• 52:07
SPEAKERS
Nolan Bradbury, Damon Pistulka
SUMMARY KEYWORDS
financial pitfalls, entrepreneur challenges, accounting issues, business growth, data accuracy, strategic decisions, financial reporting, operational KPIs, business scaling, AI impact, personal finance, fractional family offices, business freedom, financial evolution, AI automation
Damon Pistulka 00:01
All right, everyone, welcome once again, the faces of business. I’m your host, Damon pistulka, and I am excited for my guest today, because we have none other than Nolan Bradbury here today from bradco Financial, and we are going to be talking about key financial pitfalls entrepreneurs should know, thanks for being here today. Nolan, thanks
Nolan Bradbury 00:25
for having me pleasure to be here.
Damon Pistulka 00:27
Yeah, yeah. Well, you know, it’s always great when we can start out our show and talk about your history, learn a bit about you know, Bradfield accounting advisory, what got you into this and what, what do you like to be doing every day, helping people?
Nolan Bradbury 00:48
Yeah, appreciate that. So you know, I am a CPA by trade, although I did not go to college to be a CPA. I went to college to focus on psychology, believe it or not, and I share that, because that I think informs a lot of the way that I view finances and accounting in particular. While I went there, I did ultimately go down the path of accounting, and I’ve been doing accounting for almost 20 plus years, and I did public accounting, so I worked in a really large audit firm on really large clients. I worked in private, really large businesses, but all of that just kind of felt like I was doing necessary, evil work for people who didn’t really want it in the first place, and that wasn’t necessary in alignment with what I was interested in. And so for the past 1213, years, I’ve been working with business owners, like the people who are actually created and started a business and are running it. And what I’ve learned over that time is that, you know, most people didn’t start a business to run a business. They started a business to have a better way of life, that they felt that most people, not all, but a lot, I think, realized they were really good at something, and thought, I can do this on my own better than if I’m doing it for someone else. And somewhere along, from that point to where they’re at now, things didn’t work out necessarily exactly the way people wanted. And so what I love to do is help people understand sort of where finance and accounting is often being ignored, but how that can be the to the detriment of them, and ultimately, how they can use that to actually increase the a lot of aspects of their business, and how that ultimately feeds into a better personal life, quite honestly, because when you have money stresses, it is not isolated to one part of your life, it is across the board. And so really trying to help people, you know, on all aspects of that. Yeah,
Damon Pistulka 02:47
and you, you said one thing that always hits me, and we always talk about as well, you know, you got into business because you’re really good at something, and you’re usually doing it because I, I think I could make more money and have more freedom if I started a business. I think it’s kind of the universal thing people see. And when, like you, I’m sure we’re going to talk about a little bit down here. That’s not the case when people get into their business for a while and really get going in it. Yeah. I mean,
Nolan Bradbury 03:17
I think with anything, there’s a honeymoon period, right, where it starts off, and you’re like, Wow, this is great, like, I can leave whenever I want and do whatever I want. And then, you know, the honeymoon period ends, and you kind of realize I can’t really leave whenever I want, and I, you know, it’s just not what we kind of envisioned. And when that happens, it kind of becomes what do I do now? And for a lot of business owners, especially early on, it’s just them, and it can be lonely, and it can be hard to sort of navigate that. And if you’re not an expert in a lot of these areas that are part of business, it’s hard to be an expert in a lot of these areas that are part of business, right? And so how do you make the right decisions? How do you find the right people? How do you implement that and scale and grow to a point where you’re not working constantly in the business, but rather you have the option of working on the business, right? I mean that for a lot of people, that’s the ultimate goal they’re trying to get to there the business does not rely upon that, that it’s not just them showing up every day.
Damon Pistulka 04:22
So as you’ve been doing this for the last dozen or so years, helping business owners, what are some of the common things that you hear them saying, like, when, when a client comes to you and you go, and you’ve been working a while, this is a really great client. They’ve you’ve been able to help a lot. What are some of the things that bring the two of you together that you hear them saying in the beginning. So if someone’s listening today and they’re saying these things, they might go, Hmm, maybe Nolan is someone that I want to talk to.
