Small Business Big World
New episodes every Tuesday discussing the challenges, adventures and fun of being a small business owner. Each week we'll delve into various small business topics, from real-world DEI considerations to selling your business, using video to market your business, unique benefit offerings for your employees and so much more. Curated by the crew at Paper Trails.
Small Business Big World
How to Scale a Small Business
Learn how to scale a small business with insights from our guest, Jason Atwood of Arkus. Jason shares his journey from a three-person startup to a flourishing company with over 75 employees. Listen as he emphasizes the crucial importance of cash flow management and financial health, providing a candid look at the ups and downs of entrepreneurship. Learn from his experiences to better understand how to manage your business's finances and avoid common pitfalls.
This is Small Business, big World, our weekly podcast prepared by the team at Paper Trails. Owning and running a small business is hard. Each week, we'll dive into the challenges, headaches, trends, fun and excitement of running a small business. After all, small businesses are the heartbeat of America and our team is here to keep them beating. Welcome to Small Business, big World, our weekly podcast, where we talk about all things small business.
Speaker 2:My guest again today is Jason Atwood of Arcus. Thanks for joining me again, Jason. You're very welcome. I'm excited to hit this next topic. I think it's a fun one.
Speaker 1:Yeah, absolutely. We're going to talk today about scaling a small business and Jason's got a pretty good case for knowing how to do that.
Speaker 2:He's gone gangbusters the last few years, I could tell you all the things that were great and all the things that were a failure.
Speaker 1:So well, good, well, before we get, uh, hop into that, don't forget, please like, follow, share, rate, review. Uh, small business, big world. Anywhere you get your podcast, anywhere you consume social media, anywhere you consume pretty much any content, we're probably there. So, uh, if you could give us a like, follow, share, read or review, that would be fun. All right, jason, tell us about Arcus, where you started and where you are today, and let's go down the rabbit hole.
Speaker 2:Sure, I think it'll be a good rabbit hole. I did take some time. Since we talked about doing this podcast, I've been taking some time to think about it and definitely thinking, oh, what did I do right? What did I do wrong? So just Arcus. We started in 2010,. Three founders all had worked together and started a Salesforce consulting firm and went from three people up to I think we're 75, 76, 77 right now. I don't know, there might be people literally starting today. We've had fits and starts across that. Never shrank, I would say, but there's definitely been years where two or three year periods where we doubled in growth, both on all the sides from revenue, from sales, from people. Again, today we're serving mostly nonprofits in the Salesforce ecosystem and helping them build out their systems to help them do their constituency or their programs or whatever their missions are. That's where we are.
Speaker 1:What period of time have you gone from the three original Amigos to 75 employees?
Speaker 2:About 14 years rolling on 15. So 2010 to now, it's about 15 years and it's definitely been some things in there, some, definitely some lessons, I think we can talk about.
Speaker 1:So you started. It was just three of you guys you and Justin, thank you, and uh, justin, thank you, and Larry, thank you. It's been a day over here and uh, yeah, so you guys started. I remember working with you guys way back then that first, you know what are your first projects? Uh, in my prior life and uh, you know, how did you you know first. I guess the question always becomes do you hire first? Do you find the revenue first? Did the chicken come first, or the egg, I guess, but this was a bootstrap effort.
Speaker 2:Right, this was. We knew what we wanted to do. We didn't have any money. It was not like we were handed. We didn't go out and get loans, we didn't get funding whatever. So bootstrapping a business is also very different from scaling a funded business. Someone hands you a million dollars, 10 million dollars. You're going to do different things than if you have to bootstrap, so-.
Speaker 1:But the majority of small businesses. That's how we start right. We're not out there getting seed money from investors or you know, daddy's not giving us a check. It's you know, you start a business and you do it. That's right.
Speaker 2:So you know, first lesson, when you bootstop it. Bootstrapping and it's really the first lesson I learned starting and running Arcus for a long period of time is cash is king. Right, cash is the king or cash is killer. So, whatever you want to think about, you have to be prepared to run and understand your cash flows, because it is the thing that most businesses, small businesses you know it's what one of 10 businesses make it out of. One year. They die, they run out of their runway of what they can do. So be prepared to not only to have cash.
Speaker 2:I was like well, jason, you just said you bootstrapped yeah, I did, but we ran off our own personal savings of things we had gotten ready for. But we also understood cash and we paid very, very close attention to it. So, anyone starting a business if you want to start a business, go out. There's some really good ones out there. Maybe we can leave some of the notes or later, but that's the one I read 15 years ago. Probably doesn't apply anymore, but I went out, got three or four books on cash management, cash flows and almost the spreadsheet that I have run the cash flows from since 2010 is the same spreadsheet I run the cash flows from now. It works I mean, it's been added to. But understanding your cash flows and the bills and the ins and outs of your company, I just if you just want to drop the podcast now say, oh, I've learned something great. That is the number one thing to learn and to skill and to grow your company.
Speaker 1:Yeah, absolutely. I mean, we see, you know, we see a lot of our clients, gosh, they have great success and then there's a ton of money in the bank and the owner's like, let's go buy a truck and let's go build a new house, and let's buy a house in Florida and whatever, right, and then all of a sudden they hit a slow period. You know, winter comes or whatever, and gosh, now we're scraping pennies together to cover payroll and keep the lights on, right, and that's not what any small business owner wants to do. So, you know, I think that certainly has an impact on your service delivery, regardless of what industry you're in. Right, you know, hospitality, you know consulting doesn't matter. If you can't deliver your product effectively because you can't pay your people or can't buy materials or some lies, you know you're going to be out of business.
