191: Divide-and-Conquer Partnership with Kyle Geers

12
Jan

Kyle Geers is the CEO and Co-Founder of Zeroed-In Consulting, an accounting firm that strives to ease the pain points within a business through breakthrough technologies and continuous innovation. We discuss the foundations of a strong business partnership, the things you must do before entering a 50-50 partnership, and how AI is disrupting accounting and finance consulting.

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How To Create a Visionary Integrator Partnership

Our guest is Kyle Geers, a co-founder and CEO of Zeroed-In Consulting, a firm focused on solving client pain points using breakthrough technologies and continuous improvement methodologies. Kyle, welcome to the show.

Hey, thanks for having me, Steve.

Well, it’s an exciting thing to have you. We don’t have too many guests in the finance accounting arena. Every now and then we do and it’s very important for businesses to know where they are going and to have a clear dashboard so that they can steer clear of trouble, right?

It’s kind of crazy to see how much there can be, how much help there can be out there in the world where people need some more financial management, they need to see what’s going on, right? Not knowing your books is a very scary place to be for a lot of organizations.

That’s right. So you’re really good at helping people. So, but what I wanna start with is really your past that led to co-founding kind of a new age finance and accounting advisor firm. How did you guys come up with this? You and your partner, did you say via and you know, what did you do before that?

Sure. Absolutely. So just kind of quick background for myself and the business. I started in a large public accounting firm back in the day. So I based here in Los Angeles and started with the global accounting firm, Grant Thornton. So in there I was working a lot with companies in the form of doing financial statement audits for their businesses, as well as eventually transferring over to the consulting side. So helping those companies get ready for those audits after a number of years.

And so a lot of my background today has been in really that consulting, that public accounting side of things. So funny enough, met my co-founder, my partner at the same firm, and he decided to go a little bit of a different path after a few years and he really went into the private side of accounting departments, right, so working as that accounting leadership. When you think of a controller or when you think of a VP of finance or of that sort within an organization, he worked with a lot of companies internally in developing those processes.

So after a while, we finally reconnected, I would say about eight years into our careers. And we basically made the decision to say, Hey, I think we really like the consulting side of things. We love solving problems. We love helping firms and the people behind them. Where we were, there’s a lot of good things with the consulting profession, with the professional services profession, but there’s a lot of more antiquated methods that have been used to date.

And so we kind of made the decision to say, Hey, we could probably go out and do this on our own and let’s modernize things. Let’s use some of these technologies that are out there that aren’t as easy to implement into maybe a massive firm, right? In a large organization with a lot of bureaucracy and other areas, but let’s take that, let’s adopt some new methodologies, things like agile methodologies that we can take and run with.

And in that way, I think we can provide a lot of great value for our clients. And so that’s how XeroDem was born, using both sides of our expertise and each of us kind of filling each other’s gaps. We started back in February, 2021, and we made the decision and here we are now. And we’re building a team and we’re continuing to grow.

That’s awesome. So that’s just two and a half years into it. Let’s talk a little bit about how you founded the firm, your 50-50 partnership. It’s a classic combination, but it’s not necessarily always the easiest one. I’m wondering how did you guys divide and conquer this role? You have different talents, as I understand. slice up the pie so that you’re not stepping on each other’s toes and you know you still have a healthy partnership but you also are productive.

Sure, absolutely. So we got pretty lucky with each other. I think we’ve known each other for a number of years and so we kind of fell into these things but the more that I started talking with you know other business owners and some of the pain points that they had, it made me realize that the way that we went about it as we started out was a lot more intentional than I originally thought, something that not many people will really take the time to, you know, make sure that everything’s aligned when they start. Right.

And so as I was kind of reflecting on it and in time for this call, I’m thinking about a few kinds of key steps that we really worked on that made what can generally be a very painful process with 50, 50 partners, right. Really kind of putting some intention behind that. And, uh, you know, putting a lot of rocket fuel, so to speak, into some of these partnerships. So a few key things there, right. First one being, you know, I think we both had to be very aligned in what each of us were giving up. Right.

