you in a place where more intelligent decision making can take place because your fear is kind of amped out a little bit. Does that make any sense to you or am I all whacked?

Wes Gipe: [00:36:33] No. No. I think I’ve read similar things. I hadn’t read that specific statistic, but it makes total sense given, you know, how I’ve seen some of the clients here. They don’t even respond to what I refer to as industry specific recessions that I’ve seen the last five or six years. And it is really interesting. The ability to think rationally is severely hampered by stress, uncertainty, fear, uncertainty, doubt.

Wes Gipe: [00:37:04] And that’s why I think there’s always opportunity. Shoot. We’ve got the bank coming at us. I happen to still remain a partner in the company that I founded back in 1997 and the bank recently said we’d like you to borrow some money and buy a business. And I said, you’ve got to be out of your mind. I mean, why on earth what—there are people demanding multiples as high as 50, 60, 70 percent higher than is even rational right now and you want me to borrow money from you likely based upon some sort of revenue model that makes absolutely no sense. Yes, you’re crazy.

Michael Blake: [00:37:50] What I’d rather do is—what conversations do we have—need to be having now so that when our financials don’t look as strong, when the outlook doesn’t look as rosy this year, as willing then to give me the money as you are now, what sort of indicators do you need to have from me to show you that we’re being responsible while we do have capital and access to capital so that you’ll trust that we’ll be as responsible or more so when the real opportunity exists?

Wes Gipe: [00:38:23] And so there are people around us making noise and all kinds of very candidly unhelpful—pushing us in unhelpful directions. And I think it comes down to, again, outside influence, whether it’s a board of advisors, whether it’s people that you rely on. And it can be people like your accountant—that aren’t—I mean, don’t discount that. You know, people that you may already be in conversations with. It’s just a matter of slowing down and asking them for real feedback, real and honest feedback, because that’s the intellectual honesty that will ultimately reveal the opportunities that exist.

Michael Blake: [00:39:05] Well, Wes, this has been great. And I realize that I’m probably one of your last to do things of the week here so I want to wrap up. But I do want to give some direction or some opportunity for our listeners to maybe follow up. If someone wants to talk to you about maybe making their business a bit more recession proof and have that conversation, what’s the best way for them to reach out to you?

Wes Gipe: [00:39:27] Yes. So, our website is www.aileron. That’s A-I-L-E-R-O-N.org, aileron.org. And if you just search discover session, we—actually business advisors or team members from our staff will actually sit down with a business owner and help explore where they are. And we’re not a fit for everyone but that’s the goal of that initial meeting. It’s just to sit down, ask a bunch of questions, learn about where they are, and connect them with anything here that they might find helpful. So, it’s been a delight and a pleasure to be a part of the program today. Thank you very much.

Michael Blake: [00:40:07] Well, thank you for coming on. And that’s going to wrap it up for today’s program. I’d like to thank Wes Gipe so much for joining us and sharing his expertise with us today. 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 making it. If you enjoy this podcast, please consider leaving a review of 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.

Tagged With: CPa, CPA firm, cutting expenses, Dayton accounting, Dayton business advisory, Dayton CPA, Dayton CPA firm, Decision Vision, economic recession, economic recovery, Michael Blake, Mike Blake, recession, recession proof, recession resistant, revenue decline, Wes Gipe

Decision Vision Episode 35: Should I Hire a Business Development Coach? – An Interview with Rod Burkert, Burkert Valuation Advisors

October 10, 2019 by John Ray

Decision Vision
Decision Vision
Decision Vision Episode 35: Should I Hire a Business Development Coach? – An Interview with Rod Burkert, Burkert Valuation Advisors
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Mike Blake and Rod Burkert

Decision Vision Episode 35: Should I Hire a Business Development Coach? – An Interview with Rod Burkert, Burkert Valuation Advisors

Why should I hire a business development coach? What are the most important aspects of marketing my professional services? In this interview with “Decision Vision” host Mike Blake, Rod Burkert of Burkert Valuation Advisors answers these questions and much more. “Decision Vision” is presented by Brady Ware & Company.

Rod Burkert, Burkert Valuation Advisors

Rod Burkert, CPA, CVA, and his wife, Amy Burkert, CPA, CFA, with their dogs Buster, left, and Ty, stand in front of the RV that serves as their mobile office and their home.

Rod Burkert is the Founder and President of Burkert Valuation Advisors.

In one way, shape, or form, Rod has performed valuations since the late 1980s. In July 2000, he started Burkert Valuation Advisors in Philadelphia where he ran a “traditional” valuation practice for 10 years that focused on tax purpose valuations for manufacturers and distributors.

Based on that experience, in 2013 Rod began coaching BVFLS (business valuation and forensic legal services) professionals to mentor them in the marketing and positioning skills they need.

In March 2010, he began traveling full time throughout the US and Canada in an RV with his wife and dogs. Today his mobile consulting firm includes his valuation practice and a coaching business, all of which he built by leveraging his professional network, social media, and hiring virtual assistants to make the available technology work for him.

For more information, you can email him directly, go to his website, or you can find him on LinkedIn.

Michael Blake, Brady Ware & Company

Mike Blake, Host of “Decision Vision”

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. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike 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 the North Fulton studio of 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: [00:00:02] 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 vision a reality.

Michael Blake: [00:00:20] And welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic. Rather than making recommendations because everyone’s circumstances are different, we talk to subject matter experts on how they would recommend thinking about that decision.

Michael Blake: [00:00:39] 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 your favorite podcast aggregator, and please also consider leaving a review of the podcast as well.

Michael Blake: [00:01:03] So, our topic today is, should I hire a business development coach? And I’ve picked this topic because, as most of you know, I’m a shareholder inside an accounting firm. And one of the hard—one of the struggles that almost every accounting firm faces is, how do we motivate people to develop business? How do we train people to develop business? Because at the end of the day, in the 21st Century economy, it’s all well and good to be a great technician, but if all you have in a firm is technicians, it’s like trying to win a baseball game with great pitching only, you wind up having zero to zero. And you can’t win that way. So, you’ve got to have people and a culture that drives the ability to generate revenue. And the accounting industry, in particular, is not one that is necessarily known for its outgoing, gregarious nature. And so, that’s a particular area that that we focus on.

Michael Blake: [00:02:08] And, for me, as a leader of a valuation and strategic advisory practice, at least 70% of what I do has something to do with business development. And I can tell you that the things on the mind of our partners all the time is, how do we get people excited, and not just excited, but also trained to generate revenue? Because it’s not fair to send a bunch of kids out there, or sometimes not kids say, you know, “Go back, get us some business. Go get them.” That’s not going to produce an outcome, except for the occasional outlier. There needs to be an important support system for that.

Michael Blake: [00:02:46] And I say this is not somebody to whom sales necessarily comes naturally. When I started my career in investment banking, I was the clock guy. I was the guy they locked into a room, and shoved in front of a spreadsheet, and left them with the textbooks, and just made sure it never ever got in front of the client because that was my role. We had other people that were much more comfortable than I. And then, over a number of years, working with coaches, including Rod, for a time, I’ve managed to become slightly below average, which doesn’t sound a lot, except when you understand the disaster I was when I started. And, actually, it’s quite a long way.

Michael Blake: [00:03:25] And joining us today by phone is is Rod Burkert, who is, I think, the best in the business when it comes to this kind of topic in the business valuation arena. And I’m proud to say that I was actually a client of his when I had my own practice for a little bit under a year, and I fired him for the best reason possible, is that I was generating so much business, I could not handle all of it. I had to turn off basically. And I give him a lot of credit for that, as well as another coach sort of earlier in my career. And I can’t think of a better endorsement than that. And it happens to be true.

Michael Blake: [00:04:03] But Rod is the founder of Burkert Valuation Advisors, a business valuation and litigation support firm. His assignments focus primarily on income, gift, and estate matters, specializing in closely held companies and private investment partnerships. He also provides report, review, and project consulting services to assist attorneys and other practitioners with their engagements between 1996 and 2025. Rod was a member of an elite instructor for the National Association of Certified Valuation Analysts – just rolls off the tongue – Consultants Training Institute. Missing the classroom environment, he rejoined the NACVA’s teaching circuit in 2011, championing the subject of Report Writing, another topic near and dear to my heart.

Michael Blake: [00:04:42] He is a recipient of various instructor awards, including the Circle of Light and Instructor of the Year. He is a past chairman of NACVA’s executive advisory board and education board, and has been named one of NACVA’s outstanding members. He is also a regular contributing author to Business Valuation Update, the Value Examiner, and Financial Valuation and Litigation Expert. If you’re not in valuation, you don’t know what those are, but those are basically the Sports Illustrated of the Valuation World, the New York Times of the valuation world. Rod is leveraging social media to build a mobile valuation consulting practice, allowing him to travel full time in an RV throughout the United States and Canada with his wife, Amy, and their two dogs. And Rob, thank you for taking time off the road to talk to us today.

Rod Burkert: [00:05:26] Hey, thanks, Mike, for having me. I appreciate it. I—gosh, until you read my bio, I didn’t realize how much I’ve done, but it sure sounds like a lot, doesn’t it?