Speaker 2:Pretty soon, so I think that's a really great tip, yeah, and it's the thing I think you cannot take serious enough. The second thing is I just have like a little saying that I think kind of applies. It is a strange one, but when you're starting a company, I think you need to do things that don't scale, but pick things that will. Sorry, I'm going to say it again, you have to do things that don't scale, that just will not scale with your company because you have to, but on the other side of that, pick things will not scale with your company because you have to, but on the other side of that, pick things that will scale with your company, with your business. So I'll give you a couple of tips, and this is where I think the heart of the conversation should really go into. So, for example, let's talk about not scale.
Speaker 2:When you start your firm, you're going to do things that you just know you're going to have to replace or get rid of right, like the payroll right. The way you do payroll when you first start your company might be very basic. It'll be simple. You know that if you go to 100 people, you're not going to be running payroll all the way You're doing it. When we ran it. We had an accountant. He would run it manually every month. He would send us links and, like that, we would just put checks to ourselves or maybe write checks ourselves. Clearly that was not a scalable solution, right? So you know that you're going to need to change that as you grow and when you're starting off you know you don't need to go invest million to million to million dollars into the highest end payroll systems ever work, because you know you're going to change the system. But you're going to do those things right, even the way you do your marketing, your hiring.
Speaker 2:Another example is HR. Right, when you get to a certain size and we can argue about what size that is I think I have some numbers crunch here the way you do hiring and onboarding and even having an HR part right, you might start with nobody and just the founders are going to do that HR thing. But then as you scale, you might hire on virtuals, you might hire a company and eventually you might have your own HR department and eventually you might have like 10, 15 people in that HR department, depending. So you know that that thing, the way you started, that the founder's doing everything and hiring everybody, isn't the thing that's going to scale. So there's so many things on that side and that's okay. You're going to do things that don't scale and I would say don't worry about it, right, don't go. Oh, this won't scale, that's fine, because your first job in your first year of business is just to stay in business, literally just get through that first year, get your customers, get your revenues, get your product out there. Those are the things you need to focus on. Not will this process scale forever, because some of these things are not. But now I'm going to go the other side of that.
Speaker 2:I think there's things you can pick and choices you can make along the way, and I think a bunch that we started touching on this last time, the last podcast. There's things that you can pick that will scale with you. Right, there are things you can do, and a lot of those come into, you know, sort of software, what you pick in your first set of software to run your business. Your organization can scale nowadays and there are pieces of software I'm using the exact same piece of software that I use with three people, that I'm working with 75, and I know it can go to 200, 500, 1,000, 10,000. And so some of those examples. Right, say, I'm a CRM guy, you know I'm Salesforce, true and true drink and make the Kool-Aid. But our Salesforce instance is the same one that I booted up and it has my name on it and it's been 15 years and that thing has scaled beautifully, right yeah, we make those decisions too.
Speaker 1:I mean, I look at it as okay. What's the difficulty? To scale something, grow right. So if it's that piece of software, if it's a salesforce instance or so or whatever you're going to choose, you know the shitty crm to start, because you can't afford salesforce, maybe, but gosh, you know how hard it is to do a conversion later. Then guess what that's when we have to hire someone like you to come to a force and it gets expensive, right, pay me now or pay me later.
Speaker 2:But yes, and I think that is the hard part Again, as a small business owner, growing a company, the hard part is to make those decisions and knowing the things, that's like okay, this is the thing we're going to invest in because this will scale with us as an organization or as a company. This is the thing we're kind of going to flub it for now we're just going to wing it because we know we're going to have to change. Some things are easier than not. I know the system that you know financial software. We started with QuickBooks Online, have started with QuickBooks company out of QuickBooks. But as a solution for the time being and for the cost is one of those things like I'll pay the $35 a month and, trust me, when you're starting off, $35 a month feels like a lot right. Looking back, it's like really that's nothing compared to what other things we do. So there are things like that you can pick and I think other things like office sweeps Nowadays it's not so bad.
Speaker 2:Everything's subscription. You've got Google, you have, you know, office, microsoft. You have lots of things to pick from. They're very scalable solutions. But those are the things that you don't want to move in the middle. The first email I ever sent from Arcus is sitting in my sent box. The first email I ever got from Arcus is sitting in my inbox. They've never moved. I've never had to change them. And then I scaled perfectly well. So those types of things.
Speaker 1:You know there are choices you can make that will actually scale. So how have you taken into consideration when it's time to make a change in a scale right? So perfect example. We just recently did an acquisition. We added 200 clients literally overnight. We took on a couple of new employees and now it's only been a few weeks that I'm still losing air from the craziness that's going on with that.
Speaker 1:But there are all of a sudden, are things that I used to just kind of do that gosh. I did because I could right as we've been growing. It's fine Things like our bookkeeping right. I'm a little bit of a control freak and you know I like to same thing. I need to know my numbers, I need to keep my cashflow on top of things, but I haven't paid the bills. I realized this weekend I hadn't paid the bills in over two weeks because I just had too much stuff going on Like well, that's going to be a problem here pretty soon.