So neither of us, we had to be very humble and making sure that you’re not, each of us isn’t taking control of the entire business, right? It’s very difficult to have that, especially with egos, finding the right balance of who gets what, right? And do I want, are we going to get, is it going to be a 60, 40 balance? Is it going to be 50, 50? And so I think it’s getting the understanding of who’s putting the most effort in, right?

And or is it an equal balance of effort and tailoring things accordingly? So that’s the first one. That’s the hardest one. I feel like for a lot of folks to say, hey, you know, maybe I have 100% of, you know, ownership right now. I’m not going to have that in the future. So that was very helpful as a very beginning of getting this thing going off the ground. If you don’t have that, then it’s doomed from the beginning, right?

So how did you know that a 50/50 would be right?

We both decided that we wanted to put 100% of our energy into this, right? And we were at the points in our lives, respectively, where this really was our main focus, right? And so, being ready to dedicate that, I know there are some times where that can go a little bit differently, where once somebody says something and then two months down the road, they’re only contributing 20%, right? Or a lot less than you expect. But I think it was that initial really having that background and having that alignment before we even kicked off to know that we both want to be tackling 100%, 100%, 10% plus into this business.

Okay, so you’re two and a half years in. So have your expectations been met or to what degree they have been met and to what degree they turned out different than what you expected?

I think they turned out different. In my mind, it was in a really good way. And that’s because, you know, we have the benefit of really talking with each other about where we want this company to go, right? Getting aligned on that mission and that vision of where things are, because, you know, if you have very different goals in mind of where you want a business to go. That’s just going to cause so much friction down the road. And so getting aligned on that vision.

And I think one really important step that we did as part of the process was sitting down and just kind of mapping out each of our areas, right, to say, hey, where are the things that I’m most beneficial, right, that I know the most. And quite honestly, that energized me at the end of the day. What are those areas? And asking the same question of him, right?

So we came to find out, I thought that we were very similar people and figured that we were just gonna be butting heads in a lot of different areas. Tell him to find out that he really likes certain parts of the business and I like other certain parts of the business and it really spoke to some of these things, these books that you read about, people have different personalities, right? And that came very clear when he was able to articulate that versus what I had in my head of what he liked to do, right?

Having a clear vision and mission for the company was essential. Misaligned goals can cause friction down the road, so getting on the same page early on was crucial for success. Click To Tweet

That’s great. So first you have to be clear on what you’re giving up. You’re giving up complete control, right? You’re gonna put 100% of the effort, but you’re not gonna have 100% of the control. So that’s the first thing. And then the second is to find your functions. So what are you gonna be happy doing and excited to be doing and what your partner and how does it mesh together?

I think that’s a great, great way of saying it. And then I think maybe one last thing that I want to make sure that we chat, we mentioned is, you know, I’ve found the longer that we do this, that there’s a lot of people with different working styles. And I kind of referred to that previously. We have our impression of ourselves and then others have their impression of us, right? And so understanding, having that communication, being able to be honest with each other and to receive that feedback to say, hey, I function this way, right?

Maybe I like having lots of calls and staying plugged into everything. Maybe the other person doesn’t, right? Maybe they want to say, they avoid meetings as much as they can, and they like verbal communication and such. So I think what I’ve come to find most is, and we do this for all of our employees once they join, is almost just taking a personality or a working styles assessment, and I think that really helps us figure out being also mindful of how to act for that person.

It’s easier to have those check-ins to say, hey, everything’s going great. No, there’s this way that you kind of interact with me that’s not very efficient, not very effective. And I think that kind of clear communication has been something that really has helped us grow in a major way.

Recognizing different working styles is important. Communication, honesty, and feedback about how each person functions contribute to a more effective and mindful partnership. Click To Tweet

So basically, self-awareness and then the be willing to confront each other, to give candid feedback. That’s really important. So what is it that during that time that you have got better than you expected? And what is it that turned out to be less optimal as you expected?

I think we came in not realizing how each other functions. And I mentioned in the past where there’s, one of us really enjoys being hyper-focused on a certain thing, right? And they devote a lot of attention and a lot of energy into something for a few weeks at a time, right? But when they shut off, they shut off, right? They want to turn their brains off. They want to be able to go back to friends and family and not think about the business in certain key areas of time.

