A Guide to Scaling Your Small Business: Is there room to grow?

Scaling a business sounds exciting… until you realize growth is not always the goal. In this episode, we dive into the real questions every small business owner faces: Is there actually room to grow, and do you even want to?

We’re talking about the signs it’s time to open a second location, how to know when a client relationship is doing more harm than good, and the tough realization that not everyone is your ideal customer. We also unpack the pressure entrepreneurs feel to constantly expand, and why sometimes keeping your business smaller, simpler, and more profitable can be the smartest move of all.

Whether you’re trying to scale, stay lean, or figure out what success really looks like for you, this conversation is packed with honest insight, practical advice, and real-world perspective for business owners at every stage.

Transcript

SPEAKER_00 0:04

Hi, I'm Thomas Fontez with Accounting Services Unlimited. Andrea?

SPEAKER_01 0:08

Hi, and I'm Andrea with Accounting Services Unlimited. Today we're gonna talk about keeping business in business. So Thomas, not everyone is your client. Why is that?

SPEAKER_00 0:21

Correct. Well, you know, when you first start out in business, um, you know, you're you're trying to get clients. You're trying to make enough money to survive, um, making sure that you know you get your bills paid. So you start taking on anyone and everyone that wants to come in. And so at least for us with accounting services, when I first started out, you know, I started off as inexpensively as possible. And as time went on, I started realizing that I was really working to survive, not working to become really profitable. So uh as as time went on, and you know, you add employees and your expenses go up, you realize that those clients that were using you to be as cheap as possible, they're looking, you know, that you're that you're as as cheap as they can find, um, are really gonna start to take advantage of that and they're gonna hold it over your head. And the thing is, the loyalty is never gonna be there if you're the cheapest person. Yeah, the loyalty is never gonna be there. Um, and and and unfortunately, you suffered through it where you bend over backwards for these people that you're making no money on. And as soon as somebody comes in cheaper, they drop you like a bad habit after all the work that you've done. So that's business. So what I've learned is guess what? Not all clients are your clients. Make sure you stick to your guns when it comes to your pricing. Value the work that you do and value the people that work for you that do the work that you do. Because if if your clients are taking advantage of you or are beating you down on price, you're always gonna have those problems. And one of my favorite lines is if your clients are having cash flow problems, you're gonna have cash flow problems. Absolutely. So um, yeah, I mean, the the the name of the game is profitability, right? You want to make sure that you're reasonable, but you want to make sure you're profitable. Um, you don't have to get rich. Yes, you do. Um, but um at least, you know, you keep your clients by doing a good job, not necessarily for being the cheapest. So you have to keep that going.

SPEAKER_01 2:25

Right. I've always learned, too, from you and from others that have mentored me, you never want to sell on price. You want to sell on your service and what you're providing to your customers. And then you have a customer for life.

SPEAKER_00 2:38

Right. You you know, but yeah, I I remember um 10, 15 years ago, we had a client that uh we really went out of the way for. Uh it was after a hurricane, they'd had some financial issues. Um and we, you know, worked with them, got their accounting done, got their books done, got them all cleaned up in order to submit to insurance companies in order to get paid. And we were very excited for them when they finally received the money for for uh for the damages and for business interruption and everything, and they stiffed us and they ghosted us, they never paid us, um, and to this day they've never taken another one of our phone calls um and everything. So it happens. Um so so the client that uh somebody's asking me for over there in the corner, um is how do you know when to let a client go? Okay, that's a good question. So that's that's a toughie. There's a there's two parts to that. Always, of course, of what we just talked about when the client um begins to mistreat you or abuse um the services that you're offering. If you offer one thing and they want you to do B and C, but they don't want to pay for it, that's a good time to shake off the client. Right? Now, the other side of that that's very important to me, um, and I'm not just saying that because you two are in the room, um is also if the relationship becomes a little abusive between the client and your employees, the people that work for you, the people that are actually doing the work. Uh as I like to say, if if a client wants to call me and yell at me about something, it's no problem. I own the company. But nobody gives them the right to abuse somebody that works for you. And to me, it is way more important uh to maintain the employee than it is to uh keep a client that has that habit or has that attitude. And we've done it. And and and you know, you'll know when those times come. Um my father told me uh when when uh when I first started out, he says one of the best days you're gonna have as a business owner is the day that you fire your first client. And it doesn't hurt your bottom line.

