Can You Build a $13M Payroll Business Without a Sales Team? Lori Brown Tells All

It's been exactly 3 years since Lori Brown, the CEO of PayNW, was on Payrollin'. And the title in that episode was "From $500,000 to $8 Million: How She Exploded the Growth of PayNW." You are not going to believe how much further she's taken it since then. And she shares some really surprising lessons learned and mistakes made along the way that I think are going to not only surprise you, would help you to learn and think about your go-to-market strategy. In this episode, we break down not only that, but we talk more about her lessons learned and also the IPPA Spring Summit and some of the great speakers and people you're going to meet there in March of 2025. Thank you for tuning in to Payrollin'. You're going to love this episode where we teach you how to grow your payroll bureau. Thanks for tuning in. Let's grow. Welcome to Payrollin', the show where you will learn how to operate and grow your payroll business from the most dynamic minds in the business. If your company offers payroll services, this is the podcast for you. And now, here's your host, Matt Vadie. Let's go! Lori, first off, welcome back to Payroll. And so excited to follow up on the amazing first episode we did. It's been 3 years ago now, 3 years ago in February of 2022. And it was interesting because our conversation a couple of weeks back, you said, hey, how much did I say I was doing in revenue last time I was on the podcast? Because somebody just said we were doing that. We've grown way past that. So I want to give you the opportunity to talk more about that amazing growth because the title of that episode was From $500,000 to $8 $1 million, the insane growth you've led PayNW through. So bring us up to speed. What's changed since then, Lori? Let's talk a little bit about the latest growth curve.

Yeah. So since '22, we've actually been able to do 3 acquisitions as well as some organic growth. So we're going to hit $13 million in '25. So it's been, it's been kind of crazy, but fun. And I think a lot has changed since our last time here. Glad to be back on the podcast. Excited to to talk about kind of what's changed and what I've learned over the last 3 years that maybe, maybe learned the hard way that other people don't have to.

Yeah, I'd love to hear more about that because that's always the sort of cliché question, right? What are the mistakes you made that we can learn from? And, you know, and, and that's one I always ask because that's, that's the easiest learning hack you can have, right? It's like, I, I coach youth sports and I always tell them some of the best coaching you'll ever get is just listening when somebody else is being coached up, and then you can apply what you hear as being coached up to them. And so it's kind of like, you know, the same methodology or thought process when we think about your mistakes can save me hopefully from making some of those mistakes. So share, please, what are some of the mistakes that you made in that process of scaling that maybe some of us can avoid?

Yeah, so I think that one of the things that I— one of the mistakes that I've made along the way is investing too much in a sales team, specifically last year. You know, the sales element is such a hard— the organic sales, organic growth is so challenging. Especially for me. I came from an operations background, right? I was at Paychex for 11 years and then Pay&W. So, it wasn't until about 5 years ago that I really even got into the sales side of things. And it, you know, I read a couple books and I talked to a couple people and I thought, well, maybe I can just do this. And so, we invested a stupid— I'm a little bit embarrassed to even say how much money we invested in a sales organization last year and it just didn't work. So, we had to completely scrap that and we're kind of starting from scratch. So, the growth has been amazing because of acquisition opportunities that I've found. And I think the key there is just, you know, you've probably heard me say, and most people have, being in every room. That was one of the things I probably said it on the last podcast. When I became CEO, I had this goal for the first 2 years of my CEO tenure of being in every room in this industry. I really wanted to not only be able to learn from people that were in those rooms, but also just to be known as provide some inspiration and some help to folks and then get some of that from other people. And I really did that those first couple of years. I have found that one problem with that is that you can't get out of the rooms then somehow, right? So it sounded really good. I was able to tell my husband, like, for the next 2 years, let's just do this. And then those 2 years came and went and it's like, oh, you're still on the road. So I'm still on the road more now than ever, but I wouldn't trade it for the world. So that's been really powerful. But that organic growth piece has been really the toughest for us. And I think we, we thought the book would work, you know, we studied it, we researched it, we created a plan and then it just, it didn't execute. So I think making sure that you maybe tiptoe into that a little bit more. I always thought that, you know, I don't want to hire a sales manager until I have 5 or 6 reps because it's such a big expense cap, right? Like you're, you're, spending a huge amount on that sales manager. So we did it all and then it didn't work out and it was a lot more expensive. So I wish I would have just hired a sales leader, let them kind of build, build their team last year instead of kind of doing it all at once.

Yeah. Well, fun fact, we basically both did the same exact thing last year. I hired and removed an entire sales department in the course of a year. And yes, one of the most expensive experiments in my career. And so I feel you and there's a whole ton of lessons learned there that could be their own thing. But I'd like to dig a little bit into that. That's an interesting concept. And I remember you now, listen, I get to benefit from you being on the road because you, we just met up in Greenville, South Carolina a few weeks back, which is awesome. Yeah, obviously PayNW, Pay Northwest. You're in the Northwest. I'm in South Carolina. It's pretty rare that we get to bump into each other. So that was dope. So I'm the beneficiary of all your road trips, but I know how hard that can be. Talk a little bit though about that philosophy. I want to understand that more, the be in every room. So you mentioned some kind of industry peer-related rooms, but then, I mean, is that the primary focus of that? It's like, hey, I want to be around the people that are building what I'm trying to build, or is that also like, hey, in my local market, I want to be in front of, you know, I want to be at the chambers, I want to be in front of local leadership, all those sorts of things. Tell me a little bit more about how that played out.

