134 ⎸ How to grow a multi six-figure business

In this solo episode, I delve into the complexities of growing a multi six-figure business and share insights on efficiency, workflow management, and hiring strategies crucial for business scalability.

In this episode you’ll hear:

• the importance of narrowing your focus of services
• tips for creating processes & systems in your business
• the relationship between your niche & your marketing efforts
• how to evaluate your profit margins

Resources mentioned in this episode:

• Planning for Profit episode: ambitiousbookkeeper.com/blog/129
• Asana for creating your workflow: https://asana.com/product
• Loom for creating SOPs: https://www.loom.com/
• Tango for creating SOPs: https://www.tango.us/
• The Bookkeeping Business Accelerator®: https://www.ambitiousbookkeeper.com/bba

Thanks for listening. If this episode inspired you in some way, take a screenshot of you listening on your device and post it to your Instagram stories and tag me, @ambitiousbookkeeper

For more information about the Ambitious Bookkeeper Podcast or interest in our programs or mentoring visit our resources below:

• Visit our website: ambitiousbookkeeper.com
• Follow the Blog: ambitiousbookkeeper.com/blog
• Connect on Instagram: instagram.com/ambitiousbookkeeper
• Connect on LinkedIn: Linkedin.com/in/SerenaShoup
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Podcast Publishing Tools we use:

• Podcast Editing: Sabr Media LLC
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Transcript

