5 to 50: Financial Strategies for Growing Companies · 2025-10-21 · 37 min
Key moments - from our scoring
Substance score
58 / 100
Five dimensions, 20 points each
Patrick Dichter built Apple Tree Consulting into a $4.5M revenue accounting firm through strategic acquisitions and organic growth, but discovered that team-level change management was far harder than managing clients through operational transitions. His approach to managing acquisition integrations - spacing out changes like Canopy portal migrations, QuickBooks Desktop-to-Online conversions, and payroll bureau migrations to Gusto - proved successful when clients had continuity with existing staff and clear processes weren't bottlenecked around single individuals. However, his third acquisition failed partly due to messaging problems around the previous owner's role, and poor staffing decisions when he assigned new clients to his newest hires instead of experienced team members. Beyond acquisitions, Dichter is now focused on reaching his five-year $5M revenue target by building scalable service lines like financial due diligence and quality of earnings (pioneered by hire Devin), distributing leadership responsibilities, and recently bringing on a salesperson to reduce his 50% time spent on sales. His philosophy mirrors modern management theory: identify natural revenue inflection points (solo, team of 5, 15-20, 35-40 headcount), avoid getting stuck in the valley between them, and continuously evaluate team alignment as the business grows.
Team change management affects your staff's entire daily work experience and represents greater risk (losing key people, damaging culture), while client changes are more transactional - clients interact just 1-2 hours monthly, so a single client loss is less disruptive than losing or demoralizing a team member.
Poor messaging led four major clients (who were friends) to believe the previous owner would stay on, causing them to lose trust; Dichter also assigned new clients to his newest hires due to capacity constraints instead of experienced team members, which degraded service quality and drove departures.
He hired Devin as a consultant, they researched how other QoE providers structured their offerings, tested the service on a few small deals to validate feasibility, and scaled it up with additional contractors - the key was hiring the right person first rather than building the entire offering internally.
He targets $5M in revenue within five years of acquisition to establish enough scale for a leadership team, positive cash flow, and the ability to buy other businesses while maintaining work-life balance - he notes there are natural inflection points at solo, 5 employees, 15-20, and 35-40 headcount.
Each new tax professional costs $100K+ in compensation and benefits, and each new client requires 5-6x the typical workload in year one due to bookkeeping cleanup and onboarding, plus the new hire is slower and less efficient, creating a double penalty against profitability during growth phases.
Our reviewer’s read on each dimension, with quotes from the episode.
The episode contains some actionable insights about change management, accountability systems, and scaling professional services (e.g., revenue milestones, team lead promotion strategies, KPI scorecards). However, much of the discussion covers familiar ground - hire good people, communicate clearly, track metrics - without deeply exploring *why* these work or what makes them non-obvious. The rapid-fire Q&A section especially devolves into platitudes ('go sell some stuff', 'revenue heals all wounds'). A B2B operator would extract perhaps 3-4 genuinely useful tactical ideas amid considerable filler and repetition.
There's a culture of performance and accountability where people have to like, see those things and everyone can kind of see the scorecard.
If it's one that affects a lot of people, I definitely have had to slow down and learn to get buy in. Um, but if it's small stuff, I'm just like, let's make a decision, you know?
The core frameworks here - two-way vs. one-way doors (borrowed from Bezos), EOS/Traction methodology, KPI scorecards, 90-day planning cycles - are all well-established and widely circulated in business literature. The guest does apply them competently to an accounting firm context, but there is little genuinely contrarian or first-principles thinking. The framing of change management as hard (especially with employees) is intuitive rather than surprising. No novel mental models or counterintuitive claims emerge.
I love E Myth. E Myth Revisited. That's just a classic, classic, classic book.
Two way door decisions... should be made quickly. Uh, one, one way doors are decisions that you um, can't come back from
Patrick Dichter is a legitimate operating founder with material experience: he acquired and scaled an accounting firm from ~$1.2M to ~$4.5M in revenue over several years, built new service lines (quality of earnings), implemented systematic change management, and is actively managing a leadership team. He has skin in the game and real operational scars. However, he is not a household name, has not achieved venture-scale growth, and operates in a niche professional services vertical. He is a credible middle-market practitioner, not a tier-one operator.