Yeah, I think it's all of the above. Certainly peer groups, you know, as you know, I'm big into peer groups. I participate in 3 separate peer groups myself. Most of those virtual, one of them is in person once a quarter. But then also software, you know, making sure that I'm raising my hand anytime UKG, which is the software vendor that we use, wants feedback or has, you know, advisory boards, that kind of stuff, making sure that I'm in there and understanding and being influenced there. As well as the industry, right? The IPPA. I joined the board of the IPPA probably about 3 or 4 years ago now. I'm now the president of the IPPA. So making sure that I'm at the conferences and meeting people there, not only from an IPPA room or from an IPPA perspective, it's more than just meeting the other CEOs and the other people in the industry, but it's also that vendor hall, right? Because so much of revenue can be driven through new vendors or new products or new ideas. And so making sure that you're in that room is really important. And then, yeah, at a local level, certainly, there's an organization here in Washington called CEO to CEO that we participate in, going to monthly breakfast, just becoming really a sponge and somebody, again, that can lend a voice to some of those conversations. And then, most recently, I started a blog called Leading with Laurie, which ties into kind of all of that as well. Because I was finding, as I was in every room, that I was able to kind of help and influence people a lot from a leadership perspective. People were coming to me with a lot of like, how do I handle this employee situation, or what should I do here? And I realized I could impact a lot more people by putting that down in writing and starting a blog. So I've done that here just recently as well.

Now, I think the low-hanging and like obvious cliché fruit is like, Lori, you're such an inspiration to other female leaders. Like, thank you for putting this out so that other female leaders can benefit from what you've done. And And I would define you, and I don't know that you would like this word as a definition of you, but as aggressive. And, and I, I like, like, that's what I learned from you is like, you, you advocate, you ask, you do what you want. Right. And so like that, that's inspirational to me in that sometimes I can be a little more passive than I should be in certain situations where it's like, it's good to see somebody else just, you know, raise their hand and be like, no, this is what I want. This is how I want it. And whether or not it comes out that way or it doesn't, you know, sometimes I can be a little shy for lack for lack of a better term, and sort of advocating for myself. And, you know, IPPA might be a good example, just in certain terms, you know, do you want things this way? Do you want things that way? You know, you and I both served on the board together and have had many conversations about that. Neither one of us, you know, I guess shy is definitely not a term most people would use with me. But, but at the same time, I still, you know, sometimes I'm either, you know, I think we're all a little embarrassed or hesitant at times to ask for what we really want. We kind of pussyfoot around it when in reality, it's a little better to be direct. Where do you think it— A, are you offended when I call you aggressive? I don't know if that's the right word, but I think it's like the one that comes to mind of like, hey, you see it, you want it, you go for it. And I, that's admirable. And, you know, A, how do you feel when I say that? And B, what are your thoughts when I position it like that front end? Because obviously first I say, hey, you're an inspiration to other female leaders. They should look to you. They should subscribe to your blog. It's wonderful. It's a great blueprint for how someone else could do the same. At the same point, I'm learning from you too. So obviously you're not just inspiring female leaders, but tell me a little bit more about your thoughts when you hear me say all that.

Yeah, so that's interesting. Aggressive, sure. You know, I've been called a bulldog. I've been called aggressive. I'm okay with that. Like, I'm not offended, certainly. I think the balance is, or the thing that differentiates me from other people that you might consider aggressive, is that I try my damnedest to give out as much as I'm taking, right? So yes, I know exactly what it is that, that I want, and I know where I'm going. I'm also super agile, so I can change that goalpost pretty quickly. But I always have a forward movement in mind. And I think that's also why I can kind of come across as aggressive more so than others, because I always know exactly where I'm going. And I'm always thinking ahead. One of my kind of cliché comments is I don't have a rearview mirror. I don't look at the past. I don't worry about the past. I don't hold grudges. I simply am always looking forward. And that can get me in trouble sometimes. Like sometimes I've, you know, repeated mistakes that maybe I could have avoided, but I just feel like if you spend too much time looking back or worrying about what's happened in the past, then you're not going to get where you're going. So I always, always, always am looking forward. And that can come across as aggressive. It's not necessarily aggressive, but it's like, I know where I'm going and I don't question that. So I don't have to, you know, I do, I know where I'm going and I know where I want to be. So I can say it with a level of confidence that can come across as aggressive. But I balance that to the best of my ability with giving as much as I'm taking, right? So, if anybody in the IPPA community or one of my peer groups is, you know, we're at the Leadership Summit in Texas this year, and somebody that I had never really talked to before was like, 'Hey, I heard you say you did an acquisition. Can we sit down for 30 minutes? I've got this opportunity. Let's chat about it.' And so, I sat down during lunch with him and chatted with him for 30 minutes about that. So, I really want to make sure that I keep it balanced in that way. But then maybe somewhere in the back of my mind, because I am giving as much as I'm giving, I also feel more confident in my ability to ask for things in return. So I think that that balances that. The female leader thing is an interesting element that you bring up, and I get that a lot. And it's— I don't want to put off the perspective that I don't want to be an inspiration to female leaders because I do. But I want to be an inspiration to all leaders. And I don't know if it's because I was raised by a single dad. So this idea of being around women growing up, I just wasn't, right? I was raised by a single dad. All of his friends were dads. So, I was around a lot of men kind of growing up. And so, I don't really see myself as a female leader. And that's not to say that I don't see myself as female. It's just to say I don't really distinguish. And I've been lucky in my career for the most part. I can recall back to a few conversations that I've had where gender seemed to matter, where I was sitting in a room with Mike Anderson and and the person asked Mike a question and Mike, you know, threw it to me because I was the one that had an answer. And then they asked Mike the follow-up question. Like, there's been a few of those times, but really my gender hasn't influenced my career too much. So again, not to say that I don't want to be an inspiration to female leaders because I do, but I just want to be an inspiration to all leaders. Identify with the fact that I got to where I am, like, without a college degree by really paying attention to the folks around me and working really hard and being willing to you know, print W-2s when needed or work till midnight calculating manual checks or do whatever it needs. Like I've spent a lot of time in the trenches. Right now, my role is more to just kind of talk to people. That's what I tell my kids. So they're like, what is being a CEO like? I just talk to people all day and make decisions that matter a lot. But, you know, I spent my time in the trenches. And so I want to inspire people that are in the trenches right now that don't necessarily have the traditional degrees or whatever it is that might make them feel successful, whether it's because of their gender or because of their background. Like, anybody can get to being a CEO. Anybody can be successful. It just takes grit and determination, and it doesn't take asking for it, right? It takes working for it. So that's who I want to inspire more so than any other kind of category of person.

