Small Business Interview with Justin Sisley of Digidern Bookkeeping – Small Business Show 112

The Small Business show. Episode number 112 for Wednesday, March 29, 2017. Greetings, folks, and welcome to to the Small Business show. The small the smo. The show by, for and about small business owners here in Durham, New Hampshire. I'm Dave Hamilton.

And in Concord, California, I'm Shannon Jean. How are you, Dave?

I'm good, man. How are you?

I'm good, I'm good. I am struggling along with a little microphone issue today. So if I sound a little different, maybe I sound younger, maybe it'll be better.

You do sound younger.

Yeah, actually. There we go. Yeah, there you go. That's nice. That's nice. Well, hey, we are like we always talk about, we're always on the lookout for guests to come on the show. And I've been hanging out in the small business forums up on Reddit and meeting some great folks, one of which joins us today. Justin Cisley from Dig Dern Bookkeeping. Did I pronounce that right, Justin?

Yeah, that's right. It's a word I made up. So I get to dictate how it's pronounced, but that's how I have it envisioned in my head.

It's just another benefit of owning your own company, right?

Yeah, yeah. I went the Acura Compaq, figure out a word that I can make up so I can make sure I get the domain.

Yeah, that's awesome. That's great.

And were you able to get the domain or did you have to?

I was.

Okay. All right, well, that's. Yeah, that's good.

Yeah, it worked out.

That's good. Well, thanks for coming on the show, man.

Yeah, thanks for having me, guys. Appreciate you letting me come on and share some stories with you.

Yeah, that's great. We appreciate it. So we're going to talk about your current business, but we also want to hear some background about things that you've done and other things because you've had a number of different experiences with different businesses. Going to focus on digidern for a few minutes. Tell us about what you do, what services you offer, what's the customer that you are really focused on addressing?

Sure. It's bookkeeping, accounting, and there's no good way to explain the difference. It's kind of in everybody's head. Everybody's got their own idea of what the difference is. But I handle the day to day finances or financial records of small to medium sized businesses. So I focus on service based businesses. So I work with a lot of SaaS, startups, IT consulting places, and then food and beverage restaurants. Breweries, that sort of thing. You know, it's the day to day stuff rather than tax stuff. That's kind of how I delineate. My responsibility is I do all of your accounting stuff until it comes to tax time and then I hand it off to a CPA. So that's kind of the 10,000 foot overview of everything.

Sure. And then tell us how you got into it. I know you had some other business experience. What led you down to the road to start a booking keeping company for other companies.

It was a bit of a back to my roots moment. I actually have a master's degree in accounting and a bachelor's in business. So it's what I went to school to do. And I got kind of out of it for a little while and got the entrepreneurial bug probably back in 2011 or so. And so it was something where I started a business that ultimately failed. And then I got kind of sidetracked into starting too many businesses, some simultaneously, and that shiny object syndrome got a hold of me pretty hard and nothing worked out well. So at one point, about a year and a half ago, I was in a full time job that I hated and still trying to run two different side businesses while working the full time job, going nowhere fast, and decided I would just pick up and move across the country. So I was in Wisconsin at the time. You guys may be able to tell that I sound like I'm almost Canadian. But I picked up and moved to Texas and kind of started back to my roots. Took a job at a bookkeeping company that I was planning on purchasing. Ultimately ended up not being able to agree on a price with the owner and rather than, you know, try and find another job, I just said, heck with it, I'll just start my own. And so I did. And a year later I am, you know, making a full time living. That's more than more than I made in any of the full time jobs I've had so far. So it worked out pretty well.

That's awesome. So you really just dove off the cliff in terms of you didn't start this while you were working for, for this other place that you were looking to buy you. It was, it was. All right, we'll cut that start here. Go.

I had, I think I had maybe two clients that I had started with before I quit the full time job, but those two clients were enough to know that there was a market and there was definitely a need for somebody. I'm, I guess I call myself more of the, the big fish in the small Pond, you know, I stick to small to medium sized businesses who typically when I take over the books, it's usually been the owner themselves that have been doing it and they absolutely hate it. Yep. And for me, being someone with a master's degree in accounting and I've had various accounting and finance roles before as, as jobs, most bookkeepers, unfortunately, it's not a regulated term. So anybody who takes a QuickBooks course online for two days can call themselves a bookkeeper. And that really, that course teaches you how to use QuickBooks, which buttons to push. It doesn't teach you any of the underlying concepts that apply to accounting and bookkeeping.