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Welcome back to the ambitious bookkeeper podcast. I am coming at you today with a solo episode. to talk about a question that we received from someone in the audience, one of you lovely listeners. About. the idea behind growing A multi six figure business. So if this is something that you are interested in hearing about. Don't go away, pop in your earbuds and, let's do this. All right. So today I'm going to answer the question, how to grow a multi six-figure bookkeeping business. And this question came from someone in the audience. I've been sitting on it for a while because. First of all, there's different ways to look at this. But one of the things that I kind of hesitated to even do an episode on this. is because. Well, are we talking profit or revenue? And if we're talking revenue. what is the rest of the business look like? it could look so different depending on how you run your business and what your margins are. So. I'm going to do my best to dive into this from the perspective. Of a. For simplicity's sake, let's call this. a multi-six figure revenue generating bookkeeping business. And then I'm going to talk about mergings and systems and processes and all this other stuff. That go into running a business that grosses six figures. So. Even if we're just talking a hundred thousand dollars a year. whereas there's a huge range, right? It could be a hundred thousand dollars a year in revenue. It could be a $999,000. In revenue and both of those businesses are going to look very different on the inside. so. Without further ado. Let's talk about growing a business, a multi six-figure bookkeeping business. And I'm going to start with whether you're growing it from scratch. Or you're already in business. Maybe you are. Halfway there. Maybe you're making 50 K in revenue. And do you want to get to six figures in revenue so that you can be bringing home at least 50 K? Right? That is my hope for you, that you are approaching things from a perspective of what is the amount of money I want to be bringing home from this after taxes, money in the bank. And what should my margins be? And so with both perspectives, whether you're starting from scratch or you're already in business, I want you to begin with the end in mind. And, We're going to, if you are already in business, I want you to evaluate each of these points. As they are now as we're going through this list. And. Decide whether or not like, are you already doing this? Could you tighten up your operations? is there room for refinement? And all that stuff. So. As we're going through this, some of this might feel counterintuitive, especially if you're already in business and you already have some things going, but you're here listening to this because something might not be working and you are wondering how do I reach that next goal post. So. Going back to beginning with the end in mind. I did a podcast episode. towards the end of 2023. called planning for profit. And I'm going to link that in the show notes, because it is. A piece that you don't want to skip over. So As we're going through all these points of things to look at and evaluate in order to grow a six figure business. One of those is going to be your profit margins. And I dive deep into how to plan for that profit and create those profit margins in that episode. So make sure you go back and listen to that after this one. So. Number one. and these are not in any particular order, but one of. I'm just going to go through a list of things that. I've evaluated. I encourage my students to evaluate, or even just set up from the get-go. And, number one, we're going to start with narrowing your focus of services. So. this is one of the things that is going to feel counterintuitive. Especially if you're already in business and this means accessing some of the services you offer in order to become more efficient, but the reason you want to have a narrow focus of services. it's multifaceted. First of all, you want to be able to easily explain what you do and offer your clients. Uh, suite or a package of services that, you know, they're going to need. in their particular business. their particular level of business. And so you need to basically figure out what are the services that you want to offer. Now, this is something that, I'm actually currently going over inside of the bookkeeping biz workshops this week. As this episode airs. Registration will be closed. So unfortunately you've missed this round, but that's okay. You can always jump into the next one. You can buy the replays. There's lots of options for you. or you can just jump right into the bookkeeping business accelerator, which will be opening on Friday. January 26th. But you want to work on figuring out which services you do and don't want to offer so that You have a focus. So for example, I don't offer accounts payable or accounts receivable services inside of my business. a lot of other bookkeepers do, this is something that is time consuming and you're going to have to work on it frequently for each client. Like maybe weekly. So if that's not going to work with maybe the way that you work or your style, you've got to think about that. and if it doesn't, but you still want to offer it, you're going to have to be able to train and hire people to do this for you. so narrowing your focus on services is going to also simplify, being able to. Like I said, explain to clients what you do and, Be able to sell your services easier. It's going to help you onboard quicker because everyone is choosing from basically the same few options. It's going to be easier to scope the services. And as you hire team and they're delivering the services, it's easier for them to understand what they're supposed to be doing. So number two. Is focusing on a single software. So you're niching in a software that you use with clients. For example. I'm not talking about. your backend software, I'm talking about. Either QuickBooks or Xero or FreshBooks. And I will caveat and say, when I started, I started out using Xero and QuickBooks because it was a lot easier to find clients who were already on QuickBooks that has its own issues. If that's not something that you, if you never even want to be working in QuickBooks, but. It's something that if you are maybe at the 50 K mark and you are offering multiple softwares to do bookkeeping in for your clients, it might be time to narrow that down. So. What I did is I would bring on a few clients