He bought into an accounting firm that he owns, Apple Tree Consulting, where they offer outsourced accounting tax to small, medium sized businesses
we went from 1.2 when I bought it to like this year we'll do 4.5
The guest provides some concrete figures (average client fee ~$900/month, adding 5-8 clients per month, $100k+ cost to hire a tax pro, revenue target of $5M within five years, expected to hit $4.5M this year) and specific tool names (Canopy, Keeper, Gusto, QuickBooks, Traction/EOS). However, most claims about change management, team dynamics, and growth challenges remain anecdotal or general. The client acquisition example (third acquisition failure) lacks specific data on churn rates, lost revenue, or timeline details. Many assertions ('five or six times of work the first year') are unsupported by numbers.
on average client pays like $900,000 a month to cover bookkeeping, business taxes, personal taxes
we went from 1.2 when I bought it to like this year we'll do 4.5
The host asks reasonable follow-ups and probes on change management and scaling ('why was team change harder?', 'what made it successful?'), showing genuine curiosity. However, many responses are accepted without pressing deeper. When Patrick says his third acquisition 'didn't go well' and blames himself, the host nods but doesn't push for specifics on loss amounts, client churn percentages, or root cause analysis. The Keeper software example is clarified well, but most technical decisions go unchallenged. The rapid-fire section feels rushed and shallow, with no follow-ups. The host does not disagree or challenge any major claim from the guest.
Why so.
What made it successful, you think?
Computed from the transcript - who did the talking, and the words that came up most.
In this episode of 5 to 50: Financial Strategies for Growing Companies, host Jeff Rudner sits down with Patrick Dichter, founder and owner of AppleTree Consulting, an accounting firm specializing in outsourced accounting and tax services for small to medium-sized businesses. Patrick shares his unique journey from business consultant to accounting firm owner, having grown his company from $1.2 million to $4.5 million in revenue through strategic acquisitions and organic growth. He offers candid insights on the challenges of change management, the reality of scaling a professional services firm, and the difficult decisions that come with rapid growth. From navigating client transitions to building accountability systems and expanding service lines, Patrick pulls back the curtain on what it really takes to build a modern accounting practice. Whether you're considering an acquisition, scaling your firm, or simply trying to build the right team, this episode is packed with real-world lessons from the trenches.
Transcribed and scored by The B2B Podcast Index.
Speaker A: You had change management on both your customer level and your team. So which one was harder?
Speaker B: Uh, a team. It just felt riskier, you know, to lose a team member or to like, have a culture that's really upset versus, like losing a singular client.
Speaker A: It's easier said than done. Of course you got to get the right people to execute. Of course you got to help hold people accountable.
Speaker B: There's a culture of performance and accountability where people have to like, see those things and everyone can kind of see the scorecard.
Speaker C: Yeah.
Speaker B: Clear. 90 day plan. When somebody comes in and not being afraid to give somebody a warning or put on their performance plan or let somebody go. Sucks to let people go, but whenever I do it, it sucks for a couple days. And then afterwards I'm like, that was the right move.
Speaker A: Hey everyone, I am super excited for this one because our guest today is in the same industry as I am. Patrick Dichter. He bought into an accounting firm that he owns, Apple Tree Consulting, where they offer outsourced accounting tax to small, medium sized businesses specializing in professional services and, um, home repair and more and more as we'll go. But, uh, we share a lot in common. The way that we approach servicing, um, our clients is, is, um, a lot in a lot of overlap. And we're going to unpack that today. So, Patrick, welcome to the show.
Speaker B: Thanks for having me, Jeff. I'm excited to be here. And, um, you know, just two people in a nerdy space nerding out together. So should be, should be a fun conversation.
Speaker A: Oh, awesome.
Speaker B: So look, I'm a cpa.
Speaker A: I went to school, studied accounting. I started my career in accounting. But you chose to join this profession. Now, is there something that, uh, was wrong with your upbringing that, uh, kind of had you decide, uh, that had made you want to be an accountant? What, uh, what caused you to join the profession?
Speaker B: Mommy issues at the root of it? No. So I, I kind of had a winding path. I've always kind of been analytical and gravitated towards numbers. But, um, studied business in college, got my mba, and then I, I did sales leadership for seven years and then I did small business coaching and consulting. And that's really where it happened because I was doing this consulting and coaching work and all my clients would have terrible books. And I was always referring out a lot of bookkeeping. And then I started to hear about people that buy businesses and like this whole search fund concept. And I was like, wait a second, what kind of business should I buy? And then I was like, I'm referring out all this Bookkeeping. What if I bought a bookkeeping or accounting firm? And so that's. That was really kind of the genesis. And there was literally one day where this guy Adam came in for a potential console. And, um, he was telling me he had bought his accounting firm and he was about to buy a second one. He's like, yeah, there's tons of accounting firms for sale because they're all aging up. It was just like this perfect storm of me wanting to do something entrepreneurial and hearing about people that buy businesses. And then that conversation with Adam and having referred out a lot of bookkeeping, that's ultimately what led to it. And then I went looking for one to buy.