Speaker 1:So you know, I was kind of realizing listen, the cup has run over and now I need to find a resource that can do some, take these, some of these things off of my desk and scale this. And you know, certainly, as things are getting more complicated now, I just added more clients with more. You know it doesn't sound like a lot, but more bookkeeping that kind of goes along with that too. Um, you know, so it's. I'm at the point now where I literally have a list on my desk of, okay, these are things I need to get off my desk because you know, and or figure out a different solution, a better way, things like that. Um, and it kind of hit me upside the head these last few weeks that it was time. And, you know, I think that's part of the evolution of scaling.
Speaker 2:Yeah, I think we have two answers to that, and you kind of set me up because I'm reading off my notes that I jotted down for the podcast. There's two things there. One is automate early right, and it's one of those things that you think oh, why should I automate this process? If you automate something early, it can take it so that it's easier and easier to do as you scale. So if you take a process, just think of something you do, I mean whether it's invoicing or whether it's your process for how you bring on clients.
Speaker 2:If you can think about automating those processes early in this, then they will scale with you because I don't spend as much time on it. So that's my one tip is you can automate things and connect things, and the world of software nowadays the Zapiers and the Ricottos and the way to automate and connect data so they can work together is so much better than it was 15 years ago that I would say look into that earlier than you would think. Oh, I don't need to connect these two systems. Do it if it saves you some time, because then you'll be able to scale with it. The second is.
Speaker 1:I have my team trained. Similarly, I have my team trained. Everyone has a list on their desk somewhere. I call it the 10-minute list. Something takes you longer than 10 minutes to do, whether it's client work or you know a process that we have to do. Let's stop and find a better way to do it Right, and you know, 75% of the time we can come up with probably fix something, or we have already have a solution to do it. We just have to stop, take a half an hour, implement it, and then it goes from 10 minutes to a minute or no time right, because we're automating and integrating it or whatever the case may be.
Speaker 1:So you know, we deal with a lot in our world. We deal with a lot of imports from timekeeping systems and things like that, where years ago we were hand keying payrolls right. Print out the Excel sheet and literally take your ruler and yep, 40 hours for Joey and 20 hours for Susie and um, and we don't do that hardly at all anymore. We're like no, no, no, send us that Excel sheet. We're going to create a macro, we're going to import it and we're going to be done Um and so I'd really harped on my team the 10 minute list, right, like anything that takes you longer than 10 minutes.
Speaker 1:Let's find a battle and that's and I, to have you know I don't have to hire more people because they're more efficient, so we're still giving the same great service to the client. They have no idea that. You know it's taking us only a minute now, where it used to take us a half an hour, and I can take on 30 more clients. Oh, so you know that's really important is use the tools that you have available and work smarter.
Speaker 2:Yeah, and learn to automate it. And it does. It has that thing. You do something over and over again. You're like, wow, I really take the stop and I like the 10-minute rule, so that's good.
Speaker 2:The second thing you were actually talking about was delegation. And when is it time to scale delegation? Delegation is probably the number one thing that people who get beyond the first year and survive. When do I start to delegate out those tasks? Right, I'm the founder, I did everything to start. Maybe I'm one of three. We did everything. When do we start to delegate out those tasks and to hire in? And this is not mine, not make this up, so I'll just use it and someone else can take credit for it.
Speaker 2:Do it when it really really hurts. You Don't expand or change or grow or hire in or start to delegate things until it's really painful, because the opposite of that is over delegating and over and bringing people too early, and then it's not being done right or it's not being done officially, or you can't afford to do it. It's just the worst part to do it. So I say, do it when it's painful. If it's painful, then you're like, okay, time now to bring in that second person, time now to bring in that.
Speaker 2:We went for years and years and years and I was doing a lot of the COO stuff and a lot of it manually. In fact, I had to be I would say I'm probably the worst example of this. They had to pry some processes out of my hands that I was like I don't want to get you know, they're like you have to in order for us to scale. And it did hurt. I was really struggling because I was juggling too many balls and things were slipping, and that's when you can say, hey, it's hurting, right, and it's not temporary, this is permanent, let's bring in somebody to help do that.
Speaker 1:So I think that's the really good thing about you just mentioned with that is you know, is it a temporary slip? I mean, I've noticed myself slipping things the last few weeks, but I've also been juggling 47 balls the last couple of weeks. We're starting to normalize as things are getting settled down.
Speaker 1:I'm feeling more comfortable with these things, but still on my list that I've got on my desk, there are things that are painful or things that can easily be delegated. I have resources today. I'm not going to go hire somebody or it's not going to cost me any more, but for me, you know, just like you said, there are things that I'm not ready to let go of right, because in my mind they're either too important or you know things like our licensing with the state that I have to manage every year, which is on my desk for this week to do, um, our renewal. And or you know even things that I just like to be on top of is you know the bookkeeping and the bills and the. You know the cashflow and all that stuff. Um, maybe because I don't feel comfortable bringing somebody in to see some of that information, but it could also be, you know, a control freak.
Speaker 1:So I think we all, as business owners, have to figure out um, you know it's funny. I mean I own a payroll company. I still do our payroll. You know, on the side every week. You know I'm doing it because I don't want anyone to see it right. You know I'm still in that old school mindset. So I've got to. I have to let some things go myself that are very, you know, replaceable tasks, I guess. Right, it's not. My time is better spent working on the strategy and scaling the business and thinking what's next and creating the process and so forth, rather than doing the work sometimes. And that's hard for me as a leader sometimes to like and I'm sure you've been here too, we've all been there, I know we're very much alike and if my business partners were listening to this, they would say, oh yeah, absolutely.