Nolan Bradbury 04:54
Yeah. So I’ll first by, I’ll start off by sort of caveating this, which is I am going to. Accountant. I am a CPA, but I also recognize that for most business owners, like the least enjoyable part of our running a business like I fully own, and acknowledge that. But I think that if you understand how humans behave, we tend to avoid things we don’t like. And so if you sort of if so factso, like, if I don’t enjoy accounting, I’m probably not focusing on it as much as I should be or could be, and that ends up sort of being this thing that where it’s a core piece of your business, regardless of how you feel about it, right? The finances of your business are important, and if you’re ignoring it, or at least not focusing on as much you should you are, there’s an opportunity to be missed, right? And so where I like to start with people is help understand why they have that relationship to accounting, because ultimately, it doesn’t really matter what I recommend if it doesn’t actually resonate in a way that they want to take action on it. I could give you every wonderful recommendation from here to the end and save you a whole bunch of money. But there is an element of this that we tend to forget, which is all of it is kind of preference based. Are you going to do it right? Same thing is true. Like working out. Why do we not work out? We know it’s good for us. We know that we need but we don’t show up because we don’t want to. There’s like this element that we let ourselves off the hook with. That same thing is true for accounting. And so we try to help solve where that issue lies. Is it because you’ve had a bad experience with someone in the past when it comes to accounting? Maybe you got bad information. Maybe it’s that the information when it gets to you is so late that it is meaningless, like it doesn’t actually help you at all, maybe. And this is a common one we run into, which is accountants are really good at providing things to other accountants, but not actual business owners. And so what you get as a business owner is like a foreign language to you. It’s not meant for you. And so how do you utilize something that is meaningful? If every month you’re getting the same information, but it isn’t actually in a format that makes sense to you or is the way you think about the business, then it’s not helpful. And so understanding what are the barriers that are preventing you from sort of leaning in, if you will, to accounting, then we can help to tailor the right solution for you, because it isn’t the same thing for every person. If you’re maybe more of a creative person, maybe sending you a really thick packet of tables and graphs is not what you want. Maybe it needs to be something else, where it’s more narrative based. Maybe it’s a short loom video that explains to you how the business is doing. The important thing that we always try to stress when we’re starting out with a client through the entire relationship is we want to meet the client where they’re at. That’s not about like how smart you are or anything like that. It’s about where you’re at in the process, about where you’re at in the understanding of things. Because that’s where we can actually help you. If I’m operating above or below you, that’s not helping it just isn’t. And so that’s kind of where we like to start with. It’s like really understanding what are the things that are holding you back, or what are the negatives that you feel like, why do you not like accounting? I get on a call with someone, one of the first questions I ask them is, I know you don’t want to be here talking to me about this, but something prompted you to get on the phone with me. What is that thing? Let’s start there is the what is the forcing function that got you to this point? And then we can start to peel away the layers and start to understand what’s really underneath the surface that’s causing sort of the resistance.
Damon Pistulka 08:21
So when you’re you’re having that conversation, what? What’s, what’s, what are some of the common things that you hear that, what? Why are you talking to me? Now,
Nolan Bradbury 08:32
one of the most common ones is things aren’t coming when I need them to. So there’s a delay in the information, right? A very common scenario is there’s this, I like my accountant, and then there’s like this, but Right? And the but is usually information doesn’t come when I need it. It’s not the information I need. It’s not accurate. It’s those types of things that the business owner is aware that is holding them back, but doesn’t necessarily know, like, how to fix that with the person, right? It isn’t there isn’t, like, a clear understanding of, like, how do I go to this person and solve that? Yeah, and a lot of what I try to help people understand too, is just because that is the situation that exists, it doesn’t mean that you’re getting bad service. It’s just the service isn’t matched upright. I think we sometimes forget that it is a relationship. You may not think of it as that, but it’s a relationship. And so one or both parties are not seeing eye to eye on what is happening and when it’s happening and how it’s happening. And so that’s kind of that’s the common thing is that it’s usually inaccurate information or that is either not on time or not in a way that they understand or is useful or meaningful, that they can’t make decisions on the other one, I would say that’s fairly common, is they. They’re doing a good job, but there’s not strategy involved in it. And that’s, that’s a fairly common scenario. And what I try to explain to people is, again, that doesn’t mean that the person is a they’re not doing the job. Is that if you’re in the detail and you’re doing detailed compliance work, it’s very hard to do strategic work. Yeah, it’s like the context changing between that is very challenging. And for most professionals, they’re going to start by solving the compliance work. One, because that’s a little bit easier usually. And two, there’s the most liability and exposure for them, yeah. And so they focus their time and energy on that, and then what’s left becomes strategy, but what often is left is not very much. So that leaves the client with this feeling or experience, like I just don’t feel like I’m getting the thing I signed up. And the reality is, in a lot of cases, they usually aren’t, not because the person is not good at their job, but just because of the way the whole machine is kind of constructed.
Damon Pistulka 10:56
Yeah, yep. So as you’re helping people sort things out, what are some of the things that you find that are common threads that you go, Okay, this is something that we usually start, because this is one of the places that will help us to really get things going right from here.
