Should You Start Offering Payroll | The Realities of Starting and Running a Payroll Company

Every week we get more inbound leads for white label payroll than anything else in our business. So we rank number one, page one, or one through five typically on page one of Google for white label payroll software. And again, we get more inbound leads for that than we do any of our other services. People who are interested in starting a payroll company or, or adding a payroll line of business to their existing business. And so today we're going to break down Should you start a payroll company? Because I often joke on these calls, it is my life's work. If I can prevent one person from getting into the payroll industry and save them from some of these headaches and some of the nightmares that are in the industry, then I will be doing God's work. But conversely, obviously there's a ton of good and a ton of upside to being in here. So I'm joined today by John Mason Smith. John's going to help me break this down. He has grown and exited his own payroll business. So I feel like he's a wonderful person to talk to about this. Thank you for joining us today, John. 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.

Yeah, happy to be here. And I will say, on top of having my own payroll company and gone through that process, I'm also a serial entrepreneur and a sales coach. So I think I've spent a lot of time talking to people who have been in that entrepreneurial spirit thinking, hey, what do I want to do with my life here? So no, I'm excited to talk about it. Yeah.

And what do you want to do with your life? You need to know the hard, the dirty, the ugly in the payroll industry. And so that kind of starts with, as we're preparing for this, I bucketed it into 4 types of people who call us about starting payroll, adding payroll, etc. So we've got the fresh startup. They're kind of industry veterans typically. There's very rarely anybody I've ever talked to who's like, I'm just going to start a payroll and HCM company. I have no experience in the industry. I'm just going to rock and roll. So usually it's somebody leaving an ADP or Paychex. They've got— they're either in sales or operations. They think they can do it better. They want to go out. They want to get that equity. That's kind of bucket number 1. I see more coming from the sales side than anywhere else. That was my background. Background. The second bucket are CPA firms expanding their services. So usually this is, hey, we're already doing payroll for our clients in some way, shape, or form. Maybe we've got a wholesale agreement with ADP, maybe we're just using QuickBooks and we're processing 10, 20, 30 payrolls. We've realized it's enough that we want to get more formal about it, put a system in place, make this an actual line of business, and maybe even spin it out as a secondary brand. If you're interested in that model, definitely check out the, uh, the interview we did with Matthew Patrick. That's a great one. Then the third bucket is the adjacent service providers, so people like Financial advisors, insurance brokers, even have a lot of marketing agencies call, which I thought has been a strange phenomenon that like marketing agencies want to add payroll. And I don't even want to talk to them. I'm like, what are you thinking? Like, why would you do this to yourself or your clients? But the mindset there, right, is it with the adjacent service providers is, hey, I've got 2, 3, 4, 500 clients, whatever it is on this product. Now I want to try to upsell them another product. And so they think this might be a logical extension. And we'll talk about whether or not that is here in a second. And then technology integrators would be that fourth bucket. So these are people who have an existing app that's in an ecosystem where they hear from their clients a lot that it'd be great if you had a payroll module. So, you know, POS systems, you know, talked to one the other day, it was an ERP for manufacturing companies. And so there's a lot of folks that want to add payroll in and just aren't sure exactly the best trait to go down. Would you add anybody to that mix?

Yeah, I think I would almost rephrase the fourth one. You said adjacent service providers. I think the last one was adjacent tech providers. Right. It's complementary technology.

Yeah, absolutely.

I would also like almost split out that first bucket between in-industry folks that are operations versus in-industry folks that are salespeople, because I feel like the path to go from knowing enough about payroll to be dangerous to actually running a payroll firm is very different for a salesperson versus an ops person, you know. But absolutely, I think that's— that gets some minutiae. And I'm curious, Matt, which one of those buckets you fell into. When you started your company? I want to hear that story if you don't mind sharing it.

Yeah, so I'm certainly in the industry veterans sales background component, right? So my story I've probably told on here a handful of times, but I worked for a big national company that rhymes with Sladey P. And I, you know, the story goes like this, right? So I called up to corporate one day. I wanted to, I had moved here to Columbia, South Carolina. I'm not from this area. It's kind of a smaller town than I was used to. Was looking to put down roots. Wanted to grow a family here. My wife and I had been married a couple years and we were getting ready to have kids. So we moved here, wanted to be more involved in the community, called up to corporate, said, hey, can you guys give us a few hundred bucks to sponsor this local 5K? We'll get the logo on our back, we'll go out, we'll run, we'll volunteer. You know, we've got a satellite office here. We weren't super integrated. The brand wasn't well known beyond sort of the national footprint. And they just said, hey, Matt, we can't do that. We can't get involved at the local level with every office. You know, if we pay $500 every 5K for every office we have in America, shareholder value, blah, blah, blah, blah, blah. Right. So from that point on, I started looking at, you know, it was funny that same year we were losing a lot of customers. And this one I know I've told on here before, so I'll keep it brief. But in the CRM, we had a field for closed loss deals. And who did you lose the deal to? You selected from the dropdown. You had to as a mandatory field. They had to know who we lost our deals to. And you had your paychecks, your paylocity, your Paycom, whatever. And then you just had one bucket for other local competitor. And other local competitor was everybody local, you know, they could have 1,000 clients, but they're still just bucketed into other local competitor. Just so we all know, like, that's how ADP looks at us, right? It's just a blip on the radar comparatively. And that's probably true even if you have thousands of customers considering they're hedging a million at this point. But so from that point, I started seeing that number grow. Other local competitor was growing, growing, growing every year. All right. Well, how the heck is an $11 billion company losing a payroll deal to Joe's Payroll Shack on the corner who's got 300 clients. And like, you know, what on earth is this guy doing? And so then I started peeling back the onion. How do they get the software? All this stuff we're doing right now, we're about to talk about, you know, I spent the 2 years before trying to learn of, all right, how is this happening? Where are the gaps in the market? Where can we serve where they're not serving really well? When does it matter to have boots on the ground? When does it not matter? And so That was a big piece for me is just understanding like, hey, what's our angle? Like, are we going to just go head to head with ADP, Paychex, Paycom, Paylocity, everybody and try to win deals? That's not going to be a winning proposition. So, you know, we've got to go Sun Tzu on them and shift the playing field and make sure we're not fighting on their territory. So yeah, so that was me. Came from the industry veterans. What about you? When you started yours, where were you?

