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Building out the LBD
Episode 1522nd November 2021 • Strategy and the Virtual Controller • Penny Breslin & Damien Greathead
00:00:00 00:29:42

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Previously we have teased the Little Black Dress (LBD) concept - if you haven't checked out that episode (13) go ahead and have a listen as it'll help you to get the most out of this episode.

Penny uses the LBD to help practitioners understand a tech stack. The term tech stack hadn't even come into the accounting vernacular, but the LBD analogy had everyone in the room nodding along - well 50% of the room anyway😂😂.

We discuss the importance of having a standard technology set to not only help you scale, but also help you deliver a consistent client experience. After all it's this client experience that will drive referrals into your business. Hopefully listening to the episode you'll breathe a sigh of relief as you learn that you don't need to become an expert in every expense tracking app or KPI reporting to make a meaningful recommendation to your clients.

Enjoy the episode and if you'd like help working through this or any other aspects of your business transformation, drop us a line via LinkedIn.

Penny Breslin - LinkedIn | @PennyB57

Damien Greathead - LinkedIn | @Damien_GH

Transcripts

IN AN EFFORT TO BE AS EFFICIENT AS POSSIBLE THIS TRANSCRIPTION IS AUTOMATIC - AND WITH OUR HOSTS' ACCENTS WHO KNOWS HOW WELL THE TRANSCRIPTION WILL WORK. GET IN TOUCH IF SOMETHING DOESN'T MAKE SENSE.

00:06.25

satvcpodcast

And we're back with another episode of strategy in the virtual controller. My name's damian grayhead I'm sitting in sunny sydney overlooking the beach and it's a beautiful day out here. Um penny my co-host. How are you? what's happening in San diego.

00:19.61

Penny

Well, it's a sunny day in San diego on a mobile looking the beach also but on the other side of it.

00:25.19

satvcpodcast

Yeah I guess it is the Pacific. Yeah, so we're looking at the same beach just from different views. Um, so at different times of the day and and different days. In fact.

00:30.71

Penny

Yeah, and different times the day. Yeah and different things.

00:38.35

satvcpodcast

Um, so so here we are episode I think we're up to episode 14 of strategy in the virtual controller we got past unlucky thirteen which was good. Um folks. You can find us at satvc dot co let me just get some of the housekeeping out of the way. So satvc. Co. Ah, you can go there to catch up on the latest episodes you can download any of the notes or any of the articles that we do that we do mention throughout the webinar. But today penny wanted to talk about this little black dress in Detail. We we touched on it on episodes past um and and. The little black dress I think is a phenomenal analogy for this concept of a tech stack you and I have been to well you you taught me about tech stacks many moon many years ago. Um, and and it was almost as if when we talked about tech stacks. I think the name and the wording and the nomenclatures has become much more widespread today. But but back then people's eyes just glazed over and and and people looked at us saying stacks stacks of technology what on earth are you talking about and the way that you. Helped people to understand this um was the little black dress. Well fifty percent of the audience understood it the other the other fifty percent did it. So so let's let's dive deep today into this this this idea of the little black dress.

02:02.20

Penny

Okay, so the little black dress came from the concept of in Santa monica actually I came up with it because I couldn't get the what I don't think I used the word tax stack tech stack and there was no. Ah. Echo system technology ecosystem or I just had that Diagram of sas pass. You know, managed servers desktop applications and then you got the cloud and so I'm standing there and everybody's looking at me I'll close the goal closed over and I thought well. Every woman has a black dress in her closet. That's the base of her clothing and and okay if I'm going to sound pejorative a sexist in this I'm sorry but every woman has a black dress and some of them might have. It's their favorite black dress is a cocktail dress some of them their favorite black dress has long sleeves some of them their favorite black dress is a mini skirt some of them. It's a strapless. It doesn't matter. But it's a basic black dress that they can add accessories to and change the look. Depending on the event on mood that they're in so but you always have to have a base and so I said look at everybody if you're going to be in the Cloud if you're going to do this type of cloud technology if you if you if you want to do cfo type services fractional cfo so type services. If you want to do advisory services Beyond just advising on tax twice a year and then doing the tax return you have to have some kind of level of upfront franchise on the business that businesses that you're working with and so in this case, we're talking about a. And accounting business are a fractional cfo business that works with small business owners. So if you're going to do that you should in ah in and the best world is have the same gl for everybody decide. What it is that should be is it going to be zero. Is it going to be.

04:10.84

satvcpodcast

Um.