Hey, Shannon, you and I are bookkeepers, man.

There we go. That's right.

Not only have I taken QuickBooks courses, I've taught them in Austin, believe it or not.

Really?

Yeah, I lived there for about six years. So I totally get picking up and moving across the country because I did that and moved to Austin and actually had great success with it. So.

Yep.

Yeah, that's.

That's where I am. So that's.

Yeah, I think that's a huge point, is that, you know, there is lots of folks out there, you know, calling themselves bookkeepers and you know, digging deeper for their qualifications is critically important because it impacts your business so much and it can be in such a negative way if things are not handled correctly.

Oh yeah. I mean, I'd say half the clients I get or the owner was doing it or wasn't doing it, in most cases, they were just putting it off till the end of the year. The other half of the clients I get usually have hired somebody, but it's usually your 15, $20 an hour bookkeeper they find on elance or something. And the books are worse than if they had just not been keeping them at all. So it's definitely something where anybody who's listening to this and has a small business, you need to do your due diligence, don't take the first person that comes calling and definitely don't go for the budget opt. I mean, you get what you pay for. And if you go with the 15, $20 an hour bookkeeper, you're gonna get 15, $20 an hour service. And that's frankly just not enough when it comes to the livelihood of your family. You know, if you're a full time entrepreneur.

Oh yeah, go ahead.

No, I was gonna say this is interesting because you're going after. You're not necessarily targeting the people and saying, hire me as your bookkeeper because I'm better than whoever you have. And I realize that that probably happens sometimes, but, but it sounds like your, your main focus is going after the people that are hiring that need, need to hire their first bookkeeper, but haven't yet. And so you're selling them not only on yourself, but on the concept of someone else essentially handling this very important task for them. That's, it's an interesting thing, but it, but if you've got the right customer service skills, and my guess is if you're successful at this. You do. Then you're good to go.

Yeah, yeah. I mean it's, it's. And it plays into, you know, outside of bookkeeping, just entrepreneurship, running your own business in general, you can't just be good at running the business. I mean, I guess if you're a funded startup, you hire people to do sales, to do marketing and so forth, but if you're bootstrapping like I did, I mean, you have to be, you're the salesperson, you're the marketing person. You are the one doing the day to day. And you know, that's all part of it. So I happen to know quite a bit about sales. You know, I've, I've listened, I've spent countless hours listening to Brian Tracy. I don't know if you guys have ever heard of him, but he's kind of one of those old school sales trainer guys, similar to like a Grant Cardone or something like that. So I spent a lot of time listening to him kind of honing my sales skills. And that's translated into success in landing new clients to the point where I've more than I can handle and I'm hiring right now. So it's, it's worked out pretty well.

Wow. Okay, so you're, you're hiring more bookkeepers to, to service your clients, is that right?

Yeah, yeah. So I just started, I just put, you know, listings out there earlier or late last week. So, yeah, it's very recent.

So this is interesting. And, and I, there's a reason that I'm not in the computer consulting business anymore. And it, it comes down to a very simple thing that I couldn't clone myself. And I tried. In fact, there's a business that might still exist in Austin called Computer Nerds. That, that, that was, that we had back in the, I don't know, the late 90s, where, where we had, you know, it was like pre Geek Squad. People were out in the field and stuff, but I could never hand off my clients to other people. So this is a. Because the clients didn't Want other people, they always, you know, it always would come back to me. And, and so it was impossible for me to scale. So I don't say that to you to, to scare you off from this. I say it just to be aware. Like, you know, you're going to have to massage your clients into this. Of course, the clients that get assigned to the people that you hire first and foremost, well, that's easy. They don't know.

Yeah, yeah, yeah.

I think it'll be something where the person I'm hiring is. I don't plan on replicating myself. I realize that's that was my hesitation on hiring in the first place is, is I have this unique skill set right. In this industry and I'm not going to find somebody else to do it who, who doesn't want to get paid, you know, as much as I'm billing my clients, which the whole point of hiring somebody is to build them at one rate and pay them the lower.

