The Value of Niching Down - How Mike Ritzema Grew a Niche Payroll Company

Welcome to Payrollin'. If you own, operate, or work for an independent payroll company, this is the show for you. We talk to the brightest minds to learn what people are doing to create payroll companies that matter and share those tips and best practices with you. I'm looking forward to learning alongside you and finding innovative ways that we can create the future independent payroll and HR companies. Thank you for joining us. I hope you enjoy the show. So I have the distinct pleasure every week of talking to maybe 3 to 5, sometimes more, sometimes less folks that are either starting a payroll company or have a payroll company that they're trying to grow, or they're in the early stages. And one of the biggest pieces of advice I always give and have never followed is to niche down as hard as you can. Niche down, niche down, niche down until it hurts. And I often say, like, if we would just start this whole thing over, I would start dentalpayroll.com, and I would only offer payroll services to one industry. And I, I would actually not choose dental practices for a variety of reasons, but just for this example, dentalpayroll.com, one service, one industry, chase it as far as you can until they're just demanding some other services from you, and then layer on some other services on top of it, but only based on man. And so that's what has always intrigued me, Mike, ever since we've got connected, is the fact that Superior Trucking payroll service— like, that makes my heart warm, the, the part inside of me that I can't actually pursue. Because we were talking about just before this of how much I enjoy chasing squirrels and how much I enjoy doing a bunch of different things. So tell us a little bit about how did you get into focusing on just one industry?

Oh, hey Matt. Yeah, thanks for having me on. Uh, I have a different story than most of your payroll, uh, colleagues, most of our payroll colleagues that got into it. From what I've heard from a lot of other people, they worked for a major payroll provider and then they decided, well, maybe I can do this without them, and then they go off on their own and have some degree of success or whatever. And it's a great path and it makes a lot of sense. I did it the other way. I worked for a trucking company. I worked there for 10 years. I was the CFO when I left, and I— we were using a national payroll provider, and they kept screwing it up because we had some things that we wanted to track. It'd be like tracking hours but putting no pay to it, basically. And they kept trying to put hourly rates to it, and even though we'd put in zero, they would have the zero, but basically overwrite to the default rate, and we kept overpaying people. So I went to the owner of the company, and he understood that I knew a bit about computers. He and I had done some projects before, and he was great to work with. And he— I said, I can write you something better. We can do all the stuff that this national payroll provider does. We can do it in-house, direct deposits, 401 and match, you know, all the stuff that we do. And he's like, yeah, go do it. All right, so I did. So I wrote the software for him. And it worked like a top. And I was like, well, this is pretty cool. Um, so we, then we got rid of the national payroll provider, of course. And I, we just kept on working and kept on going. And then I started to learn through some of the vendors that we had that, uh, dealt with other trucking companies that there was a need for this in the market and that other people had similar problems in that trucking is such a different industry than anything else. And people that are in trucking understand that, and people that aren't in trucking generally think, oh, it's just a different widget. Well, it's really not. There's a whole different set of challenges. And so what had happened was the owner of the company had retired and the successor took over, and she had us take Myers-Briggs personality tests, which I think are a great tool. And mine said that I like to question people's ideas to make sure that they thought them through. And hers said, I don't like when people question my ideas. It makes them think that they don't have faith in me. Now she's the president of the company and I'm not. So that's a problem for me. Yeah.

Right.

And so, yeah, it was time to move on. And, uh, so then I, I realized that this was a market and an opportunity that we, I, we could really help some people, uh, really help some trucking people. And so instead of being a payroll guy that got into trucking, I was a trucking guy that got into payroll.

Love it. Love it. Now, so how long ago did you guys get started?

Uh, full-time, 11 years ago.

11 years ago.

Yeah. I, I was setting it up for a year or two beforehand because I knew that the match wasn't right at my trucking company that I worked with. And so just kind of making an exit plan to get myself something else to do. Um, yeah. And as we joke in the, I mean, the peer group you had Jeff on a few episodes ago, I'm in one of those groups and we all joke that we're all unemployable by anybody else.

So, uh, Amen to that.

Right? Yeah. So it was time to go do our own thing. And so, but yeah, it was been 11 years. Actually, last week was 11 years full-time.

11 years. You are certainly unemployable at this point. That is one thing I learned pretty quickly. It's like, oh yeah, I'm never gonna have another normal job again. Um, so, so yeah, this, this is kind of interesting. Something came out in our conversation as we, when we first jumped on that I was not aware of, and now you've kind of led into it there. And that's that you guys wrote your own software. So tell me a little bit about that and what that process has been like and how that's evolved over the years.

Um, well, it started— I learned how to— I'd learned how to write databases back in high school. I just, I don't know why, but it always appealed to me. And then when I went to work for the trucking company, there's a thing that they have to do with fuel tax. I don't get too deep in the weeds for the trucking stuff. There's— I mean, I know that's not the market we're we're broadcasting for. But there you basically have to reconcile all the fuel you buy and all the, all the fuel you burn in every state, and you pay that, you even out the taxes for the— because the trucks pay a lot of road taxes. And we were using a service and we got audited and they goofed something up and they would have cost us $10,000 the way they extrapolate the data. And I went through and redid it and got the fine waived. And so I'm like, well, I can write you this. And he's like— and the owner was like, yeah, go write it for me. And so I did. And then that led to other conversations, and then the payroll part came up. And so I just wrote it for him, um, in a just a, you know, Microsoft Access database. And then, but that was, that was hard-coded. Again, I don't want to get too deep in the weeds on, on, because it gets into computer talk, uh, but it would, you know, that was hard-coded for the company that I worked for. And then when I left, I had to rewrite it. Of course, there's IP issues, and so I rewrote it and made it more open, and I've continued to revise it to make it more open over the years. But it's really nice. There's pluses and minuses to it. The plus is that a client calls and says, I want to do this. I want my check stub to look this way. I want, I want to send you an import, a goofy file import, and you turn it into, you know, chicken salad. And we can do that because we're, you know, I don't have to go to anybody to do it. I just, they send me the file and I convert it and make it do what I want to do. The downside is because we're a custom shop, you know, that it's— we're it. Like, we don't have the backing of some of the national software providers, uh, to, you know, make sure that everything's, you know— sometimes, sometimes you miss something, quite honestly. I don't like to admit it, but like, you know, you know, sometimes I'm not a professional programmer. So we actually are bringing one on because it's grown beyond me. Uh, so we're redoing our whole software again. Uh, it was time. We do about every 3 years, we end up rewriting the whole thing, soup to nuts. Uh, and that's, you know, now that we're past things like, uh, you know, we want to be able to provide a better user interface, things like that. Right now we don't have much of one, quite honestly, because I couldn't program it. And so I brought somebody in. I realized that I should have realized this sooner, that that was something that we needed to have. It's part of the customer experience. It's part of, you know, I kept thinking to myself, well, nobody wants that, they want a service, but it's not for me to tell people what they want, right? I go through the grocery store and I use the YouScan lane every time, even if the cashier is just standing there twiddling their thumbs. So, right. And so I got to be, I got to adapt to that kind of stuff.

