Practice Success Podcast

Stephen Smith Dives into Creating Niche Audiences

• Canopy • Season 1 • Episode 5

Share episode

Stephen Smith, CPA is the founder of Controllership Solutions in New Jersey. He discusses how he has created a niche and persona through the use of partnering with complementary service providers and leveraging technology. He also discusses how he finds balance between building his practice and making time for his passions, including his family.

KC Brothers:

It's time for a new episode of Canopy's Practice Success Podcast. Today we'll hear from Stephen Smith, CPA and founder of Controllership Solutions in New Jersey. Stephen discusses how he has created a niche and persona as the cooking coach, the power of partnering with complementary service providers, leveraging technology, and how he finds balance between building his practice and making time for his passions, including his family. Listen for some new insights that will help your firm thrive. Welcome to an episode of Canopy Practice Success. I'm Casey Brothers and I'm here with Stephen Smith. Welcome.

Stephen Smith:

Thank you. Thank you, Casey.

KC Brothers:

Can you give us a quick introduction of yourself professionally, maybe throw in some personal nuggets as well?

Stephen Smith:

Sure. Um, my name is Stephen Smith. In my firm, Controllership Solutions, we are out of Morristown,

KC Brothers:

Say that five times fast, right? Controllership Solutions.

Stephen Smith:

L L C. We are out of Morristown, New Jersey, northern New Jersey, just west of New York City. And we're, uh, you know, we're, we're, we're in the suburbs, two kids, uh, family and soccer. Soccer Sundays.

KC Brothers:

Oh, fun. It's a good time in life. Yes. Yes. Well, thank you so much for joining us. Um, tell us a little bit about controllers. See, I struggle with that. Maybe it's my retainers controllership solutions and what you do.

Stephen Smith:

So we are a boutique, uh, kind of firm. Uh, it's myself and one employee and we provide training troubleshooting set up and ongoing controllership. services to both businesses as well as individuals needing a little bit of accountability with their personal finances in the household.

KC Brothers:

Okay, and you've specifically helped individuals. Who are, when we're talking about individual clients and not business clients, um, who are already managing their finance as well and typically have come to you with just technology issues, but you've found that even though they might be coming, it's funny, we all think we know what we want. Um, I've seen even in the context of AI. Uh, people say like, I'm not out of a job because then someone would have to actually accurately describe to AI what they want. And we all have a hard time doing that, don't we? Um, so people probably come to you thinking that they know what they want, and then as you're evaluating things, Well, tell us a little bit about that process.

Stephen Smith:

Just like, you know, just like with businesses, individuals have the same problems. They need to know what their money is doing, where it is, how it's doing, how it's being deployed. Uh, and as businesses grow, obviously it becomes more of a complex chore. Same thing with individuals and families. As they become more successful, they have the same problems. Multiple homes, multiple accounts, multiple investments. And just like with businesses, the question of, Am I making money? And why can't I make payroll? And is this working? Who are my most profitable clients? That becomes a similar issue just in a slightly different context with individual households. Oh, I have different houses What about what am I spending? Do I have enough money for college? They have enough money for retirement Are we living beyond our means we feel like we're making a lot but Are we spending too much? Those types of questions. And it all comes down to data.

KC Brothers:

Yes. Data, data is king. Right? Data, um, checks our emotions at the door. It's hard to argue with. So what's some of the data that you love reviewing with your clients?

Stephen Smith:

So in the beginning, it's just what I call like, you know, writing the ship, we just got to get a balance sheet in place. So what exactly does a balance sheet look like? Whether again, if it's a business or, or an individual household. When it comes to businesses, it's accounts receivables and liabilities or their customer deposits, fixed assets. With an individual, it's the same thing. It's might be stocks, bank accounts, credit cards, second homes, third homes, collector cars. Who knows what. So, let's, let's get everything on one page. Then, of course, after the balance sheet comes the P& L. So, what is the, you know, what, what are the... How does the cash move in and out, uh, both for, again, in the business, customers, expenses and an individual, it might be earned income, it might be passive income, it might be rental income, and is that enough to offset expenses? Yeah.

KC Brothers:

So, data is not... strength of everyone. I think it comes really naturally to accountants because accountants work so well with numbers. Um, how do you help your clients understand the data that you're dealing with?

Stephen Smith:

Yeah, well, they usually have a question. They understand that there's a problem. They don't necessarily know what the solution is. Frequently, the relationship starts with Just solving technical issues. So I have to build trust knowing they need to know that I know how to work the software, the QuickBooks, the e commerce, the integrations, Quicken, they need to know how everything works. So once they see that I am, uh, an authority when it comes to reconciling, getting a balance sheet, uh, understanding how these things all kind of fit together. Then they, they start to have some trust and then it's like, we get to the real nature of the issue, the real nature of the problem. It's. Yes, I don't know why we're not doing more, more, why I'm having difficulty making payroll or, you know, Why is there never as much money in our bank account to pay the credit card bill? And so once we start to like say, okay, well, that's the problem. Let's now let's look at the actual numbers Yeah, so let's see where it's actually going and then from there that opens up a whole nother realm of you know trusted advisory and I can do some additional cuts like Is this necessary? What is this? Why is this? You know, what's going on here?