Nolan Bradbury 11:20
Yeah, it, it? It may seem obvious, but that doesn’t make it less true, right? Which is a lot of the times, what people want is the strategy, and what I have to explain them is to do the strategy, we have to have meaningful information. If, to use the fridge, right? Garbage in, garbage out, if, if it, yep, the best professional in the world. If you give them bad information, they will give you bad recommendations. It doesn’t matter, right? Because what they’re basing their recommendation on is not accurate. And so where we have to start is, is the underlying data and information correct? And there’s a lot of different ways to cut and splice that, so correct can mean is it accurate? Like, is it the right number? Is it complete? Meaning, do you have all of the numbers? Is there ownership attached to it? Meaning, like, are the things in your financials actually yours in the first place? You know, like, those types of things have a very large impact on what your situation is and what strategies and recommendations can be made at the end of the day. And so we start by looking at their their accounting software, and what’s the underlying financial reports? Um, where we start with most of our business clients is, let’s do an assessment of what you have. Let’s just like, lay it out there. It’s it’s factual in nature. There’s no opinion to it. It’s like, here is what we see, and based upon that, here are some recommendations. And in order to be able to really do the next step, you need to have this, this foundation in place, right? And so that that’s where we that’s where we try to start the conversation with. And I think it makes it we do that, not only because of the foundational component, but I think it also makes it easier for the client to understand maybe why they’re experiencing the issues that we talked about up at the front, right? Like, if the data you’re getting doesn’t make sense to you, and then you find out that a lot of the information is not correct, well, that kind of makes more sense now, right? Like you go, Oh, well that that a plus b equals c in that stair. Like, I understand how I got there. So that’s where we start at with with things. And then from that, once we have meaningful data, then we help construct the right reporting environment. So you can have great data, but if it isn’t coming out in a meaningful way, the data is useless, right? You can have all the numbers at all the right places, but if the reports you’re getting, then the metrics that you’re getting aren’t the right ones, then you’re not actually able to do anything meaningful with it. So in short, is the data decision useful? Because where I ultimately want people to be with any decision that they have is that they understand what the data is telling them is the quote, unquote right answer, and then it’s their choice to decide, do I follow that or do is there some other factor that I need to use to evaluate the decision so I don’t have a problem when I’m meeting with clients and we’re talking about strategic decisions that they disagree with me and want to do something else, so long as they know that that’s the decision they’re making. So it’s a conscious decision, not an unconscious one, right? The thing that oftentimes is happening that gets businesses in trouble is they’re making unconscious, strategic decisions they don’t actually understand, like the underlying information is telling them something different, and as a result of that, they are unknowingly making the wrong decision, yeah, and that’s, that’s the scenario we have to get them away from. And you know, it’s not their fault, necessarily, or anything like that. It’s just a function of you have to be able to rely upon what you have to tell the right story, and then at that point, you can inject intuition, gut, industry, experience, other things that maybe aren’t quantifiable within the data itself. To. Make the ultimate right strategic choice.
Damon Pistulka 15:01
Yeah, it is bunch of good stuff in there, and just trying to take some good notes, because really the first thing is, is taking the time to make sure the information going into your financial stuff is right. I mean, that’s honestly that that’s where everything starts going well or going badly, and that, that is it. It is a key point for sure. And then, as you said, the reporting, the reporting that doesn’t make any sense to anyone is useless and and even if it is good data, once you once you know that so. And then at the at the end, you were talking about the if you don’t have a if your reporting is bad, your data ends bad. You know the the data you’re using for decisions is not going to allow you to make the best decisions, because not the best data, or not the right data. So what are some of the things that you see happening when people start to go, oh, we start to get the data better. We start to get some reporting things happening. What are some of the the aha moments that you hear from people as you’re as you’re starting to work through this process?
Nolan Bradbury 16:11
Yeah, so one of the first things is I actually start getting a different type of question from the client. So early on the question is like, what is revenue? What was my profit? Very, sort of, like basic, like, one word, sort of answers. And then there’s this tipping point where, after they start to get the, I’ll say, the right data, or more meaningful data, and it is coming to them in a more meaningful way, they start to actually see the business in the way they see the business, meaning that, like, the data is now aligned with their viewpoint. And so what we’ve then the questions that start getting asked at that stage are, what is the relationship between this particular cost here and the product that I’m selling it at? And it’s like, the next level of the question it and you it’s like, it’s not just a black and white right or wrong number. There’s a strategic question behind the question, right? And that’s where I start seeing there’s this leaning in that’s occurs from people. They’re they’re now embracing the data, because they can see the value in it and what it’s telling them. And you know, oftentimes that conversation, it’s really exciting actually, because now you are at a stage where you can actually really drive helpful change for the client. I’m always sort of not amazed, but, like the thing we see a lot, is when we start to get to that stage, the the difference between what the business thinks is their most profitable item versus what oftentimes is their most profitable item. I would say it’s more often than you may think that the sort of ancillary product, product B, if you will, is more profitable than product A, but all of the resources within the business are focused on driving people to product A, and so when you stop and look at that, you have to go, Well, are we misusing our resources? Is part of the reason why our profitability isn’t where it could be, because we’re putting our energy behind the wrong product, or have we not positioned the products together in the right way? It starts to give you data to ask the questions about how the business is operating, to then really dig into other areas of the business. Yeah, it isn’t meant like data isn’t meant to tell you the answer all the time, right? It’s kind of meant to more be indicators, flags of like, where you need to go look and what you need to be asking, and that’s where you start to really get the answers that can make really significant positive change.
Damon Pistulka 18:42
Yeah, that’s for sure. Because when you can start to see some areas that are really good, really bad, or in between that you want to make move one way or the other, the data kind of helps you get into those areas and really see, I want to say really quick. We got Rhea here today. Thanks for stopping by today, and we got omalade is here today. Thanks for being here. So appreciate that. Appreciate the comments. The interesting how you say the level of questions change, because I love that part of it, when, when you can start to focus on not just revenue or profits, but really what is generating the profits? And that’s that, as you said, some of the things that generate profits that we think generate the profits aren’t not generating the profits, but when you really understand what parts of your business are making you the money, then you can make the biggest impact with your business. Yeah.
