Russ: Hi I’m Russ Capper and this is The BusinessMakers Show, coming to you today from WorkFlourish where I’m very pleased to have as my guest Stephen King, Founder and CEO of GrowthForce; Stephen welcome back to The BusinessMakers Show.
Stephen: Thanks Russ, thanks for having me.
Russ: You bet. So I think it was about 7 or 8 years ago we had GrowthForce on. At that time it seemed like it was you and an administrative helper, have you been able to keep the administrator?
Stephen: Yeah, we’re now at about 56 staff so we have really – we’re growing, following our name.
Russ: Wow, congratulations. Okay, tell us about GrowthForce.
Stephen: So GrowthForce is a fractional share of an accounting department that you can get just in time, a bookkeeper, a staff accountant or a controller, for your business on an as-needed basis for companies that use QuickBooks.
Russ: Okay. I know a lot of accounting services that love to do the services but you must not have many competitors that do exactly what you do.
Stephen: There’s a lot of CPA firms who do bookkeeping and outsource CFOs who provide advisory services. We are unique. There’s some other national players like us – our clients are all over the world because it’s web based – in Houston there’s not a lot of companies like ours but there are a couple of other national players; but we were the first.
Russ: Okay, so take us back to the beginning. What motivated you to start this idea?
Stephen: So I left Ernst & Young where I was a manager and I went back to serving small businesses, which was my passion. I started a CPA firm and I realized quickly that I had a human capital problem. I could not find trained, knowledgeable workers and keep them because as soon as I trained them they would go work for a larger firm. And I thought if I could outsource the bookkeeping and the accounting so I got financial statements and work papers, that I could be the trusted advisor that my clients wanted me to be.
So I tried it in 1985 with 9600 Baud modems and dedicated phone lines, it didn’t work. I left and became the Chief Financial Officer of one of my client’s, a nonprofit called Amnesty International and I learned Management Accounting. But when Netscape came out in 1995 I thought there’s the wide area network I need to do this web-based outsourced accounting business. So I started a company called Virtual Growth and raised $43 million in venture capital funding, grew that to about 250 people in 7 cities and sold that to Insperity. Came down here and became President of Insperity Financial Management Services.
After September 11th the whole economy tanked and so Wall Street said you can’t diversify into outsourced accounting, went and got a focus on outsourced HR. Paul Sarvadi the CEO believed in this and said okay, you can buy it back and I started it back up from scratch and we’ve been doing it ever since. We became an Insperity strategic business partner in 2011 so we’re now bundling back HR and Accounting.
Russ: Wow, so for full disclosure we’re kind of an Insperity partner too these days.
Stephen: Love that.
Russ: Impressive company out there.
Stephen: Big fans of Insperity.
Russ: So go back to this Netscape part, does that mean today you’re primarily online? I mean you’re doing the services online?
Stephen: Yeah, 100%.
Russ: Or do your people go out and visit?
Stephen: No we have a service center in Kingwood where all of the accountants are in teams and we serve all of our clients all over the world; even our Houston-based companies are virtual. What we do is we give a dedicated bookkeeper staff, accountant and accounting manager to your team and they become your accounting department. And what’s unique is we have this smart back office. It’s a kind of a QuickBooks-centric ecosystem where we’ve integrated bill payment, time sheets, payroll, job costing, expense management – the whole accounting system fully automated and integrated with the general ledger.
Russ: Really cool. I haven’t heard you mention taxes yet, do you do taxes?
Stephen: No. Well we do sales taxes, we do payroll taxes; we call it operational taxes. We don’t do income taxes because we don’t want to compete with the traditional CPA firms. We get a lot of business from CPAs whose client’s books are a mess; they can’t get the taxes done, they can’t get through an audit. And we partner with CPA firms who have clients whose books are a mess; who can’t get the audit done or they can’t complete a tax return and so we don’t want to compete with our partners. But we’ll deliver the whole package in conjunction with the CPA firm.
Russ: So your customers, the size of these companies, what’s the range?
Stephen: They’re typically under $20 million in revenue. And that’s because once you get to $20 million that’s when you really want to hire a fulltime CFO or a full time Controller and oftentimes you might outgrow QuickBooks; but in that under $20 million space we’re going to save you 30% – 40% over hiring somebody yourself.
Russ: You have this guide out now called The CEO’s Guide to Keeping Score, tell us about that.
Stephen: In my career I’ve served over 1,000 clients and really studied what’s the difference between the companies that are widely successful and those that struggle to survive?
Russ: So you’ve broken the code?
Stephen: I think so. I think the difference is the winners keep score. They have their fingers on the pulse of the business drivers and they make data-driven decisions. They know what their best marketing campaign is and they know to double down on that one. They know where to send a sales rep to go find the most profitable clients. And the companies that struggle do it from their gut or they look at their bank balance or they just look at a regular, traditional financial report – an income statement and a balance sheet – and it’s not actionable. They’re not making decision based on data. And I think that’s why we wrote the book because it kind of shows the people how you build a scorecard to help you be a winner.
Russ: Okay, tell us about the book. I mean is it like a book you can – a hard copy book or do we still do that anymore?
Stephen: You do but it’s an eBook and it’s one of a series. We’ve created this CEO’s Guide series, so this is The CEO’s Guide to Keeping Score. We’re also got a CEO’s Guide to Increasing Profits and a CEO’s Guide to Increasing Cash Flow. The Keeping Score one is unique in that it comes with a companion KPI template so that you can actually read through step by step how to build a guide and then we give you this Excel model that you can walk away with an actual scorecard.
Russ: Okay, so we’ve got people watching right now, say somebody’s interested in it. I mean you sell it to them online; will you come and teach it to them?
Stephen: Yeah, we’ll give it away. We’re hoping that people are going to set up the scorecards and look at the data and say I don’t believe these numbers, they’re not right. And then they say well you should outsource your accounting to GrowthForce. You have cash basis reports your profits go up and then they go down depending on how many payrolls you’ve got that week, whether or not you got a big deposit check from a client; you’re running your business on your bank balance. If you’re doing accrual based accounting then you’ll be able to see a real profit and it will last every single month. That’s why we’re giving it away. But if you go to www.growthforce.com under resources it’s a free download.
Russ: That’s hard to pass up. But I thought I’ve heard too that you might go through a classroom type instruction with the same materials?
Stephen: I’ve become a Vistage Speaker. I’ve been a longtime member – a 10 year Vistage member this year – and so we’ve been working sort of first with our group and then with other Houston groups too, to teach them how do you figure out what are the business drivers? What should you have your fingers on? What will make a difference to your decision-making? And then going through a step by step process. And we’ve just done a webinar on that and we’ll repeat that webinar series again.
Russ: So before I let you go repeat the website again.
Stephen: www.growthforce.com and under resources you’ve got the eBook CEO’s Guide to Keeping Score and the free KPI templates you can keep score yourself.
Russ: Steve I really appreciate the story and impressive growth and keep it up.
Stephen: Thank you.
Russ: And that wraps up my discussion with Steve King, Founder and CEO of GrowthForce and this is The BusinessMakers Show.
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