episode 95 – transcript – Rea CPA

episode 95 – transcript

Dave Cain: Welcome to unsuitable on Rea Radio, the award-winning financial services and business advisory podcast that challenges your old school business practices and the traditional business suit culture. Our guests are industry professionals and experts who will challenge you to think beyond the suit and tie, while offering you meaningful modern solutions to help enhance your company’s growth. I’m your host, Dave Cain. When you hear people talking about pursuing the American dream, often times that dream includes the prospect of business ownership, but as many of you already know owning a business is so much more than a fleeting aspiration. You have to be open to expert insight from outside advisors and be willing to put in long thankless hours away from your family on the quest to finding long-term success. Still, people choose this path every day and the concept of business ownership remains a mainstay in our American ideals.

Today we are joined by a business owner, who like many others found himself driven to leave a very successful career in corporate America to start a business of his own. On today’s episode of unsuitable on Rea Radio we’re going to find out what led Austin Black, co-owner of William & Grant Design LLC, to make his decision, what challenges did he face during the startup process, where his business stands today, and what lessons he’s learned over the years. Welcome to unsuitable, Austin.

Austin Black: Thanks for having me Dave.

Dave: Good to have you. You’re a podcast rookie, I understand.

Austin: I am, I am. I’ve listened to quite a few of these, but yeah, this is my first time on a podcast.

Dave: Good. I understand in doing my homework for today that you have a very short bucket list. There are three things on your bucket list. One is to start a business, which you successfully have done. The second, to see the Browns participate in a Super Bowl. The third is be a guest on a podcast.

Austin: Yeah.

Dave: We can count two-

Austin: Two.

Dave: Of three’s pretty good. Two of three.

Austin: I got a few years left in me, so hopefully that third one comes true.

Dave: Now, you’d mentioned that you’d listened to a number of the podcasts on Rea Radio. I assume you’ve listened to about 90.

Austin: 94, to be exact Dave.

Dave: 94.

Austin: Yeah.

Dave: As you have listened, you’ve heard the music in the beginning, the intro, and usually we like to get some input from our guests about the walk-up music. Of course, you played baseball and all baseball players have a walk-up song. If you were to change the introduction music to the podcast, to your podcast, what would be your walk-up song?

Austin: Oh, man. I think the walk-up song to this podcast should probably be Thunder Struck.

Dave: Thunder Struck, okay.

Austin: After getting here today and being presented with a beer as soon as I walked through the door, maybe a little Eric Church Drink In My Hand, I think that might be all right.

Dave: Okay. We’ll check with our marketing team, see if they can make that happen.

Austin: If they’re not out late drinking and all that stuff, Dave.

Dave: Well, that happens from time to time with that group. Tell us a little bit, maybe an elevator speech about William & Grant Design, about what you guys do and what you’re all about before we start into today’s topic.

Austin: Sure. Just a little bit about us, we are located in Jackson Center, Ohio. We are a mechanical engineering design company. We utilize SOLIDWORKS and Inventor as our design software and we do a lot of different kind of design work. We’ve done things for the manufacturing industry, for commercial products, kind of all over the board. Robot cells, weld fixtures-

Dave: 3D design?

Austin: 3D design, it’s all 3D. That’s kind of the new thing out there.

Dave: Good. How about … A lot of our listeners do a little task switching during the podcast. Why don’t you tell us your website and maybe while we’re talking they can jump on the website.

Austin: Yeah, our website is www.williamandgrant.com. It kind of goes through a little bit of what we’re about. We’re also on Facebook. Not on Instagram, not on Twitter. We don’t get into too much of that. We don’t really advertise too much on the internet. A lot of our work comes from just recommendations from other clients.

Dave: Okay. Well, on unsuitable we get a lot of feedback from our listeners wanting to talk about and have guests, entrepreneurs who face challenges and victories of leaving corporate America to start a business and your name came up immediately in that process. Let’s talk about the decision to make a career path change. You probably had a wonderful compensation package with a benefit package as long as your arm, but you left. You walked away from that. What was the deciding factor?

Austin: Honestly, I don’t know if there was just one thing. It was kind of a lot of different things that I had learned over the years and I think I just had it in the back of my mind that one day I want to be my own boss, I want to start a company. Luckily, I found someone else along the way, my business partner, Lance Woolley, who also shared a similar view. Together, we … It wasn’t just an immediate decision to leave. We planned for over a year and even after a year we were stilling wondering, “Is this the right decision?” We took that leap and luckily things have been working out for us so far.

Dave: How long have you been in business?