Nolan Bradbury 19:38
And I think part of that evolution too is what is the data you’re looking at, and what I mean by that is, early on, it’s a lot of what I’ll call stock, financial information, P and L, maybe a statement of cash flow, stuff that, like you’re used to most businesses, you think that as a business, you need to be reviewing. But as we progress, what we start to get is sort of this. Natural occurring KPI list or metrics right of that, excuse me, they indicate like the key components of the business, and that tell you if something is off or on track and and those metrics and those KPIs, they shift away from just being true financial numbers to being operational in nature, headcount in nature. You know, a common one, like, we start looking at sales people start looking upstream from, like, where the the financials are telling us, and what we end up getting is this very nice picture of the whole of the business, not just this one, like section viewed in this one way, and that then makes it a lot easier to have a quick view of like, how are we tracking? What is the data telling us? And, you know, again, a lot of this, it shifts over time. But what I see a lot in the beginning is you see these chart of accounts to these profit, profit and loss statements that have hundreds of accounts on them, right? And there’s granularity down to the point where sometimes there’s an account that is like a specific vendor. You’ll see Costco on there, or, you know, like zoom, and they all have their own accounts. And the unfortunate thing about that is, on the surface, when you do that, you think that that’s going to give you better visibility, but then what you get is this, like, eight page report, and you’re just flipping back and forth trying to find these numbers, and it just becomes white noise. So what we want to be able to get to right is like, what can I tell you in one page, ideally, less that encapsulates all of your business? Yeah, that key that sees that if this is number is off, we know we need to go ask more detailed questions. Yes, then that, then you find the right people to go dig into that, and they are responsible for reporting back what is going on.
Damon Pistulka 21:44
Yes, and I’ve been, I’ve been fortunate enough to be on the teams and doing some of the you talked about KPIs and metrics and really understanding some key components. And when you have those working well for you, the financials are still important. The end of period, financials are still important, but you almost develop a sense of knowing what they’re going to say before they say it. And that’s what truly empowers, I think, people that have good financial data and then use it to develop good operational data that can then drive, okay, how did we do last week? Yeah. Or how did we do yesterday? And, and what are we doing? Yeah?
Nolan Bradbury 22:25
I mean, you make a great point, right, which is, as the business, I’ll say scales and grows, right? Sometimes waiting a month to find out what happened is not fast enough. And so when? But that, you know, having weekly financials is not really the most practical thing, but you can have weekly KPIs. You can have more. You mean about daily KPIs, right? Like, did we hit this metric? Did we hit this target here? And that becomes a bit more real time and data, and it gives you better opportunity to course correct. Should you need to? You know, one of the, one of the concerns a lot of business owners have is they get to the fifth, sixth of the next month, and they find out that last month wasn’t great, yeah, well, at that point, it’s a little too late by the time you identify what the issue is and you make the change now, we’re now, you’re at the end of the next month, and you’re into the following month, and sometimes you’re two months away from the original problem, that runway to figure that out, that each day costs you. You know, the longer you wait you have to the longer that goes before you figure out what’s happening and how you can solve it, that that’s just money being spent in the wrong place.
Damon Pistulka 23:28
Yeah, that’s true, and that. I love it when people can get their businesses onto the weekly KPIs, because what that does is it allows your operational team, your executives, to really understand, how are we doing now? And just as you said, make adjustments three or four times or five times, even in a month, that really can make a huge difference in the overall
Nolan Bradbury 23:51
Yep. And with that better data, right then, one of the one of the common questions we get a lot is, like it helps solve when do I need to hire the next person. When do I add the next resource? Because that then ties back to what we’re kind of talking about the beginning, which is the whole freedom part, right? So how do you create freedom for yourself? Well, it’s, it’s the ability to hire other people to do the work that you don’t need to do. And early on, there’s this perception from business owners that, well, I gotta do all of it. I can’t hand this off. It’s, I don’t have the money to hand this off. It’s hard to know if you have the money when you don’t have any information. And part of it is, like, you know the Dan Martell like, talks about buy back your time in terms of, like, what is your cost? What is the cost, then, that you should be willing to pay anyone else to do that work on your behalf? And even sometimes it’s above that number, right? Because there’s an expertise that exists that you just don’t possess. So it doesn’t matter if you could do it for that you’re not capable of doing it. But that’s that you need that information to be able to start to get enough pieces in place that you can step out and start working on the business.
Damon Pistulka 24:56
Yeah, and when you can start doing that, then you talk. About building a business that starts to generate its own independent value of the owner too, which is obviously something that we’ll discuss here in a moment. And you work with a lot, but that’s this, this whole thing where you’re talking about is really, it starts with good basic information. It works into good basic financial reporting. And then you work into the you more operational, more frequent KPIs to be able to get the improvement cycle down, a lot shorter we used to and and when we work with E commerce companies, we are typically going, you know, you’re looking at the sales every day, but you’re looking at the gross margin profitability, at least on a weekly basis. Because things can change very quickly in the in the electronic type markets like that, because things are moving, you don’t see it. It’s, it’s not like you see, you know, seven trucks backed up to the dock a lot of times with E commerce, it’s just happening because you’ve got warehouses everywhere, all over and it doesn’t, you know if you’re, especially if you’re doing something like an FBA thing and Amazon, it’s all electronic, and if you’re not on top of it, things can happen very quickly. So 100% Yeah. So what are the some of the things that you really enjoy about what you had to do?