Michael Blake: [00:05:38] Well, as I tell people, one of the benefits I see for myself having gray in my beard and two arthritic ankles is, at least, when you look behind in the rearview mirror, there’s some interesting stuff.

Rod Burkert: [00:05:49] Exactly, exactly.

Michael Blake: [00:05:51] So, you started out, I think, as did I, as a practitioner, giving out the work. Why did you decide that you’re going to develop, if you will, this persona or this new vocation of practice development training?

Rod Burkert: [00:06:13] Well, one of the things that you said in the beginning kind of struck me as pretty close to home is back in the day, when I started doing valuations, if someone said to me, “Describe your ideal day,” I would have said, “Sitting in front of a computer building an Excel model to help a client accomplish some—you know, or solve a valuation problem.” So, I was very much the nerd sitting in front of a computer as well, but I had my own practice, and I had to bring in work in order to build those kinds of models.

Rod Burkert: [00:06:50] And so, I’m kind of an outgoing person. I don’t mind getting out there. And I actually found that the more I did it, the more I enjoyed it. And then, I turned 60. So, I’m 63 now, but when I turned 60, I’m thinking my health is really good, I’m having a great time, I’m not thinking about retiring, I’ve got a long road ahead of me, and I have an opportunity really to embark on a second career. And for me, that second career piggybacked on what I know and what I do best, which is doing business valuation work. But instead of doing the work, I’m actually, as you said, helping people get the work because there is a lot of information out there that’s of a very technical nature. It tells us how to do the work, but nobody tells us how to get the work.

Rod Burkert: [00:07:47] And the last piece of why I’m doing what I’m doing, as you mentioned in the introduction two days ago, my wife and I officially crossed 9.5 years that we have lived full time in our RV, traveling throughout the United States and Canada with our two dogs. There’s no home. There’s no storage facility. Everything is in the RV. And I want to give that RV equivalent experience to other people in our profession. So, I don’t expect everybody to think that they’re going to pull up stakes and live in an RV like Amy and I do. But rhetorically speaking, Michael, what is your RV equivalent experience? What is it that you would like to do in tandem or in parallel with the business valuation work that you do? And one of my—kind of one of my success stories is a client that I am working with, and he really had a previous life as a painter and an artist. And we’ve restructured her practice to give that life back to her again.

Michael Blake: [00:09:00] So-

Rod Burkert: [00:09:00] That’s why I’m doing this.

Michael Blake: [00:09:02] Okay. So, yeah. And obviously, you’re helping a lot of a lot of people with it. So, before we go, I’m going to define a term because what we’re going to be talking about here is business valuation because that just happens to be my world. But I want to emphasize that Rod, also, helps people that are in the forensic and litigation services area, which generally means expert witnesses. And that that’s not an area which I play in. I’m on record saying that’s not my strength, to put it mildly. But a lot of what Rod does is he works with professionals like that as well.

Michael Blake: [00:09:38] So, when I say business valuation, because I don’t want to say that entire mouthful each and every single time, just imagine to yourself out in the audience that we’re also talking about forensic and litigation services. So, with that in mind, the question then is, can anyone do this? Can literally anyone who decides that, for whatever reason, for career development, or for survival, because they’ve got to eat, and they’ve got this practice, can anyone develop a business valuation practice?

Rod Burkert: [00:10:11] I think, to an extent, the answer to that question is yes with a huge but caveat. And that caveat is simply this, it’s that you have to be willing to keep showing up to try new things and always keep moving forward. And I think that’s the problem with many people in our profession. They don’t have that dedication to the consistency and persistency that’s required for the marketing that you need to build a practice.

Rod Burkert: [00:10:46] So, one of my coaching clients coined a really cool term. He’s been accused by his friends and colleagues of dolphin marketing. And what is dolphin marketing? Well, dolphin marketing is when you need work because everything in the pipeline is done, you come up for air, you breach out of the water, you grab a few new clients, and then you disappear under water, and nobody hears from you again until you need more work. That’s dolphin marketing.

Rod Burkert: [00:11:18] Anyone in our industry who we might call an industry titan, the seasoned professional, will tell you that you need to be out there marketing, if not every day, at least every week. And I think, given some of the mentality in our profession, we don’t want to do that. We convince ourselves—to me, we convince ourselves, “I’m a person that was never good in math,” and I had convinced myself that I will never be good in math. When actually, it’s a learned skill like anything else that we do. You can learn to be good in math, and you can learn to be good in marketing and practice development if you don’t talk yourself out of it.

Michael Blake: [00:12:05] What you talk about resonates with me. A podcast to which I listen fairly frequently is the Rosen Institute. You might have heard of it.

Rod Burkert: [00:12:14] Oh, yes.

Michael Blake: [00:12:15] Yeah. I mean, Lee Rosen is very much a kindred spirit of yours, except he goes global. And one of the things he says is that almost any marketing activity you do will be successful as long as you stick with it, and you’re consistent.

Rod Burkert: [00:12:31] And yes, I agree with that. And related to that, Michael. You have to like it. I mean, one of the things is what works for others may not work for you. And what works for you may not work for others. But the important thing is to play to your strengths. I would never advise a coaching client that they need to be out there speaking constantly if they didn’t really like speaking, or writing, or doing videos, or anything like that. You have to pick a marketing skill that you are halfway good at, so that you can learn to get better and enjoy doing or else, you won’t stick with it. And that goes back to being consistent and persistent.

Michael Blake: [00:13:14] So, why isn’t just being a great technician good enough? I mean, the little voice in my head that says the world in America is a meritocracy. Tell us. And maybe this is a rationalization that the marketing and sales are just fluff, but I’m a professional of substance, and I’m really good at the business valuation, et cetera, world. Why is that not good enough?

Rod Burkert: [00:13:39] Yeah. I mean, I used to think being a technician would be good enough. And then, I read Dale Carnegie’s book, How to Win Friends and Influence People. That book was written back in the 1930s. So, 80 some years ago, Dale Carnegie had this observation about the finance, about the success of the people that he was coaching. And he says, basically, it’s by observation that if you look at anyone who has achieved some level of financial success, 15% of that success is due to technical skills, and 85% of it would be due to what we would call today people engineering skills, the soft skills like good listening, having empathy, being patient. That has—I think, many times, we gravitate to somebody who can capture our imagination and tell us what they can do for us without, actually, supplying the mathematical solution for what they can do for us.

Michael Blake: [00:14:56] Now, sales, for people who don’t do it, and for me, I surprisingly found to my to my astonishment, really, that I get a big endorphin rush from it, but not everybody does. And some people—I think a lot of people still look at sales with a certain amount of apprehension, even dread. And I’m sure it comes across people’s minds, “Maybe I could just hire a salesperson or maybe partner up with a salesperson.” Is that. Is that a model that could work for a small firm, or is that just sort of putting a Band-Aid on a gunshot wound?

Rod Burkert: [00:15:32] Well, there are firms out there, even in our business valuation space, that have a team of salespeople only. They do not do valuation, or forensic accounting, or litigation services work at all. They go out and their job is to sell the work. And they have built an incredibly successful practice. I think they are five or six offices. They’ve been around for like 80 years, and they have used that model to some success.

Rod Burkert: [00:16:09] Rhetorically speaking, though, if you’re the prospect, at that point, because you haven’t signed on, this isn’t a widget that we’re selling. We’re selling a solution to an acute problem that could be the death of a family member, and their interest in the business needs to be valued for estate tax purposes. It could be the sale of your business, something that you’ve built over the course of your lifetime. And now, it represents the largest asset that you own. When it comes to interviewing somebody that’s going to help you solve that problem, do you want to meet somebody who’s selling the solution or somebody who is going to be preparing this solution?

Rod Burkert: [00:16:56] So, I’m not saying that the sales model where you’re wanting to hire somebody to outsource the sales piece of your practice development won’t work. But I think where we really fail most often is the people that do the work that we do, we don’t put ourselves in the shoes of the client. And how would we feel if we were going to have our problems solved by a salesperson as opposed to a person that’s going to actually do the work?

Rod Burkert: [00:17:27] You go to a doctor, there’s no salesman selling you the procedure that you need to have performed. There is the doctor that’s telling you the what, the why, and the how that this procedure needs to be performed. And I think with a professional service like ours, to me, prospects and clients want to meet with the person that’s going to be doing the work, not the person that’s just going to be selling the work.

Michael Blake: [00:17:57] Now, one of the objections, I’m sure, you face, and I certainly see with somebody who is confronted with the need to develop a business development mentality and business development practice, if you will, is a lack of time. I don’t have time to sit. I don’t have time to do X, Y and Z. And I’m curious, I would imagine that—I know this for a fact, as I’ve been a client of yours, is that it’s not a free ride to kind of jump on board the Rod Burkert training and become a coaching client, is it? I mean, there’s a there’s a time commitment and not just inside of school, if you will, but outside as well to prepare and build those skills, and build those business development muscle, isn’t there?

Rod Burkert: [00:18:45] There is. And I think, a big factor in all of this in what you said, Michael, is really how—first of all, well, how successful of a practice do you want? What does success mean to you? Because there are some people, you and I both know them, that have a successful practice simply by sitting in their office and aggressively waiting for the phone to ring. That’s a term that I used in coaching with you. And they are perfectly happy with that. They’ll never make high six figures doing that or it would be unusual to think that they could, but if they’re making a low six figure billing revenue and however you want to look at it, that may be all they need, and they’re not going to invest time with a coach like me.

