How to Create a Vision for Your Business & Achieve Greater Freedom Through Systematization! – with Darren Root

Do you want to create a vision for your business?

In this interview, Darren Root CEO of Rootworks reveals how he created a vision for his ideal business and achieved freedom through systematization!

You will also discover how he was able to build a business that supports the life he wants to live, and gives him the freedom to travel when he wants to, and work when he wants to work.

Darren Root CEO of Rootworks


In this Episode You will Discover:

  • Why Darren believes that if you build a business that relies entirely on you, it keeps you tied to a location.
  • Why Darren’s lowest moment in his business was when tax season hit.
  • How Darren came to realize that he built a job and not a business.
  • Why Darren eliminated 80% of the services he was selling.
  • How Darren figured out what kind of product to offer to attract the right kind of customer.
  • Why Darren focused on solving pain points with this systems.
  • Why Darren has off-site one-week retreats with his entire team on a yearly basis.
  • Why Darren never goes into a meeting by himself.

Episode Transcript:

OWEN: My guest today is Darren Root and he is the CEO of Rootworks, LLC. Darren, welcome to the show.

DARREN: Thanks Owen, it’s great to be here. I’m looking forward to a good discussion today.

OWEN: Awesome. This interview is all about us going out there to get entrepreneurs like yourself who have been able to systematize your business so that it runs successfully without you and get you to share how you actually did that for our audience or listeners who’s listening today. Before we talk about how you systematized your business let’s talk about what are some mind-blowing results that you currently experience as a result of going through the process of systematizing and automating your business?

DARREN: I think the big one Owen is freedom. I have the ability to have a business that supports the life that I want to live, which gives me the freedom to travel, to work from wherever I want to work, when I want to work, and not sacrifice. Often times when you’re working and everything depends on you and you’re not working then all of a sudden the money goes away. What’s really nice is when you systematize the business and it gives you this freedom, and the money’s still coming in. That’s probably the best results.

OWEN: That word, freedom is huge. It’s nothing to sneeze at. It’s a huge thing. Everybody’s looking for that and I’m glad you have that. How has your company been transformed as a result of systematizing the business?

DARREN: I think the big thing is that my team, when I first start systematizing, we brought eight staff people. Now we have 32. I think the big transformations there from the systematizing, it’s really hard to run a company of 32 of employees if you don’t have systems and processes in place. The fact that we systematize our business, it gives my team the confidence to run the day-to-day operations without feeling this need to sort of tug on my pant leg all the time, if that makes sense.

OWEN: I totally understand. And you already mentioned you have freedom but I was kind of looking from your personal life. During the pre-interview you said you travel a lot now. Talk about that.

DARREN: I do. You enter different phases of your life. I’m at the point I’m an empty nest. My wife and I have been married for 32 years and I do a lot of speaking gigs around the country, but also around the world a bit now. Having the freedom to pick-up. An example is I was doing a speaking gig in London in mid-April, a couple of places in London. We decided to stay over there for 3 weeks and hit Paris, and hit a few other great spots. It’s that freedom to not have the kids at home anymore, but the freedom to just pick-up, go and enjoy places that I’m also happen to be working in as well.

OWEN: That’s awesome. Just so the listener have some context as to what your business is all about. What exactly does your company do and what big pain or problem do you solve for your customers?

DARREN: That’s a great question. I’ll start with what we do. I started out owning a traditional CPA firm Owen. That has evolved, as a result of systematizing and creating this vision for our accounting firm. I got really good at running an accounting. What I found was I could leverage that to other accounting firms across the country. What our business really does today is we help CPA firms across North America, UK, France, South America. We help them figure out how to run the business that we figured out how to run.

OWEN: I like that. What I’m hearing from that, sorry to cut your short. First of all you run a CPA firm where you do the traditional firm where you’re helping your customers and understand their finances and all that. But because you’ve systematized your CPA firm you’re now able to take the learnings on that to other CPA firms themselves to build and systematize CPA firms. Is that what you’re saying?

DARREN: It is. We’ve written a few books about the process as well as I do a lot of public speaking. Sometimes when you have a business that, although you systematized it, if you build a business that really depends on you solely it keeps you tied to a location. When you can create a business that doesn’t depend on you and you have these systems and processes, it gives you this freedom to travel. That’s what I really enjoy doing now, is teaching other people how to do this.

OWEN: Is your company profitable? What was last year’s annual revenue and what do you probably expect to generate this year?