Nolan Bradbury 26:13
So, you know, we’ve talked about some of them. It’s, I sounds kind of cheesy, but I love the evolution in the relationship, meaning that, like from when you start working with someone and you identify, what is that thing that they’re coming to talk to you about? What is that forcing function that got them to talk to you about this thing that they’re not excited about? And then you get down the path and they’re actually excited to talk to you about it, because they understand it, and they they bought in, and they see the value in this and that accounting and finance and taxes, they don’t have to be a cost center. They can be something that drives real value within the business and helps identify areas for value in the business and and that’s not like a selfish thing in terms of like, Oh, my area is important, more important than other areas of the business. It’s just, I love to see that sort of growth in someone, that they they’ve learned something new, and that they’re utilizing it in a meaningful way, and then when you see that actually deliver bottom line results for them, I mean, it’s awesome. Like telling someone that they that they can take home an extra $50,000 next month because their profits were that great? Like, that’s awesome. Like, there’s no other way to put it, like, it’s just a really great thing to sort of be able to talk about with someone. Because, you know, as we kind of talked about up front as well, like, the personal side of it is hugely impactful into the business side of it. You know, if finances at home are not great. It bleeds into the work. And vice versa is true. And so when you’re able to create better stability in the business, and it can lead to better finances for you personally, and that then translates to your family, like, that’s a real life changing event, like, literally, that is changing your life in terms of how you’re living and what you’re capable of doing to be able to go from living paycheck to paycheck as a business owner, to being able to, like, take advantage of all the savings opportunities that are available to you because you now have the money to do all of those things. It’s amazing. It’s it’s just, I mean, it’s awesome to be able to see that transformation.
Damon Pistulka 28:17
Yes, yes. Another thing that we’ve seen by financial improving your financial aptitude as a business owner working with someone like yourself, is you can begin to understand like when we talk about KPIs, we talk about having the monthly find good monthly financial information business owners, as they begin to scale their business, get their teams built up, can begin to step away from the business a bit more because they they know how to read the KPIs and the financials and feel comfortable about doing that, rather than thinking I have to be in there, in my fingers and everything. Talk about that a little bit. Yeah,
Nolan Bradbury 29:00
that’s a really great observation point you make, which is, when the business is small, it’s easy to sort of do everything right, because there’s not as many moving pieces as it gets bigger. That’s not possible. You can’t keep your arms around this thing forever, and to get it to a point where you don’t have to be the everything to everyone, you have to be able to have a process and structure within the business that allows you to still be on top of the information without, like, giving complete control. It’s the idea of delegation versus abdication, right? Which is, you’re delegating things to people, but you’re not, like, relinquishing all ownership of it. So you still have the ability to and you still have the sense of responsibility. This is my company. I’m making sure the important decisions are being made, but you’re delegating much of the work to other people, and that’s their job, and that’s really where the freedom you know that we all want, right? I mean, the whole reason we do what we do, for most part, is we want to be. Able to do whatever we want, whenever we want, right? I mean, that’s the ultimate dream for a lot of people, and so to do that, you have to create an environment that doesn’t rely upon you. And you know, I think that this is one of the things too, that I see a lot as businesses are struggling, because businesses will come in and be like, Hey, we’re doing really well. And it’s some variation of this, right, which is, but we keep getting to this revenue number, and then we get pushed back, like we can’t quite break through to that next level. And what I try to explain to them is, and I used what’s called the rule of three and 10 as an explanation of this, but for those who aren’t familiar with it, what it basically says is that as things, as businesses scale in increments of one to three, three to 1010, to 33, to 100 on up. That could be revenue, people, whatever that what got you to that point is what’s going to break and prevent you from getting to the next point. And so it sounds really simple and basic, but even though it’s not, which is when someone’s a $2 million business and they’re trying to get to $3 million the reason most often that they’re not a $3 million business is because they’re not behaving like a $3 million business. Yeah, and that’s not easy to do, don’t get me wrong. Like I’m not saying, Oh, just change what you’re doing, but if you’re doing the things that are that got you to be a successful $2 million business. What we can’t just assume that that’s going to scale in the same way to the next plateau. Like it just doesn’t work that way. And so as you progress through and as you get bigger, you have to be open to the idea that you have to redesign what got you there. And there can’t be any sacred cows that of like, how that works, right? You have to be able to go, like, if I really want to get from 3 million to 10 million, that’s a big leap. There’s a lot of people that have to come on between those revenue numbers and there’s a lot of work that has to happen to be able to actually scale to that point. Otherwise, you’re just gonna, you’re gonna keep kind of petering out and really over exhaust yourself at like these various points along the way, because you just keep running into the same problem, which is you have natural barriers within your business that are preventing you from getting any bigger efficiently.