SPEAKER_01 4:50

Right.

SPEAKER_00 4:50

So yeah, that's that's uh that's a good one. Um so the other the positive side of that is uh it's fun when you work with a client that values what you do and you get the thank yous and you get the gifts all of a sudden that they that they send to your office. Uh for our office, it's usually food for some reason. Yeah, the office can take food, they'll mow down anything they bring in, uh, whether it's donuts, whether it's uh Mexican food, since it's Cinco de Mayo today, in case anybody was wondering when we're filming this. Um and or or um, you know, even if it's artwork. I mean, we've had we've had all kinds of gifts, and that's that's always the fun part. Or or when somebody that uh that does the accounting for them or whatever goes to the restaurant or um meets with one of the lawyers for some reason, or um goes out and and goes shopping and walks into one of our clients, um, where they see the appreciation from the client.

SPEAKER_01 5:49

Right.

SPEAKER_00 5:49

Where they get the free uh appetizers, they get the free dessert, or they get a simple thank you. Or my favorite thing was I don't want anything for free. But um, I like it when the owner comes will sit with me and we'll chat for a minute. Right. So, I mean, that kind of thing, especially if we're drinking. Um but uh but um that's that's the kind of thing that that's really, really, really goes a long way. Right.

SPEAKER_01 6:12

Um I think what goes a really long way is just when you can take this off of the shoulders of a small business owner, and they're just like, oh my gosh, I feel relieved. I've I'm so glad I don't have to worry about this anymore. I know it's in good hands with you guys. I know I can call if I have a question, or I can stop by the office. I mean, I'll I got told that last week, you know, they're just like, oh my gosh, I'm so glad you all are handling this.

SPEAKER_00 6:40

I don't know if we talked about it at the last podcast, but it's almost like marriage counseling sometimes. Um, you know, where the wife will be doing the books and has been doing the books, and they come in for for a consultation, and for the first time, the wife admits she hasn't been doing the books.

SPEAKER_01 6:55

Right.

SPEAKER_00 6:55

Um and the husband is shocked, and everybody stares at each other, and then we tell them that it's easy for us to catch them up. Um, and we'll catch them up, and then all of a sudden um they have a happy marriage again. And um and and they'll go on vacations now and they love each other, all because of ASU.

SPEAKER_01 7:12

Right. ASU solving everyone's problem, right, and marriage counseling. So let's talk about innovation in the business. What can businesses do to lower the overhead and increase profit? What have you advised some of your clients to do?

SPEAKER_00 7:31

Well, uh that that's that's um that's a really good question. So when you innovate, you look for ways to make things better, right? That's a that's a very definition of it. So you try to come up with new things that'll make things either better for your clients or simple, um uh, you know, simpler um, or uh maybe more um a little clearer for them. For in our industry, uh innovation comes in several forms. One is, of course, looking for ways to get information from the clients, process it, and get it back to them as fast as possible. Now, um, are we going to use uh what we have? Yes. Are we gonna buy other softwares and everything to try to use to try to make things better? Of course. What do I mean by that? That means that instead of having one person working for a client, maybe we'll have two or three and we'll have separate eyes and we'll be able to improve things in their accounting. So that's innovative. The second thing is improve on reports, add some categories or take categories off of some reports that aren't necessary, and maybe and maybe share the type of information on a balance sheet uh that might help a client uh make the right decisions. I'm smiling because I'm I'm thinking of a client uh that I had dinner at yesterday, um, and he was talking to me about thanking me because he didn't open a second restaurant. Uh his restaurant that he owns now is doing great. It's killing it. And so, of course, he has people coming in, see a full place, and they're like, oh, you should come check out this other location, or maybe you should try this other concept or everything else. And so I sat with them and I said, Don't do it. You're cleaning up, you're making money. Um, why would you risk what you have now if it's not worth it? Now, don't get me wrong, if if there's a spectacular location or the right kind of financing presents itself, or um, you know, there's all of a sudden a concept that's really hitting, resonating, and it might work, sure, but the numbers are going to tell you whether or not it's it's time uh to do something like that. Um and so, and that's what we use, and that's what we use numbers for. We've gotten it down to the point to where uh we tell clients, for example, if we see a lot of repairs on a piece of equipment in a print shop or something like that, where we'll tell them, hey, listen, I don't know what machine it is that you keep paying every other month for these repairs, but you've spent seven thousand dollars on a ten thousand dollar machine. Right. It's time to buy a new one.