on QuickBooks online, and I would end up migrating them, or they would fall off because they closed their business or they sold their business or. they moved on to another bookkeeper. And so instead of bringing on more clients on QuickBooks, online, every new client that I got, I would tell them I will migrate you. So, if you don't want to be on a different system, we're not going to be a great fit. and I would sign on clients who are brand new businesses who had no idea what software they even wanted to be on or what was available. And it was a really easy to sell them on just. Starting them on zero. So number two is to, choose a single software so that again, you can be more efficient with your workflows. You can be more efficient. Your team can be more efficient. They only have to learn one software. You have SLPs for one software instead of multiple, it just makes things more efficient and efficiency is going to be a recurring. theme here with this episode, because you cannot scale to multiple six figures. Or even arguably six figures without being super efficient. Okay. Number three. You probably already know this is coming. But you are going to probably need to find a niche or a niche. Whatever you want to call it. When it comes to industries or types of clients, you could have like an umbrella type industry where it's like, okay, we do home services because all of these types of home services use similar point of sale. Maybe they use service Titan or whatever, and they have generally similar business models. Or you could go super narrow. And choose. For instance, I work with online businesses, particularly e-commerce and course creators, but we don't take on e-commerce without the course creation component. So we're pretty niche. so again, having a niche is going to help you have efficient processes. You don't have to develop different processes for different types of clients. If you do, they're very small nuances and tweaks and your team and yourself will be very grateful to not have to. Recreate the wheel and think through a whole entire different industry. Every time they sit down to do work. which brings us to creating processes again. In case you haven't noticed being really efficient is what is going to help you scale. when it comes to hiring, when it comes to doing the work yourself, whatever you choose. you've got to approach things from the perspective of, is this going to be easy to hand off? Is this going to be easy for me to scale it? By hiring someone or is this, if I'm the only person working, I need to maximize my own efficiency and eliminate as much. Thought as I can, every time I sit down to my desk to get my work done, I don't need to have to rethink like where I left something. Last time I was working on it. What's the next step in the process? So I want you to get really serious about creating processes in your business. If you don't have a workflow management system now is the time to get one. Even if you only have one client. You can use systems that are free. Like Asana has a free version. I was on that until I was probably at like 10 clients is when I ended up upgrading and arguably I probably didn't even need to either at that point, I just wanted some of the. Bells and whistles that are in the paid version. So create those processes. If you have one client start creating the processes as you're working through the client this month, like that's your action item for this week. When you sit down to do the work document, what you're doing, whether it's a loom video or you're typing out a step-by-step another really awesome option that I like to use to create SOP that doesn't involve recording a video is using, a Google Chrome add on called tango. I will link that in the show notes as well. This is something that I use to, send processes over to clients in like a step-by-step format. That's more of a written slash visual format. It takes screenshots that creates the steps for you, but it's not a video, which is really helpful sometimes when it's like late at night, I'm trying not to be loud or. Vice versa. My whole entire house is really loud and I can't record a video. So. Those are some options for you. Create those processes. Okay. So we're gonna do a little recap before I keep going. Number one was narrow. Your focus of services. Number two is select a single software that you were going to dedicate all of your clients to working on. number three, niche your clients, whether it's a overarching, broad industry sector or a very specific industry. start narrowing down your niche. Number four, create those processes. Okay now, number five. Um, uh, this one makes me laugh because I know there's so many people in our industry, like gurus in our industry. That spout, this advice. Of you can't hire, or you shouldn't hire or wait to hire until you hit a hundred thousand in revenue or something silly like that. But. The truth of it is. If we're trying to get to a six-figure revenue mark or. Uh, six-figure profit mark. You're going to have to. Develop. Your processes and your systems in order to hire. And if you're like me and you want to have more time to live your life than actually working on all of your clients. It's better to actually hire earlier on. So you get used to having that space of, not working all the time and not being the one, doing everything, because it's going to make it a lot easier when you decide to turn up the dial. And bring on more clients because you've already developed the systems. For someone else to be doing the work. I find a lot of bookkeepers who are bumping up against that six figures, or even above it. And they are working 40 to 50 hours a week. But then they're like, I need to hire. And it's like, well now you really don't have time to spend on hiring people. So you're going to end up hiring the wrong people. I've seen this a lot. You hire the wrong people. They fall through. Then you get really discouraged. And then you're like, I should just do this myself. And you're stuck in this loop forever of you being the technician, always doing the work because you're the only one that can do it. Right? Because you didn't hire early enough to be able to give. Yourself and your team. to set yourself up for success and to set them up for success, where they could slowly onboard get their feet under them, take things over in a slower way and said, you're throwing them into the fire. And yes, some of us operate really well like that. Most of us entrepreneurs are really good