Speaker 2:And my business partners will listen to this. They would say, oh yeah, absolutely. And there is a part of it. There's a part of it. It's control. It's a part of it. You know that you're doing it maybe fastest and best than anybody else and there's that weird thing in the back of your brain like, oh, it's going to take me so long to document this and to make it into a process that someone else can run, and then I still have to. But this is turning into like a therapy session. I like it. This is a small podcast, small business.
Speaker 1:So when are you going to let go after?
Speaker 2:this. Oh, there's a couple of things. I mean, I'm the CEO of a 75 person company. There's still things that I do that people would probably be like you shouldn't be doing. That I definitely. I will say over the years I have done a lot to let go of stuff, but each one it was like prying it out of my hands.
Speaker 1:So I will say one of the things that I've really been thinking about a lot this year as we've grown is business continuity and succession planning and because if I get hit by a bus, there are a number of things that are literally only in my head.
Speaker 1:Only in my head and, of course, like in the break glass for an emergency file is like my phone passcode and my password, keeper password, like go there first and everyone knows where to find that.
Speaker 1:But it's been really important. I realize we have thousands of clients that rely upon us and I have 20 employees now who rely upon me for a paycheck. And if I walk out the door right now and get hit by the bus, right, there needs to be a plan in place and there needs to be people that can do things that not just me, right. So that's been a real big revelation for me in our growth is I can't do it all physically anymore, right, but to to be a good leader and a good business owner, I have to use my team because otherwise, again, if something happens to one of my key players, you know what happens to, what happens to my employees, what happens to the business potentially, and that's been really eye-opening for me this year and that's what's driven my I'm going to turn into a saying, because I like saying something say don't delegate.
Speaker 2:You have a dot right. People delegate, so just do it this way. I'll show you how to do it. Every time we dealt delegated something, we would provide very good documentation around how that thing happens, because you're not just delegating once, like you said. You're delegating it for whoever takes over that task. So just training one person on how to do it isn't the right thing to do. Delegate it with good documentation that everybody can refer to is actually, you know, is the better way to go.
Speaker 2:So document a lot. I'd say I wrote it down as document your processes. So I know it's painful and most people don't like to document anything. It's like what's the last thing in the world you want to do besides the colonoscopy is document things? It's like oh, I hate it, but I can look back on documents. I wrote 15 years ago same thing we're doing today, and if someone needs to go pick it up, what I would suggest to people around you or business partners is make you take a vacation for more than two weeks and say, okay, anything that you're going to do in this two-week process, or maybe you take a virtual vacation, anything you're doing this two-week process, you need to document what it is, because that'll prove right. If things could just run 100 without you for two weeks and no, you didn't have any manual intervention, well then you don't need to be around anyway. So that's fine.
Speaker 2:No, but like if you know it forces you into that position where, like, okay, yes, in the next two weeks if I were to go, you know, on safari in Africa, these seven things, I'd actually need somebody else to do those and they can't just be put on hold. And so that's a great way to stop. And my business partners said it to me because I was running a lot of the business they're like, hey, what happens? You get by a bus. Oh, my god, don't worry about it. Like, could you please document all the thing?
Speaker 1:do you know you live in new york city how many buses there are? Buses what I live in, maine. There's no bus. We got school buses. It's a real threat.
Speaker 2:It's a real threat. So but that documentation and and having you know a side, you know a tip on top of a tip or a meta tip is come up with a good standard for how you document, where you document, where you leave things um, that will hold you very true going forward. I find people if they just kind of do you know, oh, just throw anything anywhere, you'll anything anywhere, you'll end up in a lot of bad space. We picked some really good standards for like here's how we're going to document, here's where we're going to put things, here's how we're going to put things in the folders, and those things still exist today. So I said do things that don't scale, pick things that will. We picked sort of standards for how to our naming convention and picked our foldering system and how we handle our client data, all that which has scaled very, very well.
Speaker 2:Still the same exact system we used when we had one client. Then only 800 clients only did one project to 2,600 projects. Now things have changed in the middle, but literally like here's where you put this and here's where you put that same system. Some ways, if you come up with something, you come to the process, you document it and you think about it. Right, you think like, okay, you do have to think like well, will this last when there's 600 of these? You know, oh no, that won't work so well. So what's the thing I can do to change that process so it will scale. So I know it's.
Speaker 1:So I like the vacation analogy because it's funny. A few months ago we did a podcast with somebody else, basically about building a valuable and sellable business, and one of his pieces of advice was go on vacation for a month If the business, if the business can run without you for a month, you're ready to sell your business at its maximum value. Right, Because people are buying, not you.
Speaker 1:they're not buying you because you want to retire right, you want to get out of the business, but guess what? And the same kind of thing relates to being scalable as well. I think if your team can do what you can do, then you can focus as a leader on all the really important things to scale and grow and find new revenue wherever you're going to get it Right. That's so, talking about finding new revenue, we kind of we, we skirted around the chicken or the egg, right, but you said delegate when it's painful. How have you done that? Uh, you know, have you hired after it's painful? Or do you pre-hire knowing a big project's coming in?
Speaker 1:How have you managed? You know, cause labor is your most expensive expense, mine as well. Uh, and most businesses, you know our people are. What are expensive in our businesses? Uh, you know, and that's always when do you hire? Is is always the challenge that we've had. I tend to be a little too far ahead, I think sometimes I I probably am a little too conservative when I'm hiring, cause I think it's going to take longer to train somebody. What if you know and I've been caught with my pants down where we've wrote a lot and I've I've we've either lost clients because we screwed up, because we couldn't handle it or whatever. So I'm a little gun shy now. But how have you managed that? I mean you said, gosh, it doubled in one year. First, where'd the revenue come from? How'd you get it? Did you get it first? Did you get it out?
