The Virtual CPA Success Show: Episode 54

In this episode, Jamie Nau, our host and Summit CPA's Director of Accounting/Virtual CFO; Jody Grunden, our CEO and Co-founder; Courtney DeRonde, Managing Partner and Director of Business Development of TDT CPAs and Advisors, a boutique advisory and accounting firm for small businesses and nonprofit organizations. They help overwhelmed, successful leaders understand and maximize financial information so they can achieve better results and move their organization to the next level.

TDT is awarded as a Forbes 2021 Best Accounting Firm. Today, we will discuss the similarities and differences of TDT CPAs and Advisors and Summit CPA Group. We will highlight the different strategies the firms use in helping their clients achieve success.

Jamie Nau: Hello, everybody. Welcome to today's podcast. I'm very excited for today's guest. We are joined by Courtney DeRonde, she is here to talk about her virtual CFO firm, which actually sounds pretty similar to ours. And so we're hoping this will be an exciting episode where we can kind of go through and kind of talk about the differences between Summit and TDT CPA and advisors. So we're going to talk about both firms, but before we get started, let's just welcome, Jody and welcome Courtney.

Courtney DeRonde: Thanks for having me.

Jamie Nau: Cool. So Courtney, if you want to give us just a little bit of background on your firm and kind of how you got started and kind of the services you provide.

Courtney DeRonde: Absolutely. So, I am managing partner and CEO here at TDT. I am a CPA, so I did spend a good 17 years or so serving clients, primarily small, medium privately owned businesses and nonprofit organizations. I did both tax and audit when I started out, most of my career was in auditing and financial reporting. Then I transitioned to a business developer and from leadership around 2018. I've spent the last several years doing a completely different job that is focused more on vision and strategy of our firm. So I have that firsthand experience running and growing our own business here. But also the experience of serving clients for many, many years. And then the balance of it is getting to talk to all of our perspective clients and existing clients, hearing what challenges they're facing and sharing how we can help.

Jamie Nau: So before we get going too far here, you want to give us a little bit of the stats behind your firm? How many people, how many partners do you operate with a partner structure?

Courtney DeRonde: Yeah. So we have eight shareholders, ten partners, we have 70 team members and we work across multiple office locations in the state of Iowa and beyond. So we have team members distributed all across Iowa and in a couple of other states. And so our team members, even if they are right in the same community as an office, they don't necessarily work in the office or work in the office a hundred percent of the time. So our workforce is remote and hybrid. As far as client base, we serve clients throughout the state of Iowa, as well as across the country. And so definitely back in the day it was very much around where we had a physical office location and over the last several years we've branched out. We realized we can work together remotely. We can work with clients remotely. And so our clients are all across the country. So, we've got those equity shareholders, but structure wise we are more of a corporate model and we have an organizational structure with myself as CEO. I have an executive team and we have a leadership team. We run the firm on EOS the entrepreneurial operating system. So if you're familiar with that, that's the framework that we use for running the firm, which is a bit more of a corporate store.

Jamie Nau: Great. All right, Jody. I know our listeners have been listening to us for a while, but you want to give that same information about us?

Jody Grunden: We also work on a corporate structure. I'm the CEO and then we've got a COO and then a director team, which Jamie is a member of that team. We have only two equity partners, 55 employees and another 15 contracts. Our contractors are primarily outside of the United States. Our client base is all across the United States. We really don't have a concentration really anywhere of clients. They go from east coast to west coast. We have clients outside of the United States and Canada, as well as in central America, South America. We even have a client Japan. We were brick and mortar in 2002. It was 2013 when we started going remote and we were fully remote by 2014. And since then really haven't looked back. We have got, I think 13 or 14 people that are in the same area that our offices are in Indiana. The rest of the team is from the east coast to the west coast. We use the EOS structure, kind of a hybrid structure. It's not exactly a structure, but a kind of a hybrid model. And we've been doing that for a number of years. I can't remember when we actually even implemented it, maybe four or five, six years ago, something like that. So it's fun talking to somebody with basically the same responsibility, same tasks. I also do some business development. I really don't do any client work at this stage. Jamie did I miss anything?