Speaker A: Yeah, there's macro trends in the industry, right? I think, um, last I looked, it's like 70% of CPAs are in retirement age, which just seems, you know, incredible to think about. Um, the number of CPAs leaving the profession up until last year was outpacing the number of new CPAs joining. And so you have these macro trends in the industry, which theoretically should create a lot of opportunity. But the only thing that, that, the only problem is that this is a professional services company. So what are the things that, you know, joining this industry that you had to learn that maybe you weren't prepared for? What were the things that you've had to learn over the past few years being a business owner that, that you wish you knew then, uh, what you knew now?
Speaker B: Man, I'm always, like, learning and getting my butt kicked every week. Um, and, um, I, I would say the things that I was right about was like, I think it was the right move, given my skill set. I think, um, there's tons of opportunity. The things I misjudged or was wrong about was just how hard change management is, um, with accountants. And I also thought tax was more black and white. And the more, like, tax issues come up or tax law comes up, I'm like, it feels very gray. And you'll have really varying opinions on that. And just had that today. Um, understand with an operating agreement, you know, somebody's like, we're going to buy a business. Would this fly with an operating agreement? And like, our senior tax person says, no tax. Ernie. I ran it by said, maybe. And, uh, you know, so, yeah, that, that's. That's kind of been the, you know, the learning. And, um, it's, um. Yeah, I'm always, you know, learning just how much I don't know in the
Speaker A: space, but so let's dive into the change management. So I think that's super, um, important regardless of whether you're buying into a company or whether you're, uh, whether you're running a business and you're going to change some. Some plans. What, um, you had change management on both your customer level.
Speaker B: Yeah.
Speaker A: And your team. So which one was harder?
Speaker B: Uh, a team. Team, for sure.
Speaker A: Team.
Speaker B: Yeah.
Speaker A: Wow.
Speaker B: Yeah.
Speaker A: Why so.
Speaker B: Well, it's. It's more of their world. Right. Like, our customers interact with us one or two hours a month. Right. And for my team, it's like their. Their job. Right. And, um, and it also just felt riskier, you know, to lose a team member or to, like, have a culture that's really upset versus, like, losing a singular client, you know? Yeah. Yeah.
Speaker A: So how did you manage it with the, uh, the customers?
Speaker B: So the first acquisition that I did went really well, I would say, in terms of, like, customer revenue retention, client,
Speaker A: what made it successful, you think?
Speaker B: The first guy I bought from IT run a really good firm and like, he had done a good job kind of getting out of the day to day, and then, um, he stayed involved. So I think clients felt comfortable with that. But, you know, we. We changed our. From the client change management perspective. We changed to Canopy, which changed our client portal, changed our billing. Um, you know, so we still had people, like, trying to upload docs to the old portal.
Speaker A: We,
Speaker B: you know, had probably 40, 50% of clients on QuickBooks Desktop. And after the first year, we migrated everybody to QuickBooks Online. And so that was a big disruption. Um, we used to be like a payroll bureau of record and migrated to Gusto, hired people, so there was like, every good amount of client change. It was kind of like, paced out. Um,
Speaker A: yeah, but that's a lot to do in the first, uh, year.
Speaker B: Yeah, that wasn't on the first year. It was like payroll was year two. Canopy, we started to change in the first year. Like, we started to use it internally, and then we changed the client portal, I think, like, 10 months after I
Speaker A: bought the firm or something like that. So seems like, um, the things that went well were the things that set you up for success for the change. Management was clear processes that were not owned by a single point of failure. Right.
Speaker C: Yeah.
Speaker A: Uh, you're the owner that you. You took over from, had a team that was working, so they were able to continue what they were doing and spaced out the amount of change over a period. That was more comfortable than trying to do everything at once.
Speaker B: Yeah, yeah.
Speaker A: Um, you had subsequent acquisitions what, what worked or didn't work with those.
Speaker B: The second one was a small one that was a similar firm that, that went pretty well, kind of easy tuck in. But there were still some, like, legacy clients that, um, rather than give us like online banking access, they insist on like, mailing bank statements and stuff. And like, after a year we're just like, okay, yeah, do it our way or you're gone, you know.
Speaker A: Right.
Speaker B: Uh, um, and then the third acquisition, that one really did not go well. Um, I think at the end of the day, a lot of that was my fault.
Speaker A: Um, but, um, why is that? It's very accountable of you to take that.
Speaker B: There are a few big contributing factors. Um, but one the, the four biggest clients, all friends. And we're like four months in this transition and it was like going pretty well. And then they'd misunderstood the way we messaged this transition. They thought the previous owner was going to stay on Walmart and so they, they lost trust. And so that was my fault on the way it was messaged. And then, um, you know, we lost some of the other clients too. But I think it was a matter of like, client service felt different or they just weren't happy with us, you know, So I actually like, I should have done a better job making sure clients were happy.