Austin: We’ve been in business almost four years now.

Dave: Four years?

Austin: Four years, yeah.

Dave: Wonderful.

Austin: Yeah.

Dave: Let’s go behind the scenes a little bit. Obviously, this was a tough decision in some regards. Can you share with me the day that you decided you wanted to do this and you sat down with your spouse and had that conversation? How did that conversation go?

Austin: At first she looked at me like I was crazy and, “Why would I leave such a good job behind to go out and do something with so many unknowns?” I think after that year of planning, I wore her down pretty good and she eventually said, “I’m sick of you talking about it. Go ahead and do it, that’s fine.”

Dave: You wore her down?

Austin: I think I wore her down, yeah.

Dave: How about the conversation with your other support group, your parents?

Austin: They were not as receptive at first as even my wife was. “You have a lot of security. Why would you do such a thing?” Through a lot of conversations, a lot of talks, I think I finally got my point across and they are my biggest supporters. My whole family is my biggest supporter and I couldn’t do it without them.

Dave: Did you share this decision with your mother-in-law? Now, I understand that through the grapevine that you kind of suck up to your mother-in-law, and she [crosstalk 00:06:44]-

Austin: Oh, every chance I get, every chance I get I do.

Dave: You had great support from your closest support group. When you made the decision to leave and start your own business, how many clients did you have at that time?

Austin: I had zero clients.

Dave: Zero clients. What about your capital structure, did you have excess capital to start the business?

Austin: My partner and I fully funded it ourselves and we had some of the bank support, but not a lot.

Dave: You were 27 when you made this decision?

Austin: I was 27 years old.

Dave: Let me get this right. Let me walk through this. You’re 27 years old, no clients. I understand you did not take one accounting or bookkeeping class at Ohio Northern.

Austin: That’s correct.

Dave: How about any marketing classes?

Austin: I did not.

Dave: Are you nuts, or what?

Austin: Yes, a little bit. Maybe one too many beers, I don’t know.

Dave: Yes.

Austin: It could be that.

Dave: At that time when you started, did you even know what a LLC was, a P&L, balance sheet, cash flow statement, 1065? Did you know of any of those terms?

Austin: I think I’d heard of an LLC as we were starting to get the company set up, but a lot of the other stuff, I had other resources to kind of fall back on. I knew a couple accountants and some people who could really give me some good guidance and that really went a long way when we first started off and still to this day.

Dave: Let’s talk about business plan. We hear a lot from our clients and the entrepreneurs that, “The business plan’s important, but very difficult to put together.” Was your business plan an inch thick, or maybe was it on the back of a cocktail napkin?

Austin: It wasn’t on the back of a cocktail napkin, but maybe just a couple pages. It wasn’t a big book or a big manual. Like you said, it is very difficult to kind of sum up what you want your company to be and what your goals are in just a few words. We put together an outline of who we thought our customers could be, what kind of services we would offer, because we are a service-based company, and what we thought our projections would be through the first year. From there, I guess that’s just where we started. Then as you get into your business, you find out that you might have made some of those predictions right and other ones are going to change drastically.

Dave: Do you ever, just for fun, ever go back and revisit that business plan as you sit here today?

Austin: I do it every once in a while and I kind of laugh at it. It’s pretty simplistic for what I deal with today on a daily basis. There’s a lot more that goes into it than just the technical side and that’s what I’m good at. I’m good at the technical side of my job. The business side, and the marketing side, and the sale’s side, that’s something I kind of had to learn as I went along.

Dave: Now, we mentioned that in the start, in the beginning, you had no clients, which is a little bit unusual for a startup business. Usually, they have a couple early adopters or sugar daddy clients to get them started. How did you get your first client?

Austin: Well, when we first started off we both worked at the same company. We left and we had a lot of connections in the area with a lot of local vendors, a lot of machine shops, and those kind of companies. When we left, we thought, “Well, for sure we can get business from these guys.” Well, that wasn’t quite the case. I’m guessing a lot of entrepreneurs who have had the same feelings as me, that similar situation has happened to them. We had to go and do a lot of cold calls, a lot of site visits, and that didn’t work either. What we did was we relied on our connections, our vendors, people we bought our software from, and just tried to get the word out there that we were looking for work.

“What kind of information can you guys provide with us on the industry in our area that would help us maybe get an in with a client?” We got in with a client, I’d say, actually in the second or third month of being in business and then we went another two months without getting another client. Then after that, there’s been no turning back. We have more work than we know what to do with. It kind of just through word of mouth and using our vendors and our network to find out what kind of work was available, have kept busy.