Well, and you hit on a couple of really important things there because it's funny because a lot of people reach out to us about working with us as a partner, a white label partner, whatever it might be. And so So, you know, oftentimes they'll be like, well, I'm either going to do this or I'm going to write the software. I'm like, well, okay, like, uh, you know, I always use the example of like Gusto didn't get off the West Coast with their first $40 million round, you know. So like, let me know how long it's going to take you to get out of your state with this software that, that you're going to write. Um, but the, the, it's not saying people can't because obviously you've done it, we've done it. We didn't, we have not written a payroll module, so kudos to you. That, that's another animal that we've yet to tackle. But, but it is funny because it's like this game of whack-a-mole every time you release something, right? Because you test everything, you test it again, you test it 400 times, but there's some other random thing that happens in some other spot in the software that nobody could anticipate. And then you go, well, okay, why did that even impact that? We weren't even doing anything over there. And still, you know, my monkey brain cannot comprehend this. But at the same time, it's just like, it's— oh, there's always some random thing. And the thing that people struggle with there is just, it's never done, right? Like, to your point, like, you're rewriting it every 3 years. And just like, our, our feature request list grows by the minute, by the hour, by the day. And it's really easy to get bloated too, right? And that's the hardest thing to prevent against, which is why I love going after a niche, right? Because you'll never get too bloated. You'll always just be catering to this one audience. So, so what are some of the examples of things that you guys have had to do to make sure that you're serving your trucking industry clients that might not necessarily be something that I would write for, you know, my law firms or for my financial services companies?

Oh yeah, that's a great question. A lot of the things that we have done have come from our clients when they go, it'd be nice if you could do this. One of the examples is, uh, putting the load information on the check stub for the driver. Um, for most of you talked about your financial, your law firm or whoever that you're doing, they just have hours, generally hours and salary and maybe commission for a salesperson. And that's about it. And if you had somebody that was piece rate, it would be just number of pieces, right? No big deal. The drivers for trucking companies often get paid by the mile, but they want to know which loads they're getting paid for. Did I get this paperwork turned in to get paid for this load from Raleigh, North Carolina to Dallas, Texas? And so we can— but we developed a way to put that on the pay stub so they know exactly what they're getting paid for. We can even show them, if the client gives it to us, we can show them the loads that they are in the system that they haven't been paid for yet, so they know to get their paperwork in. Uh, it's really a benefit to the trucking company to do this because, uh, it, it eliminates so many questions. You know, the driver isn't wondering, did I get paid for— it's not the big runs that they worry about, it's the, it's, you know, the short ones, the, the Detroit to Lansing, Michigan, the 100-mile run, because that's only— that's going to pay them $50 or something like that. You know, those are the ones that sometimes they think they get they get lost, and then the driver gets convinced that they got shorted on their paycheck and they quit. Um, and they all have— if you've ever talked to truck drivers, they'll all tell you stories about the time that the trucking company cheated them. And so, and I don't— and a lot of them may have been cheated. It's not— I'm not the judge of that. But if the trucking companies just put it on the pay stub, all that goes away, right? You know, there's no question about what— did I get paid for this, or did I get paid for— there's a thing called detention, which is If you bring a truck back up to a dock, they get 2 or 3 hours to get the truck unloaded. The company does that you're shipping to, they have to unload your truck. If it takes longer than that, they get what's called detention pay usually. So, but the driver will want to see, did I get my detention pay on that load that went to Dallas? Make sure they didn't get shorted. Just by showing your work, being transparent, which every management book will tell you to do. This is just a way to do that. And it's a way that, you know, the banks or the the daycare places or the insurance agencies don't have to deal with that kind of stuff.

Well, it's interesting too because, I mean, and I'll talk here in a moment about— I follow you on LinkedIn. I see you're at trucking-specific events. You're talking about trucking-specific problems, right? Things that your other clients are not going to experience. Like, you've naturally done what every great marketer says to do, right? And that's like, know your target audience inside and out. Speak directly to them. Speak only to them, right? Everything you write should be to this one or two people. And you've kind of created these forced constraints by only focusing on this one industry where you aren't going to market it. Like, you can't get squirrel brain like I get, right? Like, you can think about, are we going to offer other products, other services, etc., but like, hey, it's all going to be under— if you start offering it to banks and to, to, you know, uh, nonprofits, that it's just going to be totally off-brand and it's not going to make a lick of sense. And so, but, but you brought up a really good point there, and this is something that we're actually doing. So, so we have I would guess probably 25% of our clients are nonprofits. And so it's a niche that we've really been trying to double down on. And one of the things that we realized is that they always have a ton of volunteers and they have to get some other system to manage the volunteers because every one of us charges a peppermint for anybody who's in a system. And so what can we do for nonprofits to make it easier for them to manage the volunteers? We're actually creating a volunteer category inside of our HRIS that's not going to bill them for volunteers. So now we can come and say, oh, you got 150 volunteers you want to manage, great. You can set them up in our system and, you know, track their information in here and onboard them through here. And we're not going to charge you for it. And so we've created that competitive advantage by knowing the industry, which we wouldn't have done had we not had so many of those. So definitely feel where you're coming from there. What are some of the other values you see that you've seen over the years as far as niching down and focusing on just one industry?