Rod Burkert: [00:19:38] And on the other hand, there are people who want more for different reasons. And they’re not just necessarily saying more income. I’m saying more time, more money, more freedom. You have to put some systems in place to realize those things. And that’s what I would like to think that my coaching helps people do, not just more money but more money with more time and more freedom to use that money to, again, have that RV-equivalent experience.

Michael Blake: [00:20:12] And one of the time investment required by a coaching client of yours, let’s say, in a given week? How many hours do they expect to invest in their education that’s being led by you?

Rod Burkert: [00:20:25] I would say that there is a ramp up. In the beginning, it may be a few hours a week tailoring down. I mean, there’s two things, if you can bear with me here, Michael. Number one is it depends on when you come to me, how much authority, how much awareness that you have because there are people in the profession that don’t do marketing per se. They’re not out there networking like we think that they might do. Their networking is speaking and writing. And so, for them, they’re not investing any time in marketing, again, per se. They’re just doing what they like to do, which is speaking and writing.

Rod Burkert: [00:21:07] The other part of what this is, of what I teach, is something that you should be doing anyhow to build your practice. Let me give you a great example. I’m at a speaking event, someone says to me, “I’m a tax person. I would love to get a valuation practice up and running. And I just don’t—but I just don’t have the time.” And I was kind of blunt, and that’s my style. And my first question out of my mouth was, how much television do you watch a week? And he was all proud of the fact that he was a Cubs fan, and that during baseball season, he’s watching every game somehow streaming on television. And I said, “So, to me, an average baseball game is like three hours a week, three hours a game. And you’re watching multiple games a week. And now, you want to tell me that you don’t have time for marketing.”

Rod Burkert: [00:22:02] So, that enters into it as well. Meaning, how badly do you want this? Do you just want to gripe about your situation, or do you actually want to take time from other activities that really don’t contribute any value to get you to where you say you want to end up, and invest it in coaching time, and learning how to market and build a practice?

Michael Blake: [00:22:30] I remember reading that story. You put it on your mailings, at least, once. And it’s—yeah, it is a great story. And television is one of styles, sort of, t sucks too. You don’t realize how much time has gone until you—sometimes, you do wake up, but you look up, and you say, “Oh, my gosh. My whole evening is gone. I could have written an entire article in the four hours I just spent watching that TV.”.

Rod Burkert: [00:22:57] Right.

Michael Blake: [00:23:00] So-

Rod Burkert: [00:23:00] And if I can say, one of the last things—well, one of the things that I teach people is how to automate certain processes. Now, I don’t have a sales system or anything like that. But given what I know, given what I can teach people about platforms like Facebook and LinkedIn, there is a way to automate your connection requests. There’s a way to automate your scripts and use conversations on LinkedIn Messenger or Facebook Messenger to make it seem like you’re actually having a conversation until you get to the point where you find out that the person really does want to buy from you whatever they’re buying, and you take that conversation offline, and have—and call them, reach out, and phone, and have them have that real discussion.

Rod Burkert: [00:23:51] But there’s a lot of automation that can go on at the front end that you don’t have to be sitting at your computer to do or it happens for you. You’ve got to invest the time to set the system up. But man, once it’s running, it really works.

Michael Blake: [00:24:09] So, what about the duration of an optimal coaching relationship?

Rod Burkert: [00:24:14] And I’m supposing some of them may not be true. So, I’m likely going to learn something, but contrast with, say, a therapist, where—and I think part of what you do is therapy, good therapy, but there are some people that have lifelong relationships, or certainly years or decades-long relationships with therapists, is there ever a point in a coaching program such as the one that you run where your clients graduate, or is this something that you think that it’s a long term, maybe ideally a semi-permanent commitment to that relationship?

Rod Burkert: [00:24:51] Yeah, good question. And tongue in cheek, I think you stay with a coach as long as the return on investment is greater than or equal to the investment. And I think what really pivots people here is that our average engagement could be anywhere from at the really low end if you’re competing on the basis of price, maybe you’re doing work for $5000. But our engagements could easily go up to $25,000, $30,000, $50,000. $100,000 if you’re doing litigation support work, and it’s a big case. I mean, that happens.

Rod Burkert: [00:25:29] So, if I can teach you something that helps you get those kinds of—that kind of case work at those kinds of fees, and let’s say my coaching is $10,000 for an entire year, or that’s what it comes out to, because it’s close to that, but I’m helping you get three, four, five engagements at a multiple of $10,000, or $15,000, or $20,000 that you would not have otherwise gotten as a result of the coaching. Why wouldn’t you stick with me or any other coach, for that matter, that can help you develop that kind of a return on your investment?

Michael Blake: [00:26:08] Well, okay. So, yeah. So, there you go. So, I’d like to jog down to that a little bit because we’ve talked about the skill set that you help your clients acquire. And that’s a big part of what you’re offering. But my sense, also, is that’s for some people, you’re also just offering an accountability partner, so that people do, in fact, stay engaged, they stay motivated, they stay on task. (A), is that a fair characterization? And (B), if you had to guess, in many cases, is that accountability contribution even of equal value to the technique and skills contribution that you make?

Rod Burkert: [00:26:52] Yeah, it’s interesting that you put it that way, Michael, because if you think about it, we know – we know what we need to do to be successful because what it takes to be a success in an industry like ours hasn’t changed in generations. Quite frankly, it hasn’t changed in centuries. You get known for what you know by a combination of speaking and writing. And perhaps, in this day and age, video or podcasting. So, you see, you know what you should be doing. So, one of the big reasons people come to me is that accountability because they know that we’re going to have twice monthly meetings, and I’m going to ask them what progress that they’ve made towards the goals that they set for themselves to have the practice that they say that they want to have.

Rod Burkert: [00:27:48] So, accountability is a big thing. It’s not like I can’t teach you some things about, for example, something has come out in the last couple of weeks that has really changed the game about how people should be using LinkedIn. I can teach you that, but it doesn’t take away from the fact that you know you should be using LinkedIn in some way, shape, or form to help build your practice. Now, are you going to do it? Are you going to set aside 10 or 15 minutes every morning and every afternoon to use it? Well, that’s where accountability comes in because you know, as a coaching client, you’re going to have to report back to me about what you did and didn’t do in the last two weeks.

Michael Blake: [00:28:35] So, you’re a big proponent of your clients making themselves visible experts. And it’s important to note, there are there other marketing opportunities or channels available if you choose to. But you’re very much on the visible expert train. Why exactly is that as opposed to other potential marketing channels or approaches?

Rod Burkert: [00:28:59] A great question. And I think the answer is simple. If you put yourself—if we’re—if we put ourselves in the client’s shoes when we have a problem, we want a visible expert to solve it. I mean, if there’s something going on in your family, in your household, in your home, and it needs to be—and by that, it could be a medical emergency, all the way down to a plumbing emergency, do you want to call somebody that nobody has never heard of to solve your problem, or do you want to call somebody that you know of, or that your friends can highly recommend because they know that that person can successfully solve your problem? And I think we would agree with the latter. I mean, we want somebody who has solved our problem multiple times successfully.

Rod Burkert: [00:29:51] And the way you do that is to have—first of all, you have to have the skills and knowledge. So, you have to be an expert. You have to have expertise. But no one’s going to know about your expertise, or your authority, or what you’re known for if you don’t get out there because we need to be where the buyers of our services are when they need us. And so, if you’re not out there constantly priming the pump with speaking engagements, writing articles, again, whatever is your strength, doing videos, how’s anybody going to know to call you?

Michael Blake: [00:30:30] Well, yeah. That’s true. And, of course, as a presupposition, and I think an important one, that you don’t want to be a commodity. One thing you could do is the alternative, is you could adopt sort of a Yellow Pages model, put yourself in directories. Believe it or not, I actually do a case. I get an email from appraisers.org. I never landed a client or even came close, but at any rate—and you can sort of go that route, but by making yourself a visible expert, you are elevating yourself and making yourself, I think, a much more obvious fit to solve that problem too, right?

Rod Burkert: [00:31:06] Right.

Michael Blake: [00:31:07] So-

Rod Burkert: [00:31:08] Exactly.

Michael Blake: [00:31:09] I want to switch gears a little bit and talk about the the the nature of the coaching relationship itself. Somebody is looking for a coach like you, and they may have a view as to what an outcome, desirable outcome would be. Can you talk about what are some—what are realistic expectations of a coaching relationship? I’ll just have you talked about you because I don’t want you to speak for all other coaches, but what are realistic expectations of a relationship with you? And maybe what might be some unrealistic expectations somebody might have in a relationship with you?

Rod Burkert: [00:31:47] Sure. You’ve heard the expression, “You can lead a horse to water,” right?. And I think the an example of an unrealistic expectation and a coaching relationship is that me imparting knowledge to you is going to solve your problem because information is dramatically different than implementation. And the coaching client in any field is going to have to take the information from the coach and implement it. So, I can give you what you need to do. I can tell you why it’s important that you do that. And as a coaching client, I will even show you how to go about doing it. So, I will give you the what, the why, and the how. But if you don’t do anything with it, if you don’t do the work, if you don’t implement it, your situation is not going to change.