Dave: For the first five or six months, you basically had two clients and began to build from there. Obviously, you lost money in those first few months of operation.

Austin: Yeah. One thing we did do when we started out was we kept our costs relatively low. We didn’t have the fanciest office with nice leather couches and big 70-inch screen TVs. We spent our money on the things that were the core components of our company, which were computers and software. We were ready to go when we would get a bid.

Dave: Yeah, you’re right. I’ve been in your office. You do not have the 70-inch screen TV, but I think it’s like 68-inch.

Austin: I think it is. It’s not quite 70.

Dave: That was a big sacrifice.

Austin: It was, it really was. Those two extra inches, I mean, it … Yeah.

Dave: Let’s go back to the capital issue. You said, you and your partner Lance funded it out of your own pocket. I would assume that would be using lifetime savings, maybe home equity loans on the home, etc., things like that. Is that the right-

Austin: Yeah, it was just home savings. We didn’t get into any of our lines of equity, but we saved up, like I said, planned it for a year, built a nice nest egg so that when we did leave our full-time jobs we weren’t out of our houses in three months after that because we just sacrificed everything. We definitely did a lot of planning. Having a secondary income was nice, as both of our wives work. I think I had to do a lot of cooking in those first couple months just to keep her on my good side.

Dave: Did that work?

Austin: On the good meals. I made a couple bad ones though, and that was-

Dave: That didn’t work.

Austin: No, it didn’t work so well.

Dave: To add to this mix, both you and your partner not only had purchased new homes and were remodeling homes, but both you guys, the way I understand it, were talking about starting a family.

Austin: That’s correct.

Dave: No time but the present to start a new business.

Austin: Right. Luckily, we waited till year two of the business to do so and we probably should’ve coordinated it better, or at least talked about it, but we had our son in March of last year and he had his son in April. At least we staggered it by a month, so when we had that paternity leave-

Dave: Was that in the business plan?

Austin: You know what? I wish it would’ve been. It’s something we should’ve talked about a long time ago.

Dave: Obviously, you guys did a tremendous amount of homework and you saw the statistics that are regularly published about the failure of businesses in their first two to three years. Did that scare you?

Austin: A little bit, but at the time we started our business we were kind of noticing a trend in the marketplace for our type of work. After the recession, at my previous company we noticed they were laying people off, people were leaving for other jobs, and then after the economy got better, they weren’t hiring people anymore. They were farming that out to contractors, or to other groups, and we saw a lot of opportunity in that. That was, I guess, one of the main driving factors for us, is that there’s going to be a lot of work out here, we don’t see this trend drying up anytime soon, and it’s worked out for us really well.

Dave: We talked about the first few years and kind of joked laughingly, tongue in cheek, about your lack of business experience. How did you overcome that?

Austin: Relied heavily on my accountants, and my financial planners, and just did a lot of homework. Listened to a lot of podcasts.

Dave: There you go.

Austin: That’s one thing that even this podcast has helped me out a lot, because it brings up questions that I wouldn’t normally think of. I’m so immersed in my company and doing the technical side of the work is that, I may not think about my retirement, or I may not think about, I don’t know, a handful of other topics you guys have talked about on here. It definitely brings up some discussion points for me and my business partner to go through and so we tackle those when we have the time to breathe.

Dave: Sure. Do you use QuickBooks as your accounting program?

Austin: We do use QuickBooks.

Dave: Are you the individual in the company that runs QuickBooks?

Austin: Yes, I am.

Dave: In our notes, you sent me an email and I think it started out, “After a 13 hour workday, plus travel. I’m headed home, here are the notes for the podcast.” When do you have time to enter the checks and disbursements? Was it after that 13th hour day, or is it the weekend?

Austin: It’s usually at the end of the 13 hour day, or early the next day before I get started on some more technical side work. It was definitely a challenge at first to figure out how to do all that stuff and to balance everything. There’s a lot more balancing the sales, and the marketing, and the books, and everything than I thought it would be when I first started.

Dave: You still wake up at 2:00 in the morning?

Austin: 4:00 in the morning.

Dave: It’s 4:00 in the morning?

Austin: Well, 2:00 in the morning if my son’s teething, but he’s running out of teeth to get.

Dave: It’s more teething, than worrying about the business?

Austin: Oh, exactly, exactly.

Dave: Are you able to take a family vacation? A lot of entrepreneurs that we talk, put that on hold.