I love it. And I will say a couple things on that. First off, I didn't know we had that in common in that I, I finished an associate's after I failed out a couple times. And then I finished my bachelor's when I was like 35, I think. And that was like, just because, you know, at that point I had a job and they were doing some tuition reimbursement and I was like, heck yeah, I'll take that. I guess it was not 35 because that wouldn't, that math wouldn't math, but maybe early 30s. But so I come from a family, you know, it's interesting. We, we went to a conference this week and there was a speaker there, a gentleman named Ed Mylett. I don't know if you've heard him. Pretty famous guy, kind of an influencer type of guy, motivational speaker. I don't know how he got rich, but they were talking about his $50 million jet and his private island and all this stuff, and he's pretty loaded. In the middle of his talk, he starts talking about every family tree has one person that kind of breaks the branch and takes it up a notch, and like one person that changes the trajectory of the family going forward. And, you know, for me, that was super inspirational because I've always, I've always thought in terms of like, you know, what's, you think as a human with mortality sort of looming, like, what's my legacy? What do I want it to be? What do I, you know, what do I want to do for my family before I leave this earth? And to me, it was always like, hey, I want to, on the ladder, I want to pull us up a couple rungs and then, you know, hopefully my son pulls us up a couple rungs and, you know, and on and on it goes. Right. And so, you know, I think there are some people that just kick the ladder over and take a jetpack to the top. And it sounds like he did when you're, you're talking about the type of wealth where you're, you're buying $50 million jets and all that. But I do think there's a lot of importance there, and it's really important to talk about the things that we just did of, hey, you don't have to have a traditional educational background. You don't have to come from a traditional family. I came from single mother, poor, food stamps, all the things. Like, get deep into that. Like, you don't have to come from that world. And it might, you know, for me, it took me a little longer to get my act together. Like, I was 28, 30 years old before I really understood what I wanted to do with my life. And, you know, so if you're out there listening to this, and I know because I've talk to a lot of people who reach out because of this podcast of like, "Man, I really want to do this thing," or "I've been thinking about taking this leap," or "I want to make this adjustment in my life." And, man, just take massive action like Laurie is talking about. If you have vision, which is the most important thing on where you're trying to go, then your actions in the universe will start to align. And, I fervently believe that. I know Laurie does as well and she's a great blueprint for how you can some of those things on a more tactical and strategic level. So I love that. Thank you for sharing that. Thank you for being open about that. Let's, let's one more thing on the, the kind of scaling piece and the growth. Like, what's something that about scaling a business or about going, you know, again, now let's, let's, let's zoom out. $500K to $12 million you've taken this company. That is a massive, massive transformation. Like, what is something on that roadmap that like, you know, people did not tell you, or you, you heard it and it seemed cliché until you experienced it and you were like, oh dang, like this is real and this stinks, or this is awesome or whatever. Tell us a little bit about that.

Yeah, I'd say that every business reaches, uh, you know, kind of milestones where you get to this certain point and it's like, oh wow, this is a little bit harder than I was expecting it to be. Or, you know, growth from, you know, $2 million to $4 million was really hard, but then $4 to $8 maybe was really easy, but then $8 to $10 became really hard again. And I heard a speaker way back, like maybe 10 years ago in a Vistage meeting that I was in that related it more to employee count. And he said at that time that like, once you hit 25 employees, you go from like that 25 to 30 employee count, it's kind of tough, just like consistently across all businesses. And then you hit it again at 50 and then you hit it again at 100. And I found that to be very accurate that around that 50 employee mark, you just, you need to be a little bit more sophisticated. You need to be a little bit more, you know, there's the FMLA laws and all of that legal stuff that kind of comes into play. But, you know, at that point, you've maybe got multiple layers of management, right? You just don't have a CEO and a manager and then frontline. At 50, you're going to have multiple layers of that. So I think being aware of that, you know, you might be sitting at 45 employees today or at 20. I think that 25 and 50 mark were both that for us. So, you're sitting at 20 or 45 employees and you're thinking, that's been pretty good so far. But as you make that next jump of that next 5 employees, you really need to kind of look at your organization and make sure that you're still set up, that you can still structure at 50 or 55 employees the same way that you could at 40 or 45. And I've found for not only myself, but a lot of peers and businesses that I talk to across all industries, that that's similar for for everybody. So if you're kind of at that pivotal point, you might not realize it right now, but putting some extra thought and intention in how you're going to cross those milestones could be very beneficial.

Interesting. Yeah, that's definitely something you don't think about as much. Well, there's one converse of that. It was interesting. A friend of mine told me, you know, we're not quite there yet, getting closer by the day, but the— he's like, look, once you get to 25 employees, it's a little bit different because if you're 10 employees, that's every person you lose is 10% of your team.

Yeah.

And that's like such a huge, you know, kick every time somebody walks out that Like it doesn't really start to like plane out until you get to about 25 folks. And when they leave, like there's enough people and infrastructure to soak some of that up for a minute before you bring in the new hire or whatever. And so there's, did you have that same experience or is that maybe a little fluff?

Yeah, no, I think that they, they, whoever they are, they say that, you know, anytime you change out more than 10% of your team, you've changed the culture of the team. Right? So, while we all as CEOs and leaders try to set culture, the reality is that we set the direction for culture. But the employees are the ones that actually set the culture and what they kind of accept and how they work together and that kind of stuff. So, anytime you have more than a 10% change in any department or on any team, you're going to have a shift in the culture. And that might not be a shift in the mechanics of the culture. Like we still value mission and mindset. And we're still really worried about being agile and collaborative and reliable and all that kind of stuff. But the personality side of the culture of the team is going to change. So yeah, if you're 10 employees and you have one person change, that can change the whole dynamic of how the team works together. So it can be— it's something— that's another thing to keep in mind. And it's important to keep that in mind not only at the company level, but also on the team level. Like, if you have a team of 10 CSRs and 2 of them leave for whatever reason and 2 come in, you got to kind of put intentionality about rebuilding that culture. And you might not think that as a service leader, that, you know, just 2 people coming in and off of your team or swapping out are going to make a difference. But again, those are the things that can catch you off guard if you're not being intentional about the way that you're leading. And that's another factor that you need to consider.