SPEAKER_01 10:07

Time for a new one.

SPEAKER_00 10:08

And maybe, and maybe sell the older one to your competitor. You know, stick in with it. Um but yeah, that's that's kind of that's that's what you know, that's kind of going back to the original question, which is kind of innovative, those are the kind of things that that we should be looking at that keep making things better and better and better as time goes on.

SPEAKER_01 10:25

If you had one piece of advice that you could give to every brand new small business owner, what would it be? That's a tough one, I know, because you usually give them so much information in those initial meetings. I mean, but what's the one thing you would want a new business owner to know today? Listening to this podcast.

SPEAKER_00 10:47

Keep it small and keep it all. Um, the idea is that when you get started, a lot of people think, oh, well, I'm gonna open up, like I mentioned, a print shop, or I'm gonna become, or I'm gonna open up, I'm gonna leave my law firm and I'm gonna open up my own law practice. Um, or of course, the restaurant example. And they think that the minute they open the doors, they have to be fully staffed and have all the latest equipment and everything ready to go before they even kick the doors open. And that's one of the biggest mistakes we see. Uh, you know, if if you are that print shop, wait for the clients to come and tell you what their needs are. You have an idea and you're gonna have some basic stuff. And also don't load yourself up with payroll. The fastest way to eat through financing or eat through the money that that you start up with is payroll. When you have people there and they're not doing anything, not because they're bored, but because there's nothing to do, uh that's that's that's you know, that's the worst thing.

SPEAKER_01 11:44

So work with what you have.

SPEAKER_00 11:46

Yeah, keep it small and keep it all. Keep keep keep everything as tight as you can from the beginning. Yeah. Um, and then as you need, you buy more equipment, you hire more people, um, you increase your advertising, uh, you do all the things that you need to do to um to get rolling.

SPEAKER_01 12:04

I think that's a million-dollar piece of advice. I really do.