04:16.80

Penny

Qbo ah is it going to be sage in tech. Whatever it is you want? is it going to be a counting suite start with your basic gl. Everybody's on the same go and then what other basic items. Do you know that every small business owner. Either needs now or is going to need within the first year of their existence if and it's going to be gl plus expense management right? because everybody's got to track the money going out of the business and the money going out of every business isn't always written by a paper check.

04:47.79

satvcpodcast

Ah.

04:54.36

Penny

ys and at that time which was:

05:08.39

satvcpodcast

It was:

05:13.62

Penny

Um, you wicked yield. So then the next thing was okay, everybody's gonna need help sometime unless they are even if they're self-employed. They may eventually want to go on payroll ah or at least using payroll from a standpoint of just paying their payroll taxes. But they're gonna there's gonna have to be a payroll system in place and you want everybody on the same payroll system and so everybody's on the same expense management system based on the same gl. Everybody's on the same payroll system and maybe I think what out that they owe a p accounts payable. Ah.

05:50.77

satvcpodcast

Yep.

05:51.53

Penny

Because not everything is expense sometimes you have accounts payable and so you want to pick an accounts payable system and I said that Okay, here's my that's my black dress and I actually put a time tracker in there too And then I said okay have everybody that I do. Business for if I do a counting type business for or they all are in the same gl. They're all using the same payroll. They're all using the same expense Tracker they're all using the same time Tracker Um, now my onboarding of that client. Just became much easier. What if they're in a different system. Well they want to work with me to I need to show them why they want to work with me. Um, and once they do I just change the system.

06:33.97

satvcpodcast

Move him.

06:46.30

satvcpodcast

And I think at the end of the day. A lot of people say most accountants sort of react to what their clients are using when they come through the front door but for for the most point I haven't met too many I haven't met any business owners that ah so. Enamored with their payroll payroll provider or so enamored with their their Ap function or so enamored with their expense management that that they would consider Well I'm not going to work with you If you're going to force me to leave in many respects. They're coming to you for that Expertise aren't they they're coming to you for that back office.

07:18.73

Penny

To here to.

07:23.13

satvcpodcast

Um, expertise and so this in in the first instance is ah is a real opportunity I'm not provide value I'm not sure if that's the right word but so sort of provide some insight and provide some recommendations to streamline. What's happening in that function that that you're the expert in.

07:37.88

Penny

Yeah I mean because you begin if you stick with the same apps. You become very very good at those apps. Not only do you become very good at those apps. But soon as everybody in your business your office your firm and like ah.

07:49.28

satvcpodcast

But I think most but then most importantly, that the experience for the customer. The client is as close to consistent each and every time so because your tick because your team is not learning 7 different payroll.

08:00.43

Penny

Yes, sir.

08:08.66

satvcpodcast

Platforms to to run payroll you know and you can almost guarantee what the experience is going to be like for the client as a result of this consolidation and standardization.

08:17.83

Penny

Well yeah, and not only that you can use the at that time minimal ai qualities and now much more robust because the robots learn.

08:33.20

satvcpodcast

Yep.

08:33.78

Penny

Um, the much more robust functions of ai to get it even more streamlined and um, keeping an eye on expansion. So if that's the case Now that's my black dress. So now when somebody comes in.

08:49.28

satvcpodcast

And.

08:52.91

Penny

Front end onboarding of the client because if you remember back then when we did that workshop. The first thing I asked see people is like I want you all write down. What's the onboarding of your clients and and everybody was like gear to headlights. You know you know like well I don't do that you know, ah.

09:01.85

satvcpodcast

Yeah, what happens when a client walks a new client walks through the door. Yeah, well yeah, we we collect that we collect their name their phone number their Taxwell number and and Irs starting away. We go.

09:11.83

Penny

Yeah, and I just know you got it's got it's it's not everybody is going to be exactly the same but it's kind of like Burger king you can have a hamburger you can have it any way you want, but it's going to be basically a hamburger.

09:30.27

satvcpodcast

But also the the quite nice thing about that as you said it's going to be a hamburger so it does actually give you those barriers to say here's what my little black dress is is these are the types of business that my little black dress is optimized for so when another business comes to you That's outside of that. That's.

09:30.43

Penny

With by. Okay.

09:49.24

satvcpodcast

That standard it makes it a lot easier for you to turn around and say no this isn't a good fit I know you came from a referral from 1 of our restaurant clients. But you're ah you're a plumber and I have no idea about plumbers. So.

09:52.22

Penny

So yes.

10:05.10

satvcpodcast

Um, thank you? But let me connect you with someone who specializes in plumbers.