Yeah, we had a very similar experience when we were about 15 people, a few more than we are now. We've, we've condensed a bit. 2 of them were just malignant. They were people that we did not realize how much they were impacting everybody else with their constant chat and their constant negative things to say about other people on the team and their inability to stay focused on the task at hand. And then, you know, we cut them out, we quickly realized like, dang, like it's actually way better to not even have these roles filled than to have those two individuals here. Like everybody's sort of willing to go, yeah, we'll do whatever it takes to not have to deal with that crap anymore. And so it's interesting because, you know, your team won't always come to you and say, Hey, these two people suck. You should get rid of them. They'll grin and bear it and now they start gossiping behind their back. And now you've got all these little pockets happening inside a small organization that you don't even realize until finally it hits a bubbling point between two individuals and something reaches your desk. Oh, wait a minute. I didn't even know our culture was getting completely sideways just because two people suck. And that's the reality on a small team of what can happen.

Yeah. And you will most often lose the good people in that situation, right? And it's not even the bad people. I think I've also over the course of my career really learned this is maybe one of those things that I made the mistake multiple times on because I don't tend to hold grudges. Like if I get upset or if somebody makes a mistake, I tend to just like address it in that moment. I'm not one to not hold people accountable, but address it in that moment and then move on. And I don't think about that in the future, but But there's been some folks that probably we should have gotten rid of or asked to separate from sooner than we did. And a lot of times it's from fear. We had that experience as a remote workforce. We had that experience in our HR implementation team this last year where we had kind of allowed some people to get away with some things that they shouldn't have because we were just too scared of, are we going to be able to find a new person? Or at least, you know, when we do have something that they need to work on and we, you know, we micromanage them, we can get it done. But the reality is they were influencing the rest of their team and the other team members weren't feeling well supported or like they were team players. And so having them exit the team was much more beneficial than having them on it, even though it felt scary at the time.

Yeah. One thing I've learned is, is if it requires micromanagement for somebody to be productive and an adequate teammate, then it's probably not a long-term solution, right? And it's like the Weekend at Bernie's. They're just like propping this person up and carrying them around and telling them what to do. And it's like, and you need Especially when the team's smaller, like you just don't have the ability to be carrying people. Now I wanted to shift real quick. We're going to talk about the IPPA and the agenda for the upcoming spring summit here in just a minute. But a hot topic on this podcast over the last couple years has been acquisitions because it's a hot topic in the space and in every space for that matter. And I joke when we've had this conversation before where it's like, man, trying to find deals is crazy because every one of us is trying to find deals and every one of us, you get into a deal. I was talking to you about small one we're working on. Of course, another friend is in the deal. And then, you know, and then you get a seller who gets cold feet and decides it's not the right time. But if you're looking for more information on acquisitions and you're listening to this, I would suggest going back and listening to the episode with Matt Morley and the episode with John Mason Smith, both good breakdowns on acquisitions, pros, cons, multiples, all sorts of stuff about the industry. But talk to us a little bit about your experience with acquisitions. You know, again, it's very sexy. Like you mentioned, it's like, hey, why would I not just add $1 million in revenue in one fell swoop and just move on and say, like, how long would that take me with a team of salespeople to add? I just go out and hunt deals all day long. And this was my mindset, and I have not been overly successful with said mindset. But, uh, the— tell us a little bit about kind of the good, the bad, and the ugly when it comes to acquisitions and some war stories there.

Yeah, I would say, as I said, we've done 3 in the last couple of years. The most recent one was just December 16th. We closed a little office in North Carolina. China, and that's been really successful. For us, it was really identifying what would be a good fit, right? What is it that we are looking for in the organization right now? In our industry in general, there are a lot of folks that are aging out. There are a lot of folks that have been in this industry for a long time. And I think society-wise, there is less and less like kids taking over businesses. I mean, we still see it from time to time, but generally speaking, I think across society right now, kids aren't taking over their parents' businesses in the same way. So we're finding a lot owners that have been working on their, their bureaus for 20, 30 years and are just ready for that next step. And they don't have a key employee that might want to take it over or a child within the family to keep the business within the family. So they're looking for those, those exits. And there's a lot of ADP and Paychex and Paycom. I mean, I have a conversation with anybody that wants to talk to me about buying our business, right? We're not for sale, but I want to understand what they're saying so that I know who my— what my competition is saying, right? And so now that I've said that on the podcast, they're probably gonna stop calling me, but that's— that is what it is. I've already talked them all. So I think though, from an—

I'll send you a spreadsheet to learn your multiples.