Rod Burkert: [00:32:47] You just may—you may learn more, you may be more knowledgeable, but if you don’t do anything, nothing’s going to change. If you don’t get out there on LinkedIn, if you don’t get out there and write, if you don’t get out there and speak, even though, again, you know these are the things you should be doing, nothing’s going to change. And quite frankly, Michael, when I see that happening in a coaching relationship, I will terminate the relationship because I’m not—I don’t want to take people’s money. If I see that they’re not implementing, we have a come-to-Jesus conversation, and I give them a little bit of time after that, and if they’re not working it, then I’m not helping them.

Michael Blake: [00:33:28] And look, I think, to be perfectly candid, too, it’s a self-defense mechanism for you as well. And I know how you coach in groups. So, if a person is not engaging, it means they’re not contributing to the other people who are, sort of, in your study group, if you will. And also—and I fired clients for similar things where I don’t want a client paying me, not taking my advice, have it not worked out, and then run around telling everybody what a moron I am because they didn’t take my advice.

Rod Burkert: [00:34:02] Right, exactly. I mean, there’s there is something in your reputation that you want to preserve out of all this too.

Michael Blake: [00:34:08] I think absolutely. What you talk about reminds me of a running joke my wife and I have. So, years and years ago, I used to be a tournament chess player. And one thing that my wife could always count on was whenever I came home from a tournament, I’d come home with, at least, three chess books. And they looked great, and they make you sound so smart. But there’s a problem with chess books, and this is the spoiler alert. They’re really boring to read. And so-

Rod Burkert: [00:34:38] I can imagine.

Michael Blake: [00:34:38] Right? They’re just not a page turner. Even though I was, in my day, a pretty strong player, they’re not boring. They look great on the shelf. And at some point, I had to stop stop myself from buying them because only in the books did not magically create this energy field that made me a stronger chess player. They just took up space on my bookshelf and made free space in my bank account.

Rod Burkert: [00:35:07] God. Yeah. Again, the difference between information and implementation.

Michael Blake: [00:35:14] So, one issue practices have, and I face this in mine, not urgently, but it’s something I think about a lot is training kind of the next generation. Many practices, as you know, sort of have a patriarch at the top of the practice, right? It could be Chris Mercer, who I know you have a good relationship. It could be Shannon Proud. It could be Jim Hitchner. And then, they have people that are working for them and are professionals in their own right. And all of those people know what it takes to build a successful and valuable firm, that if it’s going to have value, better not be entirely dependent on one person doing all the rainmaking. Do you think there’s a role for coaching in some capacity to help address the problem or the challenge of raising the next generation of visible experts? And if so, do you have any idea of what that may look like?

Rod Burkert: [00:36:16] Yes and yes. I think, to get to the heart of your question, it sounds like, well, is there a problem in training the next generation? And I think you’ve got to look at it from the origin of marketing. I mean, again, we came into this profession, Michael, many, many years ago, where there was no expectation that we needed the market. We were going to be those technicians and succeed solely on that basis. And then, things got tough.  We started to realize that if we really did want to get anywhere, we needed to do marketing.

Rod Burkert: [00:36:55] Just as a quick aside, I had a managing partner and accounting firm come to me when I was running a valuation practice in an accounting firm, comes into my office one day and says, “Damn it. The problem that I’m having is I can always find people to do the work. You can’t find people who can get the work.” And so, I suddenly realized, that was like a big aha moment for me that if I wanted to get anywhere, I needed to get the work. And so, begrudgingly, my generation – again, I said I was 63 at the top of the podcast – I happen to be what I consider a baby boomer trapped in a millennial body, or, I’m sorry, I’m a millennial trapped in a baby boomer body, the other way around. But we’ve begrudgingly learned these things that we have to do to bring in more work. We have to network. We have to have lunches, and breakfasts, and coffees with attorneys. We have to do it this way.

Rod Burkert: [00:37:54] And that patriarch at the top of the firm is saying to the younger generation, “This is how you have to do it,” and it doesn’t work that way because generations change. And the patriarch grew up with a certain generation of colleagues and referral sources for which networking events, for example, worked for them. But I hate to even say the millennial generation because it sounds like we’re maligning them, but I don’t mean to, they’re growing up with a cohort of similar-minded people who saw the damage of being away from your family all the time create. So, going out and networking every night of the week is not something that you’re going to convince the millennials the right thing to do. They’ve grown up with all sorts of phone apps, and texting, and that is how they communicate with each other.

Rod Burkert: [00:38:54] And these millennials, if they’re professional service providers, they’re going to get work from attorney and CPA referral sources who are their own age, who grew up with the same technology, and have the same shared experience of wanting to be with family and wanting to do a good job. So, I think when there’s a breakdown between trying to train the younger generation, it’s because we’ve already approached the relationship that these people are lazy, and they spend too much time on their phones, and they don’t want to get out there, and we make them bad and wrong because we want them to do it our way.

Michael Blake: [00:39:37] Yeah. And darn it, we want them to pair the same horrible price we had to pay, regardless how much sense it makes.

Rod Burkert: [00:39:43] Exactly. I mean, think about it the other way around. What if patriarchal generation grew up with texting as a way to bring in new work, but the younger generation didn’t like that? They don’t like texting. They want to have real conversations with people. They want to go out and meet them in person. They want to go to networking events. Would we, the older generation, be yelling at millennials if they didn’t want to stop texting to get business, and instead wanted to go out and do networking events? Would we be yelling at them because they want to do networking and not rely on something more technology related?

Michael Blake: [00:40:23] Yeah, and I see that. I see that in my practice because, as you know, I do a lot of work in the tech space. So, my demographic tends to skew a little bit younger. And I’ve actually not met about half of my clients in person, and it doesn’t matter, right? Even if I did a site visit, I wouldn’t even see servers anymore. I would see a bunch of Macbooks, and iPads, and a couple of conference rooms. If, they might even be in a coworking space. But they’ll respond to a text, they’ll respond to a tweet. I can read some through Instagram. And as you have often said, in a way, that millennial generation has it right because if you think about the investment you have to make, meeting one person at a time, breakfast, lunch, drinks, whatever it is, right, in the time you spend doing that over the course of a month, you could have reached 100,000 people over social media.

Rod Burkert: [00:41:19] Several times. Several times over. That’s exactly right. And just try and say, “Hey, we don’t care so much.” What we’re really saying as the patriarch, we don’t care about the results as much as we care about your methodology.

Michael Blake: [00:41:38] Right.

Rod Burkert: [00:41:38] And I think that’s wrong.

Michael Blake: [00:41:39] Yeah. Clearly wrong, right? That is just—that’s no longer a business solution. That’s a psychological issue.

Rod Burkert: [00:41:47] Right.

Michael Blake: [00:41:48] So-

Rod Burkert: [00:41:49] Again, like you said, we want those people to pay the same price that we had to.

Michael Blake: [00:41:54] That’s right. So, you obviously coach this business valuation forensic area, I think, exclusively. Do these—could these principles—again, could these principles apply in other industries? Law? Digital marketing? Management consulting? Could they be applicable anywhere, or are they strictly useful only and in the field that we’ve chosen?

Rod Burkert: [00:42:21] I think that what I do is applicable to other fields, but  you know from working with me, I’m a big fan of niching. So, I’ve got this minimum viable audience of business appraisers. So, I would be violating my own philosophy of niching if I try to go out and proselytize about how to develop an accounting practice or a law practice. I just—I’m not saying it couldn’t work, but I don’t think I’d have any authority or credibility because I’ve never built an accounting practice, or I’ve never built a law practice, but what I have built a couple of times over different iterations is a business valuation practice. I know what my clients are up against. I know how things are changing because I still run a traditional valuation practice. And I think it gives me the authority and credibility to do and to talk about what I do for similarly situated professionals. I’d have no idea. I wouldn’t really know where an accountant is coming from. I mean, I sort of would, but you get what I’m trying to say.

Michael Blake: [00:43:32] Yeah, sure, sure. And to be clear, I’m not suggesting that you should diversify, but somebody who I—some—it is most likely that the vast majority of people listening to this discussion today have nothing to do or have no interest in the business valuation industry or profession, but they may be wondering, if I could find a coach with a similar approach in my industry, would that be viable? My own answer is it probably would. It’s just a matter of finding the right person who are similarly niche that understands kind of the industry-specific realities that have to intersect with the techniques.

Rod Burkert: [00:44:15] Number one, I would agree with what you said. And number two, I would also like to point out that I think you’d be really hard pressed, Mike, to identify anyone that has achieved any level of success in finance, in industry, in sports, any field of endeavor without a coach or mentor. People say, “Well, why do I need a coach?” And I’m like, “Hey, do you ever watch a basketball game?” “Yeah.” “What’s the objective of the game?” “Score more points than the other team.” “Do you think the five players out on the court know that that’s what the objective is?” “Yes.” “Well, then why did those five players need a coach? Why don’t they just go out and score more points than their opponent? They know what they have to do. They don’t need a coach. right?” And then, there’s a big pause.

