Episode Transcript

Please note this transcript was generated by AI and contains errors including missing and misspelled words.

Meryl:

So at the time I founded Bean Ninjas with a business partner called Ben McAdam. And we'd been talking about, we were both accountants and we both had other businesses and we saw an opportunity to build a bookkeeping business using a productized service, recurring revenue model. And we'd also both.

Been interested in the startup world, and we'd also both read Dan Norris's book, the Seven Day Startup. So, we had already decided that we wanted to launch a business together. We lived in different cities in Australia, and we thought the best way of starting the business was to actually meet in the same city.

So Ben traveled from Sydney to the Gold Coast and to spend a week together to launch the business. And so during that week, we were able to create our website, come up with a logo. Create, our fixed fee bookkeeping packages and find our first paying customer. And in order to do that, we headed quite a lot of planning to make the most of that week.

And then from there, after finding our first paying customer, we were then able to continue on and iterate. So that's a summary, but I think we could go into a lot more detail about it.

Host: Yeah, absolutely. So I'm curious about the planning part now. Did all of the planning really take place in this one week that you and your partner were sort of in the same city?

Or was there stuff that you were doing kind of prior to the first of those seven days that really prepped you for that seven day period?

Meryl: It actually took, we needed to prepare for the seven day period before we went ahead with the business. We discussed and documented our co-founder agreement, and I mean both being accountants, that we knew that there were some things around business structure and a shareholder agreement that we needed to discuss and put in writing before we actually even started the business.

And that actually took us a couple of months of, talking things through around where we saw the business going, and then trying to make sure that. Our shareholder agreement would capture different scenarios that could happen. So from the beginning before we launched the business, we also discussed things like what a future exit might look like or what would happen if one of us wanted to buy the other partner out, which was great because about 18 months into the business, I did actually end up buying Ben's share.

Of the business, and taking over bes. So I think it was really important that we had those discussions and put the time into that and had time to get feedback from other people around that shareholder agreement. So we were starting from a good place and also felt like we were on the same page because we did discuss things like where we, what we could see happening with the business in the future.

And what an exit might look like. But that was part of the planning process. And then another part of the planning process was just a, we actually mapped out a schedule of things that we wanted to achieve. So looking at, well, if we wanna get it in into a position where we can serve our first customer, what are all of the things that we need to have in place before we can do that?

And so there were some, some different things around licensing in, in the accounting industry, like a basian. License. There were some things like that that we needed to organize as well. And

Host: so I'm curious, it sounds to me like part of this sort of pre-planning, uh, that you did before you got together in the same city involved, really kind of looking at what are all the things that could happen.

And like you said, you know, at least one of them actually did, which is, you know, what are we gonna do if we get to the point where one of us wants to buy the other out? How did you sort of organize that list of. Potential issues or roadblocks that you were going to address? I mean, was it really just something that kind of came out of the conversation you had with each other, or how did, how did you find that list of things to address to begin with?

Meryl: Part of it was from our conversations with each other, but it we, neither of us. Had experience with working with business partners before, so we didn't really have a lot of knowledge about what future scenarios might look like, and the businesses that we were running were both consulting businesses. So again, they were quite different to what we were starting.

We both did a lot of reading. I know I read a ton of blog, blog posts about how you structured these kind of agreements with co-founders and what could go wrong and what other people had learned. From co-founder or founder relationships that hadn't worked, and I think Ben did the same. So we both tried to educate ourselves on that.

And then I also asked advice from from different people that I knew who had run businesses about how they would approach something like that.

Host: Excellent. So you kind of approached it with both of you coming together and then doing some research independently, and then almost having sounds like maybe some mentors or just, you know, folks with more experience than what you had at that time that you were kind of leaning on to, to guide you in a way.

What was the next step? So you kind of got your research and your planning and, and some things put together. What was the next step from there?

Meryl: From there it was, Booking Ben's flights and getting organized so that he could come up to the Gold Coast and that we could focus for a week just on launching the business and not on on anything else.

And I think it can be very tempting. It's exciting launching a business and going through detailed legal documents. It's not really exciting for most people, right. And I think it would be very easy to jump straight in, into creating the business and marketing strategies and, and, and we, that's what we wanted to spend our time on too.

But I think it's really important to get that founder agreement documented first, but, As I said, once that was organized, then it was about planning the trip so that we could make the most of it, and we scheduled our days and would give ourselves only an hour or two hours to complete different tasks, knowing that we had a short amount of time to get through a lot of work.