Speaker A: How can you do that?
Speaker B: We're growing a lot and hiring as is. And so I bought this firm and then I assigned some of the clients to our newest people because they had the most available capacity before I really knew if they were going to be great. Right.
Speaker A: Yeah, I think that's, uh, I should
Speaker B: have, I should have given them to like our best. Well, that maybe didn't have quite as much capacity. Um, Right.
Speaker A: Yeah.
Speaker B: And the other thing that was kind of outside of our control was this niche of clients. They used to all do really well with like Facebook ads to promote their business. And then that algorithm changed and then a lot of them struggling. Right. Firm.
Speaker A: So that was just their businesses. Yeah.
Speaker B: That hurt a lot.
Speaker C: Yeah.
Speaker B: Uh, hey everyone.
Speaker C: I want to take a moment to talk about how we at Pro Seer are simplifying accounting and finance for entrepreneurs. Through our outsourced accounting, fractional CFO services, proactive tax planning and accounting software implementations, we cut out unnecessary complexity for business owners and entrepreneurs. Our approach provides real time insights, practical tax strategies, and a clear roadmap to help our clients grow their businesses. If you'd like to learn more, feel free to book a free consultation with me by visiting Proseer Co. Uh, that's, uh, P R O S E E R Co. Now back to the show.
Speaker A: Yeah, that didn't help you. You know, macro trends, um, they're all businesses are, revenues are down, they're having, they're looking for areas to cut costs and you know, accounting is for a lot of people seen as a cost center and they don't see the value add specifically I'm sure in that, in that industry.
Speaker B: Yeah.
Speaker A: Um, so, uh, understood. So now how do you, now what are the things that you know, you survived a few years post acquisitions, um, had the, the dust is settled. How do you go from taking this approach to of, of being that consultant and helping clients to applying that mindset to your business? Um, what are the things that you're looking at to, to scale your business on a regular basis? Um, you're, you support professional services so your team is advising them regularly. But, but do you take your own medicine? What are the things you're looking at, uh, on a regular basis to determine if you're good or not?
Speaker B: Great question. We, we've been growing and um, our bread and butter is um, we do a monthly subscription, so billing. So on average client pays like $900,000 a month to cover bookkeeping, business taxes, personal taxes. That's kind of our average new client fee. So each month we're typically picking up like 5 to 8 of those per month clients. Um, so trying to double down on the organic growth. And then we added um, financial due diligence and quality of earning services, um, like 18 months or so ago, maybe two years ago. And so that's been a new revenue stream for us. And then it also allows us to like work with a client earlier in the life cycle and then if they buy that business then we often get the post close accounting.
Speaker A: Yeah.
Speaker B: Um, and then actually when I, when I first bought Apple Tree, I was doing more billable consulting work. And then since then I've kind of scaled that back because I'm focused on growing the firm more but a little bit of consulting work and then in the future I'd like to add financial planning and wealth management, um, as like new service line to.
Speaker A: Yeah.
Speaker B: You know, continue to work clients.
Speaker A: Let's talk about starting up the new due diligence practice within the uh, existing firm. What were the steps you had to take to build this new offering for the market? How did you educate the market that you had this and to uh, to build it up?
Speaker B: So I had been close to it because I bought a business and then I'd kind of been involved in the small business m and a community and so just being close to other like Quality of earnings providers. I had seen the work that they do in like the, the pricing and the way that people offer it. Um, and then there was a guy, Devin, who we hired, um, to do consulting work. And then people would always ask me like, do you do quality earnings? And we were always saying no. And then him and I decided to go do it. And so we like talked to a few other people, got example models, like dipped our toe in the pool with like a couple simple smaller deals and then we're like, like, we can do this and we're good at it. Um, and so short answer was like, I hired the right person to be the first person to go do that. Um, and then, um, yeah, we've like grown it over time and hired um, a couple other contractors that help us as well.
Speaker A: Yeah, that's awesome. It sounds like you're building for scale, um, compared to the businesses that the traditional, uh, professional services that are founder led until they're dead. Um, and you know, the founder is the product and they never get out of it. Um, they eat what they kill. Every dollar that goes through the system flows through them. It's different than how you're building your practice. Um, you're focusing on growing profitably and scaling in a way that's different. Um, how do you look at that? Is that with a modern approach?