Michael Blake: [00:45:07] I’m glad you brought that up because I think the reputation of the professional coach has evolved and elevated significantly, certainly, in the last 10 years. And I think, in particular, in the last four or five. And I think it’s elevated partially because I think coaches have become better, and the coaches themselves are people that are accomplished as opposed to 10 years ago, I seemed to encounter a lot of coaches that weren’t very successful in the actual field. So, those who can’t do teach kind of thing.

Michael Blake: [00:45:42] But I think, also, there’s a recognition that particularly in business development, and I know you don’t like the word sales, so I’m trying to avoid it, but business development, we don’t teach that anymore. And it used to be—you’re a little older than I am, but, certainly, in the baby boomer generation, in most professional services firms of any size, even the smaller ones, there was a notion that the senior people would impart their wisdom, their knowledge, and would participate in the management and development of that next generation of business developers.

Michael Blake: [00:46:16] Now, what I see is just everyone for themselves. They got to meet their billable hours goals. I think to a certain extent, they’re fearful the younger generation will come and take their jobs. They’re certainly not rewarded for developing new talent as much as most firms kind of give lip service to that. And that confluence has created, I think, an opportunity for people like you to fill a very real vacuum that, I think, has occurred and has generally been harmful to most professional services industries.

Rod Burkert: [00:46:50] Yeah, yes. I mean, you’re preaching to the choir. And I know this sounds self-serving, but I think a lot of people might be more willing to embrace a coach, but I think they look at it as a cost instead of an investment. And that goes back to, well, how long should they stay in the coaching relationship? Well, as long as you’re getting a return on your investment, it’s not a sunk cost. If you’re not getting a return on investment, you should find another coach or quit your existing coach, find another coach. But investing in your own personal development, I don’t know where else you should spend your money first if not spending it on or not investing it in your own personal growth.

Michael Blake: [00:47:37] I think there’s plenty of literature out there that is very clear that one of the best investments anybody can ever make is on themselves, right? And certainly, one of the best bets you can make is on yourself.

Rod Burkert: [00:47:47] Correct.

Michael Blake: [00:47:48] So, we’re winding down here, and I want to get you back to your beautiful weather and your scenery. But two more questions I like to ask. One is, can you think about kind of one of your favorite coaching success stories and tell us a little bit about that.

Rod Burkert: [00:48:07] Yeah, yeah, yes. And actually, I’m going to—more than one comes to mind, but let me tell you the one that had the most impact that I feel like I’ve had the most impact on somebody. My biggest success story was somebody who I coached out of business valuation, because one of the things that goes back to, “Well, why don’t we like marketing?”, we realize for this person, for this individual, that she did not really like—the reason she didn’t really want to do marketing is because she really didn’t like business valuations. And actually coached her out of the business valuation world. She went to work for her husband’s business and is, now, focusing on something that she realized that she really wanted to do, which was to become a writer. And so, she’s starting out selling detective stories on Amazon. And I’d like—from a personal standpoint, from my viewpoint, that is like my most successful story.

Rod Burkert: [00:49:17] From another client’s perspective, I have an older client, late 60s, early 70s, who came to me really drained. I mean, emotionally drained of the years of just doing one project after another. And we’ve turned things around. We’ve tried to get away from one-to-one client service. He’s created a one-to-many product that he’s selling—creating one time, selling to his industry niche, and they don’t want to say what it is, what his niche is, but it’s webinar related. And he’s making almost as much money from a one-to-many product, which takes him a couple of days, a month to create, as he was going out there trying to sell and do one-to-one client service engagements. And he’s got a whole new—he feels totally reinvigorated about his practice and the possibilities for his practice.

Michael Blake: [00:50:23] And I do think those are very important outcomes. And at first, I have a similar one. As you know, I do office hours a few times a month.

Rod Burkert: [00:50:32] I think it’s a great idea. Let me—I’m sorry, Michael, to interrupt you, but everybody thinks it’s got to be something so secret saucy, there’s a magic bullet, secret potion, silver bullet that is the answer to marketing. And the simple things that I see you do on LinkedIn, creating the hard candy is an example. Letting it be known that you’re going to be at a restaurant for a certain time, and anybody who shows up during that time, you’re going to help them. I think, sometimes, we get so lost in the trees, and we don’t see the forest. And then, it’s the simple things that if we did consistently and persistently, we wouldn’t even consider it marketing. We wouldn’t hate to do it because we think it’s—you hate going to lunch and having those open office hours? I don’t think so.

Michael Blake: [00:51:21] No, no. And you take one look at my waistline, you know I do not going to lunch and having those office hours. But one of my favorite stories of office hours was I’d call a successful failure like Apollo 13. I had office hours. And this was about eight to nine years ago. And a guy showed up, ran his pitch, his venture pitch by me, and said, “What do you think?” I said, “I think this thing has a lot of holes, and I think that you are risking years in your family’s finances on a very dubious proposition. And it’s most likely going to fail.” And he was so upset that he got up, walked away, stuck me with this bill, and called me a couple of names on the way out. He was not happy.

Michael Blake: [00:52:07] Six months later, I received a handwritten note from him thanking me through the fact that I told him something that his friends and family just didn’t have the heart to do and for having the courage to kind of tell him that he needed to do that. And he sent me $100 gift card hoping that was going to cover his tab, which is more than it did, but that was somebody I held by getting him out of something that just was not going to be successful. So, there’s no nothing wrong with that.

Michael Blake: [00:52:36] All right. So, I’m already going over time for both of us, but I want to make sure I get this last one. And that is, how can people contact you to learn more about business development coaching? And maybe if you’re not the right person because they’re not in business valuation, maybe elsewhere, how can they reach out to you?

Rod Burkert: [00:52:57] Well, I think just saying it over the phone, probably the easiest way is just if you know how to spell my name, you can find me on LinkedIn. I’m there a lot. That is my social media platform of choice. And so, you can message me on LinkedIn. I have a website that outlines pretty much who I am and what I do. And that website URL is rodburkert.com. And my email address piggybacks off of that. You can email me at rod@rodburkert.com.

Michael Blake: [00:53:31] All right. Well, thanks very much for that. And that’s going to wrap it up for today’s program. I’d like to thank Rod Burkert – B-U-R-K-E-R-T, so you know how to spell it – so much for joining us and sharing his expertise with us today. We’ll be exploring a new topic each week. So, please turn in so that when you’re faced with your next business decision, you have clear vision when making it. If you enjoy this podcast, please consider leaving a review with your favorite podcasts 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.

Tagged With: CPa, CPA firm, Dale Carnegie, Dayton accounting, Dayton business advisory, Dayton CPA, Dayton CPA firm, Decision Vision, dolphin marketing, forensics services, litigation services, marketing, marketing professional services, Michael Blake, Mike Blake, podcasting, professional services firms, professional services marketing, professional services sales, Rod Burkert, Sales, selling professional services, speaking, valuation services, video

Decision Vision Episode 34: How Do I Get an SBA Loan? – An Interview with Joy Manbeck, Vinings Bank

October 3, 2019 by John Ray

Decision Vision
Decision Vision
Decision Vision Episode 34: How Do I Get an SBA Loan? – An Interview with Joy Manbeck, Vinings Bank
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Mike Blake and Joy Manbeck

Decision Vision Episode 34:  How Do I Get an SBA Loan? – An Interview with Joy Manbeck, Vinings Bank

What are the different loan options in the SBA loan program? How do I qualify? Joy Manbeck, a banking veteran with particular expertise in SBA lending, joins “Decision Vision” host Mike Blake to answer these questions and much more. “Decision Vision” is presented by Brady Ware & Company.

Joy Manbeck, Vinings Bank

Joy Manbeck

Joy C. Manbeck is a Senior Vice President and Director of SBA Lending with Vinings Bank. Joy is an Atlanta native who has been in banking for over 35 years. For most of her career she has been in commercial and small business lending with several different Atlanta-based banking institutions. Her community and civic roles include 2019-2020 President of the Rotary Club of North Fulton, alumnus of Leadership North Fulton, board member of Capital Partners Certified Development Corporation, member of the Board of Trustees of Alpharetta First United Methodist Church, and volunteer youth leader at Alpharetta First United Methodist Church. Joy is a graduate of Georgia State University with a degree in Finance, and her hobbies include fitness, gardening and violin.

Vinings Bank was established in 2007 to offer something unique by combining community-based banking expertise with services that create an environment that encourages both growth and prosperity. They offer a full range of financial products and services including specialized deposit solutions for business checking, sophisticated lending options, and outstanding cash management services to help businesses thrive.

To contact Joy, you can email her directly or call (678) 710-2820.

Michael Blake, Brady Ware & Company

Mike Blake, Host of “Decision Vision”

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. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike 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 the North Fulton studio of Business RadioX®.

Visit Brady Ware & Company on social media:

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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 vision a reality.

Michael Blake: [00:00:21] And welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic. Rather than making recommendations because everyone’s circumstances are different, we talk to subject matter experts about how they would recommend thinking about that decision.

Michael Blake: [00:00:39] 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 your favorite podcast aggregator, and please also consider leaving a review of the podcast as well.

