Who's Really the BOSS?

There may be errors in spelling, grammar, and accuracy in this machine-generated transcript.

Rachel Dillon: Welcome to Who's Really the Boss podcast. I'm Rachel Dillon, and along with my husband, Marcus Dillon, we share the joys and challenges of leading a $3 million accounting firm together. From team structure to growth strategies, we share our leadership successes and failures so you can avoid the mistakes we have made and grow a valuable accounting firm. Welcome back to another [00:00:30] episode of Who's Really the Boss podcast.

Marcus Dillon: Hey, thanks for having me back.

Rachel Dillon: We are entering the New year, and so we need to give an update on the girls.

Marcus Dillon: All right, so New year 2025 is when this will drop.

Rachel Dillon: Yes.

Marcus Dillon: Awesome. Yeah.

Rachel Dillon: So we're recording before even Thanksgiving. But I believe that this episode we're going to schedule to drop in January.

Marcus Dillon: Well that's good. Um, no. So things seem to be clicking along. Um, you know, Avery in her senior [00:01:00] year of high school, just signed her National Letter of Intent to swim at TCU. We're excited about that big achievement for her and, you know, for the family that has supported her all these years and all the chlorine burning eyes, swim meets and natatorium that we've been a part of. We get to do that for four more years maybe. So yeah, looking forward to that. And then you want to give the update about Kinley, our oldest.

Rachel Dillon: Yeah. So Kinley is finishing up her [00:01:30] fall semester at Baylor and she is still doing apparel design and loving it. She is about to finish a project up. She said she only has to add the buttons to her shirt and then it can be graded. So she's super excited about that. And I think our whole family, all four of us, are really looking forward to our trip to New York coming up after Christmas. And so, uh, all of you listening will have to ask one check [00:02:00] on us, make sure we made it back safely, and then to definitely ask for an update on how that trip went, because we are all definitely looking forward to that.

Marcus Dillon: Yeah, yeah, it'll be good. First family vacation and a while, um, in a few months. And whenever you've got kids in college, I know some of the listeners will kind of agree. It's always special to kind of have the core family unit back together. And this is before any boyfriends or fiancés or anything like that have to start traveling too. So, um, [00:02:30] but yeah, I'm sure that day will come.

Rachel Dillon: All right. So to kick off this new year, we wanted to talk through some of the decisions that we're making in our accounting firm, Dillon Business Advisors. And so catchy title to throw out there or the clickbait to throw out. There is decisions we're making in our $3 million firm, but really just wanted to talk through what are some decisions that we were making in Q4 and decisions that will continue [00:03:00] to make and explore in 2025.

Marcus Dillon: Yeah, so catchy title, but it's real, right? So we run a real firm. We have real team members that support real clients. Um, this is not theory. This is true real world life. And so we have hit 3 million just at the firm level. And so that is made up of about 100 monthly clients that we're serving, and a mix of about 10 [00:03:30] to 15 family groups that we serve annually. And you know, the mix of MRR is about 75% now. Um, and depending on how that goes, would look to grow that just a little bit more. But we also have some family groups that we've gotten into, a model that works really, really well, even though they only pay us once a year. So that's the other side of the business. So that's kind of how we're structured. Just for those of you that may not realize that [00:04:00] we've got 15 W-2 team members, one external contractor who sits in the Philippines, 12 of those, well, the equivalent of 12 FTEs is where we're at because we do have a handful of part time folks, and I know we'll get into some of that. Some of the things that we're rolling out for those part time folks beginning in January 1st, 2022. So, um, but yeah, that's kind of the background on where we're at. We still provide tax as part of like our advisory [00:04:30] packages. And I love advisory, but I love it as, um, kind of an add on to sticky services. So if you're going to provide sticky services like payroll, bookkeeping or tax, then we would add advisory because, you know, in in tough times, advisory and consulting are maybe some of the first services to get cut back. And we always look at that and trying to meet our clients where they're where they're at, kind of the balance of value that we bring. So we always want to pair advisory [00:05:00] with those sticky services. So that's a that's a recap. I don't think you asked me for the recap, but I just wanted to provide that for listeners.