Austin: Yes, and I think that Lance and I have done a good job of doing that over the last couple years, because to us, family comes first. With being an entrepreneur and owning my own business, the work-life balance was definitely a factor in there. I want to make sure that, yeah, I’m working 13 hour days here and there, but we’re going to go on our vacations, and we’re going to … If I’m gone, Lance will support. If he’s gone, I’ll support and I just think it’s a key thing to do to just recharge your batteries.

Dave: You’d mentioned that currently the backlog is strong, you have a lot of work. Does your business plan call for expanding, hiring another engineer?

Austin: Yes, and that’s probably something we should’ve addressed months, and months, and months ago. At the same time, I mean, you get into this deal where you’re working in your business, not on your business. That’s something I think that I need to do a better job of, is working on the business and making sure we have the talent to support our workload. We could’ve accepted a lot more work if we had more people, but when’s the time? I got to do the books. I got to go home, I want to see my family. It’s one of those things. It’s something we’d like to do here in the future, is grow relatively quickly.

Dave: What do you think your greatest accomplishment is over the last four years with the business?

Austin: I think it’s getting some of our key clients and keeping them happy for an extended period of time, providing constant support, or answering their needs in a timely manner. Being a small company, we are pretty agile. We can at a moment’s notice be at your facility. We’re located right in Jackson Center, Ohio, so it’s an easy drive to Troy, it’s an easy drive to Columbus. If you need me in Nashville tomorrow, I can be there in six hours. There’s a lot of flexibility in what we do.

Dave: Now, I’d ask you about your largest failure, but entrepreneurs don’t fail, they fail forward, they learn from their mistakes. Can you share any mistakes that you guys learned from?

Austin: I think that our biggest failure, or learning from our mistakes so far, is that we should have grown quicker. We shouldn’t of … If we want to do bigger business, we have to act like a bigger business. We can’t stay small forever. I think that we should’ve been a little more proactive in looking to hire. We’re trying to take steps to do that now, but like I said, there’s only so many hours in the day. I’m seeing if we can get like a 25th, 26th hour added to the day. I don’t know if that’s going to happen, so we’ll see, or maybe a couple extra days at the end of the month.

Dave: Well, maybe you bill those clients for that 25, 26th [crosstalk 00:19:17].

Austin: Yeah, exactly. See if they like that.

Dave: Again, two 27 year olds had the guts to do this and certainly the crew at Rea & Associates applaud you for that. There’s an entrepreneurial spirit that is very difficult to replicate and you guys were able to do that. First few years, sounds like you challenged the overcoming the lack of business experience. We were joking about no accounting courses, no bookkeeping courses, no marketing courses. You guys just knew engineering, the business, but you’ve learned.

Austin: We’ve learned.

Dave: You probably made mistakes, but you’ve learned.

Austin: Absolutely.

Dave: Where’s the business today? Are you guys making money?

Austin: Yeah, we’re doing all right. We’re staying very, very busy. I’m working more hours than I thought I’d ever work, but it’s going well.

Dave: Would you do it all over again?

Austin: Absolutely, 100%.

Dave: You made the decision, you’re stuck with it. How about going forward, is that business plan, we joked about the business plan, are you looking at a new business plan, a strategic plan?

Austin: That’s really what we need to approach next, to plan more for our growth, to plan more for supporting our clients, maybe expanding the scope of things that we do, services that we offer. Being a service-based business, you can only offer so many hours and I think it would be good to produce, to create the designs that we come up with. I think that would be a definite next step. Maybe some expansion to a new building, we’ll see.

Dave: Fantastic, great. Our guest today has been Austin Black, co-owner of William & Grant Design LLC. I think it’s appropriate, we always like to do a first every now and then on unsuitable. I think we should have a toast to the entrepreneurs.

Austin: I’ll cheers to that, Dave.

Dave: All right. Do you want to do the toast, or you want me to?

Austin: I’ll let you do it.

Dave: Okay.

Austin: I think you have something up your sleeve.

Dave: Here’s to the tremendous spirit of our entrepreneurs out there, the passion and the growth, go for it. Cheers.

Austin: You got it.

Dave: Thanks again for joining us today on unsuitable, Austin.

Austin: Thanks, Dave.

Dave: Great insight. Time went very quickly. We’re going to have to have you come back when in year six to see how the business is growing.

Austin: That sounds great.

Dave: We’ve included several helpful resources for veteran business owners and budding entrepreneurs on our website at ReaCPA.com podcast. Go take a look. If you’re just joining us on unsuitable and like what you hear, why not take that next step and subscribe. You can find unsuitable on Rea Radio nearly anywhere at anytime. Until next time, I’m Dave Cain encouraging you to loosen up your tie and think outside the box.