KC Brothers:

Yeah, so data is just something I'm personally passionate about too because there's so many instances in where if you have, and you're tracking data appropriately, what's hard about data, right, is that it's only as good as you make it. Right. You, we were talking earlier and you were saying garbage in, garbage out. Yep. And if you're putting in bad data, you're not going to be getting the data you need to, that, that data is not going to reflect reality. Sure. So how do you go about making sure that your processes to capture data are capturing it correctly?

Stephen Smith:

So if I'm really doing my job right, the, the, the, the, the process is. is, is easy. It's selling them on the process. That's the, that's the hard part. They need you to kind of have their own aha moment. The client needs to really want it. So the challenge is, is getting them to want it. So they came to me with a technical question. Okay. They kind of want it. So then I give them the technical answer, but then it's like, you know, this is going to happen again. If. You don't learn something if you don't learn the process and if you don't want the process if you don't want to Have constant improvement constant ongoing, you know analysis of this So how do I try to get that buy in? From them by getting them to have the own their own aha moment and i'll use expressions Yeah, i'll use i'll say this is garbage in garbage out and You gotta work for it, you know, um, you know, the results are not given.

KC Brothers:

We're talking about behavior change here, and it's not going to happen overnight.

Stephen Smith:

Yeah, it does not happen overnight. So, so they need to actually understand that and get that. And so I'll use expressions that they've heard all their life, you know, you know, such as, you know, garbage in, garbage out. So they can say, Oh, okay, yes, I get it. And then when it goes wrong again, They're holding themselves a little more accountable to it. So I say, okay, here's the process. This is what needs to be done and is it hard? No, but you know, with risk reward is another one. So everyone understands that there's a risk and a reward and everyone understands that there's a relationship between the two. So I try to demonstrate and show them where that risk reward is and where that paradigm is. And the other. Element to this, of course, is there's a point of diminishing returns, so they can't go too far with it. So where do we find that sweet spot? Where do we find that, that actual like, okay, this is something that we can do. And then I use another expression, I use the 80 20 rule, something they've also heard from their, you know, all their life. 80 percent of your problems can be solved with a little bit of effort, with 20 percent effort. So let's just course correct a little bit here, and then, great, we'll fix that. And then, of course, that moves everything up. And then hopefully it gives them a little bit of a taste of, oh, this is really nice, this is great. Well, great, what's the next big thing that we can do with 20 percent effort that will give us... 80%. Uh, 80 percent success, 80 percent results.

KC Brothers:

Yeah. So talk to me too about how you found all of this within your firm, how you found that this was a need to, to help people identify. How to, um, find these points of leverage and

Stephen Smith:

at the conferences and just podcasts and ongoing books that I've read, uh, I, I, I absorb that because it's very interesting to me. And. Uh, but it's very difficult to give, you know, a client a book and say, Oh, if you read this and they don't, they don't really want that, but so I needed a much quicker, I wanted a cliff note, right? So that's kind of where these expressions kind of came from that like, Oh, well, you know, the expression, right? You know, a bird in the hand is better than two in the bush, like, okay, Oh, well, what does that mean? Well, again, it goes back to your risk reward. What kind of entrepreneur do you want to be? How successful do you want to push this? How, how much leverage do you want to apply, uh, as you grow a business? Because they don't have unlimited capital. They don't have an unlimited labor, you know, labor. So they have to decide what is the priority and kind of that discussion. Okay. What do we, where do we spend our time next then? The Pareto principle 80, 20. Well, where do you think you're going to get the most. Paying for your buck. Another expression.

KC Brothers:

I'm hearing you talk about this and thinking that maybe there's a difference between a new client and a really developed client. Because, and tell me if I'm wrong.

Stephen Smith:

No, it's, it's, it's, it's a, it's a progression. It is, it is, it's never ending.

KC Brothers:

Well, I mean, in terms of your data too, like, let's say you have someone who comes in and is tracking things. They might be tracking them while they might not be, um, whereas someone you've been working with for a much longer time, you can have established processes to have that data and maybe even established, um, schedules of when you're sharing that data and how you're sharing that data. So how do you get a customer through that? Uh, progression to a point where your data is on autopilot,

