The Art of Succession

welcome to the Art of Succession podcast

with Barrett Young join us as we explore

the strategies stories and insights that

shape the journey of leadership

transitions and business success no

matter where you find yourself along the

journey this is the podcast where you'll

find the tools to make it happen i was

passionate and still am about my

business so if I'm in a sales situation

I'm very passionate about it cuz I

believe in it we just grew uh word of

mouth marketing efforts uh internally uh

externally my partner was not interested

in the payroll uh payroll is a very

complex field uh more so than people

realize take that and take the

responsibilities and and the liability

that goes with it and um have your own

firm my name is Barrett Young and this

is the Art of Succession podcast my

guest today is Charles Reid CEO of Get

Payroll in Dallas Texas charles bought

an accounting franchise in 1991 and has

since grown and refocused it into a

payroll company charles welcome to the

art of succession barrett thank you very

much for having me it's a pleasure to be

with you so uh I want to start off just

asking you know what brings you to talk

about succession planning here on the

art of succession what really interested

you in getting in front of my audience

well it's the same reason I wrote my

most recent book is providing

information to clients and potential

clients uh is something that I like to

do um anything that adds to their

education

uh is great anything that puts us in

front of potential clients is even

better awesome thank you Charles i

appreciate that so you are a CPA a

fellow CPA how long have you been a CPA

uh it's uh let's see this is 25

uh

47 years

okay

so about 10 to 15 years there working

for other companies then as about about

15 years in the corporate world gotcha

uh after I got my MBA I went to work for

Texas Instruments and then I spent 15

years basically in the corporate world

large companies small companies

turnaround startups lots of wonderful

experience but uh I knew I was never

going to get to the top of a major

corporation i don't have the political

skills uh I'm unwilling to stab people

in the back and toss them off the ladder

so if I was going to run a company I was

going to have to start my own okay uh

talk to me just about the the landscape

in 1991 um accounting franchises really

aren't known uh that much anymore uh in

the you know in the profession so talk

to me about what it was like in the late

80s and how you found an accounting

franchise and let's talk through that

success that uh acquisition a little bit

i have to say it was

serendipity i had finished my uh time at

JC Penney with a contract dispute

um they wanted to void my contract and

have me do other things and I wasn't

willing to do that and my lawyer who was

handling that uh had a

friend who had

uh Financial Express it was a mobile

accounting service okay okay like go to

somebody's house and prepare their tax

return kind of thing go to their

business we had a van that would vans

that would go to the business park in

the parking lot get the stuff do the

books go over the financials with the

owner and go on to the next one okay and

they needed a COO so I went in and was

working for Financial Express the board

was pushing the president to get rid of

the original office

uh and concentrate on franchising

so I said "Hey I'll buy it." And I did

uh now a year later the franchiseor went

belly up uh mismanagement

um some piccadillos some other things

going on that just weren't right and so

a year later uh the franchise or

disappeared we just changed the name and

kept on going and that was over a third

of a century ago

so you were working there in one of

these vans going you know doortodoor

business to business i had I had I had

two vans and uh another accountant and

was going to to door to door and uh

every time I'd uh go to a client I'd uh

that I hadn't been to before i'd pull

the doors on every side just to hand out

additional information try and find

clients and uh marketed and did all the

things my wife and I started it

together so uh it worked um work life

balance wasn't a problem because she was

there as much as I was u was she was she

the other accountant or was she on admin

kind of she was the admin and customerf

facing person uh she people liked her

she's a people person was uh I'm I'm I'm

an accountant i mean you know you

understand we're we're not people people

we're we're numbers people uh you know

we're professional nitpickers uh you

know naysayers and and excitement

dousers all that kind of stuff as as

long as Yeah you know I you've been to

CPA conventions 8 o'clock at night

they're all in bed they don't go out and

party

okay it's crazy at a CPA convention

there's There's no night life

that's funny like I said I haven't heard

of accounting franchises i mean you've

got like tax shops and stuff like that

like an H&R Block i don't really

consider those accounting franchises i

guess they are but was this unique at

the time this kind of Well American

Express was uh trying to franchise

accountants

uh basically buy up accounting uh

practices and and have them practice

under the American Express name they got

legally they got legally shut down

because of that in several states and

quit doing it uh but this was a

consolidation time the the big four was

well the big eight the big 10 was coming