Well, you kind of touched on a big one, which is the shiny object idea. It kind of keeps us in our lane, which is handy because I don't— you know, for me, it would be tough. I've got an insurance agency, local car insurance agency right next door to me, share a wall with them. It would be hard for me to compete with all of the other payroll options to get their business. The unique selling proposition, or however you want to say it, why someone should do business with us is a lot harder to explain versus, you know, when I'm selling to the insurance agency against the big national players and QuickBooks and the IPPA members. We've got like 4 in Grand Rapids where I am, you know, and all the other people and their CPA or whoever. It's just, it's a lot harder sale for me than it is to just be like, look, our lane is trucking. And so, you know, we're just— yeah, that keeps us— you can't be an expert in everything. You know, that's really the thing. Anybody who's an expert in everything is an expert in nothing. So not to be harsh about it, but that's, that's kind of what it is. We were talking before we went on about PEOs and that you guys have a PEO, and I'm like, yeah, you can have it because that's— it's not our lane. Our lane is trucking. And so the advantage of being in our niche is that we know what we do and we know what we're good at, and we're not going to try and venture out of that until we've sold to all the trucking companies. And that's never going to happen. So, you know, that's— yeah, we're not, we're not looking at— yeah, it keeps us focused, I guess, is what I'm saying. It keeps us on track because, yeah, I do look at shiny objects and my brain starts spinning and I'm like, ooh, I could do this and this and this and this. But like, no, no, no. No, we're not ready for that. We got other things to do first.

Yeah, absolutely. And you talked about the PEO, and I promised we would talk about it. And so it's, uh, you, you've, you've, you mentioned how you've heard the temptress of the PEO over the years, and as have we. I think every year, uh, for the last 4 or 5 years, I've kicked the tires on are we going to offer a PEO. And it always comes down to a couple of things that have stopped us, because we offer an ASO already and we're a licensed insurance agency. So we're doing You know, 80% of it. That last 20% is a lot, but we were doing 80% of it already. But the thing has always been, you know, we— what are we going to do with United and Aetna and Cigna? Like, are we even going to be competitive going out to market with that? No, we're certainly not. And then also, what about our software? So our software was not set up to handle the PEO environment. And so are we going to run two platforms with a small team? Like, we've done that once before. And it was an absolute nightmare. It was the dark days of, uh, your former ERG back in the day. Um, so we actually had circumstantially a couple things happen. We got connected with somebody who got us Blue Choice as our primary carrier, and that was like, ooh, in South Carolina, Blue Choice is everything, right? So it's kind of like, okay, well, this is interesting. Now if we're able to cost control and put people into the best, uh, um, network, then that's intriguing., but we still have that software issue. So can't do it, can't do it, can't do it. And this, this has literally been the last 6 months, uh, of, of thought process. And then all of a sudden we stumbled across my boy Mike, um, shout out Mike Collith, who was running a PEO on the same platform we use. And so we talked to him and his team, how are you guys doing this? What are you doing? How are you making it work? And we got intel and that's what, like, that's why these industry connections are so valuable. So for those of you listening, if you're not connecting with more people around the country, Mike and I just talked about it before, you know, we were in some similar groups. Groups of mastermind type stuff. And he does that on a regular basis, meets up with payroll industry owners all around the country. And quite frankly, that's what you— not to keep, uh, I want to hear more from you than me, but like when you talk about the niching down, you, you asked the secondary question before we got started. I'm like, okay, so how on earth did you get spun off into offering services to payroll companies? Like, this is the easier side of the business because talk about understanding your client inside and out. Like, it's just, okay, what's working for us on the marketing side? Cool. We're just going to give it to the other payroll companies and just put their logos and names on it. Okay, cool. What do our clients need on the HR software side? Great. Well, yeah, here's what we offer and here's what our clients use. And it's just very, very easy. And so it, it, it gives me that sense of what you have, and that's understanding my client inside and out because I am my target client, uh, even though I still have my challenges on the payroll and HR side. So what about, what about the other side of this thing? What are some things— are there cons to niching down? Like, have you ever felt any, uh, any areas where it's given you trouble?

Yeah, there's always the, you know, the, the losing side of it. Some of it is, for example, like the— I was talking about the insurance agency next door. Um, there, I couldn't sell to them. I mean, they're right next door. Like, I could give them the best service ever because if they need something instantly, they just walk over and we do it for them and it's done. But they're not— I don't even go try and sell to them. We had the people on the other side. I'm in a kind of an office park. The people on the other side had about 70 pays and I couldn't even get in the door with them. I was like, that was right when I first started the business. I'm like, I'm going to take a shot at him anyway. And he wasn't— he's like, yeah, all you do is trucking. And so we'll come into people that will come to us and say, we have a trucking company and we have this other company, but can you guys do that other company? We don't think you can. I'm like, no, that's the easy one. That's your 6 people that are all salaried, right? We can do those in our sleep. Those are the easy ones. And so, you know, so sometimes it becomes a limiting thing that way. The other limiting thing too is, I guess, I don't know if it's limiting or not, is it's sometimes hard to get the right people. Like, I feel like I have to educate the whole industry because we do conferences, the industry does conferences all the time. There's going to be one in Las Vegas this weekend. But their classes are always about driver recruiting, which is important, or safety, which is important, or how to avoid getting sued. All these things are important, but they don't, they don't do them about financial things as much. And so I feel like I'm trying to train up some of these guys and look, this is where the math comes in and this is where, you know, this is, this is really important and this is why. And we're going to do a webinar next month on paying per diem. You know, and so why— we've done it before. It's why is this important? How physically does this help you? This puts this much money in your pocket. Or the other trick too is with trucking, a lot of the owners of the trucking companies are not classically educated. They learned by starting in trucking and became lifers, almost like the way that people get into payroll, right? They work for a payroll service. They're like, oh, I can go do this. And this again, some succeed and many succeed and some don't or whatever. And trucking is the same way, but it's these guys who are like, oh, I can do, I can do this. And so, and their intuition is usually really good, but their analytical and strategic stuff isn't as classically strong. And so we got to kind of work with them and communicate with them in a way that they can relate to, which fortunately we can do. But it's just, it's sometimes tricky. Like you're not going to find them all on LinkedIn. Necessarily. You're not gonna— you gotta really go look for them. And so that's why we've redoubled our efforts on our website now to try and like— so if they Google, they want them to find us.