Michael Blake: [00:01:04] Our topic today is, should I consider taking out an SBA loan? And I’m excited to cover this topic because although I don’t do a lot of stuff with banks, frankly, my skill set is more on the the equity side as a recovering venture capitalist and so forth, but I do—it is my belief that the SBA loan program is one of the least understood or most commonly misunderstood opportunities for small business finance out there. And frankly, it’s also—in spite of the fact that there are many outlets and many venues that are promoting the SBA program, it’s a program that not many people even know about. And if you’re a small business, and you’re looking at financing, if you’re looking at acquiring a small business, it might even be a franchise, if you don’t know about the SBA program, you really are leaving important options available to you off the table.

Michael Blake: [00:02:05] And like I said, I’m really not qualified to talk more than a very superficial level about the SBA program. So, if you’re a listener to the show, you know what’s coming next. I’ve brought in an expert who does know about the SBA program quite a bit. And here joining me is my pal, Joy Manbeck, who is a Senior Vice President and Director of SBA Lending with Vinings Bank.

Michael Blake: [00:02:32] And sort of funny story. Joy and I have known each other, I think, for 10-12 years or so, and we haven’t been in contact. We sort of all do our various things. Joy was off taking over corporate America, and I was probably in a gutter somewhere. But we happened to run into each other at an event where we had both recently joined our new companies as a mixer to my firm, Brady Ware, and her bank, Vinings Bank. And it turns out now that we are about 500 yards away from each other in terms of where our offices are; though, neither of us is actually ever there because are always on the road. But at least, theoretically, now, we’ve come together. And that’s kind of what got my wheels spinning about this particular topic.

Michael Blake: [00:03:14] So, Vinings Bank was established in 2007 to offer something unique by combining community-based banking expertise with services that create an environment that encourages both growth and prosperity. They offer a full range of financial products and services, including specialized deposit solutions for business checking, sophisticated lending options and outstanding cash management services to help businesses thrive.

Michael Blake: [00:03:36] Joining is an Atlanta native. Haven’t heard of any Atlanta natives left anymore. Has been in banking for over 35 years. She graduated from Georgia State University with a degree in Finance. And her hobbies include fitness, gardening, and violin. I did not know that. We’re going to have you on our band.

Joy Manbeck: [00:03:52] I would not at all.

Michael Blake: [00:03:53] We’ll do a Dexy’s Midnight Runner kind of cover situation there. She has a number of community and civic roles. She is a 2019-2020 President of the Rotary Club of North Fulton. She is an Alumnus of Leadership North Fulton. She is a Board Member of Capital Partners Certified Development Corporation, is on the board of trustees of Alpharetta United Methodist Church, and is a volunteer youth leader, also, with the Alpharetta United Methodist Church. Joy, thanks for coming on the program and somehow making time because you do a lot.

Joy Manbeck: [00:04:27] Well, thank you for having me. It’s an honor to be here.

Michael Blake: [00:04:29] People talk about banker’s hours, man. They have not met you. So, let’s get started. Let’s start with the very basics. What is a small business administration loan?

Joy Manbeck: [00:04:42] Well, an SBA loan, SBA was started in the 1950s to help businesses who were struggling with getting loans to help incent banks to make loans by guaranteeing a portion of the loan. So, 7-day loan, that’s the seven day program, it has a 75% SBA guarantee. And then, the bank takes the risk of the 25%, and then the SBA guarantees the 75. The bank makes the whole loan. And then, the government guarantees it.

Michael Blake: [00:05:15] So, why do companies consider taking out an SBA loan versus a more conventional financing instrument?

Joy Manbeck: [00:05:21] Well, several reasons. One is the longer terms. Financing equipment, usually, is over a 10-year period. No balloon payments. Real estate, we can finance over a 25-year period. Again, no balloon payments. And then, the amount down can be as little as 10%. Also, businesses that are special use like a daycare, gas station, car wash, they have a little bit more trouble in the conventional world getting financing. And so, SBA is, usually, a partner with those type businesses.

Michael Blake: [00:05:54] And so, you say, for example, a 10-year repayment period. In a more conventional loan, what do those repayment periods look like? Is it like a three to five-year or maybe even quicker?

Joy Manbeck: [00:06:05] Typically, usually three. At least, they’ll amortize them sometimes over 20 years if it’s real estate. 20-year amortization, three, five or seven-year call feature typically on those.

Michael Blake: [00:06:17] So, my understanding is that not all SBA loans are created equal. There’s actually a number of programs out there. So, can you highlight a few of those specific programs?

Joy Manbeck: [00:06:25] Certainly. As I mentioned, the seven day program a few minutes ago, these are eligible for any most small for-profit businesses. And it’s for a myriad of things. It could be to purchase real estate, construction, buying fixed assets, purchasing another business, starting a business, or working capital purposes. Seven day covers all of that. Then, you’ve got the SBA, what’s called a 504 program. And that’s only to buy real estate or fixed assets. And then, another one that’s become very popular is something called the cap line, C-A-P L-I-N-E. And that’s another 75% guarantee program up to $5 million, but it is an in an out line of credit.

Michael Blake: [00:07:09] Now, in the past, I think the SBA has also had so-called express loans. Is that right? Like for veterans, things of that nature. Do they still exist? Am I right? And if so, can you tell us about those?

Joy Manbeck: [00:07:20] They do. This is not something I have a lot of expertise in, but it’s a—an express loan would also be a line of credit. It would be a shorter term. And those loans are usually $350,000 and under.

Michael Blake: [00:07:31] Okay.

Joy Manbeck: [00:07:33] You have 50% guarantee on those.

Michael Blake: [00:07:35] So, for your needs, as long as you’re not trying to buy Apple, sounds like there’s potentially an SBA loan out there for somebody.

Joy Manbeck: [00:07:43] Absolutely.

Michael Blake: [00:07:44] So, what kinds of companies are good candidates for SBA loans? I assume there must be some that are kind of better than others.

Joy Manbeck: [00:07:53] Again, it’s for for-profit businesses. And basically, I mean, there are certain industries. Gambling, we can’t loan to. We can’t lend to finance companies. But pretty much anything, any for-profit business professionals. As I mentioned, car washes, restaurants, daycares, funeral homes, you name it.

Michael Blake: [00:08:15] And the SBA is actually a big source of franchise financing, right-

Joy Manbeck: [00:08:18] Absolutely.

Michael Blake: [00:08:18] Because it, actually, maintain—I think, it’s a pretty interesting list of the most successful franchise in terms of low failure rates, and then ones that are a little bit dicier-

Joy Manbeck: [00:08:27] Correct, yeah.

Michael Blake: [00:08:29] … for lack of a better term.

Joy Manbeck: [00:08:30] Right.

Michael Blake: [00:08:31] So, what about—the world I play in, as you know, is a lot of technology companies. Now, I presume that SBA is not a replacement for venture capital. There’s just not that kind of financing. But are there scenarios in which a technology or technology-driven company might also consider an SBA loan?

Joy Manbeck: [00:08:50] Oh, absolutely. And we loan to technology-driven companies quite a bit. So, they are totally eligible. Their terms are usually going to be—it’s usually for working capital purposes. So, if it’s permanent working capital, like a 10-year term, but the lines of credit are also good for those.

Michael Blake: [00:09:08] Okay. And then. you talked about companies that are not good candidates for SBA loans. You talked about casinos, I guess. Gaming is not going to be a good candidate.

Joy Manbeck: [00:09:18] That’s right.

Michael Blake: [00:09:21] I would assume a marijuana company is not going be a good candidate yet. That may change. But right now, we’re not there.

Joy Manbeck: [00:09:26] You’re right.

Michael Blake: [00:09:28] Finance companies. So, you don’t want people borrowing money from the SBA to, then, lend it out to somebody else. That’s not-

Joy Manbeck: [00:09:33] That’s absolutely right.

Michael Blake: [00:09:34] That’s not the goal of the program. Any other companies that, probably, come to your mind that they may not be great fits.

Joy Manbeck: [00:09:41] Not that are for-profit. Pretty much—I mean, if it’s legal, and if it’s not a finance company or a gambling company, typically it’s eligible.

Michael Blake: [00:09:53] Okay. So, I’d like to spend our time on the seven day loans because, I think, one, I’m not knowledgeable about real estate at all. I’m not even very good at monopolies. The 504 things have been great to me. But I think most of our listeners are more likely to be interested and candidates for the seven-day program. So, can you dive a little bit deeper into that? What does a seven-day loan look like? We talked about a 10-year term. Was it look like in terms of typical collateral coverage, interest rates, things of that nature?

Joy Manbeck: [00:10:23] Okay. Very good question. First of all, SBA gives us a set of regulations that we have to follow. But then, banks can use their own, I guess, credit guidelines. So, SBA is not a collateral lender. So, if the loan is not completely collateralized, andmost conventional lenders want their loans completely collateralized. So, that’s up to the lender if they want to make the loan with an SBA guarantee on it. However, if the loan is not fully collateralized, and the borrower has outside collateral, personal collateral, SBA does expect them to pledge it. So, that’s one advantage of getting an SBA loan. It does not have to be fully collateralized, but we are required to take available collateral. The other thing is cash flow. We’re gonna look at debt serviceability. SBA’s minimum debt serviceability is 1.15:1. We, as a bank, like to see 1.25:1.

Michael Blake: [00:11:22] And that, what’s that? What does that ratio mean?