I know his business owners were always on 24/7, but for him, on the other side was his mindset is very different, right? He wants to be on 24/7. He always wants to be thinking of things. If something comes into your head, you have to get it out. You have to tell somebody, right? Or else it’s just going to drive you nuts for the next few days.

And so I think really where we’ve done a good job of better understanding each other is saying, Hey, at these certain points in time, right, you know, I don’t want to be receiving this feedback in the middle of my, my quiet time, but I know that you need to get that out. Right. And so finding the right forms of communication to say, build a list, right, send it over, delay, send your message, things like that to make sure that both of us are getting the most out of how we work and how we take time off.

Okay, that’s very interesting, definitely. Yeah, I’ve seen some partnerships that’s really great. I know three guys who started a stockbroking investment banking firm after we finished college, which was probably 35 years ago or so, and maybe a few years yes and they’ve been together ever since and it’s been working out well and three people and the company has grown and became a major player. I also know some partnerships where the two partners grew apart. They had different ambition for the business. One was more risk averse, the other one was more risk-seeking, willing to take more risk, reinvest more money, and there became a tension and it just was un-painable and they had to essentially go their separate ways. So do you guys have a plan on how to sustain this for a long time?

Yeah. So I think it’s important that, you know, as we go forward and as we’ve known each other for a while and we’ve been in business for a few years, having some of these, just having that intent at the very beginning, right? So if we have that, those disagreements down the road, if life changes, right? Like life can absolutely change just kind of having these built-in protections to most efficiently figure out how to separate, right? There’s eventually gonna be a separation there and you just need to make sure that you’re prepared for it.

So, you know, we’re 50-50 partners, right? But we do have things like a time breaker clause in our operating agreement that basically says, hey, if we have a disagreement, we’ll bring in an independent third party to help make a decision there. So that helps make those disagreements easier, but also when the time comes where we need to, if we were to say, hey, let’s go our separate ways, to your point, I want to be more risk-averse and put more in, and another person wants to walk away, it’s having those clauses, having those clarifications set out, whether it’s an operating agreement or otherwise, to set that path, I think is the most important thing. Do that now. You don’t want to be figuring that out as it happens.

You want a prenup. When you get into business with someone, a business marriage, you want a prenup for sure.

 Absolutely.

Okay. So let’s switch gears. I think it’s definitely very interesting how this dynamic worked out so far and it seems like it’s working even though there were some things that turned out differently than you expected. It’s still you’re finding ways to align around this which is fantastic and I hope it will stay like that. Now another topic that I want to talk about which I’m personally curious about because I started life as a KPMG auditor, I don’t know, 30 years ago and it was from there and I’m curious what’s happening in the accounting finance profession in the 21st century, in the 20s, now we are almost in the middle of the 20s. So how is technology impacting accounting and finance consulting?

I would say technology is changing everything in the industry of saying, you know, is technology going to take over jobs, right? And one of those major areas is in accounting and then audit specifically. That’s a big, been a big point of concern for firms, small to large, right? So funny enough, that was one of the things that we had thought about when we decided to start Zeroed-In is saying, Hey, there’s a lot of manual work that goes into this.

And I think there’s a lot of great software out there and there’s been a lot of breakthroughs in technologies in a lot of different areas. But funny enough, accounting wasn’t one of those areas, right? I mean, it’s still you’re putting them a lot of people in a lot of labor hours on setting these tasks together. So that’s where we started thinking about, OK, there are all these amazing things. There’s these huge technologies like artificial intelligence, like automation that’s coming out, and they’re becoming widely available to a wide range of folks, right?

It used to be, let’s say, five, 10 years ago where only the big Fortune 500 companies were able to sink billions and millions of dollars into this technology, and that was what was gonna set them apart. Well, now that’s changed, right? Even with buying a standard Microsoft Office subscription, you get access to a very powerful set of tools that can really do a lot of that automation work for you as long as you go in and understand that it’s there and the power behind it.

And so a long time ago, it was where I would say small to medium businesses just figured that they didn’t have that advantage. And so now it’s really helping go out there and communicate to them that, hey, you can take, there are these tools, they’re widely available, you don’t have to be spending even tens of thousands of dollars on this, we can find those connectors for you.