So that's an interesting point because that's, that's like one of the— that's the benefit and the downside of having a really niche audience is like you can find them, they're in really specific places, but maybe not the same place as everybody else is looking for people. So, so let's, let's take a step back. I had a question you were talking about a moment ago. So do you work— you guys do the sort of traditional payroll company thing? Do you work with a lot of CPAs that refer you business partners like that?

We, we try to. Um, there are a few CPAs that specialize in trucking. Um, when we always reach out to them and we always try to be a resource to them, uh, in with varying degrees of success, you know, of course, like anybody, um, it sometimes takes the other referral partner is— I'm sure you have the same similar relationships— the referral partner's got to have vision for it too. And so if there's a lack of vision, it makes it harder. But yeah, there are insurance agencies that work with trucking companies. They all— because all the trucking companies have to have a particular kind of insurance, and you're not just going to get it from your local State Farm guy, um, liability insurance and things like that. Uh, there's CPAs there, uh, yeah, there's, there's other vendors that we work with. They're attorneys Uh, trucking attorneys, that's a specialty, is transportation law. And so we try to work with them to get them to, you know, hey, can we be a referral? Can we be a resource for you? Can we help educate your clients? And that's, that's our whole, that's our whole marketing ideas. We're just going to educate and educate and educate, and hopefully they want to do business with us.

And, and this is something we did early on, and I'll suggest anybody who's listening to this that's considering niching down, so take this advice first of all. All right. If you're just getting started, you will get traction so much faster if you just focus on one industry. Like, it's undeniable. Like, you will not run out of trucking companies. You will not run out of dentists. You will not run out of marketing agencies. Whatever your thing is, go to an association event. This is what we did back when we were chasing the dental practices that it really opened my eyes. We went to— they had a big one up here or down here in Atlanta. It's about a 3-hour drive for me. Drove over there and huge conference and all of the vendors were specific to the industry, right? So whether they were a marketing agency, whether they were insurance, whether they were legal, whether they were— it was legal for dentists, it was marketing for dentists, it was website for dentists, it was. And so now you've also got all these strategic partners and like that first one, don't go get a booth, go there with a stack of cards and go around to the booths and make friends with everybody at the booths because they're your real target clients when you're there, right? Like, if you go and try to meet every dentist at the event, you're not going to get anywhere. But if you go and meet the people that already have a bunch of dentist clients, then you're going to get a lot further a lot faster.

So yeah, you're exactly right. And that's what— that's what we've done that in the past. COVID obviously put a damper on all that stuff, but there are like 4 or 5 truck shows a year. Uh, there's a big one in Louisville every year, and so I try to go to that one every time I can. And yeah, and again, just go talk to the booth. And I always tell them when I go see them, hey, if you've got a prospect coming up, just shove me out of the way. It's cool. Like, I know you're here to get, you're here to get business, but if you've got nobody in front of you, I want to talk to you about, is there a way that we can work together? Can I help educate your people? And have them go, man, these, you really, you know, it could be like the insurance agencies providing the education if they have a webinar series or something. Like, we're happy to do a webinar. For you absolutely free. We want to educate your people, and if we get something out of it, that's great. But, you know, it's about— it's, you know, it's, it's marketing collateral for us, and it's, uh, it's a good way to make friends. And yeah, and always go to it to see what you can do for them. And I think that's really important too. Don't go to the, the insurance agent or whoever, or the marketing person for the dental office and say, here's how you can help me. Now be like, hey, you're a marketing for a dental practice, how can I help you be more successful? Um, and I think a lot of people get that wrong. They're like, they want— they expect that first meeting to— I went and met with these guys and I didn't get 77 referrals. I wonder what's going on. Well, they don't know you yet. That's what's going on. So, you know, show them some love.

Yeah, and I'd love to hear some more of your best practices on that because that's so, so, so important, is like creating value for the other people. And we have the easiest conceivable way, and you just mentioned it, to create value for our partners is to educate their clients. And we have— we just sit on all this information, whether it's payroll, HR, benefits related, whatever your thing is, that you can share that will help to shed a good light on your client. And they don't have to create the content. All they have to do is get their audience to show up. So that is actually really valuable to them, is just go, okay, cool. If they know you're not going to show up and give a really poorly veiled sales pitch, right? Like, that is just— you gotta get that crap out of your bag right now. Like, I mean, if, if all things lead, you know, if you got 20 slides and the last 8 are about your products and services, like, you're doing it wrong, man. Um, just, you gotta— you certainly have the opportunity to give them your contact information at the end, but you should leave them wanting to contact you, not feeling like they just got hammered over the head with a sales pitch. And then your partner will never have you back anyway, so you won't have to worry about that. You'll only do that pitch a few times and then you'll never go anywhere with it again. But so you have really good opportunities. And, you know, one of the things we've also had success with that that I think is interesting. And I see Paychex has a way that they do this. I think they got a little portal they do it, but is we'll give them co-branded or even just fully branded material that they can distribute to their clients. So like we've got, you know, some of the stuff we get from Mammoth, now Mineral, like we'll take that stuff and we'll just put the CPA's logo on it and be like, hey, here's a nice little piece you can send out to your clients. You know, thanks for being a good partner. Like we don't want the credit, we just want that CPA to remember us if their clients come in. And ask the question, hey, who should we work with? What are some of the things you guys do along those lines?