I was very much in the sales side. So I was selling for First Paychex and then I spent a long time at Paylocity being first, their only rep in the area. I spent almost 8 years at Paylocity before ultimately deciding to start my own. And a lot of that came from really the desire to have residuals. I mean, that really is all it boiled down to because as you probably know, most everybody in the payroll sales community gets an eat what you kill commission structure. And so I called a local payroll company who I asked. I just called the owner. I happened to know the guy and I just asked him, I said, hey, can I work for you, sell for you, have my own little logo, and then I just get a residual. You run the back office, which, you know, kind of is what it sounds like people are calling you for. Same thing. And the guy told me, hey, I don't actually want to deal with that. Why don't you just start your own payroll company? It sounds like that's what you really want to do. And then he told me, you know, here's how you start it. Which, by the way, if there's anyone listening to this who doesn't run a payroll company and wants to know what are the 3 things you need to do to start a payroll company, it's— he made it sound really easy, which, by the way, anytime you simplify it down this much, it sounds easier than it is to actually do it. But he was like, all right, you need to have, you know, basically a software provider that gives a website. For people to log into and it calculates the numbers. You need to have a bank that's going to move the money around and you need to have some kind of tax solution, whether it's baked into the software or if you just want to hit the ground running, you could probably just outsource it to someone like a, you know, MasterTax, PTM kind of thing, right? And I said, all right, well, which vendors do you guys use and which ones, you know, I called the vendors and I started shopping around on all those vendors, got some numbers, built a spreadsheet and said, holy moly, this is doable. Well, you know, this wouldn't be that hard. And then I discovered all the pitfalls one by one and did all the things I'm sure you did. It sounded so easy. Well, because like I was doing the numbers as a seller, I was doing the math in my head. You know, the number that really got me to do this as a salesperson was it was from Paylocity. Paylocity had a change in their sales strategy and a change in leadership. And this happens in any company as they grow and become public and you have new leadership come in. And one of the things they did was they saw a lot of their senior sales of talent was deciding to move on in their careers. And they said, how do we retain this top talent that has these deep industry relationships? And they decided to do a bonus based on like the total dollar amount sold for the history of your life as a sales rep. So I'd been there like, you know, close to 8 years and I'd been selling, you know, $600,000, $700,000 a year pretty consistently on a quota of $350,000. So I was having a, you know, I had a good time and it was like, it was like mold. It was like, I don't know, it was like $5 or $7 or some million dollar number, some crazy number.. And I realized that I wasn't getting an increase in pay every year. And I looked at my margins on that spreadsheet after shopping the vendors and said, okay, let me get this straight. On paper, on paper, it was like an 80% margin based on the cost of these vendors. I was like, oh my gosh. So if I, you're telling me you make $7 million a year on the work I did in the past and I don't make anything on that. If I can make a 30% margin on that, I'm making a few million a year. What am I doing? I gotta, I gotta be on the other side of this equation. And so that's the number that made me say, even if my numbers are way off, it looks like a cash cow. What am I missing? And we can talk about that, Matt, in terms of what you're missing, but all the things is the answer.

All the things.

Well, and Matt, the funny thing was, is I remember quitting my job and jumping down that path and we had bought a new house and had a baby all at the same time. And we were moving in, you know, my wife was super pregnant, hadn't actually had the baby yet, but we were moving into the new, she was due in February and it was like, I think it was January or whatever. And we were moving into this house. My neighbor across the street comes out to, you know, my new neighbor comes out to say hi and introduce himself, all the moving trucks pulling up. And he said, what do you, what do you do for work? And I said, I just quit my job to start a payroll company. And he said, oh, well, I run a small business. I have an IT company. We've got like, I think he said, we have like 5 or 6 employees. And he said the most devastating thing I could have ever heard out of his mouth. He said, why would anyone start a payroll company? I use QuickBooks and it's like $20 a month. And I was like, oh my God, what have I done with my life? I just threw everything out.

That's such a funny reaction though, in the terms of like everybody I would talk to would, they'd be like, what do you do? You'd go out and you'd start networking when you first start and you'd say payroll and they would be like, I use Paychex. Like they'd get like hyper defensive. Like immediately it would be like, here's what I do. Like, like don't talk to me about payroll. And because they're used to salespeople banging them over the head about payroll. And so the second you— I'll never forget this woman from a local PR firm. I can't, like, I can't even look her in the eyes now because of that. She asked me what I did at a networking event and I told her, and then she immediately shot back with an objection on why she's not going to do business with me. I was like, I didn't ask you to do business with me. I simply answered your question on what do I do? Like, chill out, lady. So anyway, so, so just know there's, there's your first like powder keg red flag of like what sort of industry you're getting into. People hold it near and dear oftentimes. And unhooking clients is 100 times harder than whatever you think it's going to be is like thing number one. Everybody who reaches out to me, when you, you go into these buckets of folks of like, hey, I do have an existing client base, you know, maybe I fall into that third or fourth bucket of I've, I'm an adjacent service provider or a tech company with an adjacent technology. I think, you know, I'm going to just bring on hundreds of customers because I have 1,000. Well, good luck, because people don't just swap payroll companies at the drop of a hat just because you hang the shingle and say, we're now offering payroll. Even if they've asked you for it 16 times in the past, the reality of the transition is going to kick in when they get ready to sign on that dotted line. So I don't want to be spoilers here. It's not that I'm going to suggest nobody ever start a payroll company, but the— but so it's important to note, like, it all starts with that, like, realistic math. I think you kind of jumped there, started down this path of like, Funnel math, whatever you want to call it, understanding like, hey, how many people am I going to have to talk to to get an appointment? Of those appointments, what percentage of them are going to purchase? What is the average deal size? Now I'm getting into the same way that John talked about backing into sort of a quota, right? He mentioned the $350K quota. That's the other thing I have to get people used to is like that $350K quota. You were selling some good-sized deals to hit a $350K quota. Most of the people that reach out are like, hey, we're going to sell this to our 10 employee groups. That are, you know, if you sold $350 grand to nothing but 10 employee groups, you would be like top 1% performer at every payroll company in the country because it's hard, right? So your average, so let's start with the math there. 10 employees, you're going to do payroll for them. That's probably $150 a month if you're charging like that's a quote unquote premium offering because think about it, they're going to go to Gusto and they're going to pay $50, $60 a month for 10 people. And so now you're asking to pay $150,000. What's that, $2,000 a year? So now, you know, and they say on average, like the average deal size in the small business space is like $2,500 a year. So you're— you've got $2,500 a year for your average client if you're going to focus on small businesses. And so now how many of those do you need to book to make any money? Right. So like, get your— get your pencil out if you're playing along at home because it's a lot.