down to the big four and there was a lot

of turmoil uh in the accounting industry

uh there were people trying to do

franchising uh there were people trying

to do uh bookkeeping franchises and act

as accountants and it was it was a

tumultuous time uh

and some succeeded some didn't obviously

uh Financial Express went out of

business um they turned out that they

their marketing program was based on one

individual and it wasn't repeatable

robert was a unique individual and could

sell his services and couldn't train

anybody else in his style mhm and so

that was the ultimate downfall of the

franchise was

marketing we tried all kinds of

different marketing we're fairly

successful over the years uh not as much

as I would have liked to have been uh

but I found out later

on 20 years later when I finally hired a

marketing person that I couldn't market

my way out of a paper

bag so I'm very pleased at what I was

able to accomplish because uh when I had

that marketing person I realized I

didn't know [ __ ] so it was it was

incredible

yeah marketing tends to be the downfall

for most firms especially in succession

planning because that is the thing that

a founder is really good at

relationships all that kind of stuff and

never really thought to train somebody

else to do that so I was passionate and

still am about my business mhm so if I'm

in a sales situation I'm very passionate

about it because I believe in it i think

we provide an excellent product

excellent service skill levels all these

things and it shows

uh but

salesman it's a little harder yeah yeah

and you have a little bit more freedom

as an owner to make deals and

concessions and double down on something

take a hard line too that it's it's hard

to train somebody else know yes so so

the board was encouraging this guy to

lean into the mobile business and you

wanted to buy the physical location is

that that was Well we we had a physical

office but we were still mobile oh okay

but it was we had I think three vans

there and I just I knocked it down to

two when I bought it uh but it was you

know you still have to have a physical

base for for for a mobile service at

that point in time uh this was long

before the internet okay and the email

and the internet basically put mobile

out of business because there's just no

need for it anymore they can they can

internet you know it's the the ability

to

communicate is so much greater than it

used to be before I started this I was

in the footwear business and we did a

lot of sourcing out of Taiwan

once fax machines came in we were able

to get designs literally back and forth

overnight we'd send them a design they'd

work on it at We'd send it to them on

our day which is their night they'd work

it on their day and fax it back to us

and we'd have it the next morning and

the turnaround went from four or five

days each way to 12 hours and then once

you put the internet in

uh wow i mean you know there's there's

just no need for on-site things like we

provided uh anymore there's just uh you

know we service payroll clients around

the country

um because it's all electronic now

there's just there's just no need for

paperwork physical paper i mean I've got

to get a wet signature for a 2848 but

that's about it good old IRS still stuck

in the fax machine days so

Yeah I I was talking to an agent the

other day they still they're they're I

swear they're the biggest user of fax

machines in the country

and paper checks still on many things so

yes

um so with the with the franchise you

know going under a couple months after

you came in what did that do to the

acquisition deal i mean did it get

renegotiated did it get wiped out talk

talk a little bit about that because

that sometimes happens so I had formed a

I had formed a corporation and we bought

the assets of the original

office and with that was a royalty

agreement okay but when the office

closed and they were providing no

support I quit paying royalties

we got a letter about a year later from

an

attorney and I hired a a franchise

attorney and we responded basically uh

to the extent since we're not receiving

any

services and no support you have

abregated the agreement we are not going

to pay any royalties and my attorney

said to the actual attorney that wrote

the letter since you know all of this

should you continue to pursue this we

will seek sanctions against you

personally

you never heard from him again

put that to bed real quick so

that that that was the end of it

cautionary tale about four months later

my attorney called me and said "Have you

heard anything?" I said "No I haven't

heard a thing." He said "Great let me

know if you do." He sent me a bill for

that phone call well of course yeah

absolutely

he thought I was done but he was

checking in so yep all right so you find

yourself now the owner of an accounting

company still doing the mobile thing

still you and one other accountant at

this point uh at that point he'd moved

on uh you know I was doing all the work

still doing books for companies on a on

a monthly basis then yes a lot of a lot

of monthly accounting uh obviously taxes

in in tax season um mostly corporate

taxes and the owner's taxes uh we

weren't a we weren't a retail tax shop i

had no interest in being a retail tax

shop and competing with you know H&R

Block and so on and so forth uh they

they can't do corporate taxes worth the