at operating by being thrown into the fire. I can almost guarantee you if you're listening to this and you're starting your business, you are an, a team player when you have worked for someone else. you have jumped into roles where you didn't have any support, you didn't have any SOP. Everything was a disaster, but you rolled in there, you rolled up your sleeves, you figured it out. And you created the SOP, you created the systems, you created the processes. And started building the team. And so you think that other people operate that way too, but they don't. That's why you're the entrepreneur. you will find those rock stars, for sure. if you do the legwork to hire them. But not everybody operates that way. So you need to allow time to onboard effectively to coach your team, to train your team, to get them integrated into the culture, integrated with your clients. Otherwise, you're going to have a series of really seemingly bad hires and people are going to leave. There's going to be lots of turnover and you're going to be back at square one, doing everything yourself. So my advice here is to hire before you're ready. Again, Pretty much, all of these are very counterintuitive. But this is really what gets you to the point of scaling your business. I know I've told this story before on the podcast, but I hired my first team member when I had maybe five clients. And it was because when I started my business, I've always worked part time. And at the very beginning I was super part-time. I was basically just freelancing, but I kept getting. More and more clients. but I didn't want to work more than 10 hours a week because I would either need to hire a nanny because I was doing this during like nap times and at night. And there's only so many hours in the day. Where you can, focus with your brain. and raise babies. And my cap was pretty much 10 hours a week. So at that point it was like, all right, I either have to find a nanny or I'm going to hire a bookkeeper. And it was actually easier for me to find a bookkeeper. And, I found someone who had a little bit of bookkeeping experience Was very interested in learning more and she's a doer and she's self-sufficient and she was like, I'm willing to work for you if like you can help me learn. And, Blah, blah, blah. Like she's still with me. She's. She's like my number one. And. This is the other thing too, is when you get to the point. Where you're doing so much, you're working 40, 50 hours a week and you don't have extra capacity to really train or, mentor someone else. Then you're going to end up paying more for your first employee than you probably need to. You're going to have to put a lot of trust into someone before you can establish it. And so really allowing yourself extra time to hire before you're ready, is going to allow you to build that trust with that person so that when you do hand over client stuff, you're not. super nervous because you've already established the rapport with them. You've been working together. and I know that my situation. May not be common. But. That's just kind of how it worked out and, she's still with me, however many years later, four years later. Five years later. I'm trying to like, what year are we in? We're in 2024. so. Higher before you're ready. You can hire someone part-time, you don't have to hire a full-time. You can hire people that maybe already have a full-time job and they want extra income. So they're willing to do five to 10 hours a week. in there, you know, crevices of time and, yeah, two of my team members are like that, where one has, another job. This is like their moonlighting gig and the other one that I just spoke of, she's been with me since the beginning. She doesn't work full-time for me. She has other projects and things going on too. So it works out. You don't have to hire a full-time employees. The other thing is like when you move to hiring full-time employees, Please. You then have this other, this new level of. Burden. Of like, oh, now I have to offer benefits because I'm employing someone full-time. And I have to offer P PTO and that adds such another layer of stress that. Is kind of unnecessary when you're small. When you're under a million dollars in revenue. Like you shouldn't have to be stressed out about that kind of stuff. Okay. Now what we're riff. Number five, number six. My number six is to market consistently. And this is going to be way easier if you are working with a niche, because then you can really focus your marketing efforts. You can attend events, geared toward that niche. You can, uh, Speak on podcasts geared toward that niche. You can. Just create more focused content for that niche marketing becomes a lot easier and therefore it will be easier to be consistent about it. and just a little side note right now, we are in the end of January and. If you are not marketing right now. Because you don't have the capacity To work with these clients that need help. You are missing out. And even if you don't feel like you have the capacity, because I had this mindset block too. I was like, I don't know if I have the capacity to bring all these clients on. So how can I continue to market continue to have these discovery calls? And lock these clients in and not miss out on them. Well, we're doing a staggered onboarding, so. In December when I was meeting with clients and signing clients, they were slated for January late, January onboarding, meaning all of our existing clients have priority for January for closing out the year. And then. Anyone new that got signed on in December, we were upfront about it and said, we will begin onboarding at the end of January after we've completed all of our current clients stuff. And then, So that's where they're slated for. And then anyone that got signed during January, they're slated for February onboarding. So you can stagger people out and let them know we're not going to get started onboarding you until X, Y, Z date. And that'll take the pressure off of you and also fill your roster, get them lined up. for the work and you don't have to miss out on these opportunities that are abundant right now at the beginning of the year, because everyone is like, oh shoot taxes. I better get my stuff in order. Okay. So continue to market consistently. Even if you feel like you don't have the capacity, because. You just have to trust the process. That's the other thing, like you have to trust the process that if I continue to put myself out there, have these conversations