Speaker B: Yeah. I don't know how you, how you feel like, but I saw this in the consulting work that I did and I've also seen with other accounting firms there's kind of sweet spots where like, so for example, in accounting you could be solo and like make good money, but you wear all the hats. And then I think the next sweet spot is like a team of five. You make good money, you have a small team, you know everybody. And then maybe it's like 15 to 20,
Speaker A: right?
Speaker B: And then it's probably like, I don't know, 35, 40 headcount. And so if you look at the revenue, like, but what if you get stuck in between those? It sucks, right? So like the owner that had five employees and used to make a bunch of money, suddenly if he has nine employees and it's not managed well, right? He's like, man, this sucks. Like I have more headache and I'm making less money. So anyways, where I see this for accounting firms is like the, the target I've had from day one is to try to get to 5 million in revenue within five years. Because I thought that would be good enough size that I could have like a leadership team in place. And uh, have m enough cash flow, follow the bottom line if I want to. I don't know if my wife's soft working or if I want to go buy other businesses. So that's what I've been in pursuit of is kind of the, the revenue target and the org chart of a five million dollar accounting firm. Um, and honestly there's times where I'm like, man, I don't know if I'm the guy that could go past that. Like, I just, yeah, like I don't, I don't know if I want to. I don't know if like I'm game for that. Right. Like I, There's a lot of days where I'm like, man, I'm tired of pushing the boulder up the hill because yeah, we went from 1.2 when I bought it to like this year we'll do 4.5. And um, you know, there's like, we have great team members, but there's definitely times where I'm like, I feel like I'm the only guy driving growth.
Speaker A: You know, no, 100% understand that. Um, and I think that's uh, indicative of, that's, that's per. Regardless of what business you're in, I think you're going to be, you got to have a team that is entrepreneurial and is looking for opportunities to grow the business consistently. They're going to own it, um, the good and the bad, um, and they're, they're always looking forward. And so, um, I agree with you. It's a stair step between, you know, you can say number of people, revenues, but you really have to be intentional about growing and align the team and make sure you have the right people to help support that, uh, to support and execute on that vision. And so I think, I think uh, growing organically is hard. Um, I think it sounds like that's exactly what you're doing. You gotta make sure you have the right people that are gonna execute on that for you.
Speaker B: And especially in our industry, the growth is so painful and expensive.
Speaker A: Like the big stair step, right?
Speaker B: Yeah. Like, okay, if we stop growing right now, aggressively, I could have another 15, 20% profit fall to the bottom line.
Speaker A: Yep.
Speaker B: But because we're trying to grow and push, push the growth. If I go hire a new tax pro is at least 100 grand in comp and benefits and everything else. And then each new client, I'm sure you feel this is five or six times of work the first year as you clean up the books and get them acclimated and get the Process down. And then the first year tax return is way more work. And, and then the new, the new tax person as well, they're not as fast and efficient. So like.
Speaker A: Right. It's double whammy.
Speaker B: Every, everything is a slog that first year with a new client. And so yeah, growth is expensive, of course.
Speaker A: Yeah. And you know, in our industry, the, as you mentioned, you got to bring someone on, ideally, you got to bring someone on three to six months before, before they're needed, uh, at full capacity. Uh, you got to train them on your processes, you got to help them understand the client base. You have to understand the uh, relationships that you have and you don't want to mess those up. And so that's one side of it. So you're managing the inventory, you have, um, but you also have to manage the expectations of the clients and you have to train them on the way that you're doing things. Because if you're adding true value, the uh, experience from a client perspective is going to be different than they had previously. Especially if you're trying to scale. You're not going to be, they're, they're not going to be calling you if you, you bring them into the firm. If there's a question, you gotta make sure it's messaged. Right. So there's change management throughout regardless of what stage of the business you're operating in. Right.
Speaker B: Yeah. Have you, have you heard of that book Unreasonable Hospitality or read it?
Speaker A: Uh, no, I haven't.
Speaker B: Okay, so it's a great book. But there's a guy who um, had like one of the top rated restaurants in New York and they had like a really high end fine dining restaurant and then one of the guys broke off and developed Shake Shack. Anyways, but.
Speaker A: Oh, right.
Speaker B: It's an amazing book. It's really inspiring. But I remember, right?
Speaker A: Yes. Yeah. Okay.