dam so it they weren't competition in

where I really wanted to be which was

businessto business gotcha yep so just

anybody listening this means he wasn't

just doing anybody off the street 1040

only tax returns sticking to the

business owners the the ones that really

needed t need tax planning too uh have

more complicated situations and m much

more uh higher bills and so on the only

simple ones I do would be the the

owner's kids

so you say "Can you can you take care of

Larry's?" Yeah fine w2 yeah 25 bucks and

and move on i mean you know just boom

yep that's not that's not the business I

wanted but you know when when when the

client's generating you know 6 or 800

bucks a month in fees and he wants a

little 1040 tax return done sure not a

problem Joe we'll be glad to take care

of it for you yep yep gotcha i don't I

don't want him to talk to another tax

guy or another CPA

yeah

so

um have you acquired any other companies

since then or is that the extent of your

own personal uh experience through

acquisition talk talk me through that a

little i know you've walked other

clients through this but was any of any

of your growth over the past 30 years

through acquisition no we looked at

several firms uh I had taken on a

partner in the accounting firm a few

years later okay and we looked at

another accounting firm or actually

several in town and got very close but

it just never came to never came to the

final uh we had one that we were all set

on we negotiated a uh lower price than

his initial ask and we were all set to

sign and somebody else came in and said

I'll buy it for what you're you're

asking for it so he said okay and uh um

it it did not go well because the guy

didn't know what he was doing but you

know it was too late at that point in

time uh and you know CPAs

are hard to deal with

so they they like secrecy and so on and

so forth so it's uh but no we didn't buy

anybody else we just grew uh word of

mouth marketing efforts uh internally uh

externally

um you know we're not as big as I would

have liked but it was a good living mhm

what was the purpose of bringing on

another partner a couple years later

just to double double the people signing

returns kind of thing too much business

i I had more business I could handle so

I had to expand the professional staff

so uh I brought on we tried a couple and

some worked some didn't

uh we had a very nice young man that I

hell he used to mow my lawn and he

became a CPA and I he worked for me for

a couple of years and then moved on to

another bigger position because we were

a small company mhm and so I looked for

a a partner and well I looked for a CPA

and I I liked Robert and so uh we made

an agreement and I sold him part of the

firm and then I made him a full partner

and it was an equal oper equal

partnership uh and then when uh the

money wasn't enough for him

uh and I was moving into the payroll I

sold him the rest of the accounting

practice here about 10 years ago and

kept all the payroll and moved solely

into the payroll business uh the only

taxes I do anymore are uh my own

companies multiple companies taxes my

personal taxes and you know a few

friends and I'm getting out of I'm

getting out of the friends i I'm getting

tired of that

um okay so you ran an accounting company

for the good majority of the history of

for about 20 years twothirds of the of

the lifetime so far of business so what

was it about payroll that because that's

a long time with a lot of established

clients i mean you've had clients for

probably all 20 of those years that

you're now like I'm not going to do your

taxes anymore you're going over to this

guy what was it that you started to see

shift in your interest or in the

business model or because mo just for

listeners context most CPA firms would

shut down the payroll or sell off the

payroll or move out of the payroll and

stick with the taxes

because payroll is tends to be a lower

profit center tends to be a higher

headache center um and so that's how

most people would look at it so you you

took the opposite tact with that why was

that

well my partner was not interested in

the payroll i actually was i enjoy that

it's it's really business to business uh

payroll is a very complex field uh more

so than people realize

uh and we were moved into multiple

states so we're now operating in in the

mid 90s with the internet we started to

pick up clients uh all over the country

uh and to me it was much more

fascinating i'd spent you know many many

years in the accounting field and and

the payroll field was was new to me and

much more interesting uh you know I was

a grass was greener and so it was more

fun so since we I needed to move income

to Robert I moved the accounting to him

and I kept the payroll and we split the

firm now all the clients were basically

familiar with Robert because I had been

starting to concentrate more on payroll

internally

so most of them knew who Robert was and

he was doing a lot of the taxes

already um Diana was working for us

part-time um she was an interesting hire

she'd been a full-time CPA at Brinker

International okay and had her first

baby and wanted to work part-time and

they wouldn't hire her part-time

so she came looking and I found her and

hired her immediately and a few months

later Brinker came and said "Well you

know we'd kind of like to have you

part-time now." And she said "No." And