Damon Pistulka 32:14
Yeah, and that’s that you make a great point about the plateauing and and that’s oftentimes where we get called from an operational standpoint, because we’re, we’re talking to an owner, and they’re like, you know, I’m, I’m contemplating my exit, and they look at the value of the business, and that’s like, well, it’s not what I need it to be. But I don’t know, you know, I’ve tried to get bigger or try to get more profitable. I really can’t do it. And the the biggest apprehension is going back inside and doing some of the things you’re talking about. It’s like, listen, and it’s, it’s, oftentimes it’s simple things. It’s like, you you may not be able to continue expanding with the same kind of sales systems that you’re using, as far as people, as far as you know, are you digital base, or is it, you know, going down to your local chamber of commerce? That’s how we’ve always done it. Whatever the things are that you need to change. Or it could be on the backside that we’ve never really thought about how, you know, enhancing our customer service would make a big difference, because that’s, you know, really not been a focus for us. There’s just so many things that you have to look at, and some of them are, are honestly pretty painful,
Nolan Bradbury 33:28
yes, yeah, or, and, you know, like to simplify, I think you would agree with me on this, right? To break it down, if you’re a business, it’s, let’s say you’re a single person, and you do your doctor or dentist or something. It’s just you in this very simple example, right? And you get to, you’re making half a million dollars, and you’re like, I want to get to a million dollars. If you change nothing about how you’re doing the business, you have one solution to get to a million dollars, and that is raise prices. That’s the only thing you can do if you’re willing to change nothing else about how you do your work. And at some point that runs out, people will stop, like, accepting, like, the pay increases, right? And so by default, you have to do something else. You have to add people to do additional work. You have to add capacity. You have to find efficiencies, to do things for less so that you can make more on the same thing, like, and it isn’t, it isn’t one thing, it’s all of those things in tandem you have to do, right? But we, we, we’ve, we sort of visualize the opposite, which is we sit here and go, Wow, I got to this point of doing half a million by myself. I’ll just, if I double this by next year, I’ll make it a million. And there’s no way that’s happening. It’s just not possible. Like, I don’t, I mean, I wish it was, but, yes, but you know, like the the laws of the market are not going to allow you to just triple your prices to get you to what you want to and do nothing else differently. Yes, yes. Doesn’t work that way.
Damon Pistulka 34:53
Yeah, it does not. I want to say Diane been here a while. Thanks for dropping the comments. Diane. Appreciate. Them, and she was talking about, a while ago the cost of waiting too long, when we were talking about waiting to the end of the financial statements. But you’re right, that the whole thing in this is, you know, to get to the new places you want to go with the business and to move past these plateaus. It is a it is a continuous process, yes. And as soon as you stop thinking about, Okay, how are we going to sell better, more? How are we going to do that? And if we stop and say, Well, we’re doing pretty good with our sales, and we’re just not going to mess, you know, we’re not going to mess with something because it’s working, it’s going to run out. And when we talk to clients about things like this. We look at there are, there are things that have beginning and end, whether we like to realize it or not, and sales is a great thing, because we can say, Listen, we, we’re growing, like you said. We, I’m a single person business, and I’ve went from zero to whatever this right here. But when I get to the when I get about so far, that’s not going any further. So we have to do something else, and that’ll take us so far, and that’ll the next thing will take us so far. So when we’re talking and we’re preparing businesses for sale, one of the big things that we look at is, okay, if we do this initiative, and it’s going to change our value like this. How long do we think that’s going to last, and how far is that going to go? Because what happens when you get towards the end of that, or get about halfway into that, in the business sale process, you better be on the market and getting ready to sell. Because if you’re at the end and things are flattening out, and that’s when you’re going on the market with the business. It’s not nearly as attractive if you’re in the growth phase, and everything’s going and that happens with internal systems. That happens with, you know, supply chain. There’s all these things that it runs into in a business, not just what I’m talking about. And so when you look at that. What are some of the pain points that you guys see in the accounting side of it, that you go, Okay, we’re plateaued. And you go, you’re right. Because here are a couple things we see in your accounting system, bookkeeping, whatever you’re looking at,
Nolan Bradbury 37:15
yeah, the, I would say the number one and most common, like we’re playing Family Feud, number one answer, right? Is going to be, is going to be the data is no longer in a format that supports the information you need. And so what I mean by that, right is that, like the granularity, the splicing and dicing, however you want to sort of describe it, right? It isn’t in a way to tell you the next set of information you need to make that next leap, right? So I tell people that, like, you don’t want to over engineer anything. There’s no value in that, right? But at some point it’s no longer over engineering. It’s just engineering. You got it. You have to do something different to go along with that. And so just like any other operations, the Accounting has to be up leveled. The strategy has to be up leveled. You can’t just record every deposit as one blanket revenue line. And you know, at some point you’re like, Well, how, how do I differentiate between the products? Well, we have to do something different now, right? Yeah, how do I know which products are more profitable? Well, we have to do something different now, like, we have to sort of stay up with what is the next thing? What is the next information that the business needs in order to make the best next strategic decision that’s coming, and it’s often in the information the business has outgrown the format of the information. Yeah,
Damon Pistulka 38:31
that’s a great point, because you make really good example of it is like you might have one revenue line when you start, because, hey, we’re getting money in that’s revenue. But you might have four products that you’re doing your or products or services that you’re doing, but at a certain point those need to be separated so that you can see where the revenue is coming from, where you see where the cost for that revenue are coming from. It’s a great point, because as you grow, that just gets more and more important to be able to look at the level of granularity that you need. Yeah,
Nolan Bradbury 39:06
I mean, if you just keep equally throwing resources at your four products, right, and you don’t realize that one of them is significantly more valuable to you than another, or one of them is a way worse product offering than other ones, but you’re equally allocating capital resources to it, like you’re unknowingly, like, undermining yourself, right? Which is, you’re offering this thing you shouldn’t be offering, or you’re not pushing this one thing enough to really draw in the additional growth, right? That’s an example where, like, if you just change the resource allocation, you might be able to make the next leap simply because of the of that change, right? But it did require a change.