Uh, one of the things that we do is when we're talking to referral sources, we'll ask them, what are you hearing from your customers, from your trucking customers about problems that need to be solved? What are they struggling with? Now, driver recruiting, if you've seen any trucking article, they talk about the lack of drivers, right? They've been talking about this for 30 years, so they talk about it now, but this is not a new problem, right? And so we'll do webinars on truck driver recruiting. That's not what we do. We don't offer it as a service. That's my squirrel thing. Like, that's— that would be the thing I would offer if I could get— if I got distracted is I would start a driver recruiting because it's all about fit. It's all about finding the right fit for that driver. It's not about pay necessarily. It's— it's— you want to find them somewhere they're going to stay.. And so we do webinars about that, about, hi, here's some driver recruit, some low-cost driver recruiting tips. Um, and we'll tell them what to do. We'll, we'll, we'll help people write the article. We'll, we'll, or the ad, sorry. Uh, they put the ad in Craigslist and if it just says, you know, good miles, good pay, good home time, new equipment, like your ad looks like everybody else.

Yeah, I was gonna say, it's not gonna get you anything. I know nothing about the industry, but I know like literally they have that on trucks. When they're trying to recruit. Yes.

Yeah. You got to make yourself unique because if 1,000 people read that ad, you're not trying to hire— you don't have 1,000 trucks. You're not trying to hire all 1,000 drivers. If you can get 5 responses, you're doing really well. That's half a percent of that 1,000. And I'm making up the 1,000 number, but I don't know. I don't know. Depends on their ad vehicle and how they— how the responses they get. But, you know, you're— say the things that are specific about you, you know, say that you're the owner and the dispatcher because you're a small trucking company. Say that instead of driving a 2022 Kenworth, you know, which would be like— they think everybody would want that. If you have 2011 Freightliners, tell— put it in the ad, because the people are going to find that out anyway, and they're going to come apply, and they're going to say, what kind of truck do you have? And you're going to say, a 2011 Freightliner. And they're going to be like, yeah, I'm no good. But somebody, somebody out there really wants to drive a 2011 Freightliner. That's, that's your person. So we do stuff like that, but we try to talk to our, our referral sources as often as we can and just be like, What are you hearing? What are you seeing? What problems can we help you solve to make you look better? And even if it's not in our wheelhouse, we're, you know, we're, our mission, our company mission is to help trucking families. That's the beginning and the end of it. And that now payroll is how we pay for all these things. But, you know, if they come to us with a different problem, we try and help them solve it.

That's awesome. Well, and I'll chase that squirrel for just a second on the recruiting side because it's been such a hot topic lately of work from home versus in-office versus flexible versus, you know, remote full-time. Lean into whatever your strategy is going to be. If you are the type of person who is like, look, all 10 of us have to be in the same office, that's just the way I roll, that's the way I want my business to roll, be crystal clear about it on your postings, be crystal clear about it throughout your recruiting process, and make sure you're not hiring somebody who just left a full-time remote position and is just getting something where they really loved it remote, but oh, they'll come back to the office. Like, no, if they don't— if they don't love coming into the office every day, then don't hire them. And vice versa, if you can't hire somebody who's been coming to the office every day for 20 years and then be like, all right, you're going full-time remote for the first time ever in your career, I know you're excited about it, I'm going to be the one to teach you how to work remote in 2021. No, just lean into whatever your thing is. And there are some people doing this really well. Like, on— I think there are a lot more people doing it really well on the remote side because they're saying, hey, Hey, come work for us. You can work 100% remote. But for those of you that are like, your culture is in office, don't think that that leaves you off because there are people that are so tired of being in their house. They want to get the heck out of their house. Like you've got an audience and it's kind of like you talked about, it's that 2011 vehicle versus the 2022. Like there are people that are going to prefer that and like, they're not everybody, but find your right people. And it's kind of, it's kind of along the same model of like niching down and, and focusing on a specific industry. And I pulled up on my other screen over here. Because one of the ones that first really opened my eyes to this whole thing was payrollforconstruction.com, right? And so, so I think that one of the things that some people are probably thinking as they're listening is, well, I can't write my own software, so how can I make it hyper-specific to the industry? It doesn't matter. Every one of these white label systems has, you know, not necessarily customization, but like you can know how to do it for your industry better. And if there's something you have to build around that, even if it's in Excel or in, you know, a simple low-code, uh, system that you want to try to integrate into the system, like these guys they're using a third-party platform. I've never even heard of it. I'm always shocked whenever I hear of a new foundation software. Have you ever heard of this? I've never heard of foundation software.

Um, I, I know the people that go to the IPPA shows, right? That's where I meet them all.

Yeah. So, all right, so this is a construction accounting software that's built for contractors. So they've just latched onto the side of an accounting software. But I mean, these guys have been growing like a weed for years now, and their whole thing is just lean, you know, that's it, man. They just do construction. But you say just, but the same way trucking is super wide and there are different varieties of types of trucking companies. When you think about how broad construction is, my goodness, their target addressable market is off the roof. So yeah, so interesting stuff there as it relates to, once again, I feel like there's so much FOMO when you want to niche down on what you're missing out on. Well, let's ask that. So If you were going to start over in like this hypothetical world, and let's talk about this two ways of just like, what would you guys have done differently? And then bonus question, what other niche would you chase after? Like if you could just blow it all up and we go back, you know, 15 years and you go, I didn't work as CFO for a trucking company. I want to like chase this niche because I think it'd be just fun. What would that be?