SPEAKER_00 12:07

I hope so. I hope so. Somebody should pay me a million dollars for that piece of advice. Talking about becoming more profitable that I just mentioned, right? Um, you know, of course I'm mentioning at the beginning, like you asked, what happens, you know, keep payroll low, keep your, you know, don't overbuy equipment and all those things. But once you start rolling and you see um an issue with your bottom line, I mean, you have to have good books to show you, you know, what's happening, how much is coming in, what are your costs, you know, if if you're the print shop or your restaurant, you know, print shop has ink and paper and vinyl and and and and all those things, and the restaurant's gonna have food, that's gonna be your cost. That's something you're reselling. If you're a mechanic shop, that's your parts and all those things. So the best thing you can do in order to improve your profitability is to help cut those costs. Call your vendors, ask them, hey, can you give me a better deal on that? Is there a different brand that I can use that has the same quality or better quality? Sometimes you even find that you can find better things cheaper just by asking. And um, the other thing is a lot of times people think that the pricing that they give you is set. When you look at your books, you can see throughout the year how much you have spent with that particular vendor. And that year-to-date number that we give you on your on your profit and loss statement, that year-to-date number tells you, okay, I've spent so much with my uh with my meat vendor, and and I'm paying the same price I was when I was when I when I first started, or from the beginning of the year. And I've spent all this more. We've sold so much more, and I'm paying the same amount of money. So when you make that call, that helps drop that cost. If you save yourself five or seven percent on that cost of goods, that goes right to the bottom line. And then, God forbid, you look at your expenses. What are you spending money on? Are you going out to eat? Are you taking people out to eat a lot? Is you know, what bills are you paying that you think you could cut back a little bit? You don't need to slash across the board in order to tighten things up. You just need to find two or three or four percent on every expense that you can do something about. Of course, you can't do anything about your electric bill, you know, unless you turn off lights or, you know, um use your AC less, or um, you know, if there's a piece of equipment that uses too much electricity, um, things like that, you know, that those things you can do. But sometimes you'll find things in your PL that even gas, if you're taking too many trips to uh to pick up uh uh equipment or or or one of your one of your things, one of your costs from somewhere. I keep using restaurants, but you know, if you're having to make two trips to uh to a grocery store or something because you're disorganized, well, get organized. Um if you find yourself going to buy ice constantly because your ice machine keeps going on the fritz, well, get yourself a new ice machine because eventually that stuff catches up with you. And all those little things you cut back on, every little detail that you can find, uh, it all goes right to your bottom line. So if you cut back 5% in your cost of goods and 5% in your expenses, only 5%.

SPEAKER_01 15:38

It's huge.

SPEAKER_00 15:39

Um, yeah, only 5%. And then let's say you raise your price a touch, um, 5%, 7%. Let's say it's 5%. You just added 15% to your bottom line. Now, if you're a company that makes that nets out, maybe, uh, or the or that grosses $50,000 a month, well, you know that's $7,500 that's going to be on your bottom line. That's $7,500. You say $15, $7,500. It goes right to the bottom line. What can you do with $7,500? That that adds up to over almost $85,000 a year more. And that goes into your pocket or your wife's pocket in your in my case. Um, but um, yeah, something like that.

SPEAKER_01 16:20

Right. I feel like too, with some of these vendors, it's the price is negotiable once in a while because sometimes they will run promotions, like the national people will run promotions through the vendors, like Cisco. You know, for example, Dole might say if they buy X amount of cases, we'll discount it a little bit. I mean, but do they always relay that information? No. So it's up to you to always ask and do your homework and say, you know, is there any room for, you know, for me to get a small discount?

SPEAKER_00 16:52

Right. Yeah. I mean, and and again, not just with rest. It's I'm amazed at um mechanic shops and body shops that um do the same thing. Uh I'm, you know, they think that because they buy from uh a certain vendor all the time, that they can't get a better deal ever. And and a lot of times all they have to do is keep two or three extra parts in inventory and they might save 10 or 15%. Right. Especially if it's a consumable, somebody that you know changes oils or something like that. Um, I'm always, you know, always amazed at how that's it's the little things. All you have to do is pay attention. Uh sometimes the hard part is also for a business owner to pay attention. So our job as accountants, as bookkeepers, and that's what we do at ASU, right? Is we make sure that we meet with the client often. We communicate with them continuously. Um, we're not somebody that you're gonna call and say, hey, there's, you know, we you you haven't heard from us in three months because um because um you haven't seen any reports because we've been so busy. No, we're never too busy for our clients.

SPEAKER_01 17:55

No, our doors are always open. They can always come to the office or call. That's why I love working for this company because we're approachable. We're approachable. We want to make sure we're doing a great job and we're local, and I love it. I mean, I love working for this company.

SPEAKER_00 18:09

So I'm Thomas Fontez with Accounting Services Unlimited. Thank you for joining us today, Andrea.

SPEAKER_01 18:16

And I'm Andrea Sanji. If you like what you hear and you want to learn more, like, subscribe, and share.