Mark Butler (00:00):
When something comes along and it very clearly doesn't fit the core business and it very clearly doesn't fit the way we work, it is always my inclination to say yes to it anyway because of shiny object syndrome or because of natural curiosity and interest and excitement about the new. Always excited about whatever the new is, when the fact is we have a really clean tight business that works really well when we say no to things that don't fit.
Susan Boles (00:37):
There's a good chance your business isn't designed for growth. When it's time to focus on maintenance, you have to take a step back and have a good hard look at your business. And you might realize that you don't actually have the capacity to grow this thing you built. Your existing business isn't designed for maintenance or for growth. And in order to get to maintenance mode, you need to make a shift. I'm Susan Boles, and you're listening to Break the Ceiling. The show where we break down unconventional strategies you can use to save time, boost your profit, and increase your capacity.
Susan Boles (01:13):
Sometimes we end up building a business that just doesn't fit our lives. Not intentionally. Sometimes it just happens that way. Maybe you decided to run a BNB because you thought you'd have a lot of freedom, only to realize you can never leave because you always have guests. Maybe you wanted to work one-on-one with clients, but you find you don't enjoy it as much as you thought you would. Maybe you built a course business because you thought you should, but you really want to do bespoke consulting. Ryan Lazanis and I talked about this in episode 75.
Susan Boles (01:45):
We'd each built businesses that didn't fit how we wanted to live our lives. And so we ended up starting new businesses and specifically building them for maintenance mode. If you haven't listened to that episode, go back and check it out. But you don't always have to build something new to make sure that your business is scalable, sustainable, and fits the life you want to have. Sometimes you can just shift how you're doing business. You don't have to burn the whole thing down. Meet Mark Butler. He's the founder of the accounting startup Let's Do the Books, as well as a freelance CFO for life coaches.
Susan Boles (02:19):
And instead of shutting his business down and starting over when he realized that something needed to change for him, he created a complementary business with a different business model, one that was designed for maintenance. For a lot of folks, when they think about moving their business into more of a maintenance mode or something that is just rolling along, they come into that because they've hit some sort of capacity issue, either personal capacity and their ability as a founder to be able to be in the business, or just their business itself comes up against some of the capacity ceiling.
Susan Boles (03:00):
Was there something in your business, some triggering event, that made you rethink your capacity, either as a founder, as a business owner, or inside your business?
Mark Butler (03:10):
There were a couple. About almost three years ago now, I was a freelance CFO serving mostly life coaches and online business owners who had... Well, there was a whole range, and this was one of the catalysts for the change, but I was working with life coaches and online business owners that might have been earning six figures, and then some that were earning seven figures, and then one that was earning eight-figures. I had clients across this whole spectrum and their pricing across the whole group was relatively similar. But at the price point where I was working, demand started to outpace my capacity.
Mark Butler (03:51):
I was at that point where I either had to decide to scale through adding more coaches or consultants to my business at the same approximate price point or to significantly change my own price as a filtering mechanism. Really it was my clients who get credit for this. A group of my clients kind of had me all... We were all around a lunch table one day at an event. And at the beginning of the lunch, my basic fee was one amount. And by the end of lunch, my basic fee was 5x higher. That was terrifying and I kind of freaked out for the next couple of weeks.
Mark Butler (04:31):
And in the next six weeks, I lost 80% of my clients because it ended up being that the only clients who retained me were those that were sitting at the table that day. But I was making more money. That was the other interesting thing. With the 5x increase for the clients who were at the table that day and dropping the other 80% of my clients, I ended up I came out ahead revenue and profit-wise. It was an interesting transition there, and I went like that for a year or two. I did have a co-consultant in the business.
Mark Butler (05:12):
The way we kept going for a time with some of the clients who weren't ready to make the transition to the $3,000 price point, the new monthly retainer that I was charging, I did say, "Hey, you could work with this other coach in my business." And a decent percentage of them did. We were able to go along like that. But then the relationship was really with her. It was with the co-consultant. After about a year and a half, I said, "These are really your clients." And she bought those clients for me and she left and went back out on her own, which was great.