Well, and Matt, I would almost want to zoom out for a second because I think It's easy for you and I who've done this to think about all the struggles we had to get to a point where it was a viable business. And I want to point out, like, I actually started scribbling down, as you said this, a list of potential pitfalls because there's more that we haven't talked about that I want to— I think we should loop around on. But before we do, I do want to point out that there's a reason that these payroll companies are popping up everywhere and there's a reason that payroll businesses are being acquired left and right. And the answer is, once you get it working, it is a cash cow. Like it is a— it is truly a cash cow business in a way that you don't see in other industries. And it's why it's so attractive to outside equity. And it's also why, you know, we both told this story about how defensive people get when you start mentioning that you run a payroll company. And the reason is because there is an aggressive, almost like a used car dealership sales culture that arises out of these big companies who have reached market saturation that are desperate for the next sale. And they're just throwing entry-level salespeople out into the world and saying, be persistent, be persistent, be persistent. And that puts this attitude, I think, on our industry from the outsider's perspective of, okay, someone says the word payroll, it's going to be followed by an aggressive sales pitch. And, you know, there's a, there's a process that, you know, I mentioned I'm also a sales coach. One of the things that, that I like to do is this little 4-step exercise whenever I look at any kind of idea that people come to me with. And people come to me with ideas all the time. And I'm sure you get this too, just being an owner, right? Where people come to you and say, don't tell anybody, I've got this amazing idea. I don't want anyone to steal it, which is always hilarious.

Stealth mode.

And then they go and sign this NDA. My idea is to sell shoes to cats and you're just like, come on. Right.

Let me just click pause on that real quick. The, uh, the more people you share your idea with, the more likely you are to get sales when you hit the market. So like the stealth mode kills, stealth mode kills more companies than it, than it helps. So there are rare occasions when it makes sense to go in stealth mode. And I guarantee if you're listening to this podcast, you're probably not one of those rare occasions. No disrespect to the, no disrespect to the, uh, the payroll and crew out there, but you're probably not raising $50 million to bring some biopharma drug market in 3 years from now that if anybody gets ahold of your secret sauce, it's going to be trouble for you. I can tell you right now.

Well, I mean, you can split most business ideas into 2 buckets, which is, you know, the traditional predictable bucket. And then I think the blue ocean sales strategy where you're like coming up with an idea that's so unique that that's, you know, and yeah, the blue ocean one people get nervous about. Like, I've got this crazy idea no one's ever had versus apparel company. Everyone's kind of familiar with the general gist.

You've got competitors.

You don't have to be as secretive, but what you're wanting— you know, the question I'm asking in my mind, and this is something that I've had asked of me and I love it. What is your unfair competitive advantage? What's the thing that you're bringing to this equation that ADP and Paychex or whoever else just can't compete about— compete against? What's unfair that you're bringing to the table? And so like when I think about, you know, the kinds of like business ideas that people come to me for, the thing I'm thinking about is what's my niche going to be? What's the thing that I'm going to make? And the phrase I use is sticky niches, getting this like little corner of the world that becomes yours. And you can do this within the context of a sales job, but also within the context of a payroll company. Because every time I sold for, you know, the big national guys for Paychex or ADP, it was usually within the context of some specific niche that I established myself in, whether it was being the best friend of these CPAs. And I was like in that CPA community, whether it was being the ACA expert during the years of the launch of the Affordable Care Act, whether it was being the guy at the paychecks office who just understood time clocks. So everybody brought me in to implement their time clocks and like split the commission with me if I'd help them set up the PST-1000s. Like you can find these little corners of your sales environment to dominate the world in. And so, you know, you mentioned this idea of like these people that come in kind of not familiar with the payroll industry and just say, hey, I'm just going to wing it. I think the first step is always starting with what you know, because too many people come up with business ideas that are so far outside of their area of expertise that they don't see how bad these ideas are, how bad their strategy is going to be because they've not been living in it. So I think that's why you see so many people that hit that very first category, those 4 categories you mentioned that are ADP or Paychex alumni that are operations or sales folks. They, they're starting where they know, right?

Well, let's talk about that for just a minute. Let's, let's unpack that. So the— there's a couple of different ways to do this, especially like what you're describing as you're talking about that. I'm I'm thinking more of the tangential service and technology providers who are like, you know, because obviously embedded payroll is a big deal right now too. So that's getting a ton of play everywhere. And you're seeing a company that is, let's just, let's just use that manufacturing ERP solution. So my support model for a manufacturing ERP solution looks very different than my support model for a payroll company, right? So like just going in eyes wide open, knowing what the support expectations are, like if there's if there's a payroll error, something to fix, question, whatever, like the expectation is an immediate response. Like, I mean, we average less than 2 hours in our response times and we will still get people complaining that it takes too long. And so the, I mean, that is the expectation of the world that you're going into. So also as you're evaluating like a, whether you're an independent person who's looking at setting this up as sort of your own baby and go to market with it, or you're a company who is adding it. Like having those proper expectations around what customer service is, what it looks like, and what the expectations are from the customers is really important. And the complexity of it, right? Like, so you have to have expertise on your side to be able to answer. They never ask like, hey, where's this button in the system? It's always like, you know, what's the tax in this third local in Ohio over here? Like, I mean, the questions can get so deep and so wide that it can get very, very challenging. And so that's like, you know, the— all right, let's— money, like, can I make it make sense financially? Am I being realistic about the financials? Because again, so I always tell people, especially if they're trying to add it like a CPA firm, hey, I'm going to add this as a revenue line and I only have 300 existing customers. I'll give them that example of, well, do you know that an average quota-carrying new rep can maybe sell $175,000 in the small business space and it's their full-time job? It's all they do. Like literally 40, 50, 60 hours a week, only sales, only outreach, and they can scratch and claw together a couple hundred thousand dollars. So how are you going to do that and serve the clients? Right. So like, that's like question number one is like, does this math actually work? And then let's get past, you know, I've got some math here about the investment into the business. You know, you're looking at a $10,000 to $30,000 to maybe, maybe more if you license to your point, one of these more expensive softwares. If you get an iSolved, a Kronos or whatever, now you're talking about a $20,000, $30,000, $40,000, $50,000 licensing setup fee. You know, excluding heavy licensing fees, you're looking at $10,000 to $30,000 $10,000 to get set up. So now you've got that chunk of cash laid out, you know, for a bigger company that's adding it as a business line, some of these things go away because you've already got off, you know, you've already got insurance, you've already got— you're already incorporated, you've already got your website, you know, all the little stuff that, that piles up when you're starting a company. But if you're starting from scratch, you've got to account for all that. And then you've got to account for the fact, if you're like me, where I did not make any money for 3 years. And so now I've got 3 years worth of money coming out of my personal coffers. Because again, like, what's this math look like on, you know, $100,000 a year? Like, oh, if you do $100,000 a year in revenue, after all your expenses, like, you're left at the poverty level, right? So like the, you know, and if you had $100,000 in revenue as a solo owner in your first year of payroll, you really did a pretty damn good job, to be quite honest. Like, that's a pretty good year of hustling and going out there. Because you gotta think, they don't start day one right? So you got to go out, sell it, implement it, get it going, get revenue recognized inside of that year. It takes a while for that ball to get rolling. So like also accounting for when you've got the spreadsheet out, like how long is the sales cycle? And that's another thing people struggle with is that, you know, if you're hiring, even once you get into the point where you're hiring salespeople, like expecting them to bring in a penny in the first 6 months is, uh, is ambitious if, if you're a smaller organization because the sales cycle takes, 30 to 90 days, depending on the size of the deal, frequency of the leads you have coming in or going out. And then you've got to get them set up before they start paying revenue. So, all right, I'm gonna hit pause there. Math, anything else to add on the math front before we start looking at the next step here?