Rachel Dillon: And did we say that our team members are remote? Half of us are part time, half of us are full time, half of us are in Texas and probably getting close to more than half of us outside of Texas. So maybe that's not an equal split anymore. Um, but definitely looks different than we looked before [00:05:30] 2020.

Marcus Dillon: Yeah for sure. And so we, you know, in 2016, 2017, I don't know exactly what year it was, but definitely by 2017 we were at $2 million of revenue. We were heavy on clients. We had over 2000 clients in the tax program, I think around 2400. We were more of a high volume tax shop. Um, 80% RR Our tax was our revenue at that time. So heavy accounts receivable, heavy tax [00:06:00] seasons. And then we started to shift since 2017. And what I would say is over these last, um, seven years, um, we have exited, so monetized and exited blocks of clients that equate to more than $1 million of revenue, and that growth from 2 million to 3 million while exiting clients was very hard. Um, so that journey from 2 to 3, there was a lot of growing pains, a lot of, um, [00:06:30] structure that we needed to install and get right. Part of that was a leadership team. And, you know, that's made up of you, me, Amy McCarty, our director of operations, and Leslie Reeves, our other client CFO. And there were other administrative investments that we had to make along the journey from 2 to 3. So now that we have that structure in place and now that we are ready to You kind of look ahead to 2025 and beyond. Um, you just don't want that that growth to feel as painful [00:07:00] for the next, um, benchmarks, if you will.

Rachel Dillon: I think you shared a quote. Um, the goal is growth, not comfort. So as you're talking about not being painful over there, we know that we're not called to be comfortable. Yeah. But definitely want to learn from what we've done in the past. So as we start this episode, as we talk about decisions we are making, there were different decisions and a lot of decisions that all business owners have, [00:07:30] and especially accountants and accounting firm owners at different stages in the business. So where we are today and why that background is appropriate to share, is just to talk through some of the decisions that we are making now for the firm where it is today. Um, and then those decisions that we hope will propel us to our goals. And so when we say we. You mentioned it. Our leadership team, we're talking about, yes, the two of us, but also Amy [00:08:00] and Leslie as part of the leadership team. These are decisions that we're making as a group of four.

Marcus Dillon: Correct. Yeah. So let's start. Uh, I know a lot of people latch on to technology. We can start there. Um, because as a $3 million firm, you acquire technology and subscriptions along the way up to that path of 3 million, you get sold. And that is totally the right word. Um, on, uh, features of technologies. And so what we've been doing for about [00:08:30] the last year or so is really evaluating technologies and making sure that we're choosing our core stack and then going deeper within our core tech stack versus like all the ancillary programs that we've acquired over the years, just because app fatigue is a very real thing. And we were at the events that collective hosted in The Woodlands in November, and we polled the audience, you know, right now, um, technology costs and firms [00:09:00] from 500,000 to 5 million, that range of firms is running about 9 to 10% across the board. So that's an average that we feel okay, that's a benchmark. We should probably try to stay under it if we can. Um, obviously look for any opportunities to minimize that percentage when we can, but also want to test new technologies. But as soon as we're done with the test, turn those technologies off if they're not going to be implemented. So, um, we are to the [00:09:30] point with our advisory, it's not as deep as some of the fractional CFO or, um, virtual CFO advisory that's out there. So as far as the, um, tools that are needed to deliver those advisory and those conversations which are around relationship, we don't feel that we need to turn on subscriptions to like Giraffe or Life or anything like that.

Marcus Dillon: Um, for every client. And so what we are making a shift to in 2025 [00:10:00] is we we like Qbo. We like keeper, which we layer onto Qbo. And that's kind of our workflow for accounting and monthly monthly accounting. Um, we're actually going to use parts of keeper more. Um, so using the reporting, you know, functionality of it. Um, choosing what features to turn on in balance with our practice management software canopy. Um, and then just making it simple for clients [00:10:30] to understand, especially if you're reaching out to them through multiple platforms. Because we do request documents, we send out things to be signed via canopy, and we have to make that decision. Are we going to do similar for accounting clients in keeper? And right now the answer is no. Right now we're going to keep it to one communication portal secure Messaging and Signature Place, and that's canopy. But what we have decided on is to use keeper from the reporting standpoint. So, um, we think that it provides [00:11:00] really good basic financials and adds color to those financials, which is what 95% of our clients need. And so we're not we're not going to go any deeper with reach reporting or Fathom or Giraffe or any of those type of softwares. We're going to stay with keeper and use it more. And for the clients that need a 13 week cash flow or anything like that, we will turn on special tools. Maybe some of those that we just listed, maybe just good old [00:11:30] Excel. Um, but the rest of the team, they'll learn keeper really well and we'll deliver financials coming out of keeper.