So we, we didn't have the time to do everything perfectly. We just had to do, do things well enough like creating a logo. We just had to do a good enough job that it wasn't gonna detract from the brand. And then move on to something else, knowing that we could, if the business went well, we could always come back and improve these things later.

Host: And I've heard there's kind of two sides of the same coin, I think. And I, and the coin that I'm referring to would be, you know, achieving a goal in a limited amount of time or with limited resources. And I hear two different schools of thought on that. One is, you're never gonna achieve perfection. So as long as you're moving the needle and accomplishing some goals.

Not being perfect is okay. And then the other is take the time to get things right the first time and you don't have to go back and do them over. And it sounds like initially for this first seven days, you and your partner, were working on more of a, we don't need perfection, we don't need a perfect logo or perfect website.

We just need something. To get the launch off the ground. Is there anything you regret about that or was that really hard for you to kind of not, you know, demand perfection from each step in order to meet your goals in that first seven days?

Meryl: I think it, it can be hard to think like that. And I think it's partly around mindset.

And it's actually something that I learned as a young accountant, as an auditor, I wanted things to be perfectly right, but for, for a big business, even something that's $10,000 out for a hundred million business, it's not really gonna impact anything. And that was something that I had to learn as a young auditor.

Well, yes, it's not, It's not a hundred percent accurate, but it's not wrong enough or in in accounting language, it's not material to affect any decision making. So we need to move on and focus on the big issues, and I like to apply that same approach in business. We'll, in the example of a logo. We could spend, and we actually did go back and rebrand later, and it, it was a process that took many months to do it properly.

And so when you're launching a new business, whe and you're not even sure whether it's gonna work, you don't have the time or the money to invest in something like that. So I like to think of it from a risk approach. So what is the risk? Uh, if I don't do this perfectly, what is the risk to me or to the business?

And with something like. Accounting reports, they need to be right. So you need to put in the time to make sure that they are accurate because it would detract from your business and from your customer experience if you did something that wasn't right. Whereas with something like a logo or a website, I approach it the other way, especially in the early days.

What is the minimum we can do to get this to market, to test it and get feedback so we can continue to improve it rather than let's spend two months on something and then realize we've gone off in completely the wrong direction. So it's better to get feedback as early as you can and then keep.

Iterating, but I think that it can be very uncomfortable to get comfortable with, with, with sending things out to get feedback, especially from customers when they're not perfect.

Host: And so it sounds like instead of focusing on whether or not something was perfect or perfect enough or close enough to perfect your.

Your, um, approach was really to consider the outcome of it not being good enough right now, or not being perfect right now. And I think that's brilliant because it really is what it's about. Just like you said, if the logo isn't. Perfect. Right now it, that's okay. Let's find out if we can even get a customer first.

So I love that. I love the way that you kind of split those two sides of the coin down the middle and really said, okay, but what's the point of perfection at this point in time with this one thing? So that is brilliant. So where'd you go from there? You were putting sort of a timer on some of your tasks and how did you know how much time to allot for one task versus another?

Meryl: We, we didn't really, we, we just knew that we had such limited time and, and so many things. We were building the website ourselves. We were coming up with our bookkeeping packages, and we'd never really sold bookkeeping services before in a format like this. There was so much that we needed to learn and.

We tried to just create really short timeframes and then if we couldn't do it in the timeframe, at least we'd really push, push hard, and then we could resh. We had to, we did have to reshuffle our schedule a little bit, but by only giving yourselves 45 minutes or an hour and a half, two hours to work on different projects.

We really pushed hard in that time period and got as close to finishing as we could. I could

Host: spend a week on a website and just have the homepage, not quite right. So that shows tremendous restraint and really, I think you really, I think the, it sounds like the number one thing for you and your partner was that you kept your eye on the ultimate goal, which was to launch in seven days.

So that kind of, um, Sticking to your guns, so to speak it. It sounds like that is something that really helped you to accomplish this. To begin with. You didn't allow any of the things that you could kind of get myopic with. You didn't allow that to happen. You just kept your goal in mind.

What, um, so tell me, so day one, Ben Lands in town, and what's the first thing that you guys are doing?

Meryl: We spent some time together, again, looking over our schedule and working out what tasks we were gonna work on, but also the order of priority. So we couldn't finalize the website until we had a logo, but we couldn't sell to anyone until we had our.

Packages And so as well as working out what we needed to accomplish for the week, we also worked on order of priority and then we also looked at our skillsets to, to divide up the tasks. And I think it was really helpful doing it with someone because we were both highly motivated and it was quite fun what we were doing.