Speaker 2:So in my business, the services business, everything we do is servicing our clients. As a services business, everything we do is servicing our clients on an hourly basis, so it's a very like the person's here.
Speaker 1:It's a one-to-one.
Speaker 2:They're here to do the work or they're not here to do the work. I would say it's probably the most difficult part of running a services business is this model, because there's and I thought what this says is pendulum. This is pendulum between sales and delivery. So delivery is the people who do the work, sales is the people who sell the work and you have to keep this pendulum as it goes back and forth. There's been times when the pendulum's like sales is out there selling, but they're outselling. Delivery, meaning they're selling things but we don't have enough people to deliver. That that's bad. You don't want to do that. You don't want to be like oh, we can't do that work because then the clients are unhappy or our partners are unhappy, or sales is unhappy because they can't sell. The other pendulum is the other way. You don't want to have tons and tons of people sitting on the bench doing nothing and sales isn't selling enough for them to do. You don't want that. That's revenue, that's margins, right. So you want this perfect. You want the pendulum to sit right in the middle. Of course, it never does, just because of the market or because of clients or because of where you are as a growing company.
Speaker 2:I would say we're a very data-driven company. We use a great CRM they're my third plug for Salesforce and so we spend a lot of time watching it and paying attention to where is our capacity levels, where are people and what do we see in the future. Right, if you have a good CRM and you can do forecasting and look in the future, you can say, oh, I don't think we have enough to do that. That being said, you also have to look at your onboarding and your training product. Right? If I could get someone in one day and hire them on Monday and put them work on Tuesday, well then it's not a big deal. I can literally backfill from sales easily. That's not our case. We have somewhere between a 30 and 90-day training program to get people up to running, 90-day training program to get people up to running. So I kind of have to be thinking 90 days. So now, as I know that we actually track metrics on how fast people come in, how fast they get to our onboarding, we call it first to book and so, like their first hour that they book when that happens in the process, and so we're constantly monitoring that and going okay if we see all this stuff coming up in the future. Right, we need people to do that work and so we'll start to hire in, you know, somewhere between 30 to 60 days out.
Speaker 2:It's not perfect. There's no, you know, perfect science to it, because you're looking at things that haven't happened, right, and you also have the unknowns, the unknowns of the world. You and you also have the unknowns, the unknowns of the world. You could think we're going to have a great third quarter and then go into third quarter and something can happen and that quarter just goes away. So I would say we try not to overhire.
Speaker 2:I'd rather be a little bit on the, I'd rather be the wanted commodity. That is like in every business. If someone comes to you and says, hey, I want to sign up with you, and you're like, hey, we're super busy right now, like, come back in a month, you probably go oh, wow, they must be really good at it, right? If you try to go to a restaurant tonight and you see two restaurants and one there's, you walk in and they're like, oh, we're booked, you can book this in six months. The next one's like have an empty tables. What would you say? You'd think, well, this restaurant's not very good, so I want to be at the point where I'm not like oh yeah, I can start anything at any moment. There has to be some sort of process there. But I also don't want to tell our clients they have to wait for years.
Speaker 1:So we are pretty fortunate, like you are. We know our pipeline where my operations teams, my sales team, meet every week to talk about pipeline. What's in the pipeline? Who do we think you know what's the probability it's going to close? Where are we going to put that work when it walks in the door? Hopefully you know, and so forth, and how hard is it going to be to get them onboarded and all those kinds of things?
Speaker 1:So we have, and we have been in a position, same way, where we say I mean, we have clients that we've been dealing with for two or three months already that won't start until after the first of the year, because maybe we're saying we can't handle it until after the first of the year or it's the best time to do it or whatever. So it's, you know, pushing. I would rather be in that position, like you said, of being in demand, managing the pipeline. And you know, the last thing anyone, any client wants, any customer wants, is for you to give them bad service. So I think, if you're more transparent with them, to say, listen, we can't handle you today, or if you're a restaurant tonight, right, gosh, let's, let's book you for two weeks from now or something, gosh, we might miss the special anniversary if it's, you know, a restaurant, but um, but we always are trying to be transparent with our clients about service delivery and when it's going to be effective and you know, and so forth. So managing managing the growth is been something that we've really focused on, really just to to try to make sure that.
Speaker 1:But same things happen to us, gosh, I mean we had a great pipeline, to be honest with you last year. In our business kind of January one is when we take on a lot of new clients and going into September, october, last year the pipeline was super full for January and then all of a sudden, like the contracts never get signed, for whatever reason. This fell apart. That fell apart and we came into January and like we still had a good January but it wasn't. I mean, I was hiring people in anticipation of a really really good January that never transpired. Now we made it up the rest of the year. Things have kicked down the road and we're having a great year, but sometimes that happens and that's real right.
Speaker 2:I mean, it's the hard part of being in services, because we do have this issue. Obviously, it's not for everybody. There's different types of businesses that don't have these ebbs and flows. And knowing your cycle of your year have these ebbs and flows. And knowing your cycle of your year as you get bigger. The nice thing is that the size of a deal doesn't impact you as much, right so, when we were very small and three of us and we didn't land one deal, that was massively impactful. Now, with hundreds of deals on the table, we're running 200 projects. Right now, the ebb and flow of a couple projects isn't as impactful, whereas back then, just like one person leaving. I remember when we lost our first employee. It was brutal. It was like there was three of us, four of us doing a job and one person leaves.