she still works for us now uh

god 20 let's see Drew is 26 or 27 and

she came to us when he was 3 months old

so um she was there too

but so the transition of the accounting

over to Robert and and Diana went with

him uh went very smoothly we were doing

a lot of both accounting and payroll for

the same clients of course yeah

so we just split it up in the billing

we'd always we all we had always build

it separately

anyway so it wasn't a big change for

them to just call me for payroll and

them to call Robert for accounting and

tax it it was a now Robert lost three

clients because Robert is

as much as I am a CPA and not a a people

person

robert is more so

he's not a people person i mean Robert's

a great accountant and a great tax man

exir agent very knowledgeable very

experienced uh you know a nice guy

family guy uh I like Robert but it's

hard to hold a conversation with him uh

unless it's tax so yeah he lost a couple

of clients because he was you

know you remember uh Joe Friday and dry

debt just the facts ma'am just the facts

that's all he wanted to talk about

that's all he wanted he he didn't you

know that he's gotten better over the

years but you know the the fact that you

had kids and Lynham was sick and the

baby was ill just the facts ma'am just

the facts

so I imagine then you weren't you

weren't get payroll until this time

right so he took the name of the company

the m majority of the clients and you

took the ones that were payroll only or

you know had had payroll that you guys

were working on exactly what other we

continue we continue to if I get a have

a payroll client that needs accounting I

send them to him if he accounting client

that he's picked up that needs payroll

he sends them to me uh until we sold the

building here last November we still

office together okay because I'd built a

building 25 years ago and that's where

he officed and he's after we sold the

the firm he he just rented an office

from me and we talk on a daily basis

okay so still pretty closely tied then

on that one oh very much it was very

amicable how else did you structure I

mean what other approaches did you take

having had this experience buying a

franchise from somebody who was kind of

like a peer and a friend it seemed in

back in '91 what steps did you take in

this split to make a definitive line to

be clear about revenue and be clear

about you know cost sharing and things

like that

okay the cost sharing was was a specific

contract he would rent office space and

equipment and we would provide certain

services for a fee the one thing I

didn't put into it was the ability to

raise the fee

okay it was just a flat

fee and of course as our costs went up

over the next 10 years we should have

been able to raise it

we had no mechanism to do that and

frankly it wasn't that big of a deal so

I just never did

uh we came to a very con comprehensive

contract on what business went where and

what clients and so on um so it was uh

and again we'd worked together we were

partners it was a very amicable split i

mean this was not forced or or driven

uh I offered uh you know he'd come to me

and was talking about you know setting

up his own firm because he needed more

revenue and so on and uh he was a

little I was still taking revenue off of

what he was doing okay because I'd

really moved into payroll and he was

really doing almost all of the tax and

accounting and I was still taking a cut

and so I basically said "Here you can

keep my cut you can have the firm and

I'll take all the payroll and we'll just

move on on that basis." And that was all

he wanted so

um it just was just worked uh it was a

very I was ready i knew I wasn't doing

much work in the accounting side but

still getting income off of it that was

fine i didn't mind that but you know he

he was right he was doing the work he

should get the income so okay fine um

take that and take the responsibilities

and and the liability that goes with it

and um have your own firm so uh we had

set up Reed and Shahan at one point and

I just sold him the stock in it and he

became the uh uh sole stockholder in the

corporation

gotcha okay i mean that's that's great

that it was amicable and everything

worked out there that's definitely not

the case especially with um something so

closely tied together like that were

there any conflicts or were there any

warning signs that you would had you

been an adviser to this relationship you

would have told a client watch out for

this or you know be careful i mean you

you you can't keep taking money out of

the firm and not do any work in it okay

that that's that's not going to work

over time it's not like you've put up a

major asset that they're using or

something like that you're just taking a

cut of the revenue

uh and and not doing any of the work and

that's not going to work in a

professional uh operation where it's

professional skills and and effort

that's creating the money it's not like

you have capital invested that's that's

needed and so on and so forth so that

that was an obvious I was not surprised

at all when he brought it up mhm i knew

it was I knew it was coming i mean was

that defined for a term or was that a

dollar amount that earnout that that he

was basically paying you for uh I was

taking 25% of the revenue but for a

certain number of years or just into

that was just an ongoing thing okay that

was just that's how it was uh

[Music]