Um, I want to come back to the math at the end here because I think one of— I've been writing down as we talk a growing list of pitfalls, and I think that would be something that we— and one of them, which I'll give a little teaser on, is underestimating soft costs and underpricing, which we'll have to talk about. But no, I'll, I'll pause. I'm literally— I got a list running now of pitfalls, I think, at the end that we should talk about. And I think—

Yeah, for sure.

You might have some contribution.

Yeah.

Well, but, you know, in terms of like—

Yeah, please go ahead.

Well, I was going to take us through it. So, you know, I'll say the 4-step process really quickly. We don't have to drill into it, but the 4-step process of like thinking about where am I going to enter into the payroll sector that anytime you launch a business, in my mind, one is starting with what you're familiar with. Two is finding a problem within that industry or tangential to your knowledge set. That has 3 characteristics, which is, is it endemic? Is it something that every one of your— of the people in this sector are experiencing? Has it been a problem for a long time? And is it expensive to someone in the mix? So if you imagine you're an insurance agency, everybody that you work with presumably has to deal with payroll, right? It's been a problem for a long time. Everyone's upset with ADP and Paychex. Maybe there's integration issues between you and their customers. For some reason, presumably they're coming to you about this problem. And it's expensive, right? There's money to be made there. It's not like you're just doing a volunteer service. But then the next step is just talking to experts that are outside of your knowledge house that are both industry experts and out-of-industry experts. And that's talking to you, Matt, or talking to folks like us that have done this before. I think a lot of people come up with a business idea and to that point that we talked about earlier about, you know, keeping things to themselves and being worried about having those conversations. When I, you know, not to go too off-rail here for a hot second, but when I launched my little real-time payroll solution through Signature Bank, I think the one person I wanted to talk to most was Steve Sarawitz because he ran Paylocity. I had his cell phone number. He was my manager for a short period of time when I was a Paylocity rep. Guy made a billion dollars. He knew what he was doing. And I was scared if I told him my idea, he would just do it without me. And then ultimately, a few years into that project, I called him and said, hey, I hadn't talked about this, but I wanted to get your opinion. And now that we're established, I feel like I can. And the first thing he said to me was, John, I've been doing payroll for so long. I'm so sick of it, man. I'm so— I'm never going to do anything in the payroll space again. Like, I didn't have to worry about this. He had his own thing. He was making movies with Wayfair Studio. He was making the Garfield movie. Why would he come back into the payroll sector? But the last step of that 4-step process is just being the glue that ties all of it together versus being in it and being a one-person operations department. So that's my little 4-step process. But when we talk about like kind of the pitfalls that fall into that, I mean, that's— I think, I think you've hit on a lot of these already. Do you want to jump into that or did you have anything you wanted to chime in on that?

Let's go to So, so like, first you got to have a why, right? So one thing we probably glossed over here is I'm looking at my notes is like, why are you doing this? Like, are you doing it to make money? Are you doing it for independence? Are you doing it for equity? If you're a company that's adding it as an additional revenue line, like, is it to make the client stickier? Are you, are you trying to retain your existing clients? Because to me, retaining them is better than the revenue that you're going to get more often than not. Anytime I see, you know, the number of times I've had to, I think some people are thinking I'm obnoxious on these calls. Like, it just happened earlier this week. How many customers can you guys take at once, Matt? It's like, anytime I've ever been asked that, it's equated to like 1 or 2, right? Like, they've always thought it's going to be— whether it's an association who thinks that the second they roll out our stuff, every member of their association is going to sign up, or white label provider that thinks that, you know, the second that they roll it out to their existing client base. And we had an insurance company that come to us. They've got 500 customers. They thought the second they sent that first email out, they'd have 50 signups. And, you know, we're looking at 2 years ago, I think they just gave up. I don't think they signed a single payroll. Um, the, uh, cause again, that's the other, you know, like, so, so why are you doing it? Are you prepared for the reality of it? Right. I often joke with CPAs, you know, because they're very vocal. CPAs are our best partners about, you know, their deadlines. Right. And I'm like, well, you know, I appreciate all your deadlines. We have one every dang day. Right. Every day someone needs a payroll process. Every day taxes are due. Every day someone has an emergency. Like there's, you know, And to your point, like after a while it does wear you out. And so you have to be ready for like, hey, you know, I own a marketing agency as well. I guess what we don't have over there are daily tax deadlines. It's a lot easier to maintain staff, you know, like happiness and the culture when people aren't stressed all the time about tax deadlines. So there's a lot of stress in this industry. It's something where you're creating. But again, you got to make sure the why, right? Am I trying to build something that's saleable? Am I trying to build a job for myself where I have some control over my own destiny? Am I trying to make make my clients stickier? What is your why? And then get real about that. And then that can help to guide the decision as well. Again, if it's to make money, go back to that spreadsheet. And I always joke with people, I'm like, whatever, whatever money you think you're gonna, you know, however much you think it's gonna cost you to start, double it, then double it again, then maybe double it again just to be safe. Whatever your forecast is, cut it in half. It's not gonna happen. Like, it's, you're gonna miss it. Like, the, just be prepared for everything. Not, you know, the, the whole everybody's got a plan until they get punched in the face. Like, you know, we spent 2 years planning and then basically just you know, wadded it up and threw it in the garbage the second we started bringing on clients because everything changed the minute we had sort of faced the customer with what we were doing.