Rachel Dillon: Yeah.

Rachel Dillon: I think technology is, uh, something that people love to look at and evaluate and not so much that everyone just loves technology. Um, but you definitely do get to hear a lot of cool things and see a lot of cool things when you're doing some demos. The sales people, they definitely promise [00:12:00] the world that it will solve all of your problems. And Amy shared this at our recent Together Again event in The Woodlands, and she said, people love technology and implementing a new technology as a solution because there's a definite concrete beginning and end, like, we started this implementation and we finished it. Um, that's kind of true. There's a little bit of nuance there. But when we think about [00:12:30] processes, which I'll go into, because I think that's where most of us need to look first in our steps to evaluate our technology or new technology solutions. Um, that's more of an evolution over time. It's gradual. It's testing and then monitoring and then tweaking, and then that cycle just continues and continues. And you have the human element in there. So you have to adjust for that as well. And so that one's a little [00:13:00] bit harder to define. And it feels a little bit longer and messier than just saying here's some money. They said it's going to solve all my problems. I don't want to look at the process. They said, this will fix it. I just want this. And so but along those lines of processes, that's really where we had to start on evaluating if the software's if the apps that we were using are actually doing what we need [00:13:30] them to do, and then figuring out which ones are best so that we don't have so many softwares and apps that we use for one special feature, even though they can do their very a lot of them are very robust and can do multiple things. We really had to look at the process and figure out exactly what we needed to solve for. And then we could choose the software, the app, the technology, whatever it might be to put in that place. [00:14:00]

Marcus Dillon: Yeah. And I think we asked the audience at the collective event, you know, about the number of apps they use, and I think the average was 30 different apps. So 30 different logins to really serve clients, you know, throughout whether it's the month, the quarter, the year. Um, part of that just comes back to your client base and where you're at revenue wise should really drive the processes and the technology you use, not the opposite way around. So, you know, you shouldn't [00:14:30] be buying a, let's say, giraffe in hopes that then you will get CFO clients. Like, that's just not the way that this should usually work. Um, you should have the client first and then go out and solve for the pain point and the need and that's given software or process. So I think a lot of people do the opposite. Whenever you hang out with, um, technology salespeople, you buy technology. And so we've been guilty of it in the past. [00:15:00] But I think it's taking a hard stance of, you know, are you willing to spend 10% on technology, uh, of your budget? Are you willing to spend 15? Because if you don't pay attention to it, it will just continue to grow. Kind of like the Netflix subscription, the Hulu subscription, everything that we have turned on personally, um, the business subscriptions are no different. And so the other the other piece of technology that we'll continue to embrace are the Microsoft products. So anytime we can stay within the Microsoft stack, [00:15:30] we will.

Marcus Dillon: That's where we've made decisions on where things are stored using SharePoint, OneDrive versus, um, housing things in a practice management software. We have been burned by practice management softwares in the past. As far as like they're just not great places to store things long term, and it makes it harder to to move practice management softwares if you want to move practice management softwares. Um, so all that to say, we will lean into Microsoft whenever [00:16:00] possible. And the last thing that I would say about technology is what doesn't make sense, what's not connected. Those are some of the questions that we continue to ask ourselves. And we've even toyed with the idea of, um, testing new tax software, which is really foundational in most firms that still continue to do tax. And the only option, as far as a browser based solution is one of Intuit's products, which is the one that we're evaluating that would sync up directly with Qbo, which is our [00:16:30] primary GL program. And maybe that eliminates the bridge, you know, program that we have in tally for. And we can speak directly from GL to tax product, um, once it is in it into its stack versus we use ultra Stacks, which is in a virtual remote desktop environment, which, you know, supports our remote team, but it's still clunky. It's still not the best. Um, just because there [00:17:00] aren't any other browser based tax solutions at this point.