DARREN: Our company is really profitable. I think this past year we did about 6 million

OWEN: Awesome.

DARREN: And we’ll be between 8 and 9 million this year. And our goal is always to put about 40% of the bottom line.

OWEN: Congratulations, that’s great news. We’ve talked about the results you now experience as a result of your business being systematized, but it wasn’t always like this. Take us back to when the business was not systematized and automated like it is now. What was wrong with it at that time?

DARREN: I started my career on, after I got out of NDA University as a CPA and I went to work for the late what was [00:05:37] back and the [Unintelligible 00:05:39] just collect a lawyer. From there I went off like most young CPA’s they cut their teeth in a big four firm and they go off on their own. And the biggest challenge I had was when I went off on my own I really didn’t have any plans. And so I started trying to build my business based on the skill set I had. I was a tax guy. And as I started building this business, my goal on building the business was to get everybody to love me because I thought that was the thing to do. And then you’re married, I got this business that’s growing that I built and run my particular skill set. I’m really not systematizing anything, I’m just working a little bit harder as we grow. It becomes all about me. And then you have kids and they have activities as they grow, you know probably the story. You wake up one day and you’re running around like crazy trying to keep up with work, kids, family life, everything that’s going on. And you kind of hit a wall. I see this a lot with professionals that we deal with.

OWEN: Yeah, and you mentioned during the pre-interview your schedule was being controlled by your clients at that point. For someone listening to that, we don’t want to just dive away from that. I want to describe how bad it got. Talk about some of the lowest point back then when the business was not systematized and how bad it got? I think you mentioned something about the tax [Unintelligible 00:07:11] and how that played a role?

DARREN: Yeah, absolutely. In the accounting business you had these deadlines that loom every year, whether it’s tax season. But there’s always deadlines in a tax and accounting business. Probably the lowest point I can remember was one busy season, the weather was horrible. I live in Southern Indiana so big snow storms that we were having. I’m having to get up at 3 in morning to get to the office to get work done, because starting at 8 o’clock I had clients that want to see me all day so you’re not going to get any work done during the day. And then the evening you’re going back and getting work done, or you’re running the kid’s activities. You get up the next day it’s like groundhog day. The next day is the exact same thing. And you do that right up until April 15.

OWEN: For months…

DARREN: Yeah, you do it for months. And when you do anything for months your life changes and you have to go through the cycle of trying to change it back, and we just started all over again the next year. That was not a high point.

OWEN: Yeah, I totally understand. And you mentioned how at that point to you came across E-Myth. It kind of set you in the trajectory of changing things around. Talk about that.

DARREN: I did. I’ve always been an avid reader and a self-help kind of guy. When I’m in this sort of state of I’m working like crazy. I go to Barnes & Noble, and this is back when you actually went into a bookstore, and looking for some books. I run across this book called the E-Myth, and it really didn’t make a lot sense to me as to what E-Myth…

OWEN: Bad title, right, but really good.

DARREN: So I pick it up and I devour over a weekend and I’m like, “Holy cow, Michael Gerber is speaking to me. I haven’t created a business at all. I’ve created a job for myself and everything depends on me and I don’t have any systems and processes. And I’m not running a company. I have a job, I’m a technician. And it just really spoke to me. That really woke me up Owen.

OWEN: Before we even talk about what you even did when you had this inspiration and you’re working on by reading that book I really want to talk about some of the emotional points. Because you mentioned during the pre-interview of how your wife was always pissed at you back then and how your kids were actually saying that you live at the office. How did that feel?

DARREN: My wife and I have been together since she was 14 and I was 16. Here I am, I’ve left a big firm and I’m trying to build this company but she’s at home with three small children. You’re being pulled in both directions. It just gets to the point where she’s probably had enough. Her [Unintelligible 00:10:03] with raising young kids, she wasn’t working at the time but I wasn’t home very much. Like I said, I was going to the office sometimes at 3 am and working late in the evenings. She wasn’t happy about it. It really hit me one day when at that point what was my oldest son at the time, he wasn’t all that old. Somebody asked where he lived and he said, “My daddy lives at the office.” That kind of hits you between the eyes and you started thinking, “I got to figure something out here.”

OWEN: I totally understand. Having that feeling what will you say was the very first step it took to systematize the business? I think during the pre-interview just to make sure that you elaborate on this point is you said that you had to figure out what exactly you were selling.