And by the way, Matt, I have all my spreadsheets still. If anybody ever wants to talk and just reach out to me directly on my spreadsheets and my actual numbers, go to johnmasonsmith.com. It just redirects to my contact page. You can send me a message. Nice. But Matt, to that point, what was your why when you started Guru? Tell me your why. I'm just curious to hear. At?

Yeah, so we go back to that, uh, you know, I was a guy sitting there, 30, early 30s, and we go back to like, what's my legacy going to be on the face of this planet? What am I going to do if my company that I work for doesn't care about my community? How, how am I going to put more in my community? And look, John, I just had this conversation with somebody yesterday of, hey, look, I was one of these guys, I had a cushy gig making a few hundred thousand dollars a year. Giving 10% of that to charity is going to make a pretty nice little impact. I can I'm not working 80 hours a week over there. I'm working a 40-hour work week. I had a pretty comfortable thing. I could have just put it on cruise control like so many, you know, sales and sales leadership folks do, live an awesome life, have great work-life balance, you know, make an impact in my own way. But for me, I wanted to make an impact that was bigger, right? So we were a mission-based company from the start. We give away 5% of our business, you know, 3% of the revenue, 1% of the time, 1% of the product. And then I also, I influence people to give through our actions and the things we talk about here, right? So that's always been the vision is, hey, look, if I can influence another 100 people to start giving a little bit more too, and then maybe influence a few of our clients to put in place that, uh, you know, we've had clients reach out and say, hey, we see you guys volunteer every month, we started adding volunteering as a group activity for our team for team building. So like, it was impact, you know. My, my life mantra has become impact over income. And you know, I'm not going to act like I'm some altruist who doesn't get paid a lot of money. Like, I, I make a reasonable salary, and I'm going to continue to make a reasonable salary, and I, I Well, certainly money motivated, but I know that the more I make, the more impact I can have too, right? Because those, those two are tied at the hip. We changed, we started from the beginning. So, you know, I was speaking to a graduate class at USC here yesterday and we were talking about in the early going, you know, are you going to have 3% of revenue or 10% of profit or this way or that way? And it's like, well, we didn't make any freaking money for 3 years. Like 10% of profit would have sounded a lot better.

10% of zero. I mean, I love it. It's beautiful. I will say, I think every single business owner and entrepreneur in this entire world's top driving motivator starts with money because otherwise you can't live, right? But beyond that, if you scrape away that, you know, when I looked at starting my payroll company, my driving factor was I wanted a lifestyle business. I wanted, in one word, autonomy. I had been a top-performing sales rep, and yet I was still hopping on a Monday Zoom call. You know, the team wasn't hitting their number. And so I was getting yelled at even though I was hitting my number. You know, I was getting tired of that life. And I just— I was on cruise control because I had all these referral partners just sending me business. So the job wasn't hard. Hard, but I wanted autonomy. And I think, um, to your point, Matt, about like, you know, why are you building this company, it's also easy to, I think, fall into the same mistakes that people before you have done. And the one nice thing, like, I knew when I, when I started the payroll company, before I did that, I had a string of failed businesses that I was doing in parallel to my payroll job because I had time. You know, I was just like, okay, I'm on cruise control, I'm selling these deals, and now, you know, I don't have that much to do after I make my calls and visit my CPA and my 401k advisors and my health insurance brokers. Now caught up. What am I going to do? I launched a bunch of dumb businesses just for fun, just to see what would happen. So a couple of examples was the Half Suit. Partly Proper presents the Half Suit. It was a Velcro suit. I got a patent pending on the closure mechanism on the back. And it's because I had a sales manager who was making me hop on a video call at like 8 AM on a Monday, and I didn't want to wake up till 9. So I had a, uh, I could slip into this suit and my mom cut the back of it out in her retirement. She's, she likes to sew. Got two Velcro panels. And I found out no one had ever patented this. And I went and I did a Kickstarter to try to start the work from home Velcro suit. Now this was before COVID because after COVID people found my dead Kickstarter and started messaging me asking if they were still available. And I was like, that thing's long dead, man. I had a, I had a lead sharing website for salespeople to share phone extensions. I was like, this will be a great idea. I called it like, uh, I think it was Connect Me Please. Or no, no, it was, uh, oh, it was, it was something. I don't remember the name of it anymore, but the idea was, you know, you could go in and say, okay, I called the CFO at this company and here's their phone extension. And other sales reps could like look, you know, share that information. And if that phone extension worked, they could give it a thumbs up or a thumbs down depending on what happened when they called it, leave notes, and they could all like a collaborative lead list was kind of the idea. And ultimately these ideas were all dumb in their own way. They all failed for various interesting reasons, in my opinion. But, you know, at the end, you know, I was like, okay, what's the— I started over again. And that thought of like, why am I trying these weird ideas? When I know payroll like the back of my freaking hand, you know? And so I started my payroll company because it was boring, because it was going to be a lifestyle business, because yeah, I'd have to suffer for a year or two, but then I'd have predictable recurring income. You know what, really, there's a guy who ran a local payroll company. I, I don't, I don't know how he'll feel about me calling out on this, so I won't name them in this example, but he knows who he is. He runs a local payroll company, and every year, uh, they take their like 10 or so employees out on their company yacht. And I thought, I don't have a company yacht, I'm doing something wrong, right? So that was, that was the thought. And I'm not sure, you know, this guy has been—

there's actually running it for a while. There's actually a local yacht guy for me too, ironically enough, which one of my buddies said, you know, you never, you never get the yacht, you know, as an employee, right? Like, and, and so— no, but, but I'll say this, right? So like John nailed it there. And the first thing my accountant said to me when I signed up with him to do our taxes, he's like, oh, you're in the annuity business. This is a great business. And like, to your point, like, we forecast 7-year retention for clients. You know, we're 10 years old, so the data's a little mushy, but it's like, you know, that's what we forecast when we talk about, you know, you go back into the same numbers you'd look at for any business. What's my cost of customer acquisition? What's my lifetime value? You know, what are my target margins? Like, all that stuff's readily available for any service-based organization, payroll companies tend not to be too different. Now, the thing I would encourage people to do is go, yeah, to your point, like, hey, is this all I know? And I'm not creative enough, or I just don't have any other expertise to come up with another way to make money if I'm an independent founder? Because I do think if you're an independent founder, unless you just have like a serious sickness or passion for payroll, and your, your only motivator is money, and like having the autonomy and the independence, there are 100 other blueprints to follow that don't have all the pitfalls we just talked about. You don't have to worry about tax Yeah, right. Did you, did you, you know, yeah.