I think as we’re considering how technology impacts the accounting and finance consulting business, it’s taking advantage of these widely available tools. Sometimes you just need that person that’s a connector to say, hey, it’s here and here’s how you use it. Right. And it’s not a tall task. It’s not difficult to do. It’s just having that experience and that awesome moment. You’re able to take advantage of it.

It feels like the opposite. It’s not the fortune companies, fortune companies that have the advantage, but the small business, which is much more nimble, they can just make a decision. Take out the subscription in the cloud and start using these AI tools. They don’t need anyone to rubber stamp it, there’s no political issues going on, or who using what, you can just experiment with it and work with whatever works. And that’s a huge advantage, I feel like this is something that the fortune and companies will find really hard to compete in.

Yeah, and I’ll even go so far as to talk about the big four accounting firms, right? Or the largest consulting firms out there. A really good analogy that I continue to think of is you’ve got, you’ve got the Titanic, right, that’s moving forward and it’s not so easy to turn that Titanic when it’s time to turn directions. Meanwhile, you’ve got the little tugboats and the roadboats down there and guess what?

They can do that very quickly and very easily and, you know, change when they need to. And so the question being, you know, where do these large, large companies, Fortune 500s otherwise go in the coming years, you know, are they going to be able to pivot or navigate fast enough? And, you know, I think it’s, we’ll have to see how it goes, but as a small business owner myself, I’ve got a lot of money on the, on the, on the small, small guys.

Small businesses, being more nimble, have a significant advantage in adopting technology. They can experiment, make decisions quickly, and use AI tools without the bureaucratic challenges faced by larger corporations. Click To Tweet

That’s awesome. So give me some meat of the bone. So someone comes in, let’s say it’s a small million business. Maybe they have 20 employees, they have maybe five million revenue or three million revenue, and they want to get better information. They want to know what’s going on in their business, they want to see further ahead, they want to be able to manage their cash flow and make decisions on how to expand and what risks to take or not. So what are some of the tools that you can bring to bear to help this company?

So think about, I mean, it just kind of starts with the information that they do have, right? When we think about that, a lot of it, when you are first kicking off and at that level, a lot of it is in your accounting system, right? It’s the transactions that come in and out every day. Maybe it’s some of the operational data that you’re using, and maybe that’s in, you know, all that stuff. But that’s all coming in through a report, right, reporting or a transaction detail.

And so what we’re coming to find a pretty reasonable application, such as a business intelligence application, right? Whether that be Microsoft’s Power BI functions, or there’s another software out there, Tableau, that’s really good. And there’s many others, right, that are good options. But being able to come in and just kind of plug in the information that’s there, you can start to get real-time information based on what’s going in there. You’ve heard about dashboard reporting.

That becomes a lot quicker to get that type of information than previously when as management, they’re generally looking at monthly financials, or if that, maybe it’s quarterly. And then it’s too late. The business world is just moving too quickly these days. You need to be making decisions on a daily basis. And so something as simple as being able to incorporate an application like that with relatively low cost, I think that gives you a really immediate ability to see what’s out there and start to pinpoint where are some of the key issues that are in your business, right?

Incorporating business intelligence tools with relatively low cost gives immediate ability to identify key issues in the business. Click To Tweet

Do we need to focus on this, you know, a revenue stream or when we’re thinking about cost management? Well, Hey, we can identify some of the areas where maybe we need to be taking a look and renegotiating or cutting costs. Right. I think that’s a very helpful way just right out the gate with a generally low level of effort to bring a lot of value.

So is it like an early warning system that you’re checking the numbers maybe on a weekly basis or the monthly basis, and then you can help the president or CEO of the company or business owner to see how the cash flows are going to evolve in the next four to six weeks and maybe what decisions they need to do to correct that or to bring in financing or make more money on their savings, whatever it is.

Think about, you know, the budgets and the forecasts that we try to put together at the beginning of the year to see how things are going, right? And if it’s not matching up to what we expected, we need to change accordingly. Well, having a lot of this information that’s readily available and easy to plug that in, you’re able to update those forecasts or those budgets or whatever you need much more quickly, right? And that’s generally on a monthly basis. If your information is really good, maybe it is that weekly basis.