Speaker 1:The math you lost 25% of your capacity.
Speaker 2:And you just have to make it up. Now it's getting easier and easier. It's still. Obviously we don't want to have anybody leave, but it does happen. But it's a much easier process and it's not as devastating. I mean, we lost sleep at that point, but that's in the services industry, where this is the industry we decided to get into.
Speaker 1:So what about? You've had change in your leadership right?
Speaker 2:Larry stepped away from it right, and Jeff Yep both that. Oh, Justin's got a net too. Just me, I'm the last man.
Speaker 1:on that, you're the lone survivor, right? So of the three amigos we got one left. So how has that impacted the growth of your business? I mean again, I think for us, for me, it's like gosh, if I lost it. You lost a key team player. How did you? I mean, I'm sure those were planned, it wasn't like they just ripped out the door. You know how do you plan for succession, for change and in that growth, right, because, like you said, you lose one person in the beginning, that's really hard to make up. But you know, even if you lose a key player now, that's hard to make up and knowing who those players are.
Speaker 2:Knowing, you know, staying on top of people, I would say as a CEO, you know one of the biggest. We talked about it almost entirely this time. You know the people. Part of things is extremely important Recruiting your employees, staying on top of that extremely important. The succession is I'm just going to be different for everybody. I think when you're looking back on starting a couple companies and running some by myself and then ending up running this one by myself, definitely pros and cons of doing that right. Having three people or two other people to run a business to delegate out to you, have three bodies to start, the time you need to hire is even farther down, because you can do everything and everybody can share the workload right. When you're one person, well, you're going to be out of capacity very quickly. But then there's the other side of it, which is decision making is harder, right. You're in a three headed thing, like if you get two to disagree on what you want to do, you also have three mouths to feed, right, so it's a splitting up the profits or the revenues, especially early on. So you kind of have to make more. I think if you're in a situation where you're more than one founder and I think the studies show that more than one founder actually is more successful, and that's the ones I've read that sole founders are not as successful as multiples, just for those reasons also. There is the companionship. It's a very I've run companies by myself and it's very lonely, like you can't come home and high five yourself, or or when you're having a bad day, I lose a client, or have a bad sales call, you know there's no one to talk to, can't go to anybody and say, hey, I just had. But when you have a couple of partners, or one or two, you can, you can always have that conversation. One can be down, one can be up, so, uh, but when you're in that situation, I think it's the same thing. It's it's just go as far as you can and work as hard as you can and make sure everybody is really aligned to what you're trying to do, until that moment that you say, okay, now we need to next person. Right, we're at that scale point and you'll sense it because you'll be under, you'll be overwhelmed, hopefully. I mean this is the point of business hopefully we have too much business.
Speaker 2:I now need to bring it and and figuring out that next person for us it was always delivery. We had to bring in delivery, delivery, delivery, until there's a point where like, okay, we got, we have enough delivery people. Now we need to scale the sales side. And so, you know, matching that, matching to that, that number of like okay, how many salespeople do I need to bring in this much delivery hours? Um, always became challenge, but we just got to a certain point like, okay, there's this one salesperson can't do everything, so we have to bring in this much delivery hours. Always became a challenge, but we just got to a certain point like, okay, this one salesperson can't do everything, so we have to bring in somebody else. And then succession.
Speaker 2:I think, having the right agreement about what happens, you have to change it up, because a lot of your agreements in the beginning are we all work at this company, we all do this, this is our full-time job. So I think, just being very clear and transparent around what changes are, how, the change is the structure of the agreement, because it's going to change and so you have to really talk about it and work through it In theory, if I were to do it again. So here's my advice from having done it. I would build into our shareholder agreement what this looks like now. We never built into our agreement that what was going to happen in 15 years.
Speaker 2:And if someone had pointed to this and said, hey, but at what point does one person want to go do something else, what is their option? It wasn't one of the options in the shareholder agreement, so we kind of had to change it up. But that would be something. If you're starting a business, look at it, say yes, we're all in right now, or we're both doing this right now, or all three of us or five of us, doesn't matter. But at what point? When someone wants to leave, what does that look like and how does that work? And is everybody okay with it right now?
Speaker 1:That's the time to agree to things, not I'm saying it's a lot easier to have that conversation when there's no money on the table versus 15 years later when there's a lot of money on the table and that's.
Speaker 2:Here's another thing that'll scale. You're this, that will. That doesn't scale. Well, is that right? Your agreements when it's when you have. You know, I think our first year we had nine thousand dollars in sales. You know, okay, it doesn't matter. When it gets big and and there's big, you know big numbers on the table. Yeah, things change up and your lifestyle is built around it. Or you run a company for 10, 15 years and you're commitment level to it.
Speaker 2:You know, one of the things that we would do every year and again, I would say pros and cons to this but one of the things we do every year is meet as the three founders and we would get together, uh, in some place. Earlier it was like, just find a restaurant in new york or starbucks. Later we're like, oh, let's treat ourselves and go someplace nice. But we would meet and we would just say, hey, you want to do this another year, you ready, let's go. And in that way it was great because we could. Then we'd re-say yes, we want to work together, we want to do this. The downside to that and the thing that I learned since, is that we were kind of on a year-to-year lease with each other. Right, that we could only say, hey, let's do this for another year or two. Sometimes we would look longer, but for the most part we would only kind of look a year ahead In business, and I have this in my notes to talk about too.