One is a delta. That's right, Yep.

So yeah, I plan on hiring somebody more to do the menial data entry and you know, just the time, the time consuming stuff that doesn't necessarily provide a ton of value but still has to be done. And then I'll be, I'll still be the client facing person in the business. I'll be the one talking to clients, reviewing their finances with them and that sort of thing. But yeah, having somebody to just literally punch in the numbers and stuff like that is going to free up my time to do the more valuable stuff.

That's a smart thing to do. So you're basically creating a support staff for yourself to allow you to do the things that you are good at and then have other people or things that you are most valuable to the business for and then other people to kind of support that and free you up. That's smart. All right, so go ahead, Shannon.

The customer facing things and the, and the relationship management part is, you know, critically important. So handing off that back end stuff totally makes sense. Yeah.

So I'm curious, we've talked, you've mentioned rates a couple of times and you mentioned that people don't want to hire a bookkeeper for 15 to 20 bucks an hour. So hopefully I'm not putting you on the spot. We can always edit this out if we are. But I'm curious how you go about deciding what to charge and what you charge. And I realize that every market it is different. So what someone in California hears might not be the same rate, but still it's a curious I'm curious how you go about doing this.

Yeah, I mean, it's very much something where I started low and I've just gone up progressively from there. So when I didn't have any clients and I had to attract somebody, I started out at $25 an hour and I've doubled that since then. So I'm up to 50 an hour now. And that's, you know, for people in the Austin market or other similar sized markets, that seems to be a good spot. It's enough that it, it shows people that I'm, I'm serious and I'm not, you know, I'm not somebody who's just doing this as a weekend warrior type gig. But it's not so much that chases people away or makes it unattainable for somebody who's just starting out because, you know, they don't have much of a budget a lot of times. And to be honest, I don't charge hourly very often. It's usually just in the beginning and then we work out a flat rate that seems fair to both of us. And I think hourly billing tends to reward inefficiency and my clients agree. So we try to switch to a flat rate as soon as possible. And everybody seems to like that. It provides them some consistency and encourages me to be more efficient with my time.

Right. And so. So you've got them on like a monthly retainer that the goal is a monthly retainer for?

Yeah, absolutely.

That's really smart, man.

I like it. Yeah. So how do you go about getting your clients? I mean, it sounds like you left, you know, you had a couple of them when you first started. What marketing methods have you used that's, you know, that have worked for you and maybe you know what hasn't worked?

Sure, sure. I feel like I can provide some good insights here for those who are in the similar industries, service or consulting type things. So thumbtack has been really successful for me and for anybody who doesn't know what thumbtack is, basically someone posts that they're looking to hire for XYZ job or contract gig or whatever it may be and various people then submit a bid. So it's very much an auction type system. I'll say that thumbtack is not going to be good for everybody, for every type of business because when I land a client, it generally means 5, $6,000 a year in revenue for me. When you, when you are, let's just say, running a lawn mowing company where one client may represent $300 worth of business, it might not be worth it because to send a quote, you pay money just to be able to send a bid and obviously you're not going to win every bid. So unless you a good long term revenue stream from a one client, it might not be the best idea. But for me it has been very, very good. I've gotten plenty of clients from that that it's been very profitable for me. What, what hasn't worked was, was actually I tried some Google Adwords and that was insanely expensive per click and I got zero conversions out of it. And to be honest, I don't, I haven't updated anything on my website eight or nine months. I don't rely on SEO or ads or anything like that. I reach out to people and I found that cold emailing, apart from thumbtack, which has easily been the most successful, cold emails have worked really well for me, especially when I can find some sort of correlation or warm intro. I guess I'll look for people on Facebook who own small businesses and see if we have any Mutual friends or LinkedIn mutual connections or you know, I'll just, I've, I've gone after breweries lately. I'm from Wisconsin. I have been known to drink a beer once in a while, so I go after breweries. Once I landed my first brewery, that was kind of somebody that I could put in front of every other brewery. I talked to and say, look, I'm already doing the bookkeeping for XYZ Brewing Company. I'm very familiar with the industry. I know you guys are opening within the next three or four months here. Let's talk. It may not be a good fit or you might already have somebody, but it won't hurt to talk. And that's worked out really well. So I'm on my, my fourth brewery now in the last probably three months.