Damon Pistulka 39:42
Yeah, and if you don’t have the data granularity you need, you like you said, you could be investing or putting your resources towards something that you’re not getting the return on, like, if you could, if you adjusted those resources over to something where you could,
Nolan Bradbury 39:56
yeah, and you said something early. I just want to, I want to emphasize. I think it’s really important, which is, some people like, Well, I’m not interested in scaling or going I’m good with where I’m at. It’s like, whether you want to stay where you’re at, or whether you want to get bigger, you have to, you can’t stay stagnant. Like I, the I, the example I always think of is like, if I’m in the middle of a the ocean and I’m like, I need to, I’m trying to tread water, I’m trying to swim. Either scenario, I have to do something with my arms and legs. Like I can’t if I just put myself together, I’m gonna sink. Like, that’s just I’m going down. And that’s the same thing with businesses. In this sense, it’s like, even if you want to maintain your market share and your profitability, you can’t just do the same thing over and over again. At some point that magic will wear out. The market will change. Systems and technology will evolve. Customers will demand something different. You just can’t continue to like. There are very few products out there, right, that last 100 years without any evolution in how they’re done.
Damon Pistulka 40:54
Yeah, it really is. That’s a great point, because that evolution has to continue. Because as soon as you stop the rest of the customers and everyone else around you keeps moving, and it’s you’re falling behind and don’t even realize it.
Nolan Bradbury 41:07
Well, I mean, what you forget, right, is that there is an unknown competitor out there who is trying to scale to where you’re at and and because of that, right, they are doing things more aggressively than you are. And so if you stay still and they keep moving, yep, they’re going to pass you at some point. Yeah,
Damon Pistulka 41:27
yeah, that’s for sure. The that’s a great that’s a great point, because you know when, sometimes, when we, when we talk to business owners that are getting ready to sell their business, like, well, this business has been great for 20 years. We you know, we haven’t had to change anything for the last 10 years. It’s going just fine. And what you’re saying really hurts a business owner that’s getting in the last few years of ownership because the that they may not see it, they may not feel at the point, but it is happening. The rest of the market is changing around them, and their business share is is being diminished, and making those changes to keep moving forward with everything else is critical. Yes, absolutely, yeah. So what are you looking forward to in in accounting? I mean, because they’re, they’re, I mean, they’re just so many things that are being affected by AI today, and actually accounting, which most people wouldn’t realize, is one of the big areas that people are talking about.
Nolan Bradbury 42:27
Yeah, I mean, really, any, any area right now that has a lot of manual processes, is an area that is, you know, is, is exposed for automation, right? Like something can learn patterns easily. You know, transaction recording, any things of those nature. I think it’s good in the long term, because right now we have, at least in the accounting industry, is we have a shortage of people. Yes. I mean, you talk to anyone, they’re like, I’m trying to find a CPA to do my taxes. Nobody knows a CPA who’s accepting business, right? Yeah. And so to some extent, I think AI will help solve some of that, because it will take care of a lot of the data level work that CPAs and that or specialists are spending time on, but don’t need to spend time. Yes, I think so. What I think will help in that standpoint, I also think that by getting people out of the detail, it will allow them to be offering better services to the client, more strategic things to their client. It’s bit of a forcing function for people to like, do the better work, the work they probably want to do anyway, than just sort of like, the more data entry type work. So I think it’s good in the long term. I think that, you know, depending upon where you sit in that industry, it you may be a greater vulnerability to sort of AI cutting in. But that doesn’t, I don’t. I don’t subscribe to the idea that AI is like the end all, and that just because it can improve an area, that it’s going to take away everyone’s job. I mean, like, they’re just, like, we see it evolve. Something else will evolve out of it. We just don’t know what that thing is yet. And so it doesn’t mean that there won’t be job losses, and that isn’t unfortunate. Like, I don’t mean to, like, sort of gloss over that, but I think, as with anything, it is an evolution in an industry. We see this over time, right? I mean, steam engines to, you know, you know, like, everything progresses through time. There’s no sort of stopping. So it’s, to me, it’s just with the next phase of that. I mean, it’s not one that long ago. I mean, I’m not that old. I’d like to think, and it wasn’t that, I mean, wasn’t till High School. The internet was even a thing, you know, now that’s like, unthinkable. We thought, Oh, the internet’s gonna, it’s gonna, like, completely damage the way people do business. No, we just evolved to do business differently. And I think that will hopefully be the same thing with AI,
Damon Pistulka 44:47
yes, and I agree there’s a couple things that it will help. Is, like you said, allow people to do higher value work and provide better I guess, suggestions, knowledge, information. Into their clients in the accounting industry. But it will also help to solve the the drastic accounting shortage of talent. I mean, it’s, it is not just a little bit. It is a lot. When you can, can look in these metro areas, or even anywhere, really, and go, there’s no CPAs to do taxes.
Nolan Bradbury 45:18
Yeah, yeah. 100% that everyone is, you know, it’s not that people aren’t accepting, it’s just they’re very there’s way less companies that are, you know, taking on new clients, yes, and some of that too, is, is age. The industry is a rather older industry. Yes, you have a lot of people, and covid delayed this a little bit, but you’re gonna have a lot of people exiting the job market because they’re retiring, and that that adds to the crunch of that but, and I think that this is true, not just the accounting world, but I think it’s right, you know, it’s not unique to that sense.