Jamie Nau: No. That's perfect. That's a good summary. I want to talk about clients next. I'm going to let Courtney start. So, we operate in a certain vertical. I’m curious how you guys operate in terms of clients? Do you operate in a vertical?

Courtney DeRonde: So our focus is primarily on small businesses. So we haven't honed in on a specific industry vertical at this time. So size-wise, it's the small, medium privately owned businesses. And we do a lot of non-profit work as well. So the traditional SBA, small businesses, maybe $2 to 50 million. Generally it's more about number of employees and kind of what their finance department capabilities are or the existence of one, whether or not they even have that. So, that size, small, medium, and then stage our primary focus is the growth stage. We are not a real good fit for a startup. But where we provide a lot of value and solve a lot of problems is when clients have made it past startup and then that growth stage, they're starting to realize they can't keep all the numbers in their head anymore. I feel like they're flying blind. They aren't sure like things aren't working anymore. They're coming up with new challenges as they try to grow and scale. And they don't really want to hire a bookkeeper or a controller and a CFO, but they still need people thinking those ways. And so that's where we come in. And so that's really our sweet spot is that stage in that size of business We do have clients in the mature stage as well, where some of our team specific team members will do succession planning and a really high end tax strategy around exits and transitions. But really the sweet spot is that growth stage or the mature business. So we have clients across all industries, manufacturing, distribution, retail restaurants. Sales and marketing companies. Web-based companies. We haven't gone deep on any specific industry at this point size and stage.

Jamie Nau: Great. So is that how your people operate too? Or do you try to group them?

Courtney DeRonde: We definitely are very intentional as we add team members to clients based on what they need. So mostly we're focusing on what are the business models at play here and what are the systems and software’s that have to be connected. So definitely like a restaurant or retail has a lot more connections of software with point of sale and different web based things. So sometimes in those cases one, is a business amount of question, but two, it's just like all the different technical aspects of all the feeds of information coming in that makes it ,ore helpful. So, yeah, we're very intentional about that, but we don't have people only do restaurants in that sense.

Jamie Nau: Jody again, you want to expand a little bit on how we handle this? It sounds similar in some ways, but different in some ways as well.

Jody Grunden: You know, Courtney, a lot of what you said is very similar to what we do. Typically we deal with clients, I would say in the small range between a $1 - 20 million in revenue, somewhere in that ballpark. We don't do startups unless they're fully funded startups where their capital is backed. But brand new startups without capital can't typically afford us, unfortunately. And when it gets to that million dollar mark, that's when we start to see that. It starts making sense for them and our average clients around $5 million. So it kind of goes up, and we'll take them all the way from the growth stage to eventually the exit stage, like you had mentioned. What is rewarding is when you see somebody that you brought on maybe at a million dollars and now they're at $15 million three or four years later, and looking to cash in on their investment, which is pretty cool. And with our niche, we work with primarily service companies. 60% of our client base is in the creative agency space, like a web design, web development, SEO, SEM, something that maybe would be in the remote world. But we do have others in restaurants, coffee shops and other types of industries. So with our client base, the majority of our clients, we've never even shaking their hand. Everything is done fully remote from east coast to west coast. And the same thing goes with our employees, you know, until we have our retreats a lot of times I will not have the opportunity to shake their hand as well. It’s kind of a unique model but works really effectively. I think with the pandemic, if there was something that great that came out of it, it would be the fact that I think companies are open to allowing their teams to work remotely which works great. You get a really good diversity of people from diversity of thought to diversity. It also opened the avenue where there's a lot of companies that were once resistant to having somebody come on remotely as a CFO or as a CPA, that now is becoming very acceptable.

Jamie Nau: Yeah, for sure. So, Jody, you talked a little bit about employees there, but you also talked about the marketing strategy. So I think since we've identified a little bit of a difference in terms of us being a little bit more vertical centric and Courtney being a little less, I'm curious, I obviously know your answer here, but why don't you talk about our marketing strategy.

