Tedd Drattell, Founder and CEO of The A Team
Tedd Drattell is Founder and CEO of The A Team. Tedd’s take-charge attitude combined with his extensive background in operations and finance, both in the private and public sectors, helps ensure that The A Team provides the best talent and business recommendations to effectively and successfully meet each client’s needs.
Prior to founding The A Team, Tedd worked as a CPA with a Big 4 accounting firm, and as a CFO at privately held corporations in the apparel, manufacturing, wholesaling, and importing industries. He received his degree in Accounting, with honors, from The University of Maryland.
AUTOMATED EPISODE TRANSCRIPT
[00:00:01] You're listening to Scaling Up Services where we speak with entrepreneurs authors business experts and thought leaders to give you the knowledge and insights you need to scale your service based business faster and easier. And now here is your host Business Coach Bruce Eckfeldt.
[00:00:22] Are you a CEO looking to scale your company faster and easier. Checkout Thrive Roundtable thrive combines a moderated peer group mastermind expert one on one coaching access to proven growth tools and a 24/7 support community created by Inc award winning CEO and certified scaling up business coach Bruce Eckfeldt. Thrive will help you grow your business more quickly and with less drama. For details on the program visit eckfeldt.com/thrive. That's E C K F E L D T.com slash thrive. .
[00:01:00] Welcome everyone this is Scaling Up Services, I'm Bruce Eckfeldt. I'm your host. And our guest today is Tedd Drattell and he is founder and CEO of The A Team. And a team is outsourced fractional accounting services. They also provide technical solutions and they help with recruiting on the accounting side. We're going to learn a little bit more about Tedd and his entrepreneurial journey. We're gonna find out about how he helps companies with scaling and making sure that they get the finances and the technology right inside their companies, really driving efficiencies with that. Tedd, welcome to the program. Thank you. How are you? Bruce? I am excellent. So what do we start a little bit with your background? Because I suspect that you've always been kind of an entrepreneur in different ways. But when we find out how you kind of your professional background, your free will journey, and then we can talk about a team and what you're doing now.
[00:01:46] Shaw. Shaw. So I'm a CPA by training. I work in public accounting for a couple of years and realized pretty quickly I didn't like public accounting. And what I didn't like about it was I realized I liked the internal workings of a business. And the strategy and how that how to help companies become more profitable. So obviously, I did it before starting this business as a CFO for a number of different businesses in a number of different industries. Yeah.
[00:02:17] Yeah. And what were your learnings? What were the inefficiencies that you saw that really was driving the issues?
[00:02:25] And most companies lack of using technology properly and is doing it the same way because that's how they always did in those days. Those was easily the biggest things. You know, when computers first came out, they tended to be very expensive. So people shared computers. There was just very different than it is right now. And over time is as technology got more and more inexpensive, the ability to harness it, use it, become more efficient really I think changed and drove a lot of companies growth and profitability. Yeah.
[00:03:01] Yeah. And so tell us about the 18 wounded. When did you put the put that company together? What was it like to found it? What was the motivating factor?
[00:03:10] Shaw So I started it in 2001 and originally my concept was it would be me and you would just have a bunch of part time CFO clients that really networks vision having, you know, twenty five employees. I never envisioned having an office and having my role where I'd really be running the business and driving the business rather than doing the work. You know, I have my staff who are fantastic that are there to do work.
[00:03:39] Yeah. And how is that? I mean, I think that that's a story. I hear a lot of people essentially starting a company as a way to kind of organize the clients and the work that they're doing. You know, it's a kind of a solo producer model. And then things start to shift and they get more clients and they start hiring some people. So what was that like for you? Was that was that a hard process? Was a natural, smooth process? When when did you start to bring on people and how did that feel?