But it's more than just multiple. And I think that's, so it's a good thing that you said that. For me, when I get introduced to a company that is looking to sell, the first thing I worry about is fit. Like, is this going to be a good fit? And so a good fit for us is going to be a UKG shop where the clients have continuity of system where we don't have to do conversions of system and that kind of thing. That's not to say that I would never consider. An acquisition where I need to convert the clients. But generally speaking, we're looking for UKG shops and then it's a fit of the businesses in general, right? So we tend to serve a little bit upmarket. Our average employee count is about 55 to 60. So we want to see that there's some bigger clients and we want to see that we can add value. So the acquisition that we just did in, in North Carolina, they had a lot of payroll and time clients on UKG. They didn't have a lot of HR deployed into that base. We've already in the last 6 weeks been able to upsell some of those clients on HR, and that's better for the client. It's better for us clearly in our revenue, and it's better for everybody all around. So I'm also looking for an opportunity for us to not just do a client grab. Sure, that's great. Let's add some revenue. But I want to be able to, to expand and provide better service to that client base as well as kind of bring them on board as seamlessly as possible. But despite, you know, the 3 acquisitions that we've done in the last 3 years, I've probably talked to 12 to 15 companies. I've probably been under LOI with 6 and, you know, closed 3. So, it's something that you need to be aware of is not and shouldn't, you shouldn't get everyone that you talk to, right? As a seller, you should really be talking to a lot of different people and exploring not just the multiple, right? I always call it the headline multiple of of the ADP or the paychecks. Like, yeah, ADP is going to give you whatever they're going to give you, and they're going to promise you a 60% conversion. So if you want to look at an actual multiple, take that multiple times 0.6, and that's closer to where you're going to get. And if I'm ever in a situation with a seller who the most important thing to them is the multiple, then it's probably not a good fit for me and for KNW. It's something that we, you know, we want to be a bigger picture. But we take that same philosophy with clients, right? Like, if we're talking to a prospect and the only thing that matters to them is price, then we're probably not the right fit. What we want is a client who really understands technology as being a core piece of their business and running their business, and that the support and service that we can add on top of that is what makes that matter to them, not just the cheapest person to do their payroll. And so, it's kind of the same thing with acquisitions. We don't just want a seller. Of course, every seller is going to want the most money that they can get. Like, I get that. You know, we need to be comparative there, but it's the whole package, right? And so, we've been able to do some creative deals that give sellers some upside as we're able to expand the services that are offered and then make sure we've got good homes for their employees when that makes sense.

Yeah, you bring up so many good points in there and I think it is, and even on this podcast, we're probably not helping the cause in terms of, you know, you start spewing out multiples based on size, but, you know, headline number is a very good way of putting that. And yeah, that it's like, hey, over what period of time, right? So like the deal I was just in was like, you know, he got the second offer and he's like, you know, they offered way more than you, but it was over 2 years. Yeah. And it's like, well, you told me that speed was important and you wanted the money now. And to me, that's like, hey, if I'm going to take more risk and giving a lot more cash up front, then I'm going to go with a lower multiple. And then, so it's kind of which levers are you going to pull as a seller and being realistic and just understanding, like, for me, and you've probably seen this too, if you look going into 12 deals that some of those folks back out and you, before you, and listen to your earlier point, like you should be having conversations with people about selling your business all the time. But like also being serious about when it's time to sell, like, are you serious or not? And that it's, hey, if this is $200,000, $500,000, $2 million, $10 million, like, is this number actually going to do what you hope it's going to do? Right? Like I had one a couple years ago where Gentleman was in his early 50s, made him a million-dollar offer. He asked for a million dollars. I made him a million-dollar offer and he denied the deal. Still to this day, I do not understand. Gave him exactly the terms he asked for, exactly the amount he asked for, and then he still did not close on the deal. But the first time, or that was actually the second time we made him an offer. The first time he was like, oh man, I just realized after getting these offers that this isn't enough money to retire. And I was like, you know, no crap, Sherlock. Like you got a $600,000 business. You're 53 years old. Like, did you think you were going to get $8 million $1 million and go retire today? Like, have you done any math on what— do you have a financial advisor? Do you know how much money it costs to retire in the year 2023? Uh, so anyway, it's just like, you know, there's, there's both sides of it of like, hey, if you're going out, going to go out and kick the tires with folks and get an understanding of your valuation, that's fine. But also, if you're, if you're serious about selling, do some math ahead of time so you know what you're actually selling, how much you could get on it, what a more realistic number is. Because again, to your point, like, the headline number is never going to be the actual Yeah, 100%.

And understanding the whole deal and the different levers you can pull. There's a lot of levers you can pull in an acquisition, whether it's the employee or employment contracts after the fact, you know, opportunity to capitalize on revenue that's added in the first year. There's lots of things that you can do to influence the outcome of the deal that most of the big guys aren't, right? So if you get the ADP or the Paychex or the whoever offers, we'll stick with those two for now, you get the number. But they're not going to be creative. You're going to get the same deal that every other service bureau is getting and you're going to get the same treatment. So the other thing that I would recommend, and this is something where we can sometimes have an advantage, is talk to other people that have been acquired by them. Right. So I'm happy to provide references when, when we get into a deal and the sellers that we've purchased from in the past are happy to have those conversations. And, you know, I've also had conversations with people that have sold to the big box stores, so I can direct some of those service bureaus that I'm talking to, to those folks. And clearly that I am comfortable that that experience wasn't good for them. You know, we can have some of those conversations, but I think sellers really need to educate themselves.

Um, oh, and negotiate a little bit better.

Yeah.

That's the thing I was thinking about. Just to your point of like, get a little creative and, and what, what can make it, what is that delta between what you're being offered and what you actually want? And like, then let's come up with a creative solution there for, for how we can solve it. Because usually there's a way as long as both sides are being realistic. Now, this is a great point to mention that if you are trying to sell a UKG book of business, you should call Lori. If you are trying to sell a payroll relief book of business, you should call me.

There you go.

And we should— yep. And I don't want a UKG book of business. So like, call us, sell us your business. We will take great care of your clients. I promise you that. All right. The, uh, that commercial's over. Now on to the commercial for IPPA. Now, but, uh, all right. So if I'm, if If I'm a new payroll listener, welcome if you are. Yes. I hope to meet you soon. What is the IPPA, Lori?