Speaker 2:I believe in plans, I believe in planning something out, having roadmaps, strategies, all that, but you don't have to be beholden to it. So my advice is get that plan, make it, do the thing, have it, write it down, whatever. But then go, run the business. Don't sit every day and look at your plan, your business plan or whatever, and are we matching to that? Because so much changes so fast. Yeah, you don't want to be changing the plan all the time. It's better just to kind of look back at it, whatever it said, and go, hey, how close we get right. I mean, are we successful? Did we get to where we are? I've looked at plans that we built four, five, six, ten years ago and interesting how close we nailed it. But we didn't look at it every year to say, you know, are we on track with this? We kind of just said, all right, that's great, now let's run the company, let's move forward.
Speaker 1:Yeah move forward. Yeah, when you talk about strategic planning, I mean we have really taken a more deliberate approach to that planning in our business and we started really put our first kind of real, true plan together, like a year ago, that we've been trying to hold ourselves accountable to, and we just met this week as a management team to say, okay, what have we hit the nail on the head with? What do we have to zig, what do we have to zag? And it's amazing, the things that, like you said, we are spot on, we got where we wanted to be, and there's things like, oh, we dropped the ball on that or that's never going to happen now because of this or whatever, right, so you know, it's not a black and white. You know running a business is not a black and white thing, so that's really important.
Speaker 1:You talked about kind of the companionship, of having partners, and I would say that my friend circle has become a lot more of my clients and my you know, business community minded folks, because I need, I don't have a partner, right, so I need to go have a beer with someone and say, okay, this is the problem I'm having today, right, what have you done about this? How have you experienced this in your business, right? Not that there's any financial gain to be had there, but they do the same thing to me, right Like shit. I've had a terrible day. This happened, this happened, this happened, this happened.
Speaker 1:How would you deal with that, and a lot of folks will bring in a business coach or something like that for the same reason, because you need that sounding board, because you need to be able to. You know, we can't just talk to ourselves all day long. I can but that would.
Speaker 2:For the last couple of years I've been, yeah, I've been doing. What you're doing is what I built a community. Now it's hard to build a community of CEOs or people who run companies, because it's kind of a rare thing a community of CEOs or people who run companies, because it's kind of a rare thing. But I was when. The first thing I did when I became CEO of Arcus almost two years ago was I just went onto my LinkedIn and I just said title CEO and I went through my 2000 contacts. I found a ton of them, some that I'd known for years, some I didn't know they were CEOs, some that were a CEO but I was like, oh, that's not what I'm talking about and I started reaching out and I really just I started to build that network and I still did today.
Speaker 2:I was out at Dreamforce back in September. I talked to three or four different business owners and we do we talk about it, we compare notes, we do it friendly. You know sometimes they're competitors. I have my second employee employee number two now runs, I would say semi-competitor and we meet like once a month. We get drinks, have dinner, and you know we're friendly. We don't meet NDAs, but we have a great time just really talking about it.
Speaker 2:So I find I've now made that network happen. There are programs I know that they reach out to me every day to get me to sign on but there are user groups and there are special programs and things for people in this position that it's hard to do, this talking and I think some of them are very useful. But for me, I just built the network and there's a lot of people I have on speed dial that I can call or talk to and just say, hey, let's get together and chat about it, and that's very, very helpful. I don't mean to do it every day, but having the people that are kind of going through the same stuff and we can go oh, what's up with this employee thing? Oh, me too. Oh man, what's happening to me?
Speaker 1:Yeah, we've done the same thing. I mean, I'm very friendly with folks in our industry. There's plenty of business for all of us out there, right, even my local competitor down the street. We had lunch three weeks ago, right, and it was a good check-in for us to say, hey, what are you seeing about this? What's going on with that? How do you feel about this? What employee issues are you having? Same kind of thing, right, and we try to have lunch a couple times a year. Same thing. I've got a guy in Massachusetts. We'll meet up halfway between and have lunch, and, of course, we see each other at conferences and we're very friendly and they all know if they ever need anything they can reach out to me and vice versa, and I think that type of support, particularly in your industry again, like you said, you're not sharing all your secrets, but I think you're getting most people want to help you, right, so I think we all want to be successful. I do have one local competitor that won't have lunch with me, which I think is interesting.
Speaker 2:But-. Better doesn't listen to this podcast.
Speaker 1:Maybe he'd learn something Just saying but no, I mean, I think that's really important is, as you're scaling things, to really have that sounding board, having peers that you can really rely on to help drive you, because we all have our own internal drive. But I think there are days where I go home and I'm like why am I a business owner again? If it was easy, everyone would do it right.
Speaker 2:That's what I keep telling myself. It is very lonely. And then I do a lot of studying. I do a lot of I actually I don't do as much reading because I find that I still have that time but I listen to lots of podcasts, lots of interviews. I find the leaders who I think I trust or like and see, and then I listen to them and hear from them. I did a lot of masterclasses.
Speaker 2:To me it was like just get a lot of information in and then, as I did, I kind of built out my. I'd take things from each one of them. I'd say, oh, I like that from this one or that one I like. And so if you listen to some of the leaders who have been there and run you know companies, either bigger or whatever, it's very helpful because they'll be saying something like, yes, that's right. Or they'll give a piece of advice. You're like, oh, that's good, I should put that into the way I think about things. So just even that, I know it's not the duality of talking to somebody and getting the advice.