[00:04:04] It was in year year. I forget if it was two or three and I started to hire people and that was more because it just got handed some work. You know what was kind of easy to do, easy to staff. And it was with people that I knew that I trusted, that I knew there wouldn't be a payment issue. So I kind of just out of all those by osmosis and it was just a natural transition. It was not at that time. It was not scary or anything like that. Oh, a model also is very different. You know, all the workers were variable. I didn't have to worry about benefits and keeping them busy or anything like that. And how different ballgame, I guess. So tell us where you are now with them. Yes, I'm mostly full time salaried people that get benefits. They want training. They want to learn. They want to grow. And, you know, it's it's and I won't say it's a juggling game. It's more just the need to satisfy the clients as well as the need to satisfy the employees is the bottom line is the employees are so important. Yes. We wouldn't be where we are without them.
[00:05:12] And what I'm curious what your calculus was in terms of the decision to go to full time employee.
[00:05:20] I mean, were you doing, you know, oral y analysis is a return on investment and minimal bill ability levels and stuff, or was it more kind of gut than instinctual and more about kind of a culture? What was what was that process like for you?
[00:05:32] It was two things. One, it was about quality. I felt that when I used people from the bench or people that had other careers that were doing doing the work during the day and then doing something else at night, it just didn't work because the clients at times came second. And I felt it was a kind of a losing model. So so I changed that. And secondly, one of the things that really helped me along the way, too, is I joined entrepreneurs organization in just having successful people around me warm and people to bounce ideas off. People that have done it before, just top up tremendously.
[00:06:17] Yeah, that's a big one. And whether it's, you know, you know, the entrepreneurs organization or other kind of CEO executive groups that kind of shift from beat being being so focused on your company and kind of running our company that you don't have kind of that bigger perspective. I mean, I guess what else happened for you when you when you started spending time with folks that were in your situation or struggling with the same things? What was the shift in thinking for you or the perspective that you got by spending some time with with folks in those situations who are size?
[00:06:52] I would say the most profound thing that I learned along the way that really adjusted my thinking and just in the way I did business was, you know, sharing some different speakers about culture and culture. Whereas maybe my when I was an employee, my for certain things wasn't that great. Doesn't mean that others don't have it.
[00:07:17] It's just let it just not matter. Not everyone is like you.
[00:07:22] And it just meant so much to me that, oh, my God. You know, people want to be trained. They want to be heard. It's not about money. They want to be thanked. They want you to be grateful. And, you know, I learned and I worked out what and what.
[00:07:39] I'm curious what kind of strategies you've tried or what what I guess how you changed or what you did to start incorporating some of those facets into the culture, into the relationship with employees.
[00:07:53] We do monthly trainings, management team does a weekly phone call. We saw direct reports. I have either weekly or biweekly meetings. We have periodic firm events and we have a summer party holiday party. The things that people look forward to, we have a once a lunch. There's just like little things, but people appreciate it. We have somebody that's in charge of our office. This is relatively new. And Angela's decorating the office and just, you know, just little things, just keeping things looking good. A bulletin board. We did. I see the play pool for the first time this year. How do you do it? But people really love a really good time.
[00:08:38] And I think you're right. It can feel like small things or can feel like an almost trivial things. But, you know, the fact is, is that our day to day experience of our work environment is is a collection of small things. Right. So if you start getting the small things right, it adds up and it builds up to a great experience.
[00:08:54] Yeah. Yeah. Another thing we did, it was like an online suggestion box. It's totally got no idea who worked. And some of the ideas have been fantastic. Some of them are doable, eventually not doable. Now it's a good start. All Yeah.
[00:09:09] So what are good examples of things that have come in through three people that you haven't thought of that that have worked out really well?
[00:09:16] Having healthy snacks is one of them. So even doing that, the monthly lunches came out of that. What more frequent training came out of that?
[00:09:27] What kind of training?
[00:09:27] Curious what what training you've you've been doing, what has been successful? Is this very skill specific or is this more general?
[00:09:35] What's working at the moment, their skills? Sal, it's about becoming cookbook certified, becoming certified. Other applications that'll work with the software that we work with, which to be quick or stage intact. You know, people are working at it. We have a grant from New York City. Know hopefully people are really learning stuff out of them and they're putting the time into. So hopefully they're learning, I guess.
[00:10:02] What's your definition of success on that in terms of spending, you know, taking the time and money and energy to put together this training? Are you looking for specific returns or is this more sort of general satisfaction with employment satisfaction? What are the I guess do you have specific metrics? You looking at what? What a successful clip for you on this.