Speaker B: I remember like driving to the office and listening to that and being like, how can we delight clients? And then I'd go to the office and just get my butt kicked like with problems all day, you know. And uh, it was almost just comical, just like me getting all ramped up by that book and then just like taking punches all day when we're just like trying to service clients, you know, it's just like where, where is that
Speaker A: line of like, uh, you know. No, I think it's, it's definitely a culture, um, a culture and um, a culture building. It's got to be, comes consistency on messaging. You have to get the right people and you know, you have to understand that the people you have today may not be the people you needed yesterday or the people you might need tomorrow. And so making sure you have the right people to help you execute on your goals and training people the right way, it's just a constant, uh, it's a constant investment. So I definitely understand that. And that's, I think that's for, that's true for any business. I think constantly evaluating, uh, the people on the team. Using people for their highest and best use is just super important. Um, you want to make sure that the people that you have in different roles are aligned with the vision. Uh, they understand what they have to do and they're excited about the opportunity. Uh, and if not, then they might be great people and you should, um, try to find a space for them in the business. Um, but if they're not willing to make the changes for the business as it's, it's growing, then um, you have to, you know. Yeah. Might have to make some difficult decisions. So. Right. You know, as goals change, it's uh, it's important to, to manage those expectations.
Speaker B: Yeah.
Speaker A: So change management throughout. Right. It's just a constant, constant, uh, change management. So, um, so what's next for the business? You're talking, you're pretty close to that $5 million goal. You're not sure if you want to continue to scale or um, pull back. Obviously you're, you're, you're investing in growth because you're height, you hired your team. Um, you're gonna get to, you're gonna try to get to a certain level. But what are the big, big North Star goals for you?
Speaker B: Yeah, so we're, you know, next year, 2026 was like that, that year five where I was trying to do 5 million top line. So we're kind of on pace for that. Um, or a little bit ahead of schedule, I think. I think we'll hit it. Um, uh, the next big thing strategically for me is, um, uh, trying to add wealth management and financial planning. Then, um, I hired a salesperson three weeks ago. So like trying to free up my time there.
Speaker A: Yeah.
Speaker B: Because that's probably like 50% of my time these days. Um, and then beyond that, I, I don't know. I like, I, I think I want to like, continue to, you know, grow 20% a year or maybe 20, 30 a year if we can and like continue, um, to refine our services. But um, I, yeah, I do need to spend more time looking at like our three or five year vision because I don't have clarity there.
Speaker A: Right now, but it seems like your recipe for success has been at least what you explained today has been pretty clear. It's like do something really, really well. Build that process, define it, put somebody in charge of it and let them run with it. It seems like that's what you did, um, with the due diligence process. You had a good team on the bookkeeping side. Um, it seems like that's what you're doing on tax and then now you're doing that with sales because they're probably stepping into your shoes where you can be, clearly you can be hands on to train that person up with clear instructions and then that's how it's going to happen with uh, financial, um, financial, uh, advisory. So it seems like that's a pretty good structure for any business. Right? Like define clear processes, give someone clear instructions and let them execute.
Speaker B: Yeah, hopefully. Easy, easy said, hard heart does. Right.
Speaker A: It's easier said than done. Of course you got to get the right people to execute. Of course you got to help hold people accountable. Um, what have you seen work from an accountability standpoint? Um, are there things that you look to, um, with your team that help you hold people accountable, Help people hold themselves accountable?
Speaker B: Yeah, I think there's, there's a few things. Um, one is like having scorecards. You know, like, okay, for bookkeeping we need to be at X percent of clients completed at these stages of the month. Like it's really clear. And on the weekly staff g call, everyone reports. And then similarly for our tax team, like they have certain KPIs, like what percent of your tax returns are done and they self report. Um, and then another big one is like getting new clients out of onboarding within 90 days. So a, there's like some, there's a culture of performance and accountability where people have to like see those things and everyone can kind of see the, the scorecard.
Speaker A: Yeah.
Speaker B: Um, and um, just being clear with people what the, the expectations are. And then, um,
Speaker A: do you celebrate wins with the teams?
Speaker B: Yeah, we, we definitely like try to do that. We could always do a better job. But you know, we have like a Wins channel on Slack where we'll just celebrate like things have gone well or,
Speaker A: you know, that's cool.
Speaker B: Big, big milestones. And then in our staff meeting we always give like shout outs to other people on the team. Um, and uh, one of our core values is, you know, we give each other a good work product and we lift each other up because it's just so easy to like criticize and be like, they miss this, they miss this, you know. Right. So yeah, that's it culturally. And then um, clear 90 day plan when somebody comes in and um, not being afraid to, you know, give somebody a warning or put on a farmer, explain or let somebody go, you know, like, yeah, I know that's it. It sucks to let people go. But like whenever I do, sucks for a couple days and then afterwards I'm like, that was the right move, you know.
Speaker A: Yeah. And it's right for likely for them too. You know, someone's not performing in your business, it's likely because, you know, they don't want to be there, they're not motivated to be there. Um, obviously there's extenuating circumstances. We're talking about performance based, performance based layoffs, of course. Um, so uh, switching a bit to the systems and processes to help you scale. Uh, sounds like you have some technology that you're using. You have practice management software, you have some intake to systematize, um, the interaction with your customers. Um, are there tools that you default to, uh, that you can point to that make you more efficient and you think, um, are helping support the scale tech wise.