10:06.97

Penny

Exactly So you you get your your oppenheimer's idea of we are now son is of influence and you know Robert Oppenheimer's book of the the robots are coming So remember that book I But think I mentioned it and so he talks about that concept of.

10:13.82

satvcpodcast

Um, yeah.

10:25.78

Penny

That shared. Ah you're still the trusted advisor but you are maybe pushing them in a different way. But then there's another if you add in the fact that remember I talked to you about pods earlier. You can eventually get to the point where I've got this vertical of say I do restaurants and. I Know about toast all my restaurants that use the toast Pos system all my restaurants I've got them on the same banking system and I've got them on the same gl and I've got them on you know all of that's done and I've got a team that is how to run it and everything's working smoothly. Create another pod I'm gonna go back and I'm gonna go look at Plums now I'm gonna build a new new black dress this time. My cocktail dress is a sleeveless but the the restaurant 1 is a strapless this 1 is a sleeveless head because I don't need sleeves while I'm working on Plumbing. So um.

11:07.51

satvcpodcast

Um, yeah.

11:23.26

Penny

So but I do need to hold the dress up a little bit better. So um, so.

11:24.42

satvcpodcast

It What? Ah what? a lovely analogy that's go, but but also the other side of it. You're actually building something very saleable which I think is really important and at some point in time I've actually seen practice our businesses where they they actually sell off. Or that they sell off certain certain pods because they might be slowing down or or they might want to move the mint into ah another into ah into another section. So this this is another way in which you can think about growing your business and also sort of transitioning your business as Well. Getting different black dresses for for different segments that you serve.

12:03.10

Penny

Well I always told people I said you know if you were going to sell your accounting business or bookkeeping business. Um, you're selling I always heard well, you're selling your customers names and then the new owners have to go in and. Do the work and hope the customers stay with them and you get paid a percentage of the of the length of time that the client stay with that firm. But what if you were not just selling the customer's name you was selling the Playbook now the value be. Goes up a little bit because there's much more of a guarantee that that small business is going to stay with the new ownership of the new accounting business. Um.

12:49.55

satvcpodcast

That Well it's not just the client list. It's the recurring revenue that that that monthly recurring revenue which is what we've been talking about this backoff backoffice solution.

12:57.68

Penny

That you have an automatic Ac agreement and yo you're getting paid. You know? Automatically, you're not, you're sending him an a invoice that's already been mock paid.

13:07.54

satvcpodcast

Yeah, exactly and and I think that's also another thing for business owners that do accounting and bookkeeping to be thinking about what's more valuable a once-year activity or seeing this client on a ah, a monthly cadence to talk revenue talk cash flow talk. Growth that that's going to be infinitely more valuable as a multiple of that revenue than the traditional than a traditional once a year tax shop.

13:37.67

Penny

Well like what brian did you know when you had him Brian was we we talked to mike and brian you know about how they separated out their firm stayed and remained friends. You know brian who does those startups and then and ends up becoming their family wealth. Management person too on top of that so he's got his group that handles the business and then he does the personal wealth management for these small business. So I mean it's you could you could? It's almost like you can if you have a base.

14:05.53

satvcpodcast

Yep.

14:15.60

Penny

And you have a target start there and then grow I mean even if even if you're currently right now in a position where you've got a bunch of different businesses that you do accounting for and you want to do this month to month and you close it every month and you have the conversation and and you don't know how to get started that first that first little tool that I had them sit down with that excel spreadsheet and go list the businesses that you like list the applications that they're in. List the things that you do for them and put them in on and sort them and find a group in there that you like all these people that do construction work I like them. They all use this gl and they all pretty much go this way. That's my first pod That's my first target. Um'm gonna build my black dress for that and I'm gonna go out and push and get more of those clients some of these other clients that don't fit that mold. They you know they're not. They're not playing along with the game. Anyways, they will either fall off or they'll come in line but in the meantime I'm going to build this 1 pod. And this 1 little black dress is going to define that now each of those construction clients may have 1 unique accessory that they need. But that's just 1 unique accessory.

15:41.54

satvcpodcast

Yeah, and I think that exercise is incredibly valuable in in our previous episodes. We've sort of talked about looking at your client base through through the lens of do I like working with them. Are they good people. Do they listen to my advice. Do they pay me on time. And so this exercise is sort of taking it to a slightly more granular level to look at the commonalities around what they do the tools they use um and and you'll you'll be surprised that when you do go through that exercise and just a very simple excel Spreadsheet. You'll see commonalities across these clients and. You may not have um, you may not have just restaurants but or just plumbers but you might have plumbers electricians contractors cleaning companies sort of that ancillary that ancillary across your your customer base. And that might be where you start and and as you said you've you've got the the core. But then you're going to have some of those accessories depending on the industry I like that a lot of other folks out there will say get rid of everything else. that's not in that in that pod but that's not actual reality.