market consistently, the right clients will come in. I can be picky. I will have clients to fill the workload and I will be able to attract the right team. As we are bringing on these clients. There was a lot of mindset stuff packed in there. I constantly have to tell myself those things. So if you're like, how do you sit there and believe all of that Serina? It's like, it's I kind of just have to affirm it for myself. Cause there are times where. I get a little bit nervous. Like, I don't know if we have the capacity for this. I'm probably gonna have to hire another person at some point, if we keep onboarding clients at this pace and it's like, that's a good problem to have. And. I also have a really slick. Hiring process that works. I have 18 players and I know that I can find more of them. I know there's more out there. And you have to approach things with that type of a mindset and that positivity, otherwise you're, you're not going to attract what you want. Okay. Last one. Number seven. Expected profit margins. So at the top of this episode, I talked about. revenue versus profit in what you actually want to take home. And this is where I'm going to remind you to go listen to episode 129 linkedIn also in the show notes. Where I dive deep into planning for profit and what, this starts with is. Not only don't chase the six-figure revenue. Like, what does that even mean? Who cares? Six figures in revenue. Likely doesn't translate into six figures in profit, unless we're talking like multi-six figures revenue. That might translate to six figures in profit, but if we're being realistic here, We're trying to achieve a 50% profit margin. If you're an LLC and you're taking owner's draws. You could take a 50%. Draw from the revenue. Meaning if you're making a hundred thousand dollars a year, then hopefully you're paying yourself $50,000 in profit. So with that, it'd be very, very odd to make a higher profit than that. So at the very least, if we're talking six figures in revenue, You need to be making at least 150 to 200 in revenue in order to be bringing home six figures in profit. So go back and listen to that episode, do a profitability analysis on all of your clients. And if you don't have clients yet, and you're starting from scratch. This is the time to really plan out your pricing, figure out how much capacity you have. How much you want to work? Those are kind of intertwined, right? Because you, we all have the same amount of hours in the day. But some of us have other obligations or other desires to be spending our time. So however much time you have available to you to work also every month is front-loaded. So take that into consideration. Uh, it's not like you're going to be working an even 20, 30, 40 hours a week every, every week. It's, it's more front-loaded, it's more the first half of the month. So you've got to plan that out accordingly as well. Figure out your capacity, figure out how much you can work. Figure out what you. Need to price each client at when you figure out how much you can work, you kind of configure out how many clients you can take on, depending on the workload for each client. And if this is something that you are brand new at you really don't understand how much time it's going to take you to do stuff because you don't have any clients yet. I highly encourage you to take a peek at the bookkeeping business accelerator because inside of it, I take you through a deep dive into pricing and what it looks like to perform the various tasks that each client needs at a bare minimum. And if you do have clients, I hope you're tracking your time. So you understand how much time things are taking you and can reevaluate your pricing. Again. Shout out to episode 1 29, go back and listen to it. Do the exercise. Get your pricing squared away. and then let me know when you've planned out your six-figure year and what that looks like. I would love to hear. Okay, last little, little blurb. Let's do a little recap. Number one, narrow focus of your services. Number two. Choose a single software, whether it's QuickBooks or Xero or FreshBooks or some other obscure software. That will allow you to tap into a niche that none of us know about. Niche in clients. that's number four, number five, create your processes. Number six higher before you're ready. Number seven market consistently. Even if you feel like you're at capacity, keep on doing it. And number seven. Figure out your profit merging plan for your profit. All right. If this is something that you want to dive deeper into and you are ready for my support. Right now, or shortly after this episode airs on January 26th through February 2nd. The bookkeeping business accelerator, VIP is open for enrollment. And what that means is. the bookkeeping business accelerator. It is available to enroll with the VIP option, which is, going to close down February 2nd. And VIP means that you get two months of weekly hot seat calls, which are zoom calls with me. Where you can ask any question, get one-on-one mentoring, a new group setting and meet with other. people in the cohort that are on the same journey as you and we will also be doing weekly coworking sessions. Those are going to be in an, on an evening, each week. So we can all get together on zoom and work on. The stuff that we have going on, whether it's working on branding, whether it's working on client work and I'm there on the zoom call with you to support you in the chat. And, give you that extra level of accountability to getting the work done. And that cohort begins. February and ends at the end of March. It's just eight weeks of support for the VIP. And, if you're interested in learning more, go to ambitious bookkeeper.com/vip and all the information will be on that page. As of January 26th. And I really, really hope That I see you inside. If you have any questions, please feel free to email us@supportatambitiousbookkeeper.com or a DME on Instagram. I'm at ambitious bookkeeper. And don't forget to send me a message and let me know when you've planned out your six-figure year. I really, really want to, I want to see that, like, if you did it on a notebook paper, send me a picture, tag me on Instagram. All the things I love. interacting with listeners and I love hearing. what's helpful for you and all that good stuff. So thank you again so much from the bottom of my heart for tuning into this podcast each and every week. I appreciate you so much, and I wish you the most successful year ever. Talk to you next week.