What did I sell?

Yeah. Yeah. John, John's not currently owning a payroll company as you just, you know, as we've alluded to. So, you know, I joked with somebody after this past year and it was one of our most miserable year ends ever. And I was like, why the heck am I playing the game on hard mode, dude? Like why am I in anything associated with taxes? Like what the hell are we thinking?

Well, I mean, I don't want to cut you off. Sorry.

No, no, no.

Go ahead. I have thoughts. I mean, let's talk about like Like to the idea of like, I do want to talk about why I'm not doing payroll anymore. Because I think the thing about the payroll industry is it's so easy to exit because what you're selling is to your point, to our point earlier, it's a cash cow. It really is an annuity product. So selling, easy sell. There's no hard way to get out of payroll. The thing is, is when I think I go back to this 4-step process of finding your niche, I found the niche within the payroll industry that proved to be more profitable than doing payroll. That's why I left the payroll industry. Industry because I found another business model that was a lower-hanging fruit. And to your point, Matt, the getting got a little hard. And I, I think the business that I've ended up in is probably a lot harder to sell, but I wasn't looking to build something to, to build up and sell. I was looking for, um, you know, a lifestyle business, right? And so payroll is not really a great lifestyle business, especially at the beginning, because you have a deadline every day. I, I'm sure you and I have both spent many times at the— especially probably at the where you're like, okay, I got to get this thing done. I'm going to stay up late over the weekend and do a massive implementation for a big client and just load spreadsheets all weekend. Or I got to print paper checks. I had those restaurant owners who said, hey, I forgot to submit payroll correctly and I need you to write me 50 manual checks right now and run it down to my office an hour from your office. Like we've done that because it's paying the dues to win some of these customers. You know, when I was running my payroll company, there was a, I'm sure most people know about this that listen to this podcast, but there where there was the big Cache incident. Our big ACH vendor went belly up, and that was in the first 6 months of the launch of my payroll company, which that sucked, right? But it had me realize, okay, well, here's an endemic established expensive problem moving money around for me as a payroll provider. So I started calling in and out of industry experts, right? And that's how I found Signature Bank had a real-time transfer system. And I said, let me go up to New York and talk to these guys about making this a payroll product. And all I did was connect this bank link with an ACH expert, which was Novello, who Ellie Polanco at Novello, can't say enough high things about her. And if she was on the podcast, she's amazing. So I got Ellie involved and they found Ellie through a mutual partnership. So we started working with Ellie Polanco and then we brought in, you know, a bunch of payroll company owners who were in the Cash App lawsuit with me. And we ended up building out this really lucrative project. And I was like, all right, well, I'm making more money from this, which takes 10 hours a week. Week than running my payroll company. Was there a business model that was going to succeed at my Astra Payroll Services company? Absolutely. But I was, you know, why would I put in the work? So the problem I think that most people run into when they give up on the payroll industry is it's, it is a long game. It is not a short sprint, no matter what, right? So like, I don't want to skip over this. If you want to chime in, you're welcome to. And then I do have my list of pitfalls I don't want to miss before, because I think that's gonna—

yeah, we're gonna hit— we're gonna, we're gonna kind of circle into some like pro— like pros, cons, and then, you know, suggestions for moving forward. Because I, I think you already, you already stole a little bit of where I like— some common advice that I give every time I talk to anybody who's considering this, even if it is just an additional business line. Like, here, here's the approach you have to take. If you take any other approach, you either A, you have more volume than what we've described here of just existing client base or access to potential customers, or B, you're just being naive. So I'll finish your thought and then I'll start to round the corner there.

No, I want to hear you around the corner. I can go on forever. I will say, yeah, so my little list of pitfalls, that's the only thing I'm worried about.

So pros and cons, right? So as we've said it so far, so pros, you know, look, if you're looking to own a business and start a business, obviously obviously, I'm a huge advocate for entrepreneurship. If this is the path you decide to take, then it will be a fulfilling but challenging one, right? So if you're looking to add additional business lines, like we talked about, pros are you're going to make your clients stickier, assuming you can have some correlation between the services that, that make them come together. I think there's also this perception of stickiness that doesn't really happen. Like, if your customer really wanted to cut payroll out of the equation and go to another provider, are are you going to unbundle their package? Are you going to make them leave the entire thing? Like, how sticky is it really? Or is that a perception or a reality? As John mentioned there, it is a high M&A activity market. So you're going to have a buyer should you ever want to exit. There's a long-term, you know, sort of compounding effect. If you can hang in this game, it's like everything else, like years 10 plus, you're going to have that compounding of building a customer base that continues to grow. You've got a 90% client retention rate on average in this industry. Which is phenomenal. I remember talking to investors and they're like, you know, you can't really be expecting your customers to stay this long. I'm like, that's the industry norm, dude. Like, that's not just us. That's the— so those are a lot of the pros, right? And then cons, we'll get into pitfalls. We've already kind of talked about some of them. And then, and I'll have John start to chime in with some of these pitfalls. But, but let's talk about like, if you, you know, do you have the capital? Are you ready for the daily pressure? Do you have that sort of even keel personality? Can you handle sales, right? Like whether even if you're adding this as a business line, you are going to need salespeople to take people through a sales process. Nobody hits a landing page and signs up for payroll. Gusto learned that. SurePayroll's learned it. Everybody's got to talk to somebody. They will not do it without talking to a human. It just won't happen. And if they do, they probably aren't your customer because that's not going to be your target customer base is the type of person that's so tech savvy that they're literally willing to just like sign up for a payroll service without speaking to anyone. Um, and so then at that point— Good point.