And having someone else there in the room. It was, yeah, it, it was a fun week actually, and we were both accountable to each other and, and really trying to work hard and, and have results at the end of the, the time blocks that we were working in. And what was

Host: each day, I mean, we're, I'm, I'm assuming we're now talking about, you know, typical eight hour days.

Meryl: They weren't, they weren't huge days because we were working so intensely. It's not really, I find it's not really possible for me to work with such focus for more than eight to 10 hours a day. So they weren't, we knew that we had a whole week, so we didn't actually work the crazy 14 or ridiculous hours that some startups do.

We just tried to be very disciplined around our timeframes and then allow enough rest for us too. And then it was also, Ben hasn't spent that much time on the Gold Coast, so we actually wanted him to be able to get up outside and enjoy some time here too. Ah, I mean, our focus was to launch the business, but I, I think we've both realized we'll work best.

If we're gonna be working that intensely not to work ridiculous hours.

Host: Absolutely. That's amazing that you even cared if he got to see, if you got to see the Gold Coast at all. So, so let's move to day two. What did day two look like for the two of you?

Meryl: In the initial day? We were, that was the, The logo and then getting started on the website.

Mm-hmm. And day two, we were starting to form the packages, but also think about where we were gonna get our first customers from. We, once the website was live, we felt like that was enough. We had enough of a presence, even though it was only day two to start to contact people. And we posted in. Dan's seven day startup group.

I can't remember if that was on day tour. It may have been a couple of days later, but it was whenever the website was live just to share what we were doing, that we were launching in seven days and that this is a service we were offering. And did anyone know? Anyone that might be interested in the service.

And so we were, as well as getting the business ready to launch, we were also thinking about who could we contact and how could we generate some interests in what we were doing. And I think that was part of the reason that we went with the seven day launch as well. It, I haven't heard of that being done with an accounting firm or bookkeeping business before.

Mm-hmm. And we thought that might help to make us a bit different that we had launched in seven days and it might help. Other people to want to support us or, or help us in this journey of creating a business in seven days and then seeing where it would take us.

Host: That's So literally your site was live before the seventh day even.

Got here. Even arrived, yes. Yeah. That's

Meryl: amazing. Yeah, and I mean need spend as, he's an accountant, but he is quite handy with WordPress. But we. Bought a theme and then we looked at other websites that we liked and looked at the style and the wording and how they explained things to their customers and used, we bought a, a WordPress theme and, and then just did the best we could and, and the same kind of thing.

We knew it needed to look professional enough that. It wasn't going to lose trust from customers by looking like it was from 1980, but it didn't, we, we didn't need to compete with an accounting firm that was, Competing on a global scale, we, we weren't gonna be able to complete that in one week. Right.

Host: And so now you mentioned that part of, I think day two and maybe into day three, you were talking about where were you going to get your first customers.

So you posted in the seven day startup group, and then where else where did you ultimately get your first customer and at what point in after launch, in the middle of launch, when, how did that happen?

Meryl: We also reached out to friends and family. But, so we wrote a blog post, our first blog post on our website explaining what we were doing, that we'd launched in seven days.

And our first customer actually came from Dan's seven day startup group, and he is still with us now, Jared Robinson from the PE geek. So he, he took a punt on us and saw that yes. Two accountants having a crack at launching a business and he saw our post in the Facebook group and was our first customer.

Awesome. And that happened within the first week. That's what we were aiming for, but we weren't sure whether it would happen. So we were just so excited. Absolutely. And I must say it wasn't, that made it feel like maybe we were, we were gonna get. Find a lot more customers like that, and it actually proved a lot harder to get our first 15 customers than just putting a post in a, a Facebook group.

Right. But that at least gave us the boost we needed to think right. We're, we're on the right track with this business. And from there it was about, The early stages, reaching out to our existing network and friends and family, getting that

Host: first customer does bring you so much momentum and that it's like, I mean, it's gassing up and just hitting the hitting, putting your foot on the pedal and now you're going full speed and it feels great.

What was the timeline like between your first and you know, sort of 10 or 12 customers? What was that like? How long after your seven day launch did that take? It

Meryl: took quite a while. We both, Ben and I had networks, but they weren't really, they weren't necessarily because we were selling completely different services.

So Ben, previously, his business was a tax business and I was, my skillset was accounting with big business. So the clients that I worked with were quite different to the type of small businesses that we with be ninjas. And it was actually, it took. Time. And we also realize that you need a certain level of trust in your bookkeeper or your accountant because you're sharing financial information with them.