Rachel Dillon: All right.

Rachel Dillon: And then two other decisions that we kind of made regarding technology for 2025. We recently switched our phones. So our voice over IP phones are were in a separate app called eight by eight. It didn't do anything else but our phones and our fax line for the IRS. Um, that was the purpose of that. And [00:17:30] we recently switched over to zoom phones because we use zoom for webinars with collective, because some of our collective team members also use zoom, um, video meetings. Then we also decided, hey, zoom has a phone feature with texting, with calls where we can have a line that is dedicated and can get shared information for codes [00:18:00] and different things. So we definitely, um, looked at how could we take this one technology, our phone lines that are in a separate app that only does one thing and use something else that we're already signed up for, subscribe to in, um, use more of its features there.

Marcus Dillon: Yeah. So and you know, we just mentioned leaning into Microsoft whenever possible. So some people may be asking why don't you do teams phones? Uh, [00:18:30] we use teams internally for everything. We're not slack. You know, we are teams and would have really loved to use teams phones. It's just not quite there as far as the call quality and just some of the feature rich environment that Zoom does have. So as mentioned, you know, we're moving over from eight by eight. We're kind of canceling go to webinar and merging a couple different softwares into this zoom run. Um, zoom also is very easy to use from the client perspective and um, even team member [00:19:00] perspective. So I would consider it kind of best of breed, uh, which is a term, you know, to also a lot of people use. But I think zoom really is there. And, um, you know, the other thing is zoom is a, a newer, modern tool, which it's easy to turn on and off licenses and subscriptions within zoom versus like eight by eight and other phone systems make that really difficult to scale up or down your [00:19:30] users, and they have contracts in place. Zoom does not. So I think those are just some of the features why we ultimately landed on something like zoom. And I know a lot of people already use Zoom in this fashion, so maybe it's just us coming into the 21st century.

Rachel Dillon: Yeah, and then the last area we recently rolled out in the probably Q3 of 2020 for a new onboarding process. So a how to a workflow that's [00:20:00] designated by roll. But we rolled out a new onboarding for onboarding new clients process that involves the team of three working together to onboard that client versus just one specific person or a specific onboarding team that wouldn't serve the client after the fact. And so definitely looking now that that process is good, and we measure that good of that process [00:20:30] by looking at the quality of the onboard and the time that it takes to onboard a new client. And so when we now, I think are our averaging 2 to 3 weeks for an for a full onboard that's bookkeeping and um, tax getting some advisory questions answered. They are ready to go in service. And first set of financials have been issued. We're able to do all of that within 2 to 3 weeks. And not [00:21:00] setting aside other client work or delaying other client work. So just saying that we have tested that process, and now we can start looking at ways to enhance that with automations or adding in maybe features of softwares that we already have.

Marcus Dillon: Yeah, yeah. So I think you teed us up very nicely with process winning over technology. But then you also, you know, teed up the conversation on team of three really well, as you know, kind of where [00:21:30] we're segwaying to um, given the team structure and that team of three where we've got a CSM, a client controller and a client CFO that serve every team member over the last three years, I would say we've seen huge efficiency and effectiveness strides and client service and satisfaction as far as like turnaround time. And you mentioned even onboarding turnaround times. And so just the communication, the team working hand in hand [00:22:00] and then incentivizing how they work throughout onboarding and client service to deliver financials timely. Huge strides. And we saw, um, in August coming out of the summer about um, 45% available capacity within DBA. So we had a lot of excess capacity given our current client load. So we weren't planning on hiring or modifying too much because of the existing capacity. [00:22:30] We knew we needed to either go out and fill the funnel organically or inorganically. Um, a few things that have happened since August. So actually in November, we've had two long time team members that are leaving DBA and all for good reason. Um, so while it's sad to see anybody go, you have to celebrate their next chapter. And so both of them are actually, um, going to do their own thing, which we support. Um, I think it's pretty evident [00:23:00] that the opportunities and leadership opportunities within DBA could not be solved for, for these two, and they had to look outside of DBA to go for their next chapter.