Stephen Smith:

right? Well, that's the, I do, I am very transparent with my, with my clients. I tell them if I'm doing my job, right, I will eventually make myself obsolete. And I see that as actually success. So it has happened on multiple occasions. They've either, um, they've reached a point where they say, okay, I've, I've found my equilibrium in the size of my business. On the risk reward paradigm, I don't need to continue to grow and I'm very happy with the status quo. Uh, other clients have continued to grow and grow and grow and they outgrow me. And then they say, well, we need someone full time and I'm not that person. I like working with a lot of diverse clients. Uh, and that's great too, that's like, they've left the nest, you know, they've learned to fly. So, another, another expression, right? Um, so, uh, so, in the beginning, it's, it is, the data, it's getting, teasing things out of their Excel spreadsheets. It's teasing things from their manual paper, you know, antiquated systems, and getting it into a process. Getting something into more efficiency. And in the beginning, sometimes there's resistance. Especially if they have staff, sometimes they're established staff and, and they're like, Whoa, this is going to be different. And if. I jump into a time saving thing, there's almost a little bit of, you know, uh, uh, fear and trepidation there. But that doesn't take, that doesn't last long, because then I give them other things to do, and then they say, oh, okay. But then they're also doing things that they're feeling much more confident about. Because while the Excel spreadsheet they've been using for years... You know, they were never, they never had any check and balance on the spreadsheet. That's the difficult with the difficult part of about spreadsheet. There's no way to really check to make sure the data is correct in a system. It's what if it's designed correctly, we can reconcile that. We can find that. So they feel much better about like, Oh, great. I can do my data entry and then know that somebody else is going to tell me that's okay. Whereas instead of with a spreadsheet, they're doing data entry and they're just very paranoid about doing something wrong because it'll go unnoticed for. Indefinite.

KC Brothers:

Yeah, yeah. So depending on the processes or operations you have and the systems through which that information is collected, you can worry less. about whether or not the data itself is right and worry more about how you are examining the data.

Stephen Smith:

And once we get to the next point, it's going to be, okay, let's analyze this. And that's where I continue to stay relevant and say, okay, how can we analyze this? What's next? What's, is it service offerings? Is it real estate? Is it property? Is it insurance? What are we, what do you want to do? You know, there's lots of things that you can do. And, and my job is not just to say. I start off with systems, of course, because I'm a big believer of systems. I also have to play the role of, you know, devil's advocate and say, listen. If you ask other people, other professionals, they're going to give you different answers. If you're a business, if you ask your insurance person, they're going to say, well, you have risk here. You need more insurance. If you can ask a lawyer, they're going to say, well, you have risk. You need more entities. If you ask a banker, they're going to say, Oh, put it in a CD. If you ask an investment person, they're going to say, Oh, it's, you know, stocks and bonds. If you ask an inventory person, it's more inventory. So where can we use the data that we've designed and processed to, to really get into, okay, how do we, now let's talk about strategy.

KC Brothers:

Yes. Oh, I love that so much. Um, you're flying blind without good data. Um, and good data to me too, again, like I said, helps you check your emotions at the door, which I feel like makes it easier to take a leap when, when there might be a risk to take, um, the longer you're tracking data, the more you can spot trends. And, and see behaviors that We're unnoticed, even though you might've been the one sure behaving.

Stephen Smith:

Yeah, no, I live very vicariously through my clients because they are entrepreneurs that take risks. And I really empathize with the risks that they're taking. And there's so many risks out there, the macroeconomic risk competition products, you know, there's that they can't control. Yes. So by starting off with what they can control, which is their own house, their own information, their own data, at least then they'll have the information to make as educated of a choices as educated of a decision as possible so that when they say, well, okay, I know this is going to be a risk. I've quantified the risk the best I can. But yeah, let's, let's order that extra, you know, bunch of product from, from China that may take six or eight weeks on a, on a container to get here because I don't want to restock or, okay, no, I'm willing to go just in time if I need to, and run the risk of being out of stock, you know, or, or if you're a builder, I'm going to, yes, I'll take this big project on, even though I don't know what. behind the, the old sheet rock or anything like that. Oh, risk. Right. So they just want to quantify it. Like, okay, here, here, how can we, you know, let's, let's measure it.

KC Brothers:

Yeah. Um, now do you do this differently for business and individual clients? I mean, the data points are going to be different.

Stephen Smith:

The data points are different. The process is the same. And it's this, the process is the same. So if you're an individual and you're a household, like. Everyone who's watching is yes, they'll have to understand. I mean, if, if it's someone that has credit card debt, that's an easy one to go, right? Okay, let's get rid of that. That's the, the easiest thing that is not typically my client. It's more of like, okay, well we're quite successful. We have second homes. We, we have, you know, cars lease, you know, it's, it's more of a discussion of. Um, you know, what do we do next with a surplus capital? And again, I don't, I'm not an RIA. I'm not a financial planner. I don't have a crystal ball. So I'm not here to give stocks or bonds or insurance or any of that advice. My advice is simply to say, well, if you ask this person, they probably will tell you that if you ask this person, they'll probably tell you that, and I'll even find. One of my, I'll, I'll find articles. I'll even say like, here's, if you ask this person who's an, this is what they'll say, because here's the article that they wrote, you know, and here's this article that they wrote, and here's, you know, so I'll actually provide all of the backup and the support, what they may or may not say. And then they can decide whether or not they want to pay that person to actually give them that device directly.

KC Brothers:

Yes, I love it. Well, thank you so much for your time. It's been great chatting.

Stephen Smith:

It's been great. Thank you.