Yeah, so the IPPA is the Independent Payroll Providers Association, and it is a group of just about 200 service bureaus. It's been around for, I think, 25-ish years now. Didn't we just celebrate 24 at the last spring summit? So I think it's 25 years at this point, and it's just an association of independent payroll providers that come together in a few different ways and help not only provide kind of that peer environment, but also do some lobbying. So that's a big piece of what we've done over the last couple of years. And I am participating in the MTL committee, which is a joint effort between the IPPA and TPG. But at its core, the IPPA, you know, is a trade association for the independent payroll providers. And it kind of came out originally as a way for the independents to kind of separate themselves from the ADPs and the paychecks. Of the world. And 25 years later, here we are. And the reality though, for me, of what, what it is beyond that kind of dictionary definition that I just gave you is it's a group of people that truly care about each other and about the success of all of our businesses, right? The mission of the IPPA is thriving together. And that's really what we're doing. I mean, you can take a look at growth patterns of businesses that join the IPPA and they grow way faster than service bureaus and companies that don't join the IPPA. And part of that is because Twice a year we get together once in the spring at the Spring Summit, which is coming up here in March, and then once for an owners and executive retreat in the fall. And those conferences are very, very different in kind of not only the attendees that they bring, but also the, the vibe and the experience of participating in those. So the Spring Summit is the biggest conference. I think we had about 450 people last year trying to push to get to that 500 number this year if possible. We've got a huge vendor hall, which is really key. I think I mentioned that a little bit earlier. Absolutely love spending time in there. I mean, you know, not to give free advertising, but Poster Elite is somebody that I didn't really know about until I went to the Spring Summit, met him in the vendor hall, and was able to add that in to my base and grow revenue by $100,000 overnight. Right? And so there's a lot of really cool things that not only are additional services you can give to your clients, but also just ways to make your business a lot more streamlined. You know, we've got Rake Digital, who we don't currently use that, but I know a lot of people do and they're doing really great stuff in the reconciliation space. We've got all the different banking partners that are there, as you know, mentioned MTL a little bit, but FBO accounts are kind of a must-have thing in this industry right now. If you're, if you're moving money. And so there's 4 or 5 people at the Spring Summit in the vendor hall that can help you get, get that FBO account set up. So walking around there, I think is just really important and ways to be more efficient. I know CheckKeepers is is going to be at the Spring Summit this year, and they're an outsourced printing organization that, that we use, and they're getting into this industry and kind of revolutionizing it a little bit from that back office space. So that's a big piece of how it can help your business. And then there's the attendees and the sessions, right? So there's a couple sessions that are coming up this year that I'm super excited about. One of them is the conference is going to be opened by Farshid, right? Farshid, if you don't know who he is, he founded Paymax. Paymax, and then Anova after he sold Paymax off. And he just wrote a book about the payroll space. It's not that many people out there that have written books specifically about the payroll space, but he's super inspirational and has been in this space for a really long time. So looking forward to hearing him talk, and he'll be there with some of his books. Eric Maddox is doing a keynote on empathy-based leading, which feeds right in. Again, talked briefly about my podcast before, but part of the keys to my success is situational leadership. I mean, I know that's an official concept with the book, but just really understanding that in order to lead people, you have to kind of meet them where they are. And so, I love this idea of empathy-based listening and empathy-based leading. And so, I'm excited to see what he says about that. And then, another session that's really exciting that's going to be coming up is on AI, the AI edge. I mean, so much has changed in the world of AI, even in the last 12 months. I think that if you use ChatGPT for the first time, maybe 18 months ago, if that. It might have been even 12 months ago. And now I use it every single day for all sorts of different things. So I'm excited to see what the AI speaker has to say as well at the Spring Summit. So as you can see from just those sessions that I kind of pulled out, there's topics for everything about leadership in the company. There's sales, there's a whole sales track for sales leaders. And so not only do you get the benefit of the people around you doing the job that you do every day and being able to share that knowledge, but also great content that will be delivered in a variety of topics.

So much to pull apart there. So first of all, if you're listening to this and you're not a member of the IPPA, then you should be, because if you're interested enough in this space to listen to the Payroll In podcast where all we're talking about is the payroll industry and growing independent payroll bureaus, then you should be a member. Like, it's that simple because you're trying to improve yourself. You're trying to improve your bureau. That's the whole point. I'll never forget. I've told the story 78 times on the podcast, but, you know, the first time I went to the The Spring Summit was in 2019. And, you know, I met up with people that I connected with ahead of time that I reached out to on LinkedIn. They were fast friends. They introduced me to other people. Everybody is an open book, man. Like, it is not— there's no concern about competition there. It's all about collaboration. It's how do I help? You know, if Lori has this, hey, I'm curious what you guys are doing for your LinkedIn DMs. You know, how are your salespeople reaching out? And I say, hey, Lori, talk to me more about this acquisition. Like, Lori and I literally, you know, we met through the IPPA. Just last week we were texting and calling back and forth about a deal that I was, I was making an offer on. And, you know, that's, that's powerful, powerful stuff to have at your fingertips that, you know, let's just, let's just call it like it is, saves me thousands of dollars, maybe tens of thousands if not hundreds of thousands in a bad offer situation, right? Like maybe I make a deal I shouldn't have made because I didn't have all the context of somebody who's had the reps before and has looked at 12 other deals just before this. Now, the other cool thing, when I think about the IPPA as a whole, that vendor's word is always interesting, right? Like, if you're like us, you own a payroll and HR company, you've been called a vendor at an event before, you're treated like a vendor, you go sit at your booth and, you know, maybe people come by and they go, oh, please make sure you visit all the vendors in the vendor hall. But you, right in the middle of that, you interchange it properly to partners.

Yeah.

You know, one of the things that's really cool about the community is that We treat the partners like partners because they are. They help us grow. We help them grow. It's a mutually beneficial relationship. It's not an arm's length, hey, stupid vendor, stop trying to sell me stuff. It is, hey, if you've got a better widget or a better mousetrap, or you can help me, you know, sell posters or pack and print checks, like I want to talk to you and I want to encourage you to come back and I want you to be part of this whole family that we've got going on here. And not just the room split in half, you know, like a 5th grade dance with girls on one side and boys on the other.

Right, right.