[00:10:22] I'm not have specific metrics, but it's more about what when you encounter a piece of software. Yeah. Not yet. Maybe you haven't used before, but you've been trained on it and just knowing what to do. Not being afraid of it and just jumping in and doing it. We have some people that are just natural with it. Yeah. It's not an issue. We have others that are a little bit more tentative at training gives them the confidence to handle things for the first and second time. Was that a hitch?
[00:10:50] Yeah. No. And in terms of talent and finding folks know service based businesses.
[00:10:57] Well, every company, every every business talent is an issue and talent is strategic. But I think for service based businesses, it's it's even more so. Doubly so, I guess. How have you approached kind of the process of finding talent recruiting? What does this look like? I know. I know for accounting services in general, it's a pretty tough market. But I'd be curious to see, based on who you're trying to retain, who you're trying to recruit. What is the market like for you and what's your strategy been yourself?
[00:11:24] A We have in-house recruiters, so our jungle rallies worked with us for a number of years. So she's she's on our team. She knows our she knows our culture. She knows what we're looking for. A we're always recruiting when you don't whether we need somebody, you're not always working at it. So it's a combination of very active recruiting where we're going in LinkedIn. We're targeting people, certain skill sets at certain companies and just always working out. Is that part of it? Second, we have a relationship with Luke and a good portion of our players come from there. And we've really worked hard to nurture that relationship and it's paying off.
[00:12:07] How did you get that? I'm curious about in terms of this idea of partnering or developing a relationship with the university educational institution to recruit or to have as an inbound kind of candidate source. How did that come about? Was it something you strategically went out and did it develop from another relationship? What was that?
[00:12:25] It's actually interesting. So we always like students from there or graduate there. Return center program is absolutely fantastic. And we used to call them at their alumni department and we couldn't get arrested. They would say posted online. And what do you do? So about two years ago, we were having dinner with my wife's cousin, who's Dean there, and she told us to speak to and how to, you know, make that relationship work. And we follow it. And it's worked with me in a couple of scholarships. Are just those students fit our profile? And so that's one part of what we do. The other thing that we look for are what we call public accounting refugees. So people that worked in public accounting and never want to work seven days a week, 60 hours a week. Then they want a lifestyle and they make sure they're bright and they just want balance. And that's what we offer. And there's a lot of people out there that like that.
[00:13:36] Yeah. Yeah. What else do you do? I mean, in terms of differentiating yourself from, you know, that's sort of the public accounting firm or other firms like yours. I mean, what's your do you have particular attributes or strategies or thing is that you emphasize to help recruit?
[00:13:52] Shaw One of the things that we do that makes us different than most of our clients is we do the bulk of our work on site as a client, whereas in most of our competitors actually just do it remotely so those workers could be anywhere. Yeah, there's plenty of companies here that want somebody to come onsite and they want to touch and feel them. And from my standpoint, I think we do a better job where I we're actually at the client site because you can communicate and you have a question. You can get it answered right then and there and we're wasting time back and forth on e-mail. And also, you learn a lot by listening. So whether that translates into recruiting is for those that don't want to go to the same desk every day and do the same thing. So people that like the variability in their work life, this job really offers that. And finally, that's how I got into it. I didn't like going to the same job every day and doing the same thing every day.
[00:14:51] Do you find that you get candidates that are even people that you've hired that actually become not a liability, but, you know, undesirable characteristic and that you realize that they're going to have great skills that can be the best account in the world, but they actually don't like that model. And that's been a problem.
[00:15:06] I mean, there aren't we do have staff that do stay in the office and they make more powerful clients. But generally, most of the people have a combination of the two. So somebody that wants to sit in the same desk every day, that generally. It work. Yeah, we would like that up front. And again, that's what they want in most of the time. We wouldn't hire that person.
[00:15:28] Yeah. Yeah. I sort of came out of technology and similar model we're putting. Most of our folks are sitting on site and we also we did something called pair programming, which means that all of our developers worked side by side at one computer and we found that by actually including a workday. So we'd have our candidates come in and actually work a day with us. We actually felt it out. A lot of folks who were great technologists, but once they sat next to somebody for a couple hours and tried to work with them on a computer.