Oh boy. For the, what would I do differently? I would have hired the programmer sooner, uh, that I had, because I did it all myself, uh, for the first long time. And that— then it's limited to my knowledge. And, and that was— and it worked, everything worked, but that working isn't the goal. It needs to be about it. I think it stopped us from providing a better customer experience. And so now we're fixing that, but I should have done that 4 or 5 years ago. But what are you gonna do, right? If we also— I've also, I also feel like I've been really fortunate in a lot of ways in how the things have worked out for me through things like IPPA. I remember with the first, I think it was the first IPPA show I went to, I talked to Craig from Coastal Payroll out in San Diego. He probably doesn't even remember the conversation. And I, and I, I had like 3 employees at the time, and I said to him, what, you know, what's the next thing? And he goes, you need to get a payroll tax manager. He's like, my life got immeasurably better the day I got a payroll tax manager. And so, I did. And she still works here. And that's good. But just the idea of that kind of stuff, right? So, the timing of all that was just perfect. But I would have hired the programmer sooner and realized that I'm not going to go learn it. I'm done learning that stuff. I'm good enough that I can explain to him what I want in a way that he's going to understand As far as other niches go, I would say my first thing would be that I would stay in trucking and do something else like driver recruiting. But if I, if that's not an option, or actually we do some, like we do some trucking consulting, like I do financial statement consulting and things like that because of my experience. But if we're gonna get away from trucking, oh, I would, my answer would probably be restaurants, but I don't feel good about my answer. Um, restaurants— I, I would, I would want to drill down even more into restaurants. Like, I would— there's 80 million restaurants. I don't know the exact number, but you know, the— there's so many restaurants. Like, I would want to drill into a specific thing. Like, is it quick-serve restaurants, or is it fine dining, or is it, you know, do you just try to get hooked up into a franchise? You know, you're going to do all of the all of the tropical smoothie cafes or something like that, or all the Arby's, whatever those, you know, that would be, which seems like a goldmine to me. But I don't know, there are probably already things in place. I can't be the first person to have thought that up. But it would probably be something like that. I had some restaurant experience immediately out of college. And so I, again, I feel like I understand the industry. I just don't know what problems I could solve for them., right? You know, like, I don't know, you've got tipped employees and things like that, but that's— every payroll software can handle tipped employees, right? So I don't think that that makes it special. But like, it would be more of, again, it'd be the same idea of trying to educate, probably educate small individual restaurants, like independently owned restaurants, about best practices and how not to get sued and all that kind of stuff. People like Paul Abel, when he had the bagel shop years ago, Uh, you know, if he shared that story with you, I realized, oh yeah, okay, yeah, that's just how he got in the business story, right? And so yeah, people like that would be probably where I would go. Construction, I think, is a great idea and somebody's already on it. Um, but yeah, any— you just pick an industry or you pick— it doesn't— you can, you can niche ways besides industry. You could niche at the under 10 employees. Uh, you could niche at— like, most payroll services niche in their locality. I know I've talked to Larry up at Baron Payroll, and he's— his niche is New York, and he wants to be the be-all and end-all for New York. And I think it's an awesome— I mean, obviously he's not gonna run out of people to talk to. And so I think that— and I think that most payroll services naturally do that just because they're making all the sales in person. But you don't need to. Like, but yeah, you— I would niche. You— there's lots of ways you could— you can niche. I remember meeting a guy who does church payrolls. Not even just nonprofits, just us churches. Like, wow, you know, good for you, right? Exactly.

You could even just go, yo, we're only going to do Catholic church. Like that. And that's the whole time you're talking about it, like the restaurant piece, it's just like— I heard it once before, I probably said on this podcast multiple times, but it's, you know, niche down, niche down further, and then niche down until it hurts, right? So like, you know, is it the— is it with, you know, the— I— we serve only independently owned restaurants with less than 25 employees in Michigan, right? Right. If you, if you don't think that's a big enough TAM, target addressable market, like, you're not doing the research because you, you will certainly have— there are every state in America, there are enough of those to build a very large business on. Well, not very large, I mean, that's, that's all perception, but like— and then if you go, okay, cool, we exhausted all that here in Michigan, well, great, Great. Now we move into another state. Like, you don't have to change your industry, you don't have to change your target market, you can just continue to expand geographically or whatever suits you. Um, I'm gonna go back to one thing though you said, uh, and I was just smiling the whole time about like, you can explain things to the developer in the way they understand. For anybody out there, and, and please send me a note on LinkedIn or something if any of y'all are interested in an episode about writing your own software. We've, you know, we've learned a lot. We started, we started writing HR software in 2014. We wrote our first product and threw it in the trash. It was— I spent somewhere between $25K and $50K on an onboarding software that eventually became useless because of some of the things we just talked about. Software is never done. You, you know, if you're relying on a single point of failure for development, you're eventually going to have a single point of failure. And so the, you know, all those things that happen, and, and we've had some folks on that, it's pretty uncommon to write your own stuff in this industry, but I do think it's becoming more common now that we've got things like being able to write on the Salesforce platform, right on Force. I know people have done that. You know, we, we used CakePHP that allowed us to, to develop more rapidly than we would have without that framework in the past. And so things like that you can do to to get products up and moving faster. But yeah, so, so to finish that point, being able to properly articulate and speak developer talk in a way that they're going to actually understand and not just show them a picture or, you know, giving them a login to somebody else's system and having them try to replicate it, that just doesn't work that way. So people need to understand what they're, what they're really getting into. And especially, you know, offshore would be a whole other conversation there. We've used a lot of offshore hands over the years and like that's That's more art than science. Um, so, so yeah, a lot to be learned there.