Speaker B: We implemented Canopy, which was a big upgrade for operations and practice management. The other things aren't really tech, so we use Traction or eos for how we run the business and run our meetings.
Speaker A: Um, uh, WS's entrepreneurs operating system.
Speaker B: Right. Yeah.
Speaker A: So what are the things that um, what are the features of that that work, uh, really well for you?
Speaker B: I'm a huge fan of the scorecard. Right. So everyone knows what it looks like to win, um, being aligned on what our core values are. Um, another thing is the issues list in Quarterly Rock. So we get together quarterly and we say what are all the things we need to work on as a company? Here's like 20 stuff we could go fix. Okay, let's go prioritize the three or four things for this quarter that we're going to go go fix.
Speaker A: Yeah, that's huge. Right. Especially at the leadership level, making sure that, that your leaders are aligned because they're going to be responsible for making sure those, those outcomes happen. Right?
Speaker B: Yeah. And then just having a growth mindset and like, you know, um, yeah. Know what our growth targets are and then you know, the rest of the stuff has kind of been more sales and marketing changes that I've made that have led to the growth.
Speaker A: But yeah, from your leadership team, have you hired those people from outside the company or have they been, um, they've been promoted from within.
Speaker B: So of our team leads um, they're all internal except one. Well, I guess one started as like a onboarding and staff account and then once we kind of created this team lead group, they're all from within. I haven't, I haven't hired anyone externally. Like, ah, okay, you're going to come in as a hired gun to be our like ops manager or anything like that.
Speaker A: Do you think that would work?
Speaker B: It'd have to be a really, really sharp person. You know, it's hard. You know, like every firm is different and like, I don't know.
Speaker A: Yeah, it seems like, you know, we see big headlines of new leaders coming into um, different companies and the culture really has to be aligned. The, the company has to be set up in a way that the, that aligns with the skills of that person. Um, so those are big companies that have established systems and operations that we see the headlines for. It's uh, even harder at a smaller school. Ah, smaller business. Right.
Speaker B: Yeah. And it's also, they're expensive and like in a small business you almost don't have time for them to like get a lay of the land for six months. Like you got to come in and like contribute, you know?
Speaker A: Yeah, you have to. Startup mindset, right? You gotta just um, you gotta unpack the problems, the opportunities regardless uh, of the role. Right. If you're bringing in someone for sales, they gotta, they gotta take over for you. They gotta manage the current pipeline and also go find uh, new leads based on your icp. Um, if it's operations, uh, we're talking about change management. Working directly with people that don't like to be managed very, very with a lot, with a heavy fist. So, you know, that's a, that's a balancing act, right?
Speaker B: Yeah.
Speaker A: Yeah. So, um, so awesome. So you're right. It seems like you're executing pretty, um, uh, pretty well. Working in a professional services team. You get past the, the, you know, the three to five million mark, um, that so many, um, so many firm owners don't do when you're doing it, uh, without any partners. So, um, this is a new modern accounting firm, um, we hear so much about. I think that's where uh, many business owners are trying to structure the business, uh, without having, you know, other partners in the mix. Um, how do you feel being that sole owner? You wish you had a partner in the, in the business or are you glad to be not having to listen to anybody else?
Speaker B: So I'm kind of, I'm generally kind of anti partner because when I did the business consulting work for three and a half years. I had a lot of partnership clients and I would just see so many of them end up in, like, dysfunction and like, huge disputes, you know, So I think, I don't know, my hat's off to people that do it. But I think more often than not, like, partnerships fizzle out or they, they go a different way. So that, that could change in the future. But up to this point, yeah, I'm grateful that I don't have to like, run a bunch of stuff by other people. Yeah.
Speaker A: So, you know, obviously there's pros and cons to that. I think obviously there's nobody else that you can turn to, to, um, to, to make a decision, but also there's nobody else that you have to turn to to make a decision. Uh, what are your thoughts on decision making in general? Um, as a small business owner, are you someone that takes a long time to make decisions, or are you under the decision velocity mindset that it makes more sense to make quick decisions, uh, continuously than slow?
Speaker B: I would say if it's one that affects a lot of people, I definitely have had to slow down and learn to get buy in. Um, but if it's small stuff, I'm just like, let's make a decision, you know? Um, a couple recent examples, um, we, we tried Keeper this year.
Speaker A: Okay. So that was what, that's an operations, um, software.
Speaker B: Yeah.
Speaker A: That helps, should help your team perform their tasks or bookkeeper.