Yeah, that, let's talk about that for a minute because you know, it's interesting. It kind of flips the concept on the head, on your head of the entrepreneurs starting their own company. They're passionate about it. The guy that wants to brew beer. But here's something you're interested in. I happen to like to drink a beer once in a while myself and you know, then focusing, going down and targeting businesses that you know, you're interested in, you have some passion about and you know, become, develop your expertise in those markets and kind of develop your own niche. I think that's fantastic.

Well yeah, yeah, I mean it's, you're, you're in a niche but you're targeting another niche and that, That's. It's smart. Yeah, yeah, because they talk and.

Oh, yeah.

And they trust. Right. If my competitor's using this, well, I better get there. You know, that's just human nature, too. Right.

So, yeah, the craft brewery scene is very much intertwined. You know, every, every brewer knows all the other brewers in town. They all know somebody who's about to open a brewery in town. And it's not, it's not so much a competitive basis. I mean, there's, there's craft beer, as I'm sure you know, has become such a huge business in the past four or five years, but there's still, like, it's not, like, it's not a small market for people to do. To go to. So, you know, I'm not going to pick one craft brewery and only go there. I'm going to. I'm probably going to go to most of them. So it's. Yeah, it's a cool industry where everybody kind of knows each other. Everybody's very nice to each other, and they're very happy to send recommendations for someone who does good work.

That's great. Hey. Okay, so we've talked about the bookkeeping for a while. I'm going to have some more questions about that. But I also want to go back and you mentioned something when we first started talking about trying a number of different business ventures and sometimes at the same time, and the shiny object type thing, I have that same issue, right, where I'm always looking for the next thing, especially once I get something else going. And it is easy to get distracted to the detriment, you know, of those other ventures. How did you weave your way through that when you were working to get started?

Not very elegantly. It was. Yeah, I started out and most entrepreneurs. Somebody asked me this the other day. Most entrepreneurs kind of have that. That moment where they kind of knew. You know, some. Some kids go to school. You know, they buy a bulk box of candy bars and then they go to school and they resell them for a profit or they have the lemonade stand when they're a kid. I never had that moment. So my, My first business. I think it makes for kind of an interesting story, so I'll just tell it briefly. But it was. It was a designated driver service in Madison, Wisconsin, that we. We had scooters that would fold up gas scooters. They folded up to the size of about a suitcase. So we would. On a gas scooter, we'd fold it up and throw it in the trunk of your car and drive you home in your own car. And it was priced roughly 3/4 of what it would cost to take a cab ride back home and then back to the bar to get your car in the morning. So it was cheaper than taking two cab rides. And it was just a very novel concept and way more convenient because you.

Wake up with a hangover and you don't have to get into a cab again.

Yeah.

Oh, yeah. So it took off pretty well. And that was kind of my first experience in business by myself. I had partners, but, you know, in having my own business. And that's kind of where I ran into figuring out the concept that insurance companies will kill any fun you want to have. They, they just. This was before Uber and Lyft were big. So there was. The insurance industry had no idea how to underwrite a policy on this, on somebody driving someone else's car while that person's drunk. It was just. We got a policy for the first year we were in business and it was on a trial run. Basically we had zero claims. But they decided they still didn't want to renew it for the second year, sold it to another company, and then they quadrupled the rates to the point where we just couldn't be profitable paying that much in insurance. So sometimes you hit on a good business and just things that are completely out of your control cause it to fail.

Cause it to fail. Yeah. It also sounds like, you know, you've found that. Well, let me put it this way. Without alcohol, you might not be in business doing anything.

This seems to be a trend.

Yeah, that's pretty good. I like it. I like it. Yeah. Back to the roots.

Hey, man, you know, go with what you know.

Yeah. Find something. Yeah. Find something you're passionate about. I love it. Mix your mix business with pleasure.

Yeah.