Marcus Dillon: And, um, you know, it's just a realization that we're seeing. Um, so those are the those are the reasons that I tell myself that we now have to make sure that we're giving others opportunities within DBA, or we can't be sad whenever they do look outside [00:23:30] of DBA. So, um, we are not planning to go out and hire replacement CSM replacement controller in the traditional sense, because we did have that excess capacity and some people may be saying 45% capacity, that is a lot. I would say we want to be at 25% available capacity. So we didn't have much additional capacity that we had to make up. But now now where [00:24:00] we're at, if we did have new clients wanting to come on, that would really be strategic on how to assign those within teams versus how we were thinking about that in August or September. So good problem to have, you know, kind of getting a little bit more lean on the team side, still taking care of a very small team when at all possible. And caring for humans is always a fun thing. But you know, the the availability and looking to hire isn't really [00:24:30] on the roadmap right now, but it is something that we are focused on in 2025. So you want to share a little bit about that roadmap and who we are looking for in 2025 to add to DBA.

Rachel Dillon: Yeah.

Rachel Dillon: Well let's go back before we before we go forward. So we have a team member, a client service manager who provides about 12 hours of work each week that is going to start her own bookkeeping business. So kind of a side business again, she [00:25:00] was I think she's trying to keep her schedule about the same, but she would just not have the additional responsibilities and she would have then her own business. So would just give her some leadership opportunities and even more flexibility than what she already has within our firm. And then our other position is a full time client controller. And so what we were able to do, and she also will be starting her own [00:25:30] accounting firm. And so we are excited for both of them to.

Rachel Dillon: The business owners and they have been guiding business small business owners. One for the last eight years within DBA, one for the last seven years within DBA. So they definitely have a handle on what to do, what not to do, and now can go put some of the advice and some of the skills that they've been using to practice in their own businesses. So we are celebrating that. We are excited for [00:26:00] them, but it doesn't make it any easier on our side to have two team members exit. So what we had to start looking at for a 12 hour a week client service manager we knew we had with all of that available capacity, we knew that we could find team members to care for those clients within our team that we already had. Replacing a full time client controller was a little bit different, and definitely [00:26:30] a decision that we had to make and evaluate and really look at who are the clients, what was the kind of billable production time for that team member? What was the admin time and responsibilities? Did those need to be also replaced or just the billable client work need to be replaced? So those were a lot of the decisions that we looked at. And then we're able to arrive at we actually had capacity to fill the billable portion, and [00:27:00] the administrative didn't need to be replaced at this time.

Marcus Dillon: Yeah.

Marcus Dillon: So the other thing that we identified was even in those August capacity calculations, that is with part timers essentially logging off when they don't have work to do. So we started having conversations at the end of the summer and then leading up to January 1st of 2025, really a commitment with our part time folks to say, like, how much do you want to work? And if that's 24 hours, [00:27:30] if that's 30 hours a week, we are committed to paying you for those hours, regardless if you have work. Because we need to know how much existing capacity there is within DBA. And so we're firming that up a little bit so that we could identify capacity even within our existing team members who, you know, they may have logged off after 18 hours because they just didn't have work and they didn't want to just charge a lot of admin [00:28:00] time. So that's a little bit of a change and a shift starting January 1st. But that also helped us navigate to team members exiting to where one of our controllers who does work part time, and she was working about 18 to 20 hours average per week. Um, she saw that exit of another team member as an opportunity. And she actually said, hey, I'm willing to add time. And, you know, through a couple of different conversations. She even said, I'm willing to work full time. Like, I think [00:28:30] this would be good for myself and my family and full time at DBA is 36 hours because we do have flex Fridays, so she's actually stepping up to full time and actually will have all of that capacity replaced.

Marcus Dillon: Um, just with that. And she may have some ability to grow, um, even take on new clients after getting through kind of the transition phase, you know? So we'll watch that closely. Um, she will be leading an additional CSM through that process. [00:29:00] And so anytime you have your leadership expand through managing others and then obviously getting to know new clients, we want to make sure that that's done with care over time. So we would expect to watch that closely and maybe even make a decision on on her in Q2 if we are adding any additional clients to her, to her load. Um, but yeah, the the immediate kind of hire, I guess, if you will, that we will make is, um, an additional team member. So [00:29:30] we've really liked having April as our CSM assistant. Um, we just had a conversation about that on the podcast. So we will go and employ an additional Toa resource. So each pod has a CSM assistant to kind of support the Csm's. And then Csms can also delegate um to the CSM assistant when it all possible, just to make sure that they are having the best use of their time, which is team communication, client communication. So, [00:30:00] um, that's something we're, we're immediately looking to, to add.