16:50.78

Penny

No so.

16:52.56

satvcpodcast

Just sort of put them aside. Don't try to force the the square peg into the round hole just put them aside they they might become another pod farther down the track but just focus on on that that client base at the moment that has those commonalities that you can develop this pod that you can develop this black dress. And then start to to build on on top of that.

17:11.88

Penny

Yeah I mean if you've got ah a squeaky wheel that doesn't pay and doesn't do what you ask it to do? Why are you even worrying about it. Um, just put it off to the side when they want something they'll provide. You. The information you need to quickly give them the Information. Don't waste any energy on them look at that pod Even if it's just 5 even if it's just 5 businesses that are really working with you well and train yourself on them just train yourself on you.

17:44.10

satvcpodcast

And I've got I've got no data to well I've got so I've got no real data to say this but I can almost guarantee you that that 5 will quickly become 6 seven eight nine 10 through referrals because because of the the experience that you could yeah.

17:55.46

Penny

So I know it already has yeah.

18:01.63

satvcpodcast

Because of that experience that you create for them and the ability to to talk to them about their business. Um, as a result and and and to be able to make recommendations based on your previous experiences we're going to use this gl. We're going to it. We've got to solve this Ap Function. We've got to make sure that our payroll and our time time tools are talking to each other and that that information's flowing. Automatically, we don't want to waste time rekeying data all of these types of conversations are what build trust and build value and credibility. And I can yeah as I said almost guarantee you that the referrals will come in asking about those services those tools um not not the not the cheapest tax return in Town. For example.

18:48.81

Penny

then in the thick of it since:

20:08.95

satvcpodcast

Nope.

20:16.12

Penny

And we certainly load leveling to give everybody some time off I just took 2 days off. Yay off the grid but you know it's this is ah ah, a perfect time when I would say the stars are in alignment. Maybe it's the age of aquarius I don't know. Dating myself again, but um, it's like everything's aligned with those people who see that the forward progression is to don't argue about the cloud. Don't argue about the online. Don't argue about the sharing of information. Just as a group move together and move forward and in order to do that. We all have to be on the same understanding. We all have to have the same little black dress as our starting point and we can expand and accessorize and grow out from there whether that accessory is another pod. Whether that accessory is individual little apps for independent individual businesses within that pod of black 1 black dress but we have the Bandwidth now to do that because we've allowed ourselves the space by taking those things that are franchisable. And actually ah making them franchisable. So any sounds good sometimes.

21:33.56

satvcpodcast

So now let's let's actually what I what I want to sort of spend the next part of today's episode on is how do I decide on the components of my little black dress. There's a skateboarder going past my house right now. But but but there's there's.

21:43.83

Penny

Yeah.

21:52.84

satvcpodcast

I mean off the top of my head I can sort of name five gls for payroll providers seventeen expense processing 3 ap and that's just sort of off the top of my head. How do I let's just start at the gl. How do I start.

21:56.48

Penny

So let's hit 6

22:03.13

Penny

Yeah.

22:08.88

satvcpodcast

And how do I decide on on my components of this little black dress.

22:10.92

Penny

Ah, you know I was talking to a new client that came in he does fractional cfo work and he's like I was I think it was like it was four o'clock in the morning about a week ago and he slacked me a message and I'm going. Okay, people ask me do I have a sleep but do you, you know because he's in the same time zone as I am so I know it's four o'clock in the morning for him too and he wants to know he goes of these 3 kpi reporting systems which 1 do you think I should use and I just yeah I know and I just said I said well which 1 do you like.

22:41.13

satvcpodcast

Oh I didn't even get to kpi reporting.

22:49.28

Penny

Goes? Well I just wondered which 1 you liked and I go I don't give a damn which 1 you use. We've used them All. We can figure out what you need which 1 do you like because frankly, you're the 1 who's going to be sitting in front of the client working with them in that now. The client's never going to get in the Ka but you're going to be presenting the reports from it. Um, to same with the gl which 1 do you like which 1 are you comfortable with because you know at the end of the day if you put all these apps on top of it. You literally the gl is just the gl. It might have a different color.

23:12.26

satvcpodcast

Yeah, and end.

23:24.45

satvcpodcast

Um, yeah.