But finally, you know, the event itself, and you've already touched on a couple of topics, but like, this is something you just can't replicate. I mean, the energy, the people. So we've got the paid keynotes. Eric is awesome. He was an interrogator that was part of the Delta Force in Iraq, which directly led to the capture of Saddam Hussein.. He's going to talk about negotiating tactics. He's going to talk about leadership. He is high energy, man. He is awesome. Uh, super excited about him. We have another marquee keynote in Jeb Blount, who, well, I believe the 2019 year was the last time he was there and he blew the freaking doors off the place, dude. One of the best storytellers I've ever seen on a stage anywhere. Like again, if you go back in the archives of podcasts and I spent a whole episode just breaking down how this guy tells stories from the stage, like he is such an amazing storyteller. I can still picture the bakery that he talks about where they would inspect the bread going through the wall of this, you know, in this machine where they were looking for metal in the bread. And, you know, he jumps in this bin because he was selling, selling uniform services for Cintas at the time. But yeah, like, he brings you in in such a way that's so unique and interesting. And, and, you know, that's not even talking about what he's actually talking about on the stage, right? Like, he's just an interesting guy to observe, but he's going to be talking about AI in Sales, uh, his latest book. And this guy's got Fanatical Prospecting. If you're in sales or sales leadership and you have not read Fanatical Prospecting, I think that's his most popular book. It is awesome. Um, a couple other things I'll highlight. We've got, you know, if I'm going to look at the agenda here, which if you go to IPPA.net, you'll see events on the website, go to the website. And now listen, if you're saying, Matt, it sounds like you're really shilling for this event. Well, I am. I am on the, uh, I am leading the planning committee, uh, this year. And I was actually fortunate enough, interestingly, where Lori kind of passed the baton from her to me. She's now president of the board, but at the time, you know, she was the last person to lead the planning committee before me. I led it last year, and then this year will be my last year, and then I'll pass the baton next to some other awesome person who will help to make this event a success and continue to grow it. You know, one of the things we really pride ourselves on, we talked about earlier, is like, hey, Making sure we get good representation on the stage, sales, leadership, marketing, operations, but also, you know, we want men and women up there. We want everybody to be able to look at the stage and say, hey, there's somebody who looks like me, talks like me, and is doing things that I want to do. One of the people in that, well, it might not necessarily click that one, but Kevin Hennessy's a guy you and I both know. Yeah. He's, you know, super bright guy. Gonna be bringing a sales breakout session on cultivating sales success. And he's a bulldog, man. He sells and he's somebody I'm really excited to listening to on that.

He's actually— Kevin is the person that taught me about AI for the first time. He was in a peer group with me and he said something about how he was using AI and I was like, okay, let me— I don't know, this is all feeling a little weird to me. So he, again, just like I was talking about before, right? I said to him, I don't know about all this. Can we— can you take 30 minutes? And so we hopped on a Zoom call for 30 minutes and he showed me kind of exactly how he was using it. And that's the hallmark of The IPPA, right, is that, like I said, you give as much as you take, but everybody there is just an open book and willing to kind of help out. So yeah, Kevin was the very first person to ever teach me about ChatGPT and AI. And so I'm forever in his debt for that.

Well, and I remember my first conversation with him. He was telling me how many units he was selling and I was like, what? Like, no, no comprende. Like, how? What? How? Like, I remember feeling so inadequate after getting off that call being like, all right. Maybe I'm not built for this. Kevin is just crushing me.

He's great.

And so, you know, I'm excited to learn from him and maybe not get crushed as hard anymore by him. But, um, and then another one, yeah, Jacqueline Silk is the one giving an AI talk, one of the, a couple of AI talks we have going on, but she's a tremendous leader from Bangor Payroll, came off of Bangor Bank. I mean, they're massive companies. So she's got different access, different resources, different purview. She hasn't grown up in the payroll space. And so I'm really excited to hear, she's going to talk about some of the practical ways to lead and implement and roll out AI in your organization and make sure that you're compliant, make sure that you're secure, make sure that, you know, you're using it in a way that's efficient for your team. So really, really, really excited to see her and hear from her among all the other great speakers. And we're continuing to announce more speakers here over the next coming weeks as we get all the sessions pulled together. But my favorite part of it has got to be the You know, just that, like networking with the individuals, you know, the hallway conversations where we say, all right, the session ended. Now I'm going to stay at the table with you for another 20 minutes after we're going to, you know, just talk through a situation that they maybe the speaker brought up and we kind of were talking about next to each other. But I know for you, it's the evening event. It's always the evening event.

I just like getting dressed up.

Now this year we're going with, with a theme of, uh, you know, the theme of the event this year. Is limitless. Tech plus people equals infinite potential. So you're going to get a lot on the tech side, but also like, how do we as leaders make sure, you know, I like, we'll give Paul another plug here because he, you know, Paul Abel was on the podcast a while back and he sort of introduced this concept to me. I don't know if he did it on the podcast or previous, but, you know, he's like, hey, I substantially reduced the amount of my team and we automated and outsourced whatever we could. And I turned my people into super employees. And this was sort of pre-AI revolution, right? Where it was like, hey, you know, what can we do to, you know, make sure— there's an old quote and I've been just using this quote lately. It's, you know, the factory of the future will have two employees, a man and a dog. The dog will be there to bite the man if he touches the machines and the man will be there to feed the dog.

So I hadn't heard that.

Yeah. And boy, if we're not getting darn close to that situation, right? But, you know, he talks a lot about, hey, look how much, and we really embrace that on our team. ADD, we call it automate, delegate, delete. What can we automate? What can we delegate to an outsourced partner? And what can we delete?

Yeah.

So I'm excited. I think we're going to pick up tons of great stuff from that. Now tell me a little bit, you might be closer to the frontline managers workshop. This is something newer this year that we're adding.