Jody Grunden: Yeah. So in our marketing strategies we focus, like I mentioned everything towards our one vertical. So the marketing is built based on the creative agency space. So when we do our content marketing, we do it like on a daily basis, for the most part, we're writing articles all the time, or doing speaking engagements to different digital societies. Thought leadership is huge. It's pretty cool because what it does is it gives you the credibility that you may not have just as a regular CPA. The credibility is that this person really understands our industry or this person really gets us is a big thing because of our niching and really focusing on that niche we find that we can really hone in on streamlining our processes making our team even more efficient than what they might've been before. The vernacular becomes pretty natural for our team. You know, they understand it because they're hearing it from 8, 9, 10 different clients, you know, that sort of thing. And it becomes something that becomes a really nice referral base from client to client because we understand and their situation. So extremely niche based. I would say the niche base is probably one of the main reasons that we've grown so far with. We started virtual CFO services back in 2004 and with the virtual CFO service when I talk about that, that's not bookkeeping and accounting, that is about third of what we do. The rest of it is the strategic planning, the weekly meetings with the clients, going through a forecast and really diving into the cashflow. All that kind of good stuff. You know, clients really, really, really like that. But from 2004 until we niched in about 2011, our growth was maybe four or five clients a year. It wasn't a lot, plus the concept was very new. There wasn't many companies out there doing it. But it wasn't until we actually focused on it that we saw growth.

Courtney DeRonde: Yeah. I definitely agree. I think niching down is really a valuable strategy. I think where we're at is probably maybe where you were in that 2000 up until 2013, I think is when you, whenever you started niching is like figuring out who can we best help and then going deeper into those specific industries. I think right now, what we have seen is just in changing our approach and the way that we serve clients, we're attracting all kinds of businesses. And there's some that are not a good fit and we don't take it. And then there's some that we take it and then we realize later, oh, this is a lot different than we expected. And there's some, that's like, yeah, this is great. And so, I think we're probably still in that mode that I assume maybe you were. Doing different things and really getting to the point where we find our sweet spot in terms of an industry niche

Jody Grunden: Yeah, the key here that we've seen is really kind of honing and focusing on that niche and really driving to in all of our marketing efforts. So it sounds like your team might be moving towards that or trying to identify that.

Courtney DeRonde: Yeah, that's definitely been part of our plan for the last several years. And just determining which things really are a good fit that we can go after. And what we've been trying to, and maybe this is the wrong approach, I would be interested to hear how you guys approach this Jody, but we've been looking at it and saying okay, we want to feel like we don't just have a concentration. We have a deep understanding before we put ourselves out there as someone who is specific to this niche. So that's where we've been really building that kind of broad understanding of these different business models and different clients and seeing what works, and what things are not. I don't want to sound stereotypical, but some industries tend to attract certain types of people that might just not be as fun to work with for the type of people that we hire. We've also just been mindful. We want to feel like we've got a depth of expertise, not just have a bunch of clients in this niche.

Jamie Nau: Yeah. I think what's interesting. I think I've talked about this quite a bit recently, but I think oftentimes you find your niche through convening. We've got five or six clients in this area, and then you have to ask yourself, okay, is this something I'm actually interested in? Or is this something I can be passionate about? Because yes, convenience is good, but your clients are going to see right through you if it's something you're not passionate about. think the industry we're in, I know I'm extremely passionate about it. I love learning about it. I love going to events and talking about it. Like you said, it's somewhat stereotypical, but you know the people you meet are all somewhat similar in some ways. And so you have to make sure you are passionate about that niche. If you're going to really devote your team to it and really say, okay, this is what we're going to work on. We went to an event for the bureau last December, and this was a topic that came up and some people are like, yeah we do banks just because that's what we've always done. Like you could tell they weren't passionate about it. Those companies are the ones that grow faster.

Jody: Yeah. I agree. Yeah, a hundred percent agree. And, and you mentioned, you know, the quantity is really not the issue. You could have a [00:22:00] hundred restaurants, but not have the passion or not have the person that understands and deeply enough to really be that, that voice or that thought leader.

Jamie Nau: So Courtney, let's talk about your recruiting process and hiring and how you find the right people that can deliver your services.