That’s trickier to get to, especially as a smaller business. But yeah, absolutely putting that together where you can update your forecast or your budget and say, okay, wow, well, you know, we’re going to be doing a lot better than we expected. Maybe we need to ramp up production, right. Or even going a little bit further. And as a lot of these organizations are starting to use things like artificial intelligence and predictive analytics, maybe you weren’t able to forecast as well as a lot of the data that’s coming in through a system.

Okay, that’s cool. So what is the role of AI? So you talked about Power BI or other types of Tableau, other business modeling software and dashboard where you can track metrics and interpret them in real time. What about AI? What kind of applications, use cases are there in your experience that you can use AI to maybe crush numbers for people or to help them project the future?

One of the things that I see happening very quickly, and I know it’s maybe not quite released yet, but you know, there, these are a lot of very repetitive tasks, right? They’re not highly complex. They just take time to process. And so that’s perfect for artificial intelligence, right? Where artificial intelligence works best is with really repetitive, high volume tasks, and so, you know, what we’re seeing is, you know, things like QuickBooks is releasing more AI capabilities to say, “Hey, as these transactions come in, maybe you don’t need a bookkeeper to be looking in and processing and finding the invoice for every single one of these things.” Maybe the system can do that. And you just need to be doing checks once in a while to validate that is correct.

So that’s like the immediate, that’s where a lot of us are seeing where bookkeeping is becoming a lot more of an automated task, which is fantastic. But even in some of the more complex areas, I mean, we’re starting to look into what it also does really well is it pulls data out from, think of chat GPT, right? These large learning models that are coming in and pulling a lot of information from a lot of different areas, there’s a lot of need to make sure that the information that’s coming in is correct. And I want to emphasize that, right? That’s one of the biggest issues.

Yeah, it can hallucinate for sure.

Yes. But, you know, if you are able to do that validation, you can gain access to a lot of very difficult questions and tips of how do I, let’s say I have this really complex transaction and I don’t even know how to begin to account for it. If you can pull in that information and validate it versus spending hours of time of, you know, going through or needing to hire on a very technical resource that has to go do that. And it’s very expensive. I see there to being a lot of power there in pulling in a lot of that information and being able to aggregate that into more of a summary.

Right? Yeah, I mean, I can see this happening in various areas. I’m a tennis fan and I’m following the tennis tournaments around the world through an app. And what started cropping up is that they basically write a review of the match that’s coming up and all the statistics are weaved into it and it sounds like a reporter wrote it but it’s all AI generated and it’s fairly interesting and they mix it up so it doesn’t read badly and it’s pretty close to a real reporter writing it.

So I can see that for financial reports the same thing is going to be happening very soon if not already. So that’s great. So if I’m a business owner, if some of the business owners that are listening to this, they want to have a more up-to-date system where they want to have more information, they want to know, they want to be top on the cash flow, they want to be able to make investment decisions, and they want to explore what you guys could potentially do for them. Where can they reach you? Where can they learn about what you guys are doing.

Sure, absolutely. So if there is any interest, right, of upgrading your organization and really making the most out of what you have, I mean, I know accountants are getting harder and harder to find these days, and highly effective ones. So where you can easily find us is on our website. So go to www.zeroed-inconsulting.com. You know, same domain. You can always reach out to myself as well at Kyle@Zeroed-inconsulting.com. And those are, or reach out to me on LinkedIn, right? Yeah. It’s a, it’s not very difficult to find me. And so, you know, always happy to take any questions, even if it’s, you know, high level tips, right. Seeing where you can make the most benefit. So we just like seeing companies get better and better at what they do.

So if you want to Zeroed-In on your accounting and get your house in order, then reach out to Kyle Geers. Easy to find on LinkedIn. So Kyle, thank you very much for coming on the show, sharing your tips and your vision of the future of finance and accounting for small businesses. And those of you listening, do check out our YouTube page. We have shorts of more and more of the past episodes, actually we have all 190 plus episodes. The framework piece of the episode is going to be in a short video so you can consume many of them if you’re into that. Check out the Steve Preda Business Growth LinkedIn page as well. We post two or three times a day, infographics and videos, so lots of stuff to follow there as well. Thank you Kyle for coming to the show.

 

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