Speaker 2:So I would say study the ones that come before you, because there's a billion CEOs. Go find some ones that you like or respect or think you've done a good job. But then, yes, keep a cohort of people who are in your system, in your industry, or even ones that are local to you, that maybe aren't in your industry, because those ones can be good too. I've talked a lot of business owners where I live. I love talking to them, you know, just talking about business and what they're doing. They could be on a bar, they um restaurant, uh, they could have a little insurance shop down the street. So, making those connections too, you kind of always find something, even though they don't do anything close to what I do. But, uh, keeping that connections and building those, those communities, it takes effort, and you do. You have to reach out, you have to take someone out for coffee, you have to not be forgotten, but it's really, really impactful.
Speaker 1:My snuff heats when I go on vacation, because every time someone mentions a book to me, I go and buy it on. Amazon shows up and it goes on my stack. And then when I actually go on vacation and I'm sitting on the beach somewhere, that's when I have time to read because I, like you, I don't have time necessarily to do it as much as I'd like and I'm scribbling down a million notes on my ipad. And then when I get back like you know, I get back on sunday and I can't write my notes down then I send this email to my team and I'm we got to do this and we got to do this and we got to. What about that and what about this? They eat it.
Speaker 2:I did that. I was up in Maine, in North of you, and I did a week kind of like cut myself off, and you know this is also good advice for small business owners. Learn to step away from it. It's not just so you can relax. It's not, you know, because you're a business owner. For small business owners, there's never not thinking about your company, right? You wake up in the morning thinking about your company. I dream about my company. I go to bed thinking about my company In the shower. I think I mean it's just, there is no stopping to it, so just relax on that, it's okay. But taking time away and like shutting off the communication, I'm really, really going away.
Speaker 2:I did everything right in it, except for I didn't have my team block me out. I turned off email. I shut down Slack. I turned. I ripped them off my my desktop and off my phone. Just move them to the sides. I couldn't get into them. I should have had them and I will next year. I'll have them shut me out of Salesforce, literally just freeze my account so I can't get in.
Speaker 2:But it was great. It's not like I didn't think about my company. I came home with a stack of notes, I read books and the same thing. I do try to process them for a couple of days not to overwhelm my team, but it was great. It's a great way just to step away. Look out at a lake up in Maine in the fall and, yeah, I have great ideas. Some of them I'm just going to throw away because they weren't great. You know they're not as great now we're up in Maine.
Speaker 2:But taking that time away is super important. It's not just for the typical reasons we talked about. One good reason is like being able to delegate a thing out, but also just to take a step back from your company I think you'll have. The day-to-day keeps you very much involved in the day-to-day and if you can stop for a second then you can have those bigger thoughts I've come back with. You know bigger plans and bigger things and longer-term objectives that I found, you know staring at the lake, than I would not have found if I'm sitting here. You know doing all the things I'm doing.
Speaker 1:I mean that's. I think that's really great advice to close things up on. I did the same thing last fall. I knew we were doing strategic planning. I don't have time in my normal day to stop and think about things because I'm just doing all day long. I actually went, I booked myself a hotel in Boston. I drove to Boston, I literally shacked up in this hotel room for the weekend and I was writing thoughts down about where I want to take us, what our vision is, where we're going, because I just didn't have time to do it and I needed to detach myself to do that. I think, as you're trying to grow and scale, I think that's really important to take time for yourself, because it does breed great results and it's okay to be always on People.
Speaker 2:You know people ask me like well, can't you just step away and stop thinking about your company? I'm like not really. I mean, I think there's like a couple times during the week that I don't ones, when I'm watching my terrible jets get beat like that. I'm not thinking about my company, but other than that it's just 24 7 um, and that's okay too. Right, it's okay to okay to do that and just know when you take a break and let it go, because it is that impactful.
Speaker 1:Well, good, well, this was a great conversation. I think we touched on a lot, which is good. Hopefully, folks got some tidbits to take away. So thank you so much, jason. Feel free. How do people get in touch with you if they want to? How do people get in touch with you if they want to?
Speaker 2:Sure, well, you can hit me up on the only two social networks I'm on, which is X and LinkedIn at Jason M Atwood. It's the same. After you can find me, you can search for me. You can head to the website of Arcus, which is A-R-K-U-S-I-N-Ccom. There's lots of information there and, other than that, you can send me an email I don't mind, jasonatwood at ArcusInccom should be an email and I might reply no, I probably won't.
Speaker 1:Absolutely. And, of course, if any of our listeners have any questions for us or for Jason or any of our guests, you can always email us at podcast at Faber-Charlescom. Don't forget to like follow, share rate review anywhere you get your content rate review anywhere you get your content. I'm just going to talk content because we get a lot of it out there and otherwise we will see you next week, thanks everybody. Thanks for listening to this week's episode of Small Business Big World.
Speaker 1:This podcast is a production of Paper Trails. We are a payroll and HR company based in Kennebunk, maine, and we serve small and mid-sized businesses across New England and the country. If you found this podcast helpful, don't forget to follow us at at Paper Trails Payroll across all social media platforms and check us out at papertrailscom for more information. As a reminder, the views, opinions and thoughts expressed are the hosts and guests alone. The material presented in this podcast is for general information purposes only and should not be considered legal or financial advice. By inviting this guest to our podcast, paper Trails does not imply endorsement of or opposition to any specific individual, organization, product or service.