Joy Manbeck: [00:11:24] That means that your cash flow available to cover the proposed debt service on-

Michael Blake: [00:11:29] Principal and interest.

Joy Manbeck: [00:11:30] Principal and interest.

Michael Blake: [00:11:30] Okay.

Joy Manbeck: [00:11:32] Absolutely. But again, that is up to the bank. That’s a guideline with SBA on the 1.15. So-

Michael Blake: [00:11:38] Okay.

Joy Manbeck: [00:11:38] … we can—our bank looks at loans globally. We’ll look at all the components and make a decision from there.

Michael Blake: [00:11:46] And what about interest rates? My understanding is, at least, the one point that used to be fixed to the prime rate, usually, 1% to 2% over prime. Is that accurate? Is that still true? What does that kind of look like?

Joy Manbeck: [00:11:58] Well, we offer—Vinings offer is a couple of options. And most banks don’t offer fixed rates. We occasionally do, especially on our real estate loans. They’re going to be probably in the mid to high sevens. And they’ll be fixed for the full 25-year term. Typically, most SBA lenders are going to loan over prime. It’s gonna be typically around prime and two. You can loan up to prime plus 2.75. And then, it’s adjustable usually on the calendar quarter.

Michael Blake: [00:12:27] Okay, which makes sense cause that’s usually when the Fed adjusts anyway. So, you’re kind of on the Fed’s calendar.

Joy Manbeck: [00:12:35] Absolutely.

Michael Blake: [00:12:36] So, the question I think a lot of people will ask and where I find that the greatest misunderstanding about the SBA program is that you hear SBA, you hear that it’s got the eagle on, it’s got the federal logo, and everything; and therefore, you think like Donald Trump is writing your check or a Washington-based loan.

Joy Manbeck: [00:12:58] Right.

Michael Blake: [00:13:00] That’s not actually the case, is it?

Joy Manbeck: [00:13:01] Not on seven days. On seven days, the bank makes the loan, and SBA guarantees it. So, your funds come from the bank. They’re guaranteed by SBA. And then, the borrower makes the payments directly to the bank, and the borrower communicates directly with the bank.

Michael Blake: [00:13:17] Now, you at Vinings Bank are preferred lender.

Joy Manbeck: [00:13:20] We are

Michael Blake: [00:13:20] As are other banks, but not all banks are. So, what does it take to become a preferred lender. And if I’m a borrower, why should that matter to me?

Joy Manbeck: [00:13:28] Well, it’s huge for the borrower. First of all, to be able to qualify, you have to, in a 24-month period, have five loans that are approved by SBA on a direct basis. That means your bank approves them in our loan committee, and then we submit them to SBA, they underwrite them, and they are proven. So, once you’ve gotten to that five-limit approval of loans, then you can apply for preferred lender status, which means that you have the choice of once you approve the loan at the bank level, you can go ahead and just say it’s approved, and get your SBA loan number, and go move forward with closing.

Michael Blake: [00:14:02] And if you’re not a preferred lender, how does that differ?

Joy Manbeck: [00:14:05] It could take up to two to three weeks to get your loan approved with SBA, a lot longer.

Michael Blake: [00:14:10] And that point, I want to zero in on that a little bit-

Joy Manbeck: [00:14:14] Sure.

Michael Blake: [00:14:14] … because, again, one of the one reason that people, I think, shy away from SBA loans, when I say, “Think about the SBA,” they say, “How long is the government going to take to make a decision?” But in fact, the government, especially if it’s a preferred lender, is not making the decision at all, right? They’ve empowered the bank to do that.

Joy Manbeck: [00:14:32] That’s correct. I mean, and we do have to make sure that we do everything according to their regulations because we’re going to get audited eventually. And then, we’ve got to have everything as instructed. But we take care of that on our end. We do all the underwriting, but we underwrite them completely with SBA guidelines or regulations.

Michael Blake: [00:14:50] And so, the relationship is that the bank is lending the money and the US government is basically a guarantor-

Joy Manbeck: [00:14:56] That is correct.

Michael Blake: [00:14:56] … in case it doesn’t work out, basically.

Joy Manbeck: [00:14:58] Absolutely correct.

Michael Blake: [00:14:59] So, this may not be a fair question, but I just have to ask you. I mean, what happens if a loan does go bad?

Joy Manbeck: [00:15:07] Well, the first thing we do is try to work with the borrower. We try to get with them, find out what’s going on. Do they just need a payment deferment for a while, or are things turning around, or is this a case where the loan is just defaulting, and there’s nothing to be done? So, then, we begin to foreclose. We foreclose on whatever collateral is available. Then, if there’s a gap, then there’s always a guarantor on the loan, personal guarantor, at least, one, anybody, 20% and over as far as shareholder. They’re required to fully guarantee the loan. So, we will go to them, work with them, and try to resolve that gap. But if not, then we take further steps legally.

Michael Blake: [00:15:51] So, another point, one of the things I advise my clients who are asking about the SBA or talking about the SBA is that I think the SBA lenders do as good a job as any in trying to prevent a default, right?

Joy Manbeck: [00:16:07] Absolutely.

Michael Blake: [00:16:08] I think you get a lot more flexibility from an SBA lender than you do most conventional lenders because you really have no interest in foreclosing, unless there’s a gun to your head, basically, right?

Joy Manbeck: [00:16:18] That is absolutely—that’s the last thing we want to see.

Michael Blake: [00:16:20] And in that respect, it strikes a lot like student loans. I mean, you have to work hard-

Joy Manbeck: [00:16:25] Yes.

Michael Blake: [00:16:25] … to default on a student loan on an SBA. Is that—if your business has any chance at all of becoming solvent and repaying this thing in the future, there’s a lot of rope there, isn’t there?

Joy Manbeck: [00:16:38] There’s some. I mean, we can do it three payment principal and interest or principal deferment twice during the loan. But if the borrower defaults and is just not paying, then we have no choice-

Michael Blake: [00:16:52] Sure.

Joy Manbeck: [00:16:52] … but to foreclose.

Michael Blake: [00:16:52] That’s the way the world works, right?

Joy Manbeck: [00:16:55] Yeah, absolutely.

Michael Blake: [00:16:55] It’s not a grant. It’s not free money.

Joy Manbeck: [00:16:56] That’s right.

Michael Blake: [00:16:58] So, let’s say somebody now in earshot is interested, and wants to learn, and wants to maybe take a shot at SBA loan or pursue that, what does the application process look like?

Joy Manbeck: [00:17:08] Basically, we’re going to send them a list of the items we need. We’ll ask for always three years personal tax returns, three years business tax returns, current personal financial statement, current interim profit and loss statement balance sheet. If it’s a startup, we’re going to want two years of monthly cash projections and a good business plan, solid business plan. And then, depending on the company, whether we’ll ask for things like accounts payable aging, accounts receivable aging, just depends on the structure of the company. We’ll get things like resumes from the borrower, history of the company. We’ll go out and do site visits, meet with the borrower, and we do a lot of handholding with our borrowers.

Michael Blake: [00:17:50] I imagine because a lot of your borrowers aren’t necessarily financially sophisticated in the way they’re putting those projections, and you have to teach them the language of banking, I would imagine.

Joy Manbeck: [00:18:01] Sometimes, we do. Most times, I’ll encourage them to work with their CPAs. If they’re a startup business, and they haven’t had a lot of financial experience in the past, I will strongly suggest they sit down with their CPA and go through that projection process.

Michael Blake: [00:18:16] Okay, good. Now, I’ve seen cases where, also, on rare occasion, an SBA requires a third-party appraisal or valuation of the company to be done. When does that get triggered?

Joy Manbeck: [00:18:28] On a real estate appraisal, if the loan is over $250,000, then we’re going to require a real estate appraisal if that’s our collateral. And then, if you’re buying a business, then if the amount that you’re financing, that the bank is financing is over $250,000, we’re going to acquire a third-party business valuation.

Michael Blake: [00:18:49] Okay. And how long does that application process usually take?

Joy Manbeck: [00:18:56] If we’re gonna send a preferred lender, we’re gonna do it without having to submit it to SBA, typically—and I underwrite my—all of us at Vinings underwrite our own loans. And it takes me, usually, two to three days to underwrite a loan. Our committee meet once a week. And then, from there, we issue a commitment letter. Once the borrower accepts that, then we start ordering appraisals, we engage a closing attorney, and I tell people from start to finish, usually 45 to 60 days to close.

Michael Blake: [00:19:26] Okay. And that’s a lot faster. I think most people will appreciate it. Again, I think they’re used to certain kind of banking stereotypes, and they’re used to government stereotypes as well. But in reality, you most likely will receive funding through the SBA much more quicker than you will from a venture capitalist, right?

Joy Manbeck: [00:19:44] Absolutely.

Michael Blake: [00:19:45] VC is going to be a four to six-month exercise if it’s fast tracked.

Joy Manbeck: [00:19:49] Right, sure.

Michael Blake: [00:19:52] So, are there certain—are there any restrictions on what SBA funds borrowed can be used for?

Joy Manbeck: [00:20:02] There are—we can’t loan money to pay a borrower—give money back to a borrower. Say that they’ve bought a piece of property, and they contributed a certain amount into that property, we can’t loan money to give that money back to them. We can’t loan money to have somebody invest in a business. They can buy the business if they’re going to buy at 100%, but it can’t be for a partial investment. I’m trying to think of some other scenarios that go outside the realm.