23:27.89

Penny

It might have a different name but it's a geo.

23:31.36

satvcpodcast

Yeah, and and also it does 80 percent of what you need it to do and and and and across the tool.

23:36.31

Penny

If you try to micromanage and get a hundred percent of it. You know what? you'll be in your gray still going I'm gonna do this Someday. Ah yeah I do I do I do I do um you know take the leap I mean you know.

23:43.32

satvcpodcast

Yeah, but we know a few of those.

23:54.80

Penny

I might not want to wanted to get into that 12 foot wave that got me I wasn't expecting it and but once I was in it I rolled under that wave pretty well pretty.

24:05.10

satvcpodcast

And and and that's and that's it you rolled with the punches and he learned and he didn't make the same mistake again because.

24:10.73

Penny

Yeah I didn't find I didn't turn my back to a wave while I was taking a picture of somebody else and know my boy going. Oh.

24:16.80

satvcpodcast

sure that it does as close to:

25:15.49

Penny

What Oh without a doubt support of the app. How are they going to support you and how are they going to support your customers your clients primary number 1 on picking the app. The support of the app is critical. Um, well do they have video training. Do they have do they have a chat bot that's turned off half the time. Do they do they have somebody who has an understanding.

25:45.51

satvcpodcast

Um, listen.

25:53.12

Penny

I mean you could tell come on. You can tell when you're on the chat how long they delay when you ask a question you know they're looking it up somewhere you know so what's the support like um, how do you feel working in it and remember like when you. Client. There's client facing apps that your clients are going to use and then there's stuff that chances are if you have all these apps on top of it. They're not ever going to get in the gl if you work this right? They never get in the gl because I have like 10 clients who probably don't even know how to log in.

26:28.62

satvcpodcast

Oh that's the ideal state isn't it. Yeah.

26:29.37

Penny

They have quick books are zero because they've never got but they know to log into all the apps I put on top of it. So have you practiced with those apps as you as if you're a client user rather than looking at it because your viewpoint of the app is completely different from that viewpoint. so then what are you happy with so again do you want a strapless black dress. Do you want a sleeveless practice. Do you want a long black dress. Do you want a midi. Do you want a mate. Do you want a mini I mean what do you? do you want something that's poofy. Do you want something? That's tight. That's that has to be on how you feel walking around. In the dress all the apps right? How does it feel on you and then from the standpoint of how does this app feel for the Client. So what is it? You have to practice with it. Um, and you know get feedback get feedback from is if you're an individual 1 off 1 person firm. It's. Business. That's 1 thing. But if you've got other people that are going to be interacting sit down have them play with them all which 1 do they like kick a vote. Yeah, check it on an ipad check it on a phone. Don't just check it on an iphone check it on an android.

27:36.31

satvcpodcast

So what's the mobile experience like I think that's another important 1 particularly for client the client facing tools. Yeah yeah.

27:47.72

Penny

You know you know, check it all out to check it in chrome check it in Safari check it on a mac check it on I've got a chromebook a mac and a windows machine. Um, only because I like buying technology and I'm a little weird about that. But you know I do play I'm on.

27:57.11

satvcpodcast

Ah, yeah.

28:06.80

Penny

Um, on a different 1 every day it keeps my brain sharped my my aunt rose always said, always use your brain penny if you as soon as you stop losing it stop using it. You'll stop losing it. So.

28:15.60

satvcpodcast

Yeah, absolutely and penny I I think that's art rose I think her advice is is a good place for us to end that conversation today around the little black dress I think we've got I think we can dig deeper into the back office. Toolkit and I'm not sure. Ah and how we refer to that I think that the other side of things that I do want to make sure we get an episode on is is how to talk to your clients about these apps getting them engaged and and I think a lot of accountants overthink. It. But let's um, let's sort of talk about that onboarding experience and introducing technology to clients. Yeah yeah, we've we talked? Yeah, so let's I think they're they're really good topics for for future episodes. So let's leave it there on the little black dress.

28:48.00

Penny

And who should be doing that who should be doing it.

29:01.10

satvcpodcast

Um, folks if you if you've got any questions about the little black dress analogy about tech stacks reach out to us via linkedin. You can find penny breslin and damien greathead you can find us on linkedin our profiles are on the the website satvc dot co so all that information is there also do us a favor and and um. If you're enjoying what you're listening to write a review for us rate us on on those app platforms that you listen to us from that'll help us get our name out there so penny always a pleasure look forward to our episode next week and until then thank you very much.

29:34.36

Penny

Thank you Davian have a good day.

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