[00:15:53] If that was not the way they liked working, it was very clear very quickly. You know, make sure we didn't have any misfires. That's us. So I'm curious on the strategy side, too, as you've kind of refined your offering and this idea that you're going on site for the most part.
[00:16:10] How is that kind of help to you in terms of identifying your target customer, your customer and the sales process? And how do you find your clients and how do you make sure you find the best clients that fit well with you?
[00:16:22] Sure. I mean, we've been doing it for 18 years, so we are fairly well-known out in the marketplace amongst the accounting firms. So we do get a lot of referrals from accounting firms and also we get a lot of referrals from our clients. So just by going and doing good job, we'd tied to other business.
[00:16:41] Yeah. In terms of how do you actually structure your engagements as an hourly work? Are you doing packages or you doing by amount of time? What's your engagement model?
[00:16:52] Most of it's hourly. On a larger engagement, we might do like a monthly retainer and then above a certain level above that a retainer will charge a percentage above it.
[00:17:03] Got it. In terms of the types of companies, is any particular industry is that you've ended up kind of focusing on or you've realized need your services, you more so than others?
[00:17:13] Definitely a lot of professional service type clients, whether it's law firms, PR or marketing, engineering architecture, because they're like for instance, the billing is usually very detailed and there's just no way you can do that typically remotely. You've got to be there to interact with the staff. But also a lot of health care. We have apparel. And just trying the technology.
[00:17:40] I can see you going through your client list.
[00:17:43] It's really all over the board. Yes. Yeah. Not unless it's industry with the nuance. We do it. And again, we have so many people at this point. If there is a business with the nuance, we've got somebody that knows it.
[00:17:56] Yeah, most likely. Most likely in terms of your kind of staffing strategy and how you used to call it the game of chess. Like who do I put on what account and how do I move people around? How do you organize your your team with your clients and figuring out how you're going to deploy your team against those?
[00:18:13] Well, the way we work at that every day, one of the things that we do is we over hire. We always want to have extra staff. And if somebody has a project for us, you know, existing client don't want to say no to that. We can't handle it. So that's one thing we do. We really try to match up the skill set and personality to the client. That's very important.
[00:18:38] And what goes into that? Like, what are you looking for in terms of a personality for quote unquote, personality of the client and the personality of your team member?
[00:18:45] Well, it's the culture. So we've got to be able to fit in the culture. We have instances where we had a very, very young culture at a client and we have conversations with the person that is bringing us in about the ideal fit. Is it somebody younger? Is somebody older? And we will have that conversation. So we want to be able to pick from our team somebody that's, you know, women.
[00:19:11] Yeah. And in terms of clients. So if I'm a company and I'm trying to figure out how to make sure that I've got the right sort of accounting services, the right accounting advice, you know, technology, the staffing, how do I make the decision between kind of hiring a full time person internally, you know, using a fractional service like yours, you use pure outsource. I mean, I guess what are my options and what are the criteria that I use to decide between these options?
[00:19:35] Well, that's actually a good question, because, you know, a company that's hiring a bookkeeper, most of the time, they don't have the ability to assess whether that person is a good bookkeeper. Now, if it's in fact, the workload is a five day or many days a week workload, obviously the dollars don't work to hire us. It just doesn't make sense. The nation w help with finding somebody, but for us, we're not necessarily cheap, cheaper. Many times will be less expensive because we're more efficient. We have people that just have a multitude of skills and also we work at it as a team. So the beautiful thing is if somebody has a question, they know how to do something. There's a lot of people that they can ask as to how to handle it. Number one and number two is because of our technology slant on things, we're always looking for faster ways to do things.
[00:20:37] Now tell me about the technology. What are some of the technologies that you've investigated, adopted?
[00:20:43] You incorporate it into your business over time? And how have you made those decisions?
[00:20:47] Sure. I mean, so we use apps that work with the existing platforms, side quick books and sage in tech. So it could be built our comic, the expensive high sheets. I mean, there's a whole host of them now elaborate, which is the sales tax program. So we're always looking for the kind of the best in class that will work for our clients. It will be cost efficient, highly efficient and cost efficient. But if it's time efficient, it's going to be cost. That is because we're gonna be able to do the work a lot faster.