and you know he's

he got so he resented a little bit and

when he said something I said understand

not a problem uh pay pay he paid me

uh one times revenue uh plus uh

outstanding AR

to get out of the lifetime annuity

effectively to to buy to buy the the uh

book of business uh and I I'd sold him

half of it based on that that same uh

revenue that same formula earlier on

he'd bought in for 25% then 50% and then

we used the same terms to to go 100% uh

could I have insisted on something more

ownorous absolutely could I have said no

I'm g not going to sell it to you

goodbye uh I I could have done that too

but what what purpose

uh it was it was a time and place I was

ready he was ready uh he wanted to run

his own firm uh fully and not have to

put up with a partner and I understand

that and so how long into that split 10

years ago did that conversation happen

because you guys continued to work with

each other or next to each other for a

while sharing business yeah we we we

worked in the same same offices for

another 10 years so I mean but was that

within two years of that happening and

he said "This isn't working." I would I

would say that from when he brought it

up uh it was 90 days before it was done

sorry how long did it take him to bring

it up before that split

oh 6 eight years okay

partner it was quite a while he was he

was very happy being half you know half

but as I was working out of doing the

accounting and more into the payroll uh

I think he began to resent that a little

bit that I was still taking you know as

much of the revenue so the acquisition

kind of really happened in two phases

you're you're still a partner in that

one but you're doing over here and

you're making 25% off of him doing the

work and then finally a couple years ago

at some point he just said "No I want to

buy you out entirely." And we go our

separate ways his his point was that he

needed more revenue mhm okay and so he

was going to look for something that was

going to generate more revenue for his

family and I said "Hey just take it i'll

tell you the rest i'll tell you the rest

of the firm will that work?" And he said

"Yeah." And so we we negotiated we used

the same formula we had for him buying

in and it was it was a done deal in 90

days gotcha okay awesome

how did you now that payroll is your

100% focus i mean how did that shift how

you're selling to clients how you're

saying this is what we do over here my

my former partner can provide this i

mean and now that this how did you see

what did you see the vision the future

for get payroll from that point forward

oh we wanted to get as big as ADP but

you know we never did uh you know we we

concentrated we focused on payroll and

payroll services uh we didn't talk about

accounting services unless they brought

it up and then say "Yeah we we've got a

I've got my exartner whose office is

with me that that does accounting you

know let me have you talk to him." Yeah

and there were clients he wouldn't

take uh he didn't like nonprofits m

uh and uh you

know as as an accountant in

payroll it's much more straightforward

than taxes mhm uh and so we'd have

clients more regulated but also much

more straightforward right that would

they would pay payroll and and and do it

down the line mhm but over on the

accounting side they would wander across

the line you know on what's right and

what's maybe not and so on so he might

have problems with them there where as

long as they were paying

payroll correctly and legitimately

we didn't care what they did i mean from

the from the payroll company's point of

view they could be a crook

but if they're paying Joe Blow his

hourly rate and paying the taxes and our

fee we don't care for instance uh you

know we had some problems with the banks

uh as time went on because of cannabis

and other things that the the government

said you know you can't deal with these

people how it affects payroll just you

know boggles my it doesn't affect

payroll what do you care okay but uh

that did some things but uh you know we

didn't care if they

were not 100% up and up on on the per

side we didn't care as as long as they u

the the checks cashed and um our fees

were paid u you know we didn't get into

it we didn't care he did and properly so

had I been doing it I would have cared

too

yeah yeah complicated issues for sure

when Yes very complicated dealing with

the states state's regulations on it and

then the IRS's regulations on on things

like that so what was your target

audience or target uh client for the

payroll company was there a certain

sweet spot for you guys what' that look

like under 20 employees okay so super

small businesses as far as payroll is

concerned well yeah but what you have to

understand is 95% of all US businesses

have less than 20 employees

now when you get to a

100 uh our competition goes after them

vehemently very hard uh every company in

the US that has over 100 employees is

called on personally by an ADP rep at

least four times a year

okay

we don't have the marketing budget to go

after that and to compete with that in

addition to that in our industry uh

paychecks

ADP will do anything to get a client

when we copied the original paychecks

contract there was a

line

w whatever it takes what at WIT WIT

that's all it said was WIT and the

salesman could do whatever he needed to

close the deal the WIT meant whatever it

takes

so they're horse you know they they'll

do anything to get the job to get the

contract i'm I I have a hard time doing

that because I've seen paychecks

literally come in uh on a deal and raise

the price before the first payrolls run

and then raise it again before the

second one and raise it again before the

third one okay um I was listening in on

the

uh call that ADP has with their analysts

for their annual and Rodriguez who was

the president at the time said "Our goal

this year is to get everyone to book,"