DARREN: Yeah. When you go into a business sometimes as a professional your goal is just to get clients. And whatever comes in the door feels like a good client at that point. When you really have a skill set in that area or not you kind of take it on and you figure it out later. As you well know that’s a recipe for disaster at some point. What I realized was in those toughest moments was I had this business dependent upon me but I was doing a little bit of everything to keep the doors open. So really, the very first step, one of the things I had really figured out from the E-Myth was I had to figure out what business I was in, what was I really selling here? I couldn’t just sell everything. I had to really define what it is that I needed to sell.

OWEN: Let’s make this concrete for the listener because I really get that point. I guess before making this observation that you had to figure out what exactly that you were selling, I’m assuming that you’re just selling general tax and accounting service, so even bookkeeping… I want to make the distinction of what you were doing then and when you figured out what you were selling, what it now became.

DARREN: It seems simple. I saw accounting and tax services. But taxes can be fairly broad. Do you do non-profits, do you do partnerships, do you do courts, do you do individuals, do you do international? There’s all kinds of tax. I can’t just say that I do… You want to just say that you do tax. Today we do individual tax for US-based citizens, we do S-corps for service-based companies, and we do partnerships for service-based businesses, that’s it. So we probably cut out 80% of things we were doing as it related to tax. On the accounting side you could say I do work for manufacturers, I do work for production, I do work for retail, I do work for service-based businesses. Again, that’s a really broad spectrum of expertise that you have to have. And today, what we do is we do accounting-related services, payroll, bookkeeping, financial statements for service-based businesses only. We really narrowed that focus tremendously. And to be honest, we probably got rid on I would say 80% of the kind of services we were selling.

OWEN: Just to focus on what you had to be doing… I think you also made this analogy during the pre-interview of how Jobs when he came back to Apple. Talk about what he did.

DARREN: I don’t know if you read a book by Walter Isaacson. He talks in the book about Steve Jobs that when Jobs came back to take back control of Apple one of the first things he did is he looked at the vast product line that had been created because Sculley, the CEO that was there when Jobs came back, his concept was in order to drive more revenue I needed more products.

OWEN: No skills and everything.

DARREN: Yeah, and if you think back Apple back then was… Apple talk was their network software. They had Apple servers, the spectrum was big. One of the first things that Jobs did was he said, “I need to go through every single product and figure out can we be the best in the world at selling these and what should we be selling?” If you think back now that product line went from something that was fairly broad. They were producing printers and all kinds of things, to something very narrow. They were going to sell…

OWEN: There was literally one product at one point.

DARREN: Yeah, they got really down to that iMac, right? And then from there came the audio device before the iPhone came out.

OWEN: I was actually getting to that point. And so you said the next step back then you took to systematize the business, what was it? I’m just reiterating what you said during the pre-interview. After you figured out what to sell I think the next thing was how to deliver it.

DARREN: Yeah, again, let’s say I decided I wanted to offer payroll services. This probably an easy example. I’m going to offer payroll services to service-based businesses. That’s fairly narrow. But really what I had to do is I had to figure out if I’m going to offer payroll services to a service-based business what technology, how am I going to deliver this, how am I going to teach my staff to do this? What’s my model going to look like? Am I going to gather hours digitally upfront? Am I going to use correct deposit? Are we going to put paycheck stubs and portals so the client’s employees can see those? Or am I just going to not have a model where the client can give me [Unintelligible 00:16:01] and any way they wanted to. Some employees would want paychecks printed, some would want them in a portal, some would want them in a different way. It’s just all these different variables. What we did is we said, “If we’re going to offer payroll services to service-based businesses here’s the way we’re going to offer those, here’s the technology we’re going to use. And we’re only going to take on clients that fit our model.”

OWEN: And willing to go with the process of how you deliver.


OWEN: You also mentioned that you also had that issue of pre-existing clients, how to fit them into this new system that you’re rolling out on how to deliver the product. Talk about that.

DARREN: Sure. If you’re starting a new business from scratch it would’ve been a lot easier because now I know what product I’m going to sell. I know how I’m going to sell it. I know how I’m going to deliver it so every client that comes in can match up. But the problem with most people is that epiphany hit sometime after they have clients. And so one of the biggest challenges I had was I figured out this new system, this new type of client, what am I going to do with this, this big mess that I have that is my client base? How am I going to take them from where they are to where I want them to be? Does that make sense?

OWEN: That makes sense. We’re going to talk about this very challenge, not too long from now on how you solved it. This same thing also had to do with employees too who now that you have this new model how would they fit into this new model. We