Damon Pistulka 45:51
Yeah, yeah, good stuff. Well, what? What do you have coming up that’s exciting that you’d like to let the world know?
Nolan Bradbury 46:01
So I’ll share. So we talked a lot about sort of the business side of things. And, you know, I talked about, up front, how we start there, because ultimately, we’re trying to solve a personal, not problem, but create a better personal sort of situation. And so the thing we didn’t necessarily talk too much about, but I want to share, because I think it’s really exciting, is this idea of sort of sort of fractional family offices for people. So as business owners get to that point where the next dollar they make is less important than the way they spend the next hour of their life, then there’s an opportunity right to basically allow them to buy back part of their personal lifetime, right? And so what we, what I, where I saw this as a problem, and where I think it can really help people is your business owner, or you’re just a you’re a member and a family that has a business owner, and you know, you got your to do list, and maybe at the bottom of that to do list is you gotta update your will, or you gotta refine some of these things. And guess what? It’s always the last thing on your list, because even when you get to the bottom of your list, you don’t want to start that thing. There’s something else that you’d rather do. But the problem is, like, again, just like we talked about with the county, it’s an important thing. Nobody denies that they need to spend time on it, but the same problems exist, which is, you don’t know where to start, you don’t know who to ask. You don’t know what the right thing is. And so what we’re what we’re offering to people is as they as the businesses get sufficient enough and that the business owner can step out, we use the same tools and processes and ideas to help implement into their personal lives, so that the same thing exists right, the same way you would x outsource to professionals and experts in the areas of your business. We help do for you as a person, but we take over that responsibility of having to go find all of them. So we we coordinate all that. We make sure the right things are being done, the right recommendations are being done, with the idea that you kind of get to show up and go, This is what I want to do. We recommend something. You approve it, or say, No, I want to do something else. And then we just take it and reimplement it for you and for a lot of people, that removes this huge burden off of their personal life, that frees up time and mental capacity to do more important things, be with their kids. You know, travel and, you know, it sounds silly to think like, oh, a will prevents me from traveling. That’s not what I’m saying. It’s just that, like it’s one more thing that keeps you from being fully present in whatever it is you’re doing. And so when we talk about what is the goal of being a business owner, is to be free. And so part of being free is all these other elements of your life as well that sort of are in tandem with that, yeah,
Damon Pistulka 48:33
getting those things together. And that is a really valuable service to be able to go, okay, these things I know I need to take care of, but I don’t want to dedicate the time to them, and I’m willing to to give it to someone that can do a really good job at it. I still can review the final results and make my decisions, but I don’t have to go through the the effort to get there. And that’s
Nolan Bradbury 48:57
and I think the the key thing to all add to this, which is, I think it’s really important that the you have someone different organizing and running all that than the people doing it, right. You know, we talked the beginning the compliance versus the strategy. And I think one of the real pieces of value is that you have multiple people working on something, and so you you create this sort of natural environment where you get a better chance the right thing is going to pop out. Yeah, that like you’re not relying upon a singular person or a singular firm to do all of these pieces for you, rather, you have someone challenging what the firm is doing and making sure that it’s in alignment with what you want, and that they challenge you, and that there’s a just a healthier environment to make sure that that thing you end up with is the best thing for you? Yep,
Damon Pistulka 49:43
that’s a great point. Great point. Well, Nolan, it’s been great having you on today and talking about these, these key things that that the pitfalls that entrepreneurs need to really know about accounting and finance and some of the ways. You’re helping people work through those and and really help them. As you said at the very beginning, have make more money and have more freedom so they can do what they do, what they really enjoy. If someone wants to get a hold of you, what’s the best way to get a hold of you? Nolan, yeah,
Nolan Bradbury 50:16
you know, if LinkedIn is your jam, you can find me on there. Very creatively. Nolan Bradbury, so then their website, you can find us. You can submit a little information through our contact us page. The website’s bradfieldco.com you’ll get a real human response that’s not going to be automated, just so you know. So whatever you send there, we’re going to look at it. We’ll reach back out to you. And you know, the thing I would stress is, if, if anything sort of resonated with you today, like, don’t hesitate to reach out. This is not You’re not gonna get a salesy response from me or anyone on my team about, like, what you reaching out about? We are genuinely interested in making sure that you get the right solution, whether that’s with us or someone else. We’ll make sure we we get you in the right place. And if we can help you, great. And if we can’t, we’ll make sure we find someone or point you in the right place to find that person. So don’t be shy. Reach out. We want to help people, and the best way to do that is to raise your hand and ask for it. Awesome.
Damon Pistulka 51:13
Awesome. Well, thanks for being here today. Nolan, I want to thank everyone in the comments. Diane Muhammad came in at the end and said, it’s really good. Thanks so much for that we had. We had Zach and OMA latte and riadiator here today. Thank you. If you came into this show late, go back to the beginning. Nolan dropped a ton of great tips and comments and and just information that can really help you as a business owner that’s wondering, should I get someone to help me get my finances straightened out? How can I have my finances help me make decisions, better decisions, and how can my finances really help me to scale my business in the future? I think there are a lot of good stuff in there about that. Thanks everyone for being here. Nolan, hang out with me for a second, and we’ll finish up offline.
Nolan Bradbury 52:03
Thank you. Bye.