which means list price or above

i I mean these these people are scum uh

on their business ethics as far as I'm

concerned um and I I won't operate that

way it's too much of a CPA enmy so uh we

we chose the the small businesses uh we

find them to be very long lived uh very

constant and once we've got them trained

in the system uh it's very profitable uh

the margins are good and the amount of

effort needed particularly as technology

is improved is minimal mhm so uh we are

doing much more payroll with fewer

people now than we were 20 years

ago so the the the systems and and

software and hardware and internet and

electronic banking and so on uh uh

direct deposit um electronic payrolls uh

has made this far less labor intensive

than it used to be uh and therefore more

profitable

what's your marketing look like because

I know for under 20 under 20 employees

that gets so undercut by the the big two

brands so what's your marketing look

like or is it almost I mean I know from

having a payroll wing of our company you

could basically just pick up all the

people that they screw up

we get a lot from ADP and paychecks

because your best advertisements they're

they're our best advertisers absolutely

but we're we're we're all over the web

now we have our own YouTube channel uh

we're on Instagram we're on Tik Tok uh

our biggest source of leads is Facebook

advertise

uh we've got uh we had two people and

now we're down to one at the moment who

does nothing but our social media okay

that's really where we're doing our all

of our advertising we don't

do

um door door too died years ago um

postcards any kind of local No the the c

we do a lot of email advertising but the

cost of snail mail

is for a dollar for a a piece of real

mail I can do 50,000 emails

yeah why why why would I send out a

piece of mail uh you know I get them in

my mailbox i just throw them away yeah i

don't look at the damn things uh they're

a waste of time and money coal calling

is dead uh you know Yeah glenn Forfeit

Fabolita with he does a whole uh thing

for payroll companies uh he believes in

um bulky mail you know where you stick

some chucka in there that that makes for

an uneven package and so you open it and

so on i think it's a waste of time and

money uh I get these things periodically

for various

things one of the things I loved is a

pen company used to send me uh free pen

samples wanting me to buy pens and sell

them and I'd just take them put them in

my pen rack and have a free pen uh you

know I don't believe in that stuff uh

email marketing works for us uh in our

business we've discovered that it's

never know

it's just not today mhm we get clients

that come we get potential clients that

after a year two years 5 years as long

as 12 years come back and say "Hey I

need payroll." Now one of my favorite

stories is I had done accounting work

for a gentleman

CPA and uh 12 years after I had ceased

doing business with him he retired and

so on his son called me and says Charles

you guys still do payroll and I said

yeah

sure well he brought us a whole chain of

restaurants is as a group it's our

biggest client now

mhm out of the blue 12 years later 12

years later yeah it's it's amazing my my

my sales guy has adopted that as his

phrase now you know what I always say

it's never it's you never know it's just

not today you because he believes it now

so everything we dump in the funnel we

continue to drip market to because

sooner or later particularly if they're

with ADP or paychecks

they're going to get pissed mhm and if

we're on the desk they're going to call

us

being a being a fellow CPA and you know

like you said we're the life of the

party everywhere we go how what did you

how did you shift your mindset to this

because I talked to CPAs in my

profession some my age some older than

me and they're just no chamber of

commerce go shake hands play golf all

that kind of stuff

what caused you to shift your mindset

and then like you said finally

acknowledge I'm not a marketer i need to

bring marketing inhouse i was trying to

do all of this mail pieces networking

and so on and it was getting

overwhelming with everything else was

going on so I hired a marketing person

just local or contact or

referral i I I put out an ad and and

this was you know 10 years ago whatever

eight years ago and hired a

lady

and she immediately started doing things

in the social media area mhm

that my personal view of

Facebook is it's a great place to send

grandma pictures of the babies other

than that I have no use for it that's

why my parents got started

using Exactly she started using that and

started getting clients from it and from

other social media and email marketing

and we

we she was she was she she made me

change my mind uh and it was just

serendipity that I finally hired

somebody because I'd gotten you know I

had other things going on my wife is

disabled and uh uh from a stroke and

just I didn't have time for everything

and so far far far better at it than I

was so yeah and I I I've been to CPA

conferences for years and you know

there'll be 100 people at the marketing

uh CPE course and maybe two of them will

ask questions and one of them will

implement something

uh yeah we we don't know how to market

cpas don't know how to market they just

don't and it's it's not it's not in our

DNA it was in hers and I I'm I'm I'm the

guy who would try something from the

conference okay i'm that guy but I

still can't mark my way out of a paper

bag compared to a professional at it so

if if you have a CPA firm and you don't

have a marketing person hire one at

least part-time

nice

i mean yeah just good on you for

recognizing the limitation there