Mm-hmm. And we, we realized over time that it actually, it is going to, it's gonna take time and effort to actually build trust with potential customers. To the point that they feel comfortable with sharing their financial information. So if, if they'd never heard of us before or didn't know us personally or through friends and family and our website's only been around.

Or that they can see the ABNs. Only our business number's only been there for two months. They could wonder whether we were a legitimate, well established business. After eight months, we hit a hundred thousand of annual recurring revenue, but we really accelerated in the backend of that. So I can remember it took us six months to get our.

Monthly recurring revenue to just over three and a half thousand. Wow.

Host: So that first six months, you kind of had a lot of moments when you were wondering if we're, if we're doing the right thing. Which brings me to my next question is I'm curious about most specifically within that seven day launch, but even, you know, further into the next few months, you know what you.

We're creating a, something rather unique, which is a productized bookkeeping service. And, you know, you're doing a lot of things that no one in that particular industry has really done before, at least not this way. So what were some of the challenges looking back now that, you know, your, your business has kind of boomed and you've had these huge growth and you continue to grow, um, month over month and year over year.

But looking back on that seven day launch, in those initial couple of months, what were the biggest challenges and. Sort of some things that you would do differently if you could?

Meryl: There was a, wait, there's a couple of key challenges. One was that neither of us had run a bookkeeping business before, which meant that our intention was always to build the business to scale.

And that means you need systems because you're gonna have a team. And having not been in the detail in, in how a bookkeeping business runs, we had to figure out everything ourselves. Whereas I think I. If we were running a tax practice, Which Ben had 10 years of experience in, we would've already known all of the procedures and ways of doing little things like onboarding a customer even.

Mm-hmm. That, that work for that industry. So one major pain point was that we had to develop all of these processes and procedures from scratch. And that's not something that your customers pay you for. That's just a, a, a hit to your bottom line. And we had very limited revenue for those first six months.

Which brings me to a second pain point, which was around cash flow. Ben and I each put in, I think it was around $500 each to start the business. And that was just to get the website and, and get things set up. Mm-hmm. And then from that point, everything that we were spending in the business, we needed to earn first.

We were covering our living costs through our other businesses. And so that was a real balancing act in. Managing our other businesses to fund to, to earn enough to pay our living costs, while also trying to focus as much time as we could on bean ninjas to grow it. But with the revenue so small, there wasn't really a lot of money available to pay other people to do things.

So we really had to do everything ourselves, even though our intention was. In the longer term to have a much bigger business where we had a team running things. And so we were actually doing things like the bookkeeping ourselves, which an ALI rate for bookkeeping is a lot different to the kind of accounting consulting rates or tax rates that Ben and I would charge.

So that was actually, we didn't really enjoy that, but we knew that in the long term we were building a scalable business. And so they were the kind of things that we. Needed to accept and and do until the business was big enough to hire other people to do the bookkeeping work. And how long did that take?

We hired our first staff member. It would've been around five months into the business. Wow. And that was just as revenue was, was gearing up. So before that, Ben and I were doing everything

Host: and when. Okay. So because when I hear everything for a startup, I've worked with startups before, everything is a lot.

So you were literally doing the bookkeeping, marketing, you know, managing your website, all of it. Just the two of you?

Meryl: Everything. Yes. All of that. Writing blog posts, social media. Doing the bookkeeping work and which sales,

Host: which of those things? Because I think it's always interesting when founders do spend months, most founders at, you know, after about six, six weeks, two months, they're gonna go look for investors.

So I think it's really interesting to talk to founders that kind of kept doing everything themselves, wearing all the hats, um, until they could hire. Um, help. So of all of those things, which, which of the ones, I mean obviously taking care of your, uh, customers that you had were important, but as far as operational, which were the most important things for you and your co-founder to be doing personally, and which were the things that you think would've been better to offload from

Meryl: off your plate First?

So we, we ended, our first hire was someone to do bookkeeping, and that was what we wanted to get off our plate as early as possible, the operational part of the business. Mm-hmm. And if we'd had more money, then we, we could have invested more in marketing at the beginning, but our issue was that, Neither of us wanted, we, we weren't, weren't sure whether the business was gonna work, so we didn't wanna put up more of our own money in the beginning to pay other people to do anything.

And I think there's pros and cons of that. The, the downside is that it took us a long time to grow. The first six months was very slow, but the upside was that we had the opportunity to learn without financial pressure because it was only our time that we were losing. Right. And it was actually very beneficial to learn.