Yeah. So I'm super excited about that. I'm part of that kind of subcommittee working with Chris Caputo at Zuma Payroll, putting together that frontline managers workshop. And it really came from some feedback that we had gotten from kind of the executives of service bureaus, like, what is it that you struggle with the most? I have a service bureau that we actually do payroll for, and I was meeting with their HR manager and I just said, hey man, what's been the biggest struggle you've had in the last year? And he said, getting my frontline managers out of the weeds, right? Getting them to stop doing the job and start leading. And I said, well, did you promote them because they were the best at the job? And he's like, I'm the one asking questions here. I don't, you know, right? Like, he's like, I don't want to talk about that. And I was like, okay, good. But that's the reality is so many of us in this world, and it's partly because of the size that our companies are. But I think it's also just kind of human nature that, you know, we're going to promote the best CSR to CSR manager. Okay, great. And does that mean that they're going to be a bad CSR manager? No, not at all. They might be very well the most capable CSR manager. But what are you going to do to help them transition, right? And in smaller companies where the CEO or the leaders above that person are really focused on keeping the train on the tracks and keeping the thing going down the road, how much time are they really spending on leadership development? And it's maybe not even just because they don't have the time. It might be because they grew up in the weeds and they started this thing from scratch where they were the chief cook and bottle washer as they say, right? And so then, they became you know, a leader and they got people under them. But maybe the CEO themselves hasn't even had a huge amount of leadership training, which is part of where my blog kind of comes in and helps to inspire some people there. And where this Frontline Leader program is, you know, if you are a CEO that has a frontline leader that you haven't really invested from a leadership training perspective, this is the perfect opportunity for you. It's like $350 to get that additional session on there. We're going to have 3 sessions, one kind of Leadership 101. One about driving culture from where you sit. So, that's going to be that second hour. And it's going to talk really about how as a frontline manager, you can actually influence. I think sometimes frontline managers get so caught up in either, "I need to do what the CEO and the executives want kind of to my employees," or "I'm going to side with my employees and kind of advocate for them." I hate that advocate word, right? Because that advocate means you're going to stand with somebody against somebody else.. And so I think there's a lot of place in the world for advocacy, but there's no place in leadership for advocacy. And yet sometimes that's where our frontline managers find themselves, right? So they were the best CSR. They understand the struggles of the CSRs. They understand how executives don't understand what those struggles are. And then they go and they try to fight against the executive leadership team on behalf of the teams. And so really that second hour is going to be focusing on empowering those managers where they sit to truly lead. The teams below them and interact properly with the people above them. And then the third hour, we've got actually somebody from Paragon. The HR director from Paragon is going to be out and she's going to do HR for non-HR leaders, right? So she's going to be talking about how do you have coaching conversations? How do you make sure you have the right documentation? How do you ask some really good interview questions? Kind of all of that HR stuff. Because again, in so many of our organizations, when we've promoted a frontline manager, we didn't give them HR basics training. We didn't give them leadership training. And so this is an opportunity for those frontline managers to have that. Last I checked, there was 35 attendees registered. So that's awesome. There's going to be a really good crowd, a really good agenda. And I think you should definitely bring some more, some of your folks out. If you, if you find yourself looking at your team saying, what have I invested in these frontline leaders? What have I provided them from a development perspective? And if the answer is probably not enough, this is a pretty cheap way to not only reward them, but to provide them some of that training.

You bring up two great points there at the end, or well, one great point first and foremost of like, bring your people. I mean, the best, you know, I brought multiple people over the years and even as a smaller bureau, like I always want to have at least one other person there to get their perspective, you know, help them grow in whatever area or discipline they're focused on as a team. And I'm sold. Jason's coming with me this year. He's 100% going into that session now, like, you know, we're going to we're going to put them in there. And it is definitely, you know, the shoemaker's daughter doesn't have any shoes sometimes around our world, right? We spend a ton of time doing HR training for our clients and providing a ton of resources and maybe don't spend, you know, it's almost like, of course, you know that internally, right? Like you have to, you just told the client that thing. But no, I'm really excited about it. And that one particularly, I think is going to be fantastic. And Chris Caputo, worth mentioning as well. He's got a leadership session that he's doing. He's going to be That's going to be tremendous. So excited to see him. He's, he's such a rock star and such an awesome, just energy guy, right? Like I love a big energy guy. He brings positive energy to everything he does and just really, really great person to be around. And so I'm excited about that. Uh, we'll put a link to the blog. I'm loving it. I'm excited that, that you've started to share your wisdom with others and started to create. And, you know, I'll put that call out there to others. It's been a constant. Just, uh, said it at the start of a video I did this morning, like, hey, stop consuming and start creating, y'all. Like, no matter what stage you're at, there's somebody behind you, there's somebody next to you, there's somebody who doesn't know what you know that can benefit from what you have to share. And if you think about it purely from a documentation perspective, you know, there's, there's something very cathartic about documenting where you're at. Like, even if you look back to the start of this episode, like, hey, we, we got together 3 years ago and we were here. 3 years later, we're here. I'm like, you know, and the, the conversation continues to evolve and life continues to evolve. And but what a nice way to leave something, you know, that you're— you can kind of look back at later and say, oh man, I'm glad I wrote that down. I'm glad I took that picture. I'm glad I shot that video, whatever the thing is. Even if 2 people watch it, if you have it, you know, same way as all that camera and your camera roll on your phone, like, yeah, it's there for you to consume later and go like, oh, that's where I was at at that point in my life. So Highly encourage folks to start creating because we have so many brilliant minds out there that are just sitting on the sidelines when we could all learn from you. And we're grateful that you are now, Lori, more so than before.

Yeah, the blog's still brand new. We're still getting through our, my story, not our story, my story. So there's lots of humility out there right now. You can, you can read about kind of some of the failures that I've had early on in my career. And then once we get through my story, we'll get into some of the leadership kind of lessons and philosophies that, that I hold key to my success. So. So looking forward to seeing that grow as time goes on.

Well, we are all incredibly grateful for you sharing your journey and your wisdom with us, Laurie. We're all better for it. Thank you for joining us.

Yes. Thank you. Have a great day.

You too.