But, um, absolutely. I think of like websites. Um, if you've talked to a website designer and you tell them what you want and then they build it, you know, that's not really what I— that's not what I meant. No, I want it— I want it to be like these guys' websites. So then they build one like that other guy's website. No, but I want it to be this way. Like, you know, so a good website developer is going to be able to to knock you through all that stuff right away. But yeah, it's, you know, it's not— yeah, you've got to be able to explain it to them in a way that they're going to understand and kind of point them in the direction of what you want done versus just telling what you want the end to be. You know, like, I want this to be this way, or I need, you know, obviously in payroll, things have to happen in an order. There's— you can't just— you can't do— you got to do taxes before you do direct deposits and things like that, right? And so But you get— so you'll walk him through and explain to him how it works and how taxing works. And, uh, but yeah, it's, it's helpful to be able to, to— I'll always be conversant with them, but yeah, I can't write his code, right?

He's lost on the other variable there, right? And that's like, not only do they not necessarily understand what this vision is you have, but they probably don't understand your industry either. While there's, while there's, you know, a million developers out there that have written HR payroll stuff You might not find one of them. And so, so you've got to be able to, you know, educate them on— golly, man, you're giving me heart palpitations about— we know there's sort of this— we know there's kind of this inevitability that we're gonna have to write a payroll engine into our— or at least write a payroll module into our software. And I am just like dreading that because I know, you know, it's death by a thousand cuts.

But it, it's the tax engine that gets you. And there are people— I know like Symmetry has a tax engine that I think that they'll license out to you, uh, Isaac over there. Uh, we, we wrote our own tax engine, but had it before, before, uh, before I met Isaac, which is too bad. It could have saved me a lot of time, you know, especially as you, as you grow, as you expand and get into more localities. And you get like, for people who aren't familiar, Ohio and Pennsylvania have a million local taxes, right? So you then you got to put all those in there, uh, if you, if you have a client in that area, which is super fun, but it's just part of the deal, right?

Yeah, well, you're right as far as that, uh Hiring a tax person, we waited far too long on that and like kind of suffered through the like never-ending, you know, it's not even like the notices are ever anything all that terrible. It's just a matter of being able to easily navigate, have processes set up. It's something that we're constantly working on. We're gonna, we're gonna be doing an implementation episode here coming up. I have no idea the order of these episodes, but, uh, um, we're— that's a big thing we've had to like double and triple down on in implementations recently because our clients are bad about getting us tax stuff. And then, you know, the inevitable notice comes because they, you know, didn't get us what we asked for 15 times. And so how do we, how do we navigate that in a way with that pleasant persistence that you want to have while also understanding like, hey, we can't take over your taxes until you give us all this stuff. Well, you hired us to take over your taxes. So yeah, lots more fun to come on that.

But I'll tell you something we're working on in that vein. Uh, I found us— we use Zoho. We talked about this before, and we use Zoho CRM. I have someone building me a custom module in Zoho CRM that's going to do— it does implementations from proposal send out, like they automatically accept it, and then it's gonna go through, send them all the docs, make sure we get them all back through the other Zoho vehicles. And it will do us— it'll do a tax thing too, and we've got to get the tax stuff from them through that. And so it's almost— we're testing it right now, and it's, again, it's beyond my programming ability. So I've got that hired out. Out. But it's going to be really nice. It's going to streamline our— it's going to streamline our implementations. It's going to streamline our tax signups. Uh, we've got— we've got some ways to just do the tax signup part. So if one of our trucking companies expands into another state, you know, we can go get— we can just put it right in that system, and it's going to bug them to get the forms that we need and make sure that we get everything set up and make sure our operation side talks to our payroll tax side to make sure that they know, hey, we just added You know, we just, we just added Kentucky withholding for so-and-so. Uh, you got to make sure you get them signed up and things like that. Because like you, like you were saying too, the owner of the company or the people in charge of it, like in my world, they're trucking experts. They know how to get a load from here to there, but all this compliance stuff, oh, that just makes their head hurt. And so they're like, you just do it. And we're like, all right, we'll help you.

Yep, yep. So Are you using Projects or CRM for that, or all the above?

I was going to use Projects, and the people I work with said, no, you can do it right in CRM. And I'm like, beautiful, that's even better. And so, and again, I don't know how they, how they make the magic happen, but I don't really care that much. I'm just glad they make it happen. So yeah, it's good. We're, we're really excited about it. We think it's really going to make our process that much better because, you know, you always have one— you're always kind of wondering, where are we on that implementation?. And we had checklists and we could always go do that stuff, but it was really manual for us. And we were— we knew it was something we had to be better at. And the tax— adding new tax people, a lot of— so we'd have times when my— quite honestly, my payroll tax manager would find it. Hey, I looked at the withholding for this month for this company and they added Kentucky. Were you gonna tell me about that? And she's quite nice about it, but if I were her, I'd be less nice about it. So we don't want it— we don't want to have to come to us with that.

That. So you might have a new squirrel to chase, and that is selling all of us your implementation system you're setting up in Zoho CRM. We, uh, this is literally something we are working on right now, and we're kind of approaching it the same way that I was describing, where, okay, Zoho Projects, we're going to set it all up in there, which is basically just us moving from a different project management system to this project management system and hoping for a better result. So, so I'm not sure that that's the answer. Um, we We are trying to— yeah, I'd love to talk further about that because we can—

yeah, I'm happy to share the resource with you. Yeah, that's, uh, yeah, but yeah, I think that kind of stuff though, just the automation, you know, just trying to be more and more efficient as we keep going, um, as we keep moving forward. Uh, but yeah, it's, it's a big deal and it's just, it's really about the customer experience. It gives a better customer experience to know that, you know, even you talked about the tax letters and they're easily handleable a It still makes the blood pressure of the owner rise when they get a letter that the return address is Internal Revenue Service or State of Michigan or State of South Carolina. They still are like, why did I get this? Well, we— you got the state, the state of whatever letter because you didn't get us the information we asked for. But now they're gonna be able to see that we emailed them about every 3 days asking for that information because we never got it. So you've got like 40 emails that were sent automatically until we got it. And so now we're just gonna go fix it. And of course you fix it for them because that's what we're here for. But right, yeah, they still are like, I signed up with you so I wouldn't get letters anymore. Uh, well, yeah, and this hopefully will be the last one.