Got it. You remember I mentioned that guy at the beginning who, when I told him I started my payroll company, he said, why don't you just use QuickBooks? Can I tell you that guy still texts me asking me payroll questions? He's had me hop into his QuickBooks 10 times because he has no customer service.

Right? Right.

Yep. And I continue that.

So here's, here's my number one suggestion that I want to hear some of John's pitfalls is the, so if you use the, what's now becoming, I would call it almost traditional, we talked about it, I think with in my conversation with Ellie about the MVP, minimum viable product, coming from The Lean Startup, Eric Ries' famous, famous book written almost 20 years ago now. This is how every startup that comes out of the Valley for, for decades was built of, hey, look, we're going to build the minimum viable product. That means kind of the one feature that all of our clients will need. We're going to build an application that does that and then validate it with the market that we're trying to sell into. But before we even build it, we're going to go speak to them. Them and validate that they would pay us money for this feature, product, service before we build it. So I would highly recommend going on and speaking to at least 25 people. I'm setting this bar incredibly low because I know most people won't even do this, is have sales conversations with at least 25 people in the target industry, which is the most important piece. John mentioned earlier, I always say it the other way, the riches are in the niches. I mean, it's not just a clever saying, it's reality, right? Like, like right now, I mean, we've, we've been seeing nanny-based payroll systems get acquired for 8 figures, right? So like, there is a ton of value. TSheets, I brought up the example 100 times on here. TSheets was built as just being, it's just another timekeeping software, but it was the first timekeeping software that integrated seamlessly with QuickBooks and was high functionality. They sold for $100 million, right? So like these companies, like people get scared off by niches, they get FOMO. But if you are, we go back to dentalpayroll.com, talked about dentalpayroll.com on here. I let the domain expire a while ago. So I hope one of y'all has bought it by now. But that like starting one product to one market, you will be able to niche down. You'll be able to be more defensible to your point because it's hard to be defensible with your ICP on like, hey, what makes you unique? We all say the same dang things. We're local is number one, right? Like, and that has value.

Value.

That has inherent value. There's a percentage of small businesses in every single market that would prefer to do business with a local provider than a national provider. So you're going to have a leg up with them. There's one sort of niche, if you will, but that isn't enough. You need to go industry-specific and niche down even further and talk to those people and confirm they would actually switch and what would make them switch before you go starting it. All right. So let's talk about— and I want to hear what you want to add there. And then let's talk about some of the pitfalls because I know we've got about 10 minutes Yeah.

And Matt, this, this could easily be a 3-hour conversation.

I want to point out we could go full Rogan on this thing.

Well, and that's the other side of this is like there's another topic that I don't think we're going to be able to really drill into as much as it deserves. And this could maybe be another conversation at some point, which is selling against ADP and Paychex. The sales strategy as a local payroll company, it really does boil down to you're not competing against the other locals. You're competing against the big— there's, there's low-hanging fruit. Too many people, I think, get stuck like their head in a, like a twist thinking about how do they sell against the hardest vendor to sell against. But at the end of the day, you know, there's a lot of low-hanging fruit and you can just say, all right, you're a bad fit for me and find your target audience and just sell to those guys. But, uh, you know, I wrote down—

let me hit pause on that real quick before you start.

Yes, I know.

It's like when I was at— when I was at Sladey P or whatever their name was. No, I feel like I don't— I don't ever know what my stance is on this. One episode I'm like, yeah, you sort We're gonna ADP. Another one, I'm like, uh, this big— this other big company, uh, but the—

they don't even care about us. That's the thing. They're so big, they don't have time to care about this.

Paycom had an ad campaign when I was there that was purely just saying, hey, we will reduce your ADP invoice by 15 to 30%. That was everything that was on the ad. That's it. It was, we'll reduce your— so, so if you don't think as a local provider— they're not a public company, right? And so like, if you don't think as a local provider you can't— you know, I would never compete on price. That's not how I would go into a deal. But like, again, pick your niche. They're just going after ADP customers only, right? And they were just marketing like crazy. Like, I mean, there was— again, at that time there were 600,000 ADP customers. That's plenty of prospects, it turns out.

Yeah, well, and that's the thing. And by the way, I, I could easily get sucked into a how to sell against ADP and Paychex kind of thing, which, by the way, ADP and Paychex, they have a strategy for selling against you too, right? It's, it's— oh yeah. And we could—

I mean, it's, uh, that's all you, buddy. You better have, you better —those landmines. Yeah. And that's a whole other conversation that go, but they're setting landmines. You need to be proactively dismantling those landmines before they have a chance to talk about them.