Mark Butler (05:46):
It worked out well for her. It worked out well for me. So then I was left with... Instead of having a capacity issue, I was left with a sort of a business model issue, where there was demand for services that I wasn't offering anymore. And I thought, well, I can either ignore this demand or I could build a business to support it. And I decided to build a business to support it. I promoted one of the bookkeepers on my team to not only be the senior bookkeeper but also to be a coach, a consultant in the business. And we started to make her available to people when they would come to us.
Mark Butler (06:18):
Now she's not full, but she's approaching full. We also started to offer this bookkeeping only service for all of the new-ish coaches and online business owners who did not have a need for a CFO or the money to pay a CFO, but definitely needed to have financial statements at tax time and needed to have some more clarity around where their money was going throughout the year. We created this thing called Let's Do the Books that offered a sliding scale fee structure and was sort of just right for those up-and-comers.
Susan Boles (06:57):
Mark's sliding scale fee structure is really interesting. His bookkeeping services are priced at 3% of what a client made during the previous calendar month, and he has a minimum and a maximum price. It's a strategy that means you really only pay for the service if you're actually making money, which is fantastic for the client, but it also means that mark has to be really targeted about which clients he takes on. Because in bookkeeping, the volume and quantity of work isn't really tied to revenue.
Susan Boles (07:26):
It's based on how many transactions come through, which is how most other flexible pricing models in other bookkeeping businesses are structured by transactions.
Mark Butler (07:35):
The shift really started with a capacity issue, started with my clients making a request of me to give them more attention and more focused by raising my prices, and then looped all the way back to building a service that would support everyone else in a way that required almost no time and effort from me at this point.
Susan Boles (07:59):
Yeah, that's interesting because it sounds like you shifted your business model, but kind of in two sort of opposite directions. When most people are thinking about shifting their business model or raising their prices, they're going in one of those directions or the other. You split the difference and skipped the middle part. There's just high touch or really, really low touch, very scalable.
Mark Butler (08:26):
Susan Boles (08:27):
I'm interested to hear how did that work out for you as you were shifting. What changed for you as a founder, as a CFO, as somebody who's working with clients and also running essentially a very scalable model? What shifted for you personally?
Mark Butler (08:48):
Personally, it's been a big stretch. I don't view myself as a great manager or leader. Hopefully, my team says, "No, you're a fine manager and a fine leader," but I don't view that as a strength or as a particular interest, frankly. I was never a person who fantasized about growing a big company with a big team. I tend much more toward a lone wolf mindset, often to my detriment, but that is the mindset that I tend toward. This transition to a very low-touch, very scalable model has been really uncomfortable for me because it requires discipline.
Mark Butler (09:31):
It requires focus, and it requires a mindset of constant improvement that my highest touch, highest margin services have never required. Maybe another way I can say that is when you have such high fees in a one-to-one business, you can do so many things in a very bespoke way. You don't have to be terribly efficient, and you don't have to have amazing processes. You don't have to be great at communicating with team members, and you don't have to think about tools that reduce the total number of clicks in your workflows.
Mark Butler (10:13):
But when you have a sliding scale fee structure bookkeeping service, all of those things matter a lot. My team has been very patient with me as I've kind of struggled to embrace the role of CEO and to lean on them and to empower them and to say, "Hey, look, you all know what our values are in terms of how we want to treat the people who pay us. You know what the requirements of our service are in terms of financial statements that actually work for people's taxes and clarity around where their money's going.
Mark Butler (10:55):
Why don't you all start thinking more and more about how the actual processes should go so that they're very efficient and deliver a great result every time?" I'm in the middle of that right now, to be honest, Susan. What I mean by being in the middle of it is I think we deliver a great service and our clients say great things to us and about us. But behind the scenes, we're still always having conversations around, "Hey, should we be doing this anymore? Should we start doing that? Hey, what if we get rid of this completely."