From my end, I was spending a lot of time learning about marketing and creating content and copywriting and design, and I think they're skills that are really useful in what I'm doing now. Even though I'm not directly creating a lot of the marketing material for us anymore, I still oversee it. And I think being that hands-on in, in creating these different things and the business was great for my own learning and I, I don't think I would do it differently.

Yes. It was frustrating that our growth was slow and it was hard financially too, and we also had to work a lot of hours. Because we were, we weren't getting paid anything from Be Ninjas. Mm-hmm. But I think that all of that time was actually really good for my own development and helped me to change my thinking from thinking like an accountant, which can be quite narrow.

Mm-hmm. Into thinking more like a business owner. Which needs to be much broader, much more strategic, and also to think about our customers and think about things from their perspective. Mm-hmm.

Host: Tell me a little bit, speaking of your customers, tell me a little bit about, um, if, and if so, how your, um, your sort of, uh, customer outreach has changed.

I mean, obviously as you grow, you get more budget, you hire more people, you can do thing, more things with

Meryl: marketing. Our marketing approach, again, was very general because we didn't have a target market or an ideal customer that we were targeting. It made our marketing strategy. It was difficult to have a clear marketing strategy, and our approach was scatter gun.

So I, we, we tried everything. I can remember trying cold calling. We had a university intern who was dropping flyers at different businesses. Oh, wow. We were. I think I, I tried to contact about 50 50 different accounting firms to build relationships, to have them refer out their bookkeeping work to us. We, we just tried all kinds of different things, and most of them didn't actually work.

We didn't get anything from the letter drop. We didn't get anything from the cold calling. And in the early days, we didn't get anything from the accounting firms because we weren't established enough for them to risk their reputation on sending us bookkeeping work when they, they didn't really know of.

We were only a new business. Sure. So it was, it was really just over time when we started to do good work for, well, we were doing good work for our existing customers and really putting in a big effort to make sure they had a good experience and that was only a very small group of customers. And then over time, they would start to tell their friends and family.

And then it felt like we started to get some momentum, but it, it did take a lot of time and I think we were challenged by not having a clear. Target market, which then made it difficult to write any kind of messaging that was talking to a specific person.

Host: Exactly. Yeah. And so that's kind of some of the things from your initial seven day, uh, launch and strategy that changed.

What are some of the things that you and Ben. Built or decided in that seven day launch that I've proven to be foundationally important all the way up until now. What's something else that you want the audience to know about the seven day launch

Meryl: process? I think if someone, if I was to be giving some advice from someone else or for someone else that wanted to go down this path and launch a business quickly.

I would say one, make if you, especially if you're doing it with a business partner, make sure that you have the foundation right before you start things like a shareholder agreement and think through what your, the end game or the potential exit might look like, and make sure that you're thinking about that at the beginning.

Then I would say make sure to plan the seven days and your objectives and what you wanna achieve so you can stay focused and really push yourself to complete things quickly during that seven days. And I think the objective should be to get a customer and to have someone, lots of people can say yes, that's the great idea, but it's only when they.

Front up with their money and actually pay for something that you know that yes, they, it's very easy to say yes, but to pay for something is quite different. So I would really say to push yourself to actually get a customer, not just to ask people whether they think things are a good idea. And then also have an idea about how you're gonna continue on with things after the seven days, because we were on a real high after that week together in person.

Mm-hmm. And then we had to go back to everyday life. And so I think it's important to think about how are you gonna maintain momentum in your business when probably it's not gonna be able to pay you much money in the early stages. Mm-hmm. And I think that also ties in with having your personal finances organized.

I think you're in a much better position and create. Much less stress for yourself if your personal finances are organized before you go into business. Because the first couple of years in business, for a lot of people, You're probably gonna be earning less than you would if you're working as an employee.

So if you can be debt free and have, say, I mean home loan debt or, uh, university debt, I'm not talking about that, but things like credit card debt or car loans Sure. Have all of that paid off and have money in the bank account as a buffer with at least a couple of months of living expenses. I think you've given yourself a much better opportunity to create, to have a successful seven day launch.

But then continue that business for a successful future.

We'll be back next week with a bonus interview with Blake Oliver, who is the host of the Cloud Accounting Podcast and the founder of Earmark CPE, and I'm having a chat with Blake to hear about his content creation process. We'll be having a few bonus episodes before season two kicks off, and as a reminder, season two of the Lifestyle Accountant Show will be all about mergers and acquisitions and partnerships in the accounting firm space.