Yeah, it's funny because you mentioned that because, because it's like, hopefully the system will help them to care more. Because we just, we actually just ran into one of these where it was like, you know, they get the tax penalty notice and the client even admitted to us on the front end, she was like, we're gonna be tough, we're gonna end up with some tax penalties because we're just not that responsive. Non-responsive and like, we, we get it. It's okay. But then as soon as it came, it was like a shock. Like, oh, why on earth would we get this tax notice? Like we, you know, that's why we hired you guys. And it's like, well, you know, we had this conversation 2 months ago when you told us you were non-responsive, that you've been non-responsive. And then now we have tax notices. So it's like you predicted the future and then you're surprised by the result.

Absolutely.

That's awesome.

Yeah.

We, uh, I'll, We're doing the implementation episode soon. And so there's— well, let me do this. This is something I've been thinking about asking folks lately is like, let's talk about that. Systems, softwares, vendors, anybody you want to give a shout out to or ones that have done really well by you guys.

We really like Zoho. We started with them 3 years ago. We were just going to do the CRM. Um, but then we did Zoho One, which is all— for anybody who doesn't know, it's all the Zoho apps. But the deal is you've got to sign up all your employees for it. Um, and that's fine, like, that's what we do. It is, it is. There's so much in there that I'm not even touching yet. Um, and it all integrates with each other, and the CRM will integrate with your phone and all— like, all this stuff comes together. And so we really like that, and they've been responsive when we've asked questions.. And now I'm finding, as we're going more into it, I'm finding people that are Zoho experts that can, like, build the CRM module for us because I have no idea how to do that. But I can communicate to her what I want and how I want it to work. So they've been great. We've really enjoyed— like, for me, you know, you had Jeff Garrison on a few episodes ago. He comes to my office every 3 months. In addition to being in the mastermind group that I'm in with him, he comes here and we do strategic planning for a day, a full day every 3 months, and then 2 days for once a year. And that's been really helpful. And it's one of those things where, I mean, Jeff will tell you this too, that it's not that he's giving me this amazing wisdom that no one, you know, like he just brought it down the mountain, but it's more the accountability. Accountability. It's kind of like we all know what we need to do to be financially successful, and that is, you know, spend less than we earn. That's it, right? But we got to do it. We all know we needed to be physically more healthy is, you know, exercise and eat right. And how many of us do it? But with someone that you're accountable to and someone who helps break it down into smaller pieces, it's really— it's our growth since since we had him start coming in, which is about 2 years ago, has been phenomenal. And it's possible it's not because of him. I mean, I don't know, right? You never really know. But I think it's, it has certainly helped. It's kept us focused on what we need to focus on this quarter rather than worrying about the thing 10 years from now. Like, we have the 10-year goals, right? But we've taken them in bite-sized pieces. And so now we look back at the, in the yearly meeting, we look back at all the things we got done. Which before he had come in, we never would get those things done. And so he's been great. A lot of the people I've met through IPPA have been awesome. You know, the vendors, like, I, we use Paul Abel's poster service, Poster Elite, and they're, they're just so easy to work with and they're so nice. And we go, obviously we do the IPPA stuff, and even just the other people that you, like, you've talked about before too. You're just in a, you're just sitting around a table at lunch lunch or at the bar afterwards after an IPPA event and you're just talking to somebody who's in another part of the country who's not like you guys are going to compete for that one client and just the trading of sharing of information of it just moves you forward so much faster versus taking the long way of trying to figure it out and that's been worthwhile just going to the shows. I miss going to the live shows. I'm looking forward, I'm hoping I can go in March. I've got a— I got some other family things I got to work out, but, uh, I'm hoping to be able to go. Uh, it'll be nice to be out in person again, right? And be able to go, yeah, just go sit there. And, uh, and Paul throws the best parties too, by the way.

That's right, that's right.

Always go to Paul Abel's party.

That's it.

Yeah, you know, although— but all those guys have been great, and they've helped me because I didn't come in with a payroll background that a lot of you— a lot of the people, listeners probably had. So I understood it, I knew what a 941 was, and I knew all that stuff, but the inner workings of it all I had to learn. And people like Paul and people like the IPPA have been really helpful in making that happen.

Well, we're also incomplete, right? Like, I've got good sales and marketing background, but operations, you know, implementation setups, tax— like, I was clueless with that stuff when we when we first got going. Still, still mostly am, thank goodness, because I don't want to know that stuff. Um, the, uh, but, but you just— that— you just put the perfect bow on this conversation because the reason why people work with Jeff— and Jeff is a tremendous guy, that's one of the reasons why, and he's really sharp, uh— but the reason why other payroll companies work with him is because he works with so many other payroll companies. That's his niche, right? Results On Purpose niche is serving a lot of payroll companies. And if you were sitting in a mastermind with 7 other industries and yourself, like, yeah, it's good. I do some of those too. But like, it is really powerful when somebody knows your exact line of work inside and out, which is why niching down is so, so, so important and cool and why you guys have had so much success. And I really appreciate you taking the time, man. It's been a delight to meet you. And as advertised, thank you so much for spending a little bit of time with me.

My pleasure. Thanks for having me on. Yeah, I'm looking forward to your implementation episode. I want to see, you know, always looking for best practices, right? Like, the idea that you can't do something better is a bad, bad idea. So I'm looking— yeah, I'm looking forward to all your episodes, and thanks for doing them. It's great to have a payroll industry podcast out there.

Thanks, man. Appreciate it very much. And I appreciate it.