Mark Butler (11:24):
Something we're working on in the team right now is that we're being much more rigid about client filtering on the front end. If you don't fit a pretty tight profile, we won't accept you as a bookkeeping client and that makes everything downstream much easier. But it's just one example of things that are kind of always in flux as we try to figure out how to deliver a great service at a great margin and have a happy team do it. Those are the things we're trying to work on a balance.
Susan Boles (11:55):
Yeah, definitely. Have you found that it's... It is obviously much harder to do with a scalable service. How much of your time do you spend now leading the team on the scalable side versus consulting on the more high-touch bespoke client side? Do you evenly balance? Do you spend more time in one of the other? How do you manage that workload? Essentially you're running two separate businesses.
Mark Butler (12:30):
It is. It is two separate businesses where there's just a little overlap between the businesses because the bookkeeping team does support my CFO clients. There is overlap there. And that's where the improvements in the bookkeeping processes have benefited the CFO business, because it runs just that much more smoothly, thanks to this great bookkeeping team and their workflows. But my time is divided now. I spend very little time on the bookkeeping business. Very little. This podcast would represent my typical efforts in the bookkeeping business at this point.
Mark Butler (13:11):
It's mostly just me being a guest on different podcasts, networking, letting people know what we do, having periodic meetings with the team, both in group settings and I do one-on-ones with my different team members to try to hear what's working for them and what we can improve. But in any given week, I'm probably not spending more than an hour or two on the bookkeeping business at this point.
Susan Boles (13:40):
When you were envisioning the bookkeeping business and getting that up and running, what did you do to prepare your business, prepare yourself for this kind of split into starting almost a whole nother business? What did you actually do to get your business prepared for that more scalable model?
Mark Butler (14:09):
I think the preparation started with being committed to a specific niche in the first place. And that goes back seven years since I got into this whole thing. I sort of fell into the niche of working with life coaches and online business owners. But once I was there, I just focused on that group more and moreover the years. I feel like I'm sure there are other people who know as much as I do about life coaching business models, online business models, coaching models, retreat models, courses, all these things.
Mark Butler (14:47):
I know there are people who know as much as I do, but I don't know if there are many people who know a lot more than I do about those businesses at this point, because I've been in businesses ranging from sort of $0 in revenue all the way up to 25 million a year in revenue. And I see inside all of them to see how they work and what works in them and what doesn't work in them. Then I have been able to take that and because of my commitment to that niche, the processes that we use in the business have been coming together for almost seven years now.
Mark Butler (15:17):
The tools we use, the way we use them, the way we sell, the clients we're willing to sell to, the clients we turn away because they don't fit our profile, that was most of the preparation. The actual launch of the scalable service was mostly just giving it a website and announcing it to the world and giving it this interesting sliding scale fee structure that made it just a little bit different from how these services are typically priced and sold. But luckily, because of the work we've been doing since 2014, a lot of the processes were in place.
Mark Butler (15:58):
We've just had to refine them to work with... Instead of working with a handful of clients to work with, lots and lots and lots of clients.
Susan Boles (16:09):
Yeah, that totally makes sense. What was the biggest challenge for you either operationally or personally as you made the shift? Was there anything that you ran into that created a bit of a hurdle for you, or was it smooth sailing the whole way?
Mark Butler (16:31):
Well, the funny thing is most of it has been smooth sailing. I'm the only thing in the business that causes it to be not smooth sailing sometimes. The answer to your question is what's been hardest for me, it's really been the discipline to say no. I don't do well with saying no to ideas, to opportunities. When something comes along and it very clearly doesn't fit the core business and it very clearly doesn't fit the way we work, it is always my inclination to say yes to it anyway because of shiny object syndrome or because of natural curiosity and interest and excitement about the new.
Mark Butler (17:11):
Always excited about whatever the new is, when the fact is we have a really clean tight business that works really well when we say no to things that don't fit.