Courtney DeRonde: So when we implemented EOS at the end of 2018, we got really clear about our vision and our values, and we started aligning our people with those two things. I would say that's when it really shifted for us. Once we got clear about who we are and where we're going and what we value, it became the filter for who is with us and who do we add? And so that literally changed everything. And it's not just putting them on a wall or putting them on the website. It’s continuously talking about them, recognizing them, calling them out and doing videos about them, just all over the place, and reminding everyone of our purpose and connecting everything we do back to our purpose and the vision. So when we were creating a change initiative around something, it's because it's tied to this bullet point on the vision so that people connect the dots. So that is what changed everything for us around recruiting. Getting clear about our vision and our values and just talking about them all the time so that our people know. And I do a weekly live LinkedIn. I think this is my third year doing that. That was probably one of the single biggest impact on recruiting because I was really intentional about staying connected to all these students who I had met or interviewed or who had interned with us or people who had been at the firm and left and went into private industry. They're all connected to me on LinkedIn and I do a video every week and it's not about TDT services. It's personal branding. It's like what I'm dealing with as a leader, what I'm learning, where we're growing. And so people start to see the culture of TDT and our values and our vision, and then they're attracted to it. And it's just totally flipped the switch.

Jamie Nau: I think that's a great point. I love the idea of the video. I've seen a turn for us too. I'm curious for you as well, Jody, but like I think when we started doing the podcast and the videos, when we come in to interview with them they know us already. When I interview people now they already have that base level of knowledge because they understand who we are and they understand what we do. I think once we got into video, that was a game changer for us as well.

Jody Grunde: Yeah. I mean, just hearing you, it sounds like us. The fact that you are active on LinkedIn, can you a little more insight on that?

Courtney DeRonde: Yeah, so its typically one to two minutes, unscripted on video. I'd say 99.9% of the time it's a one-take. I'm not perfecting it. It's very authentic and genuine. So I'm thinking throughout the week, if something happens, or I've learned something, there's an analogy or something. I will think about okay, that's what I'm going to talk about. I'm a very spontaneous speaker anyway. So I just try to be very authentic.

Jody Grunden: I love it. The fact that you say it's even an unscripted is huge. A lot of people, especially accountants, who think that they have to have everything perfect before they do anything. That is so untrue because you're never going to be perfect. The unscripted part is great because it gives a real feeling versus if somebody wrote for you to talk about something. So, tons of kudos for that. That's pretty awesome. I might steal that idea from you, just so you know. If you see it coming out I will give you kudos. I'll give you credit for it.

Courtney DeRonde: Yeah, well it was something that the digital marketing company and video production company that we work with that we'd done some other produce videos with, they told us that's a differentiator for you. You are just very approachable. That shows up in video more so than if you write something. And so even though a LinkedIn video doesn't really get as much reach as a written post or even a photo post it does get way more engagement. But putting yourself out there on video every week, just being you will broaden your reach. I cannot believe how many people I run into that say I love those weekly videos. And I'm like, well, if you would just like one or comment on them, I would really appreciate that. It's just knowing that people are seeing them and they feel like they know what's going on with me, even if we maybe haven't been able to meet for coffee in a while. And then the last thing I'll say about this is my team sees these as well. So we have a workforce like you guys do. Some people are in other offices, but they're not in the same office as me. And so people, at least on a weekly basis get exposed to like what I've been up to or what I'm thinking about or where my head's at. So our team watches these videos as well, not just other people outside of the organization, we've seen impact there as well.

Jamie Nau: That’s definitely been a theme on our podcast, bringing on people. I think technology has made this world so much smaller, right? Like when we first started doing this only family and friends listened in. When we add video we reached so many more people. Awesome. Well, I think this has been a great episode. Jody and Courtney I've definitely learned, and it was fun to hear someone who else is similar to Summit and hearing their perspective on a lot of these things. So I definitely appreciate bringing you on and I definitely can see future episodes bringing you because we can talk about so many more topics. There's a lot more we can get into. So appreciate both Jody and Courtney for coming in and doing this podcast. Thanks.

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