[00:21:17] Yeah. And what has been some of the I guess, have you had challenges with getting up to speed on some of those app or the technology is or getting them in place to the client? I mean, what's the how do you kind of balance the kind of future benefits or the ultimate benefits of these new technologies versus the cost of implementing and training and integrating these things? What does that calculus look like?
[00:21:38] For instance, let's say you look at timesheets. So many companies do timesheets in Excel and just getting your employees to throw that out. All the time it can be challenging. Listen, for many years. That's how we did it to be adopted, a non line program. You know what? At the time, most of the time contemporaneously, a lot were accurate. That's really where a lot of times the savings is when you write it down way after the fact. Especially sometimes we were working on multiple sites on the same day. Now it's not so easy to be accurate.
[00:22:13] Yeah, I always found that time. Capturing time tracking time is difficult. And the source of a lot of frustration. It was always a complaint, always a thing that we would struggle with in terms of collecting time. But it's hard because you couldn't, Bill. I mean, if an hourly basis, you wouldn't be alive.
[00:22:28] Absolutely. But it's a lot more efficient. So now, for instance. So we're downloading from the time she programmed into our quick box program. We don't have to re-enter it. Nothing downloads it. And you tell it when it's time to Bill.
[00:22:41] Now, what are some of the common issues or challenges or thing is that you end up working on with your clients in terms of helping them make sure that not just that their books are up to date, but that they're using, you know, using their book and the financial information they have to build a better business, be more efficient, be more strategic. What are the some of the challenges you see or things you help people with?
[00:23:02] I think a lot of it really just kind of lack of education about a understanding what the numbers are. You going to be there, for instance, so many people manage their business by what their bank balances rather than looking at financial statements. We try to educate our clients. So let's say for tax purposes, our cash basis taxpayer while we're trying to teach them how to look at the books on a legal basis, because that's really what's telling them whether or not to make money. Yeah, I mean just we haven't paid a bill and generated a false profit. Doesn't mean they're profitable.
[00:23:37] Yeah, exactly. I think that's always a challenge for most business owners as it is really understanding the difference in the cash flow where their cash position is versus the real kind of functional profitability. And I guess what kind of things do companies need to do to make sure that they have that I have that data available that they can actually use that to make meaningful business decisions? I went through a couple of things.
[00:23:58] One is just to be willing to sit down and be committed to a once a month meeting and talk about it and walk through the numbers and understand it. Number one. Number two is goal setting. Creating a budget or a roadmap so you can determine if you need to cut spending at some point because your revenues down or can you create spending? Can you hire somebody? Otherwise, you're just flying blind.
[00:24:23] Making sure that you have the data in the right way that based on the decisions you're trying to make. I think that makes sense. So I'm kind of curious for you, as a CEO, as a founder and CEO, you've made sort of as you kind of laid out in the beginning in terms of the history of the business, you know, that you were doing the work in the beginning. Now you're not doing the work, I guess would have been the challenges around that. Have you? What adjustments either, you know, kind of mindset shifts or practical adjustments have you had to make as you've kind of moved or as a company has grown and the kind of the role your role as founder and CEO has shifted. Tell us a little bit about that for how that's played out for you personally.
[00:25:01] I mean, it seems that I love to do day to day as I love, you know, meeting our clients. I love meeting prospects, seeing how we can. So I'm trying to always make sure I have enough time to do that. And sometimes I don't. You know, we've definitely added middle management now and it's made a difference. They take care of more of the day to day. And I don't have to worry about it and not have to be in the loop on everything. But again, that's a mind shift. It takes a little while and it's not a trust thing. It's more kind of fighting your instinct.
[00:25:33] Yeah, I guess. How do you stay or how do you continue to feel like you kind of know what's going on? Because I think it's a challenge for a lot of folks as the business grows is, you know, they're now kind of more removed from the day to day from the work from the customers. What do you do to make sure you feel like you still have a good understanding of what's actually happening in the business?