My problem is if anyone reaches out to me and says, "Hey, let's talk about selling an ADP and Paychex," I will talk for free for hours about it. I just love it. And it's because it's fun. It's almost like mental chess. But going back to the pitfalls, I wrote down really, really 3 pitfalls, which is underestimating timelines, right? I did my spreadsheet with my projected P&L just pulling magic dust out of nowhere and trying to like come up with these numbers, and it was wrong. It was so wrong. So just, you know, to your point about doubling timelines. But then the second one is underestimating soft costs. I saw these margins on paper that were astronomical, and I forgot that I have limited time and I have to pay someone else to help me if I, I don't want to be doing all the work. So my margins were overestimated because of the soft costing. But it also, you know, that same, the fact that a lot of our costs in this industry are soft costs and soft costs being someone, you know, picking up the phone and, you know, talking to a tax department or on the phone with a client troubleshooting a problem. The fact that we have those soft costs is great because when you want to exit, you typically exit to a bigger company that has distributed costs across a wider service department. And so to you, like they don't, they don't even look at that as a concern. They're just looking at top line revenue. So it's awesome. And then the last one is a saturated sales environment. And that I think really gets back into what we already kind of jumped into. There are two subcategories of pitfalls related to that, which is, you know, when you start this new operation, a lot of— I think a lot of people get tempted to say, I need to grow urgently, because again, they've underestimated their timeline, and they're thinking they're behind immediately. All right, they think they should be able to hit the ground running. Oh, I sent an email to 1,000 clients, and I didn't immediately have 50 sign up, I'm behind. So now I'm going to get desperate and now I'm going to do bad ideas to get those sales. And the two most common bad ideas on sales is underpricing and taking bad clients, right? I know I, I thought, I know ADP and Paychex's pricing. I'll just be 10% less. That's what I told myself. What a dumb idea, because I just telegraphed to everyone I was going to sell to that I'm going to be the cheap option. And on top of that, it attracted the kinds of clients that seek out a cheap option, which are typically broke clients, clients who are looking so desperately to cut costs that they're shopping every vendor because they're about to go belly up. And do I want to be on the financial hook for someone's direct deposit if they are really freaking out about $0.05 per check? Right. And at the end of the day, I ended up talking to payroll company owners. I ended up changing my strategy about how I halfway through running my initial, through my payroll company. Because I talked to an owner, there was a lady who was on a webinar with other, I was licensing Assure Evolution and there was a lady that was on a webinar internally with me that was like, we both started our payroll companies at the same time. And she had a strategy that I freaking love it. It was so good. She set her pricing. My pricing was like something like $2 per check for like basic payroll, something in that neighborhood. She was charging like $4.50, right? Same product. Same thing, just a salesperson from ADP starting a payroll company. And she took her pricing with her base fees and all that. And she, she put it on a piece of paper and laminated it and went to all the CPA offices and said, look, I will never change my pricing down. I'm never going down. Maybe I'll go up, but we're not going to do discounting. This is my price because we are a high-end payroll provider, right? High touch, high quality. So you keep sending your business to ADP and Paychex that want a cheap price. But when you need you need a good payroll provider and you have a client that can afford it, send them to me. And she— and then she went out and just buttered them up. She sent them cookies and candy and pies and all that. And this lady was kicking my ass. Like, she was getting so many more sales than I was getting. And to see her and her numbers— every sale was worth more money, so she could, you know, spend the time to do these more, you know, she could hire more people. She could afford to do the kind of investment that is justified at that price point. And by refusing to work with lower-end clients, you know, she had built herself a little sticky niche, right? Like she had this little corner of the world that these CPA firms who process payroll themselves were still sending her business. Because like, I know, I know you've probably seen these guys out there that are like insurance agencies and they get a license to sell ADP Run white labeled and then they sell it at cost and they're losing money on the payroll, but they say, oh, it's okay, I'm making money on the insurance. Well, the end result is you get clients with really terrible expectations. And then they come to me mad like, dude, my payroll is all screwed up and nobody wants to spend any time on it because I'm literally losing the money by being a client of theirs. I know. What are your thoughts on this?

No, I'm missing something. So yeah, so let's, let's wrap this up here. So this is what I, I suggest as you're, you're looking at this. So first and foremost, as I, I'm going to kind of reorder what we went through, is like, go to the niche first. Who is it? What company size is it? What industry is it? Make sure it jives with your lifestyle. To John's point, like, we don't serve restaurants and construction and all stuff because I don't want these people calling over to my office, treat my team like crap. I don't want to have to worry about them NSFing their accounts. When COVID hit, I was talking to people that 50% of their businesses were shut down for however many weeks. We didn't skip a beat, man. Our revenue never dipped more than 10% on a month. And so like, that's another thing too, right? It's like understanding like, hey, am I in an industry that can weather the storm? Like, it'd be very easy in South Carolina for us to go into hospitality. It's a hospitality state. People come to visit here. Every place is a vacation destination. We don't talk We won't go near it. And guess what? There's still tons of businesses for us to sell to in our niches. And as a matter of fact, when you go back to like your conversation about going and talking to the CPAs, when I walk into a CPA and I say, hey, you know, our primary offering is a PEO for nonprofits, they go, oh, cool. Like, I get that. That's so easy. But if you walk in and go, hey, I do payroll for small businesses, yeah, you and everybody else, like, let me lump you into all the other providers that have come through here this week. Whereas I'm the only one who's going to walk in there this week and say I'm a PEO for nonprofits. Like, I can guarantee you that. Industry, you know, make it ELF. We talk— I don't know if I've talked about ELF on here before, but easy, lucrative, fun. So easy industries to work with, higher margin business. Like, hey, what is the thing for us? We've transitioned to that PEO because we know it's much more in line with the type of offering we want. We're talking about customers that average more $20,000 a year annual contracts than $2,500 a year annual contracts, right? And you got to make sure they have money. Nail down the niche first, get the ICP. What size are they? How much How much, you know, then what am I gonna sell them? Because that's gonna start to get into what providers do you need? Like, don't go backwards and start looking for providers before you're 100% certain on what you're gonna sell. And be clear about what you're like really holding as near and dear to your heart, because I see a ton of people say, oh, we wanna do this, this, this, and this and this. And I'm like, dude, do you really need that applicant tracking system? Like, I feel like you're going to end up with an inferior piece of technology and/or offering cuz you're so hung up on whatever that one additional piece of business is that one customer asked you about and you really wanna land that customer. And I made that mistake like 50 times. Times. Like, we started adding so much crap early on just because a customer would ask for it. I would just go out and find another vendor. I had a customer with 10 logins at one point, uh, because if we just were adding everything they wanted from any way we could because they were a huge customer and we just wanted to bend over and do whatever we could to make them happy. And then do that funnel math once you get there, right? Who am I gonna set— who am I gonna sell to? What am I gonna sell them? Now, is this realistic? And then, you know, the spreadsheet will Business is done in spreadsheets, baby. There's trillions of dollars managed every day in Excel. That's not going to change. You should spend some time in there before you start. All right, John, you got about 30 seconds.

Take us out of here. I think at the end of the day, our business boils down to one word, which is relationships. And, you know, we talk about relationship with clients and vendors and partners, but being willing to pick up the phone and have honest conversations with the people that you think are going to give you money or send you do referrals or be your vendors is worth so much more. And the people that fail are the people that are too scared to pick up the phone and just have a human conversation. So, you know, I'm sure Matt, you and I are both people that love talking about our industry and business. So it's been an absolute pleasure. People are welcome to harass me, by the way. I mentioned johnmasonsmith.com. If you want to go out and find my contact info, I'm easy to get ahold of and hard to get rid of.

Yeah, we'll put that in for sure. And I think you nailed it, right? Like the— if you're scared to pick up the phone, if you think there's another way, you can just— I should have put this at the beginning— just end it right now. There's no other way. In phone and in person. You're not going to sell it over email. You're not going to sell it on a landing page. You're not going to sell it through ads. It requires belly-to-belly conversations, as we like to say.

So, John, thank you so much. Thanks, Matt. It's been a pleasure.