Rachel Dillon: And typically what we saw with our first CSM assistant through Toa April, um, what we saw when we added April, we were able to gain a lot of not a lot. We were able to gain some capacity for our client service managers that allowed them to take on an additional client or 2 or 3 without having to add additional hours to their week. So that is what we are hoping will happen as [00:30:30] well. Assuming that that does go well, then we would also be looking to hire, um later in 2025 looking to hire another client controller, and that would help with capacity there and allowing team members to continue to take on new clients that come in the door. So those are kind of the things that the positions that we will be looking to add in 2025, um, just based on our capacity [00:31:00] calculations, where our clients are right now, how we're serving them and the current team makeup that we have.

Marcus Dillon: Yeah. And I think the the other thing to point out there is as far as an organic growth strategy, as far as new clients added, um, we're obviously watching churn very closely. Um, at DVA, uh, churn was a little bit higher than we would have hoped for in 2024, but we did have some, um, price increases that we knew would would shake things up. And then we [00:31:30] were also looking to really shake up our, um, ehm, model, which is kind of a 1040 plus a couple of tax projections and meetings throughout the year. So that was just priced too low. Um, and it wasn't profitable. So we heavily increased price to kind of move that up to profitability. And in the in the midst of that, we churned out a few clients, but we were prepared for it. So, um, in 2025, we are rolling out goals [00:32:00] of 15 new organic, um, clients. And so that'll be a mix of, um, opportunities that are uncovered in our existing client list, maybe moving some. There's not a whole lot there, because we've done a really good job at refining and already cross-selling or upselling our existing client list. So it is very much like how do we make sure that we are spending good quality time with clients so that we can be a great referral source for them, and then also [00:32:30] with our referral partners, making sure that they know about our goals and that they can play a part in that. And, you know, 15 new organic clients that doesn't move the needle much on Onboardings. We're still doing anywhere from 1 to 2 per month, and that would be spread between team that is available to do that. So we don't want to overwhelm a team of three with Onboardings now that they are such a big part of it. So yeah, that's part of the goal for 2025 and 15 [00:33:00] clients at an average price point of are we saying 2000 or 2500 per per month?

Rachel Dillon: Yeah, I would say definitely higher than 2000. 2000 is our quarterly advisory package. So all of the services as far as bookkeeping and tax and tax projections are the same no matter what, but how often they meet with one of our client CFOs is what the pricing is based on. So quarterly CFO FaceTime as 2000. But [00:33:30] typically the businesses that we onboard, we can also do their payroll or potentially their accounts payable through bill pay. Sometimes they have a sales tax requirement. So typically there's something I think most common would be that they have also a real estate entity that increases that monthly price. Even if we're not doing payroll or they don't have a sales tax requirement. A lot of times our small businesses have also a real estate entity [00:34:00] that will keep up the accounting for and add on price to that main package.

Marcus Dillon: Yeah. So those are the goals we'll have to firm up in order to hit those goals. We'll have to firm up some of our marketing strategy and ad strategy. So you know, obviously working on that side to make sure that we're assigning an appropriate budget for good growth. And um, yeah. So I know that that marketing and advertising is kind of your world. So anything else to add on that side as far as changes [00:34:30] at DBA in the near future?

Rachel Dillon: No, I think we will just be looking at who are we targeting, looking at some of our industries, because we do serve doctors, dentists and vets. That is who we market to. We do have teams of three set up with expertise in those industries. So looking at which of those should we continue to lean into more? If there are ones that we should lean into more than the other out of those three. And then [00:35:00] again, that's going to be continue to invest in relationships. So relationships with current clients, relationships with um, current related professional service providers that may have clients or a network of people who are needing the types of services that we provide.