Susan Boles (17:27):
Hey, there. It's Susan. If you've been listening to this interview and it's making you think about some of these issues and ideas and you wish you could talk to some other real live business owners about it, I wanted to invite you to my free monthly round table Dollars and Decisions. Once a month, I get together live with a group of amazing business owners just like you to geek out on money and operations and workflow and software. All that stuff that you hear me talk about here. The round table is kind of like a live interactive version of the podcast.
Susan Boles (18:01):
I would love to have you join me. No spaces, no hyphens, or you can just click the link in the show notes. Hope to see you there. Rachel Cook and I talked about how founders often tend to be the reason that businesses struggled to get into maintenance mode in the last episode. So often the business owner is actually the one keeping a business out of maintenance mode. It isn't always just the business model, and that's the case for Mark too. We'll hear how he deals with it.
Susan Boles (18:35):
But if you want to hear some other tactics and tricks that Rachel and I both use and you haven't listened to the last episode, go check it out.
Mark Butler (18:42):
I ended up being the biggest obstacle to the smooth operation of the business. And to get around that, frankly, I've turned it over to my team. It used to be that a lot of the sales... Leads would come through me. They would inquire and it would end up in my inbox. Whether over email or a Zoom call, I would sell a new client before I had real confidence that they were a good fit. And then a high enough percentage of the time, the team would come back and say, "Hey." They're always very kind about it. They'd say, "Okay, look, they don't fit our normal workflow. How do you want us to approach this client?"
Mark Butler (19:20):
And that was their way of reminding me that I was breaking our rules. Finally, just in the last couple of months, I said, "Okay, I'm out of the process now." They can come to the website. They can inquire about service. After they inquire about service, they can fill out our intake survey. If the intake survey is a good fit, then Amanda, our senior bookkeeper, will invite them into the service and she'll onboard them. And if not, she'll wish them the best.
Mark Butler (19:47):
But it keeps Mark from making messes, and that's honestly the biggest thing that the business has needed is me not making messes in it.
Susan Boles (19:54):
Yeah, I think that's so interesting because I feel like that's really common is that us as the founder, as the business owner, we are the ones that break our own processes and break our own rules and mess it up. It's one of the things I've found super helpful both as... Because I have a client who did this as well, who basically empowered the team to say, "Hey, tell me no. Don't let me break this. This is what we're doing. Don't let me get distracted."
Susan Boles (20:29):
And having somebody on your team who is empowered to say, "Hey, that's not a great idea, or, hey, that's going to derail all of these things. What do you want to prioritize," can be so powerful in making sure that the systems that we're building in our business stay there, that we don't break them.
Mark Butler (20:51):
Yeah, absolutely. And really all my team is doing is they're reminding me of the system we built together and of the commitments we made to each other. One of the hardest things about being the founder, being the CEO is that you theoretically have power to say yes, have power to change things. And to me, the discipline of the CEOs that I admire most are the people who refuse to break what's working just because they're bored or just because that's in their DNA and that's what created their business in the first place.
Mark Butler (21:31):
We started our business in the first place by sort of breaking something, breaking the old status quo, so it can be very uncomfortable to not keep breaking the status quo. But at some point, you get to say, "Oh, we found it. We found product market fit. We have happy customers who come to us in reasonable numbers. We can give them great service." We've built processes that deliver great service so that the founder is happy. The team is happy and healthy. They feel productive. They feel like they're adding value.
Mark Butler (22:00):
They don't feel like they're being jarred or knocked around by their CEO's latest ideas. We found this beautiful fit. Now we get to earn rent on this asset that we built instead of tearing it down and rebuilding it every six months. It's the hardest thing in the world for me, but I'm just coming around to what a beautiful thing it really is.