[00:25:53] Well, we track a lot of metrics. You really track are potential new business. And we track the percent, our closure rate. We track where the business comes from. So therefore, we are spending more time in the right places. And as a number pass that, I'm still my nose is still in books. I have a look at what's going on. Yeah. The good thing is I'm trained and it's all I can look at it pretty quickly and just know what's going on.
[00:26:19] I'm curious, what is there do you do like once a week or a month to month, you kind of dig into an account or what's the amount of time that gives you enough sense that doesn't overwhelm you? That also doesn't make your people feel like you're micromanaging. I mean, how do you kind of balance those things?
[00:26:37] You know, I'm spending a couple hours a week looking at different things. Whether it's profitability is a client starts slowly turning that. Analysis work over time, others, so I don't have to do it, but I think miners want to hire a local strategic level rather than just the day to day. I don't want to use that information to micromanage, you know, somebody on the team. I'd rather use that information more from a strategic standpoint to make sense and thinking through your goals for the future of the company.
[00:27:13] What where do you want to be in a couple years? Have you thought about what the company looks like, what kind of services you want to be offering geographies? What are your goals and ambitions?
[00:27:22] Sure. That's a that's another great question. So we hired a coach a couple of years ago and really made a big impact there about just kind of thinking big and creating plans to achieve those goals, as well as kind of creating the infrastructure to support a larger business. So we're actively working at that. So. So it was in December, we had our management team meeting, which was goal setting for two thousand and not 19. And my initial goal was to grow 20 percent, which to me is fairly ambitious. So before the meeting, I had a call that our coach Dave. So and he said, why 20 percent? Why might that be that number?
[00:28:13] Classic Coke question. Yeah, yeah.
[00:28:15] Egos. I really think you should give some consideration to making that number being 50 percent. Let's figure out how to do it. So the next week we have our our our management's meeting and we're trying to come up with our three top goals for the. And so the first one is that once our revenue goal and it was amazing, one of our guys blurts out, you should we should aim to grow 50 percent. So that's so that's our goal. And there was a plan. Yeah. I don't know. I don't believe they were. That's what all working towards free marketing and between business development and just kind of keeping our eye on the ball. This is Dwight. Dwight. If you asked me today, do I think we're going to get there? No, but I think we're going to come pretty damn close. Yeah.
[00:29:05] Yeah. And that's always the thing with the goals. It's like I'd rather I'd rather make 90 percent of a really outrageous goal than that meet a goal that was kind of anemic.
[00:29:14] Yeah. Yeah. And the thing I like about the growth strategy, to me, it's much easier to run a growing business than it is to run a stagnant business or one that's kind of limping along. I find it a lot more exciting. I find it more challenging. Yeah. And it really keeps my brain in use. Yeah. I mean, my partners. But some bad guy is totally in sync with it. And we're looking at all the business.
[00:29:42] Awesome. And what. Any thoughts or advice that you'd give to other other founders, CEOs and service based companies that are, you know, kind of thinking about, you know, the growth process or, you know, kind of managing their growth or thinking about how to grow? What would what would you suggest they think about or do or ponder?
[00:30:01] I would say probably the keys to success are one coach, because they're going to know stuff that you don't. And also they're going to push you out of your comfort zone and they're going to have relationships at times that you don't have to. To culture. Culture is so important. And, you know, not until I started really paying attention to it. I didn't get it one. Once you really worked out, it really made a huge difference. And then I think the third thing is he willing to share with you or with your team, you know what? You want great benefits. You've got to give great benefits. And it's something sometimes I see a mindset where it's what's in it for the owner or not. What's what's in it for the. For the team.
[00:30:54] Yeah. No, no. Good points. Tedd, if people want to find out more about you, about the team, what's the best place to get that information?
[00:31:01] Well, our Web site is www.ateamconsulting.com. My phone is always on. So 6 4 6 7 8 3 1 9 4. I love it.
[00:31:13] I love it. I'll make sure that that information is in the show notes so people can can get to it. Tedd, this was a pleasure. Thank you so much for taking the time today.
[00:31:20] Thank you, Bruce. Appreciate it.
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