Marcus Dillon: Yeah, yeah. So, um, I think a statistic that we've shared here recently and definitely at the collective events in The Woodlands in November was [00:35:30] 60% of the owner's time should be in the form of business development, and I have definitely gotten away from that. I think, you know, you as part of the ownership team, have also like I don't it's not 60% even combined, probably between the two of us. And so I I'm kind of recommitting to the team and our leadership team that I will refocus some of my time to that business development side for DBA [00:36:00] and um, as a, you know, as a result, hopefully we easily get those 15 target clients in 2025.

Rachel Dillon: Yeah. So also considering, um, advancement opportunities. So making decisions on what types of positions can we create or elevate people to within the team to be able to develop some leadership skills and have leadership responsibilities. [00:36:30] And so in the mid-year of 2024, we rolled out subject matter experts. And what that is is the person who raises their hand and says, I'd like to be the subject matter expert for a specific topic. They are responsible for not deleting the emails that come through about updates or important education events, or important just ideas or thoughts that we need [00:37:00] to know about. And so one. They will read those emails and share with the team. Two, they will provide support to team members. So they will be like the point person. So we came up with two roles initially. We have a payroll SME and we have a tax SME. And now we are going to be adding a Qbo SME. And so again what that person is responsible for is sharing with the team any updates, any process efficiencies, and [00:37:30] then being available to the team to answer questions related specifically to that area or that technology, whatever it might be.

Rachel Dillon: And so there is compensation tied to that, so that we are accounting for the additional time, because we do want that person, not just something that they have to come in and they're already an expert in that area, but allowing them to have time to even become the expert of that area. So it's more a willingness [00:38:00] of like, yes, I have an interest in this or um, you know, I am more advanced maybe than than not. And so then that just allows them to continue to grow in that area, to have some leadership skills, um, without necessarily having to change a role. They don't have to change to a different role within the firm. They don't have to look outside of the firm to begin to work on their leadership development. And so that, I think, has been a win for [00:38:30] all of the team members and definitely the firm as a whole. Definitely the clients, because service is even better when we have those people in place.

Marcus Dillon: Yeah. So those advancement opportunities, even whenever you're thinking about as like your firm, um, it could be as simple as, like, you know, an advancement opportunity like an SME to where you're elevating somebody to be the, the go to expert on your team. And maybe that's enough, but I would still encourage you to have really good, candid conversations with your team [00:39:00] about where they see themselves in the next 3 to 5 years, how you can help them achieve those goals, whether that's within your business or outside of your business. I think that's coming from a place of maturity and knowing that if you're not able to, if you're not able to provide those opportunities that people just do naturally look outside of the business. So yeah, advancement opportunities make all the sense in the world. And maybe it's just something as as low hanging fruit as SMEs.

Rachel Dillon: Any other [00:39:30] big decisions that we are making or thinking about for 2025.

Marcus Dillon: Yeah. So the last one and you know, this has kind of been a few years in the making, is we DBA will likely do an acquisition of another firm in 2025. And so that may be early 2025. That may be later in 2025. Um, but we just feel that given the capacity that we've been able to build up the efficiency and the culture, [00:40:00] um, that we can now go back into the market as an acquirer. Um, we've done a few of those acquisitions during our 13 years, three to be exact. Well, four to be exact. And the last one we did was in 2016. We've learned a lot since 2016 on how to navigate that and how to do it very efficiently and effectively. And as mentioned earlier, you know, the growth from 2 million to 3 was very hard and [00:40:30] it took a lot of investment and structure and team. And we just don't want the growth from 3 to 4 or 4 to 5 to be as hard. And so just a little bit different of how we're going to do that in the near future. And so yeah, I think that's where we're at as an as an industry, I think you're either in acquisition mode or you're likely going to be acquired. Um, so we definitely want to take the position of acquisition mode, um, to maintain culture, [00:41:00] to maintain everything we built at DBA and not dissolve into another brand or another culture.

Rachel Dillon: Yeah.