Michael Blake: [00:20:33] Well, there’s one part that I think that I didn’t know. I knew you couldn’t borrow in order to buy minority interest, but I did not realize you couldn’t borrow if it’s a majority interest, only if you’re buying 100% percent.

Joy Manbeck: [00:20:45] That is correct. You can’t just buy in.

Michael Blake: [00:20:51] In your experience, where do you think most the funds get used?

Joy Manbeck: [00:20:55] Real estate.

Michael Blake: [00:20:57] Yeah.

Joy Manbeck: [00:20:57] Yeah, because those are gonna be those bigger loans. SBA goes up to—the loan can be up to $5 million. With their guarantee, $3.750 would be their portion. So, those are always, typically, going to be bigger loans, the real estate loans.

Michael Blake: [00:21:10] So, not all SBA loans are approved.

Joy Manbeck: [00:21:17] Correct.

Michael Blake: [00:21:17] Of course, you’d love to get them all through. Especially you, you would love to get them all through. But the reality is that there’s not 100% guaranteed promising.

Joy Manbeck: [00:21:22] Sure.

Michael Blake: [00:21:23] So, one, in your experience, what percentage of applications you think make it through where the loan is actually approved?

Joy Manbeck: [00:21:31] Most of mine, if they’re not going to make it, it’s gonna be a desk turned down. Meaning, I’m going to look at it and realize it’s not going to work. Most of them we take to loan committee are approved. And then, since we’re preferred lenders, we approve it at our bank, and we just get our SBA number. So, we don’t have a lot of turn-down scenarios.

Michael Blake: [00:21:53] Yeah. You make sure it doesn’t get to that process. I’m sure-

Joy Manbeck: [00:21:56] Try to.

Michael Blake: [00:21:56] I’m sure the borrowers appreciate that too, right?

Joy Manbeck: [00:21:58] Right.

Michael Blake: [00:21:59] Much rather a quick no-

Joy Manbeck: [00:22:00] Exactly.

Michael Blake: [00:22:00] … than a long maybe.

Joy Manbeck: [00:22:01] And we try to do that.

Michael Blake: [00:22:04] What are the most frequent reasons you find yourself at that desk level saying, “We have to take a pass on this for now?”

Joy Manbeck: [00:22:12] That’s a very good question. One would be inexperience of the borrower. Somebody wants to start a restaurant, but they’ve never even worked in a restaurant, or daycare, or whatever it’s gonna be. Another is cash flow. The cash flow, the historical cash flow of the company doesn’t show that it can service the loan. And sometimes, we’ll do a projection base. They they’re going to add another city to their company, or they’re going to add people, or whatever, then we’ll look at projections. Another would be that it’s way under-collateralized, and we’re taking too big a risk there. And then, another would be trends. Maybe the companies showed some negative trends over the past few years.

Michael Blake: [00:22:53] But the good news, I think, some of those can kind of be fixed, and they can be addressed proactively. You can’t necessarily fix your history, but you certainly can kind of rework the business, right?

Joy Manbeck: [00:23:04] Absolutely.

Michael Blake: [00:23:04] So, in a way, that can actually be a very educational process because you may be—you may, for a lot of these businesses, be the first kind of professional finance person that has looked at the business in that way. And that feedback can be very helpful, right?

Joy Manbeck: [00:23:18] Sure, absolutely.

Michael Blake: [00:23:18] So, have you ever had boomerangs where you’ve said, “Look, this isn’t ready to go now,” but maybe six months or a year later, they are ready, and you wind up being able to approve them?

Joy Manbeck: [00:23:26] We have. I’ve had a few of those in my history. But usually, they tend to go another avenue. But sometimes, they’ll be back.

Michael Blake: [00:23:36] So, you hinted this before, but it’s worth kind of focusing on. If if I’m an SBA borrower, particularly, I’ve never done something like that before, is it worth hiring an accountant or an attorney? Maybe both? Maybe somebody else that can to help me through that process?

Joy Manbeck: [00:23:53] I totally would. I mean, I mentioned earlier, a CPA to help you with the numbers, with your projections, and see what’s reasonable. Also, an attorney to walk you through getting your business opened with the State of Georgia and just advice. As far as contracts, they need to have someone look at a contract with them who has legal knowledge.

Michael Blake: [00:24:18] So, one—I’m going to get to a piece of advice I often tell my clients. Boy, I hope it’s right. And that piece of advice is that if you’re declined by one bank for an SBA loan, that doesn’t necessarily mean that every single bank’s going to decline it. Is there truth to that? If bank A declined it, maybe they might come to you, and you might view that differently. Is that a valid piece of—is that a valid thought?

Joy Manbeck: [00:24:49] It absolutely is. All lenders have their own guidelines. We all have to go by SBA regulations. But different lenders have different priorities, like where—we look at a loan globally. I mean, we’re going to look at all aspects of it. Other SBA lenders only want real estate, and they want coverage of 85% or whatever. And we—most of the SBA lenders in Atlanta know each other, and we know what each other will do that maybe our bank won’t do. And I referred a number of times somebody to another bank that might look at a loan that’s gotten low cash flow to debt service coverage or collateral is way off. But yes, I mean, those are bank guidelines, as long as you’re following SBA regs.

Michael Blake: [00:25:32] And it doesn’t mean somebody is right or wrong. It can just be a comfort level of the kind of business you’re in, right?

Joy Manbeck: [00:25:37] Exactly, absolutely.

Michael Blake: [00:25:38] So, let’s take you, for example. Are there certain kinds of businesses that you just feel like you just know really well and you can really get into them?

Joy Manbeck: [00:25:46] I do. Yeah, I become a car wash lender for one.

Michael Blake: [00:25:50] You mentioned that a couple of times, yeah?

Joy Manbeck: [00:25:52] Yeah. And restaurants, I’ve done a lot of restaurant lending, daycares. So, those are industries that are sort of my area of expertise. But we do really so many different industries. So, we don’t want to limit it-

Michael Blake: [00:26:04] Sure.

Joy Manbeck: [00:26:05] … ever, so.

Michael Blake: [00:26:06] Sure. Well, what do you—besides what we’ve talked about, are there any kind of other kind of misconceptions about SBA loans that you think that the audience ought to know about?

Joy Manbeck: [00:26:19] In addition to the timing, if you work with the preferred lender, and there are other lenders that are what’s called GP, general participant, that can get the loans done efficiently. So, it’s not only at PLP lenders, but we can certainly get them done faster than the ones that aren’t PLP preferred lenders. The other thing is paperwork. Well, like I say, we do a lot of handholding. We try to complete as much of the paperwork as we can, our processing department. So, a lot of people shy away from it because they think it’s just gonna be tons of paperwork. So, that part, I think, in the past was more true than it is now.

Michael Blake: [00:26:57] I’m gonna go off the script a little bit because I thought of a question I can’t resist asking. You might not be able to answer. If you can’t, that’s fine. We’ll move on. But I’m curious, is there a favorite borrower that you’ve had that just took an SBA loan and just did fantastic things that sort of stands out? Maybe built a car wash empire or something like that?

Joy Manbeck: [00:27:18] It’s funny you should mention that because I learned—I did a 504 loan. That’s the loan that you can only do real estate and fixed assets. It was probably three years ago. He probably had 2.5 into the whole thing. Two years later, one of the big car wash franchises came and offered him $7.5 million for it. And so, now, we’re doing another one for him.

Michael Blake: [00:27:41] Wow!

Joy Manbeck: [00:27:42] Yeah.

Michael Blake: [00:27:42] I’d say he’s a good risk.

Joy Manbeck: [00:27:43] He is. They did everything right. So, good borrowers.

Michael Blake: [00:27:47] Well, this has been great. There’s a whole lot more knowledge that I know that you have. And if someone wants to think about working with you, and they’re getting the sense that I already know. I mean, you’re just a great person to work with.

Joy Manbeck: [00:27:58] Thank you.

Michael Blake: [00:27:59] So, if somebody wants to contact you to learn more about if an SBA loan is right for them or not right for them, how can they do that?

Joy Manbeck: [00:28:07] Probably the best thing is the e-mail address, which would just be jmanbeck@viningsbank.com. And I can spell that out if you’d like me to o-.

Michael Blake: [00:28:16] No, I think Vinings Bank, I think, is fairly self-explanatory.

Joy Manbeck: [00:28:20] Okay.

Michael Blake: [00:28:20] And if they can go the website, they’ll see the spelling. So-

Joy Manbeck: [00:28:22] Absolutely.

Michael Blake: [00:28:23] Okay. Well, that’s going to wrap it up for today’s program. I’d like to thank Joy Manbeck so much for joining us and sharing her 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 making it. If you enjoy this podcast, please consider leaving a review with your favorite podcasts 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.

Tagged With: CPa, CPA firm, Dayton accounting, Dayton business advisory, Dayton CPA, Dayton CPA firm, Decision Vision, franchise loans, Michael Blake, Mike Blake, Preferred SBA Lender, SBA CAPLine Program, SBA Express, SBA Lending, SBA Loan, sba loan program, sba loans, Vinings Bank

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