recognizing and and you know getting

lucky with your first hire also a lot of

people have have know so little about

marketing that they can't tell if the

person that they've hired is doing a

good job or not because they're like I

guess something might be happening so

that's that's awesome to hear

um did you say you're down to one person

now for marketing or that's just one

person on the social media what's what's

payroll one person on the social media i

have two people in the marketing staff

i'd had three uh I'd had

um uh who did all my photo editing and

and all the social media videos and so

on

we now have systems in place where

somebody anos my marketing manager can

do a lot of that and the things we need

to we can outsource on Fiverr or

whatever for a fraction of the cost of a

full-time person that's right we needed

that full-time person to develop the

systems the hardware the concepts and

everything else that went went through

it and I don't begrudge uh at all uh the

cost of having him on board for uh four

or five years

uh he was just fabulous at it but he got

an offer from somebody and you know

uh moved on and I congratulations i mean

you know I I I never uh put somebody

down for for doing what they think is

best for themselves uh if somebody says

to me you know I found a better job i'm

leaving i stick my hand out and say

congratulations mhm uh good for you i'm

glad you found something you think is

better if it doesn't work out give me a

call yeah good and and I've had people

come back to me

yeah the grass wasn't greener over there

yep michael was was a superb

videographer and I I treasure everything

he's done and got our YouTube channel

set up and and helped us define how

we're doing things and so on and uh he's

he's a very very talented individual and

at some point we may replace him and

bring somebody else in but at the moment

we're just doing it on a little less

budget okay uh two to three people on a

marketing team what size is get payroll

now where you would justify something

like that where that makes sense like

staff-wise how how big are you guys a

dozen people oh wow okay so about a

quarter of your team almost is uh is

marketing wow that's awesome

um if you want to get into it here

towards the end of of the interview

what's talking about you know your

own acquisition what's what's the

succession plan for get payroll look

like and what's the timeline on that are

you in talks do you have a leadership

team within the company what's that look

like there are three people in in

leadership positions uh Deborah has been

with me for 25 years uh Chris has been

with me he's my ops manager for 10 and

an is my marketing manager he's been

with me about five years now uh and then

I have you know eight or 10 other people

uh under

them i'm basically semi-retired now i'm

doing very little work other than

podcasts and interviews uh we have a

monthly we have a weekly marketing

meeting where we go over things and I

still you know have to make some of the

decisions uh because I'm I'm the owner

though Deborah Deborah owns 10% of the

company i gave her 10% years ago

uh my plan is to move the business

ownership to all the

employees obviously the ones that have

been there longer and are in positions

of authority will probably end up with

bigger

shares we are in discussion on exactly

how that's going to happen i don't know

the best way yet to do that i'm talking

to an attorney about uh you know um

employee stock ownership whatever but it

is my desire by the end of next year to

have gotten myself completely out of the

business the only thing I'll doing is be

getting a small income stream from it uh

for the sale of it for the rest of my

life i mean I could I could I could call

ADP tomorrow mhm and sell this

for probably one and a half times

revenue

adp

uh paychecks paychoice whatever a paycom

they'd all buy me in a heartbeat

it's not enough money to matter

uh I would much rather give my employees

the chance

to have the ownership and produce the

kind of lifestyle that I've enjoyed from

that

well believe me the first 10 years were

tough okay it was handtomouth and and if

there wasn't a if somebody didn't get

paid it was me uh

but it got better over the

years uh and I think they should have a

chance to do it as they please and uh

I'll take up you know an income stream

for the rest of my life and when I die

it's theirs you know they don't have to

do that anymore i'm not going to try and

burn them with a

uh my youngest

uh I married when I married Ruth she had

five children they were she was older uh

my baby is 61 years old my oldest are

retired okay

they don't need the company they've

never worked in it uh the only one that

might have uh passed from cancer uh 30

some odd years ago

so there there's you know they don't

deserve the the fruits of my labor uh

they didn't work in the company if one

of them worked in the company for 30

years they'd probably get it

but

uh hell Deborah's been with me 25 years

that's Yeah that that's we we don't have

turnover to speak of i mean Michael left

and we didn't replace him uh we haven't

hired anybody since Michael and he's

been with me five years so we don't have

turnover um we pay well uh we don't play

politics uh we don't hire jerks um it's

you know now we're all virtual so

everybody's working from home quite

successfully and I had

my hesitation about that but when uh

Crystal who handles uh uh the the

banking and and reconciliations and

bunch of other things and HR uh came to

me last year and said "This is what

we're spending on having the building."

Made an easy decision and I looked at

that and I said "Jesus Christ really?"