Rachel Dillon: And I think that, you know, back a few years ago, 7 or 8 years ago, when we were exploring these opportunities, we had great people in place. We had a great culture. We had okay processes at that time. I feel like now we have great people, great culture and great processes. We have spent a lot of time refining [00:41:30] and and refining one and then looking for the next, not refining one and saying, we're good, we we changed this or we made this better. So now we can sit back. We don't have to do anything after that. But really looking at that next kind of weakest point or that next challenge point in our firm and really continuing to improve on every single one. Um, we also learned some things to look for when, you [00:42:00] know, looking at acquiring a firm. So when evaluating firms and evaluating teams and clients and that sort of thing. So I am hopeful that this next one will be, um, awesome. And of course, there's no hurry. And so it's really looking for the right opportunity there, and taking our time and really doing the due diligence to make sure that what we are potentially acquiring is good for all parties involved. [00:42:30]

Marcus Dillon: Yeah.

Marcus Dillon: So we've narrowed that focus. I mean, obviously it's because we're so focused on not diluting culture, not, um, not diminishing the value that we've already built within DBA. Um, any acquisition target would be sub 1 million as far as a firm revenue size, teams of probably five or less. Um, and heavy focus on businesses. And I think that's where we've done well in the past. And we can go [00:43:00] in and filter through and look for opportunities, look for ways to apply the DBA model and team of three and then filter through those businesses as, you know, as time allows. So that's the exciting part. Um, you know, being able to connect directly With, um, the peers that are a little bit older than us. I think they welcome us into those conversations. So there's a lot of opportunity for conversations like that, even where we currently [00:43:30] live. Um, on this west side of Houston, we are also looking at other target cities within Texas, because Texas has been really good to DVA, and we don't want to we don't want to outstretch ourselves too much in the beginning as we go, um, turn on this side of the business, which is a lot of fun. So like, a lot of my time will also be focused on that. And that gives me energy. Uh, we have a banker that believes in us. We have some people that are our cheerleaders that believe in us. So, [00:44:00] um, it's going to be a lot of fun. And if we do it for the right reasons and honestly, you know, with open hands as far as, like, you know, just stewards of this business and seeing how we can impact others is the approach that we want to take. Um, with DBA and so if we do that, we're going to be all the better for it.

Rachel Dillon: So we talked about a lot of decisions that we are making or have made in preparation for this year 2025. And [00:44:30] I think that making decisions alone is hard. So as we're talking through all of these things we mentioned at the very beginning, we have four people within our leadership team helping to evaluate and make these decisions. But we also have a community and a network outside of Dillon Business Advisors that we are leaning on for their experience and their advice, their cautions. I will say that's [00:45:00] probably what we listen to most now that we're older. Not so. The encouragement is great, but the cautions are kind of what we lean on to save us. And so I think that that's really important too, that even though Dillon Business Advisors, you know, is ours. And the decisions to be made, you know, are there for the four of us, but really leaning into the community and the network of people, the network of peers that we've built over the years has really been instrumental [00:45:30] for us in our continued success.

Marcus Dillon: Yeah.

Marcus Dillon: And so I met with my collective forum today and spent two hours in that room of ten other firm leaders and, you know, even presented this idea of what acquisition looks like, the reasons to do it, the reasons not to do it, sought feedback, also seeking accountability from them on this. So if you do not have that space, I mean, everybody in in my forum, you know, I've known for a few [00:46:00] years and they know me really, really well. And um, yeah, so I mean, we would love to have those conversations on what a collective forum could look like for you. Um, and if you, if you don't have that, like, that's something to definitely check out at collective CPA.

Rachel Dillon: Yeah, absolutely. You can even go to our Contact Us page and schedule a meeting with me, and I'd love to talk to you. Whether you're looking for community or you heard something that we've said on this episode [00:46:30] or a previous. Um, love to talk more about that with you. So feel free to visit collective CPA and schedule a meeting.

Marcus Dillon: All right. Thanks so much for the conversation. It'll be fun to watch 2025 unfold. And, uh, excited for all of the good things to come.

Rachel Dillon: All right. See you on the next.

Rachel Dillon: Thanks for listening to this episode. If you enjoyed the conversation and want to learn more, be sure to visit collective CPA. You can schedule [00:47:00] a meeting directly with me, Rachel by clicking on the Contact Us page. Be sure to subscribe, like, and share so you don't miss any future episodes. We look forward to connecting with you soon!