Yep. It works out very cool. That's very good. So what do you. Let me ask. Okay, so now back to bookkeeping. What do you think the biggest mistake that most business business owners make either when they're getting going or even just the day to day running of their company when it comes to their bookkeeping, accounting, you know, finances. And I ask because over and over, when we. I'm going to ask you this question, you know, in a few minutes. What would you tell yourself when, you know, just getting started? And we always hear bookkeeping, accounting, bookkeeping, all those kinds of mistakes, you know, that folks have made. What do you think the biggest mistake is that the average business owner makes?

I think it's that they Put it off for so long that it's just. By the time they get to it, it's so overwhelmingly backed up that there's just. It becomes such a huge stressor. There's just no end in sight for it. Can you do it yourself? Yes. I'm not going to sit here and say, nope, you need to hire me. You can't do it. You can do it yourself. There's software out there. I like Xero, but QuickBooks Online works too. You can do it yourself, but you need to keep up with it is really what it comes down to. If you're putting it off because you don't know what you're doing, you're just making the problem multiply on itself until tax time rolls around and then you've got two weeks to catch up on a year's worth of bookkeeping. It's not going to be fun for you. So, yeah, the biggest thing is just. Just getting going. Take the time up front to just figure out how the software works. You're probably not going to know the answer to every question of where do I book this? But there's forums out there and QuickBooks has a big forum where you can ask questions, that sort of thing. Just get on top of it right away. Get a routine going. You don't have to do it every day, but set aside an hour a week or maybe two hours a week to just sit down and just do it. You're going to put it off otherwise, and. And once you put it off for a week, you're going to put it off for a month and it's going to end up April 15th rolls around and you're in an unhappy spot.

Yeah, that makes sense. So when you're meeting with your customers, are you getting together monthly, quarterly? What's the average face timer looking at their finances and their accounting to keep them up to date?

Yeah, it's typically I meet with them monthly and that can be either over the phone or sometimes just email. There's some clients I have in Austin that I've never met face to face. But monthly financial statements is kind of my usual thing. When I give to people, I'm in their books, usually weekly updating and reconciling and that sort of thing. But I usually save the actual financial analysis and everything till the end of the month because it's a good cutoff point.

Okay, that's cool. And one thing I hear people talking about a lot is saving money by doing their own payroll. What's your thoughts on that?

Oh, that you can get in big trouble fast. I wouldn't do that.

That's why I mentioned it. Yeah.

Gusto's like $39 for your first employee and then $5 a month after that. I mean, just do it. I don't even do my own payroll for the. The other company that I run. It's just. It's not worth it. It's not worth it.

I tried doing it years, years ago when we started Mac observer and then back BE Media. There was no real online. I mean, there was like adp, but it was a disaster for a small business. Right. You know, and. And so I tried doing it on our own and actually decided we're just not going to have employees. You're all still just 1099 contractors.

And that's what most people do.

Yeah, yeah. And I obviously lived with that as long as I could. And then, you know, you get to a point where. And now especially the IRS really cracks down on that particular distinction. And for good reason. But by then, you know, every bank, like you said, everybody in the world offers payroll and it's dirt cheap. It's so easy, and it covers everything, and I've got people in multiple states and stuff, and it's just like, boom, it's done. It's easy. Other than the state of Pennsylvania, which is a bunch of jackasses, but otherwise.

That'S a whole nother show.

That's a whole other show.

Yeah. Yeah, that's great. That's cool. That's some great information. So. So let me ask you, you know, if you could go back when you were first getting started with your current business and, you know, give yourself a piece of advice. What would you tell yourself based on the experiences that you've had in the last couple of years?

Yeah, it would be, it would be to resist that shiny object syndrome. You know, the, the, the great Ron Swanson once said, don't half ass, two things, whole ass, one thing.

That's right.

I try to. I try to live by that. It's like I said, I've gone from. I tried to do, you know, the subscription box thing. It just went off overnight and I got sucked into it. I tried a subscription box service. I tried one of those. You know how that maid service thing went through, made its rounds on Reddit. So I did that with lawn care, and it was quasi successful. But I was also trying another thing at the same time. So both of them failed. And it's. At any given point, I've been trying to run too much, start too much at the Same time. And it never worked out for me until I just, I quit my job. I mean, I'm not saying everybody should quit their job. Do some testing first. I did testing. You know, like I said, I had those first couple clients. I realized there was a market and I'm uniquely qualified to do what I'm doing. So it, but it took me, you know, just getting rid of the job and not trying to start two damn businesses at once. I just focused on the bookkeeping. And now that I've been doing it for a little over a year, you know, it's actually working. I've replaced my full time income from a job and then some. So yeah, that's the number one thing is just, just put your focus on one thing at a time because you're just going to split your time and neither one's going to do well.