And we went through it we actually added

a bit more to it

uh it was a no-brainer we'd all been

working off and on remotely since co

Yeah so to move it to remote

uh Christy who works in operations had

literally been working from Colleen

anyway you know uh 150 miles away she'd

come up one day a week then it was one

day every other two weeks

uh and unbeknownst to me because I you

know I let operations run itself now uh

she moved to Louisiana and was working

there so you know remote just wasn't a

big deal uh she got married again and

moved to

Louisiana so

uh it's all working it's all remote

uh life's good

and you know I do very little now and I

want to do less so yeah let them have a

chance at it i want to legally get shot

of it so if there's a problem it's not

me uh which is a very smart thing to to

make sure that if you're selling a

business that the potential liabilities

are not your responsibility uh that's

something that you really need to be

critical about um in in buying and

selling businesses it's why I recommend

in most cases to my clients that are

buying a business that they buy the

assets

they don't buy the existing business

form a new corporation buy the assets

move it into a pay cash or whatever

they're going to pay for it outside and

that way any potential liabilities that

exist right aren't your problem end with

that corporation end with that

corporation and I want to make sure the

same thing that I move the stock over to

them and I'm not even a stockholder i'm

just a

uh they owe me money i'm I I'm I'm just

you know you'll figure that out with the

attorney

great

awesome uh well Charles I mean this

conversation went fast i appreciate it

uh just the the wealth of your

experience and your knowledge and yeah

just the the care that you have for your

employees that's really great to hear um

uh they're they're lucky to work with

you and I know you you know you feel

lucky to have them so absolutely

anything that you wanted to add before

we jump into the lightning round no

we're good all right all right i

appreciate it uh so let's get started

with the lightning round uh coffee or

tea and how do you like it coffee black

all right uh pie or cake and do you have

a specific kind you like hot apple pie

with cheese on top okay that's a new one

for me i don't think I've even heard of

that before so Oh yeah slice of cheese

on top of hot apple pie oh gotcha apple

pie i I heard pineapple but no apple pie

i have a cold apple pie with a slice of

cheese is my favorite american cheese

cheddar cheese cheddar cheese is better

but American will will serve cheese and

apples go together if you've never had

it Yeah right try it sometime try a

slice of cheese on a piece of hot apple

pie you'll be amazed my mother-in-law is

going to freak out at Thanksgiving when

I try this awesome it's

interesting um what is a common belief

among entrepreneurs that you would want

to challenge they they they all expect

to be uh the next unicorn and it ain't

going to happen

you're you're not going to be the next

Jeff Bezos you're not going to be the

next uh Microsoft guy whatever uh it's

not going to happen but you can make a

nice living uh what's your favorite

holiday and why fourth of July

fireworks i love it works all right

awesome uh are you a morning person or a

night person night person i hate

mornings all right what's What's a

routine look like for you at night uh

well when I get up I exercise which is

probably why I hate mornings but I will

normally after after work and after

dinner I'll read until midnight i read a

a great deal and then hit the rack um

what is one thing that you would want

your successor to remember you for

Charles i don't care i don't want them

to remember me i wanted them to have

their own life i I had I had another

podcast asked me "What What do you want

your great ch grandchildren to think

about you?" I don't expect my great-g

grandandchildren to ever think about me

okay that's just ego and and I try to

park mine at the door awesome all right

interesting um where do you where are

you finding creativity right now in

technology as technology changes it

allows you to do

things look at us this conversation

right now electronically 10 years ago

never happened right

this is a marketing opportunity as well

so the changes in

technology the things you can do with

them are just

incredible i love it i love your

optimism uh I hope I can retain that for

the rest of my life so

um uh last question what do you have

coming up in the next year that's that's

got you really excited i'm going to sell

the house I have that Ruth and I built

and I'm going to buy land and build a

bachelor house i'm a widowerower uh

so I'm very excited about doing that i

built one custom home and I swore I'd

never do it again but building a custom

house is like pregnancy after a few

years the pain goes

away and you may have another child

you're like "It wasn't that bad was it?"

Yeah ask your wife she'll

understand so I'm very excited about

that change in my life and and and

moving on i I'm 75 but I live on a

20-year horizon i assume I'm going to

live 20 years from today and tomorrow I

assume I'm going to live 20 years from

tomorrow now I realize at some point I'm

gonna have to lower that horizon and I

tell people probably at 105 I'll have to

lower that to 15 years

i love it oh man uh Charles where can uh

where can people go and find out more

about you we're

getparel.com all over the web uh we have

our YouTube channel that has both fun

videos and educational videos there's

some really fun ones the the the

Halloween one with the IRS as the uh uh

living dead rising from the graves is a

blast okay uh so my email is cjr getp

payroll all right I'll make sure I link

that specific video in the description

of this show and uh Charles I just want

to thank you for being on the show and

it's been a pleasure talking to you and

just once again uh Simprify Brother and

thank you for your service simpify

brother been my pleasure you've been

listening to the Art of Succession

podcast with your host Barrett Young

twice a month we'll bring you interviews

sharing the successes and challenges

from business owners with their own

succession stories the Art of Succession

is sponsored by GWCPA and is provided

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