Speaker B: It's primarily, we wanted to use it for like a quality control improvement with bookkeeping. And I've been hearing great things about Keeper for years. And I'd been like, we should do this, we should do this. And the buy in just wasn't there. And then finally I was like, all right, let's all get a demo. Keeper, I'd like us to test this. And I had like three or four people that are like, yeah, it sounds good. And then like, we had three or four people on our team use it for a few months and they're just like, listen, if we're not going to totally implement this, like, it's not worth the effort given the stuff that we already use Canopy and the other checklists that we have. I was like, all right, if you don't think so, we're going to kill it. Right? So that was an example of like, where if it was up to me and based on what everyone else had said, I just would have been like, let's go, we're going to use Keeper. And they're just like, we don't think it's good to fully implement. So killed it. Right. Or last week our texting, like we use a texting software service and it just was awful. It just stopped working. So people couldn't get two factor authentication codes and it was just like we got to get off this asap. And so I had somebody else go look at a few providers and they like, they fell in love with ring central on the first call and they wanted to sign. I was like, whoa, whoa, whoa, no, no, no, no. Like I want you to check out these two others and everyone is telling me that like zoom phones is better.
Speaker A: Mhm.
Speaker B: And so in that instance I was like, I kind of let somebody else do some of the research and then I like, I advocated for zoom phones. So m. I don't know if this kind of gives you some perspective, but like small decisions I make fast and then if there's stuff that affects a lot of other people, I learned that I have to get their buy in, you know. All right.
Speaker A: Yeah. It goes back to the theme of the show I think uh, or our conversation is change management is very important in, in all aspects of the business. Whether it's a small thing or a big thing. Um, but to your point, I think, you know, I reference this often is uh, Jeff, Jeff Bezos always talks about decision, uh, making as uh, a two way door or one way door. So two way door decisions. Some is a decision that you can come back from. Um, it's really low level risk so those decisions should be made quickly. Uh, one, one way doors are decisions that you um, can't come back from, have material change in the business and should be taken a little bit. Should be taken more slowly. And so it sounds like you have that perspective. I like that.
Speaker B: Cool.
Speaker A: Uh, well, uh, we're coming up to our time. We have time for a few rapid fire questions.
Speaker B: Go ahead.
Speaker A: All right, cool. So um, you mentioned unreasonable, uh, hospitality. But what's one book, um, you recommend to other entrepreneurs on a regular basis?
Speaker B: Man, There's a few. Depends on the situation. But um, I love E Myth. E Myth Revisited. That's just a classic, classic, classic book.
Speaker A: For someone that's just starting a small business, what's the best metric for them to track when they're starting sales?
Speaker B: Go sell some stuff. Accounting, CRM, all that other stuff can wait. Go get some clients.
Speaker A: Revenue heals all wounds, right? Yes. Yeah. Uh, what's the most common financial mistake you see small business owners make?
Speaker B: Not paying attention to their gross margin. Good.
Speaker A: What's uh, one financial habit you had to break as, uh, your business grew.
Speaker B: I don't have an answer for you on that.
Speaker A: Or one habit sounds like getting out of client work.
Speaker B: A new habit, which I love is we track our new MRR M growth per month. So sold versus lost and kind of the net gain. We didn't do that for the first few years and man, I wish we had the data on that. But.
Speaker A: All right. And, uh, if you could instantly master one new skill to improve your business, what would it be?
Speaker B: Reading tax returns.
Speaker A: You don't want to be reading tax returns. Come on. Is, um, you got to. You have much more qualified professionals to do that.
Speaker B: Yeah, it would be because, uh, yeah, I feel like it would take me 20 years to catch up with some of our team members, but to be able to, like, you know, scan and troubleshoot.
Speaker A: I understand.
Speaker B: Huge.
Speaker A: Yeah, 100%. Cool. Well, Patrick, where can people find you if they want to learn more about you or Apple Tree.
Speaker B: Yeah, happy to connect online. Uh, Patrick Dichter on Twitter. I spend too much time there. Or LinkedIn. Or you can find our website, appletreebusiness.com Amazing.
Speaker A: Thanks a lot, Patrick. I appreciate it as much.
Speaker C: Thanks for tuning into 5 to 50. If you found today's episode helpful, be sure to subscribe, leave a review, and share with other business owners looking to grow. Do you have a question or a topic you'd like us to cover? Connect with us on LinkedIn or reach out to us at Proseer, where we're empowering entrepreneurs with real time, actionable insights and financial infrastructure through smarter accounting, tax and financial strategies. Let's keep this conversation going. Together we'll help our businesses thrive.
Speaker A: Talk to you soon.
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