Susan Boles (22:22):
Like you, this is something that I have consistently struggled with and have finally started doing that in my own business. It's been really easy to do that in clients' businesses, because I'm not the one who's going to mess it up. I'm there to build the process and help them execute it and be the one to say, "Hey, that's really going to derail your priorities." But being able to do that for myself has been much more challenging.
Mark Butler (22:47):
It is. One thing that has helped me is that I find other ways to scratch the itch. With the bookkeeping business in particular, it really is a great service. Our clients say such kind things to us and about us, and we grow through referrals, which to me it's the sign that we're giving a great service. Knowing that I don't want to mess that up, but knowing that I have this itch to create and to break and to do other things, I just do that with side projects. I try really hard to not have my side projects mess with my team. When I start a side project, like I'm doing a thing right now called Money School.
Mark Butler (23:28):
It's completely outside of our niche. It's personal finance-oriented. It's a personal finance class. It's basically a group coaching program. I'm doing it, but I am not taking resources from any of my current team members to do it. I'm not coming to team meeting with them and saying, "Hey, I'm throwing this new thing at you. You got to find a place for it." They know I'm doing Money School, but when I come to them and talk about Money School, I'll say, "Hey, look, I'm working on Money School.
Mark Butler (23:59):
If over the next six to 12 months it proves that it's worth some of our attention, then we will have a team conversation around what new team members we need to add and/or how any of you might like to shift your roles to be more focused on Money School versus the bookkeeping service." But what I'm not doing is having my little creative seizures disrupt... I'm trying not to have my little creative seizures disrupt them in their smooth workflows.
Susan Boles (24:31):
As you build side projects, you're basically using them as experiments. And if they get to the point where they pan out and they make sense to become a bigger part of your overall business model, that's the point at which you start bringing in team or discussing reallocating resources into another piece of the business?
Mark Butler (24:57):
Yeah, that's right. With Money School, Money School is this thing where it's a 12-week group experience where people come in and we're trying to work with them on their money mindset. We're also trying to give them specific... It has a tactical piece to it. Here's actually how you manage your cash and your personal life. It's 12 weeks and I'm charging $3,000 for it. And in my first launch of it, I had 12 or 13 people say yes, so that's a pretty strong sign of life. Okay, maybe this thing has legs. I'll probably work on it for the next six months on my own, probably do a fall launch.
Mark Butler (25:35):
And if the fall launch grows relative to the initial launch, then I'll say, "Okay, this thing is good. It has good margins into it. I know the numbers around group coaching experiences, because I've seen all my clients do it. I know what the business model looks like. If I can get traffic for it at a reasonable price, then absolutely it deserves resources from the business."
Mark Butler (25:56):
So then the existing team members, they'll have a say in whether they want to stay in their role with Let's Do the Books, the bookkeeping service, or whether they'd like to look to replace them within the bookkeeping service and have Money School be something that they focus on. But we won't do that until we're sure that there's a good profit stream on its way from the new thing.
Susan Boles (26:20):
Yeah, that totally makes sense. We've touched on a lot of different aspects here, but is there anything you think we should talk about either about this shift in your business model or preparing for maintenance mode in your business or personally that you think we should talk about that we haven't touched on yet?
Mark Butler (26:40):
I think that all of us as... And again, my default, by the way, is just people who view themselves as online business owners, coaches, consultants, course creators. That's who's in my head as I say what I'm about to say. I think that as you do experiments with different types of businesses and business models, it's worth it to always be asking yourself what you want to be when you grow up. A one-to-one service business is a very totally different animal than a scaled bookkeeping service or a scaled service of any kind.
Mark Butler (27:20):
A group coaching experience is a totally different animal from either a one-on-one coaching or consulting or service business or a scaled service business. These things are not the same. But because all of them are so easy to start, I have observed many business owners or aspiring business owners mix them all up and act like they're all basically the same and they have the same requirements. They don't have the same requirements. You always want to be asking yourself, what does it take to make this business model work? Who do I have to be within the business in order for it to thrive?