Yeah, I think that's great. And you know, it seems to me hearing these stories over and over again is it's also like time and place. You kind of have to have some of these experiences to get you to the point like you're at right now where you feel comfortable staying and focusing because it kind of builds up resiliency, where you have that confidence to jump out on your own because you know you're going to make the, somehow you're going to hustle your way into making a living. And so, you know, I commend you for, you know, resisting those things and focusing on the, on the, you know, the one core business. I think that's, that's great.

Yeah, I mean, I'm sure there's some people who can do two things at once and make it work. I do have a client that his running two businesses that are both bringing in almost six figures a month. And he's, you know, he's making a go of it and it's doing well, but he's also very well funded. He's, he's, he's exited, he's had a seven figure exit out of a business before. So I mean he, you know, he's taken his hits, he's gone through and taken the punches. So he's at a point now where he's, he's uniquely qualified to make that work. Somebody who's bootstrapping the majority of people who are bootstrapping a business. Just you don't have money, so all you have is your time. And if you're splitting that between two or three different ideas, it's very unlikely to work.

Yeah, I agree.

Before we go, I kind of want to highlight something, a theme that you've hit on several times throughout the show. And the phrase is uniquely qualified. I always think about that as unfair competitive advantage. And this is a good thing. I realize it has the word unfair in it, but it is that thing that separates you and allows you to do. You're not building a business plan for any person on the planet to go and run. Especially when you're a solopreneur. You are building a business plan for you, I realize. Business plan. Very few solopreneurs actually write down a business plan. But you formulate what you're going to do. And for anybody listening, it's really important to just leverage the skills you have and don't worry about replicating that, at least not initially. You know, just get out there and do it and use that. You know, it's a shortcut. And that's a good thing. You know that that's what gets you to profitability because you get, you can get the job done. Yeah, this is.

Yeah, I think, I think that's why a lot of those copycat subscription box businesses and the, the maid service businesses and all those, you see them come around and they're there for three months and then they're gone.

Right.

It's because all they're doing is copying someone else's business model. They don't have any unique qualification to make it work. It's just they saw it work for someone else. They're gonna apply it to a slightly different industry and hope that it works. And hope they have no reason to believe it should.

It's just hope, right? It's just hope. Yeah. And hey, look, there are times in any business, no matter how successful you might be, where hope is the thing that you hang your hat on that particular day. But hopefully not all the days.

Yeah.

Yeah.

Well, that's great. Well, Justin, so what's the best way for people to learn more about you and your company and the services that you offer?

Sure. I mean, if anybody is in the service based business sector and is looking for a bookkeeper, or even if you weren't looking for a bookkeeper, but this has gotten you to start thinking about it, I can certainly help out. The best way to reach me is just email. It's justinigitern.com and yeah, just reach out. Know that I'm not going to be $15 an hour, but if that's what you're looking for, just keep doing it yourself. Just bite the bullet. But yeah, once you're at a point where you have some income and you need somebody. I'm certainly willing to help.

Yeah. Of all the people we've had on the show, you're the one that markets to our audience the most.

That's right.

Which is good. It's smart. Yeah, man.

It's good. It's great. Well, thanks again. We appreciate you hanging out with us today. Some really great information, definitely. This is one that especially new startups guys just getting started need to listen to. Yeah.

Thanks, guys. It was a pleasure.

Yeah, thanks for coming. It was great to meet you. Yeah, absolutely. Folks, remember, you can always find us on Facebook at. Well, the best way to find our Facebook page is to go to BusinessShow Co Facebook. That'll bring you to our small business support group there where we. And hopefully people even like Justin can kind of help everybody answer their questions and get things rolling. And we'll see you over there. What's it that we always you say.

Shannon, Keep living that charmed life.

The right thing.

Take it easy.

Got it.

See ya.