Mark Butler (27:57):
And do I want to be that? For example, with my scaled bookkeeping service, if I truly hated the idea of managing a small team and supporting... Having the business be one thing and having the team be its own entity that needs love and attention and thought and creativity, if I don't want to do that, then I should not scale, because scale requires people. If you don't want to be in the people business, you got to be a course creator and work on your own, or you got to be a one-to-one coach or a one-on-one service provider.
Mark Butler (28:33):
You have to know what your non-negotiables are, and then you have to work within those non-negotiables. Because there's nothing more exhausting than pretending or trying to convince yourself that you want to scale with a team when deep down that you hate hiring, management, compensation, team development. There's nothing more exhausting or frustrating than that. I would hope that people would spend some time in their own heads and hearts saying, "Is this what I want to be when I grow up? And if it's not, what business model can I choose that really lets me be me and still achieve the goals that I want to achieve?"
Susan Boles (29:24):
Yeah, I think sometimes that can be really challenging to actually admit to ourselves that we might be considering a business model or considering growing our business in a way that we feel is something we should do or could do and isn't necessarily the way in which we want to operate as founders.
Mark Butler (29:48):
I really believe that almost anyone can do almost anything. Through personal development, through coaching, we can get ourselves to do the work required for probably any business model. The question becomes, what work do we want to take on in our lives? Do we want to do that work, or do we want do the work of becoming a master of the thing that is easiest for us to be? It's really hard to become the absolute best version of you. It's even harder to become the absolute best version of something that isn't native or natural to you. I'll speak for myself.
Mark Butler (30:31):
I'm trying really hard to be more and more honest with myself about what work I'm choosing. Unfortunately, I think a lot of us a lot of the time end up choosing businesses and business models because of how much money we think they'll make, as opposed to how naturally happy and high functioning we will be within those businesses. I think that's where you get a lot of square pegs in round holes is like, well, I may not gravitate to that work naturally, but I think that's where the big money is.
Mark Butler (31:04):
That's where the big maybe fame, maybe praise, validation is, so I'm going to try to force myself down that path, even though it feels completely unnatural to me.
Susan Boles (31:15):
When it comes to making shifts in your business model, sometimes that ends up being the key that helps you finally get into a sustainable business that can be in maintenance mode. Sometimes it's just easier to fix the capacity issue at the beginning of the workflow by shifting how you actually do business. You start with the end in mind with the kind of business you need to or want to run in the first place, and then design it from there. And it doesn't have to be an all-or-nothing game here.
Susan Boles (31:45):
With Mark, instead of shutting down his existing freelance CFO business, he just added another business that made the one-to-one services easier and more efficient to deliver and could still serve as a scalable business that could run independently. For me, the shift looked like creating a course that was scalable, not rocket finance, and it, like Mark's bookkeeping businesses, serves a few purposes. It allows me to work with more people at a time because it is scalable, but it also creates more educated clients.
Susan Boles (32:16):
So that when I do work with them one-on-one, we can go deeper and get more out of our work together. But when you're thinking about how to prepare your business to be able to get into maintenance mode, if you're finding that you're having a bit of a challenge figuring out how to do that with your existing business model, sometimes a shift can make a big difference in how easy it actually is to prep for maintenance. Shifting your business model is just one of the levers you can pull, but sometimes starting with the end in mind makes a difference. You can find Mark at letsdothebooks.com.
Susan Boles (32:51):
And if you're considering a shift in your business model, or if you love your existing model, but you need some help to figure out how to make it more maintenance-friendly, I'd love to invite you to the next Dollars and Decisions round table. It's a free monthly finance and operations strategy session for business owners just like you, and this is exactly the stuff we nerd out about. The session is free, but space is limited. To register at scalespark.co/dollarsanddecisions, or just click the link in the show notes. See you there.
Susan Boles (33:25):
Break The Ceiling is produced by Yellow House Media. Our executive producer is Sean McMullin, production coordinator is Lou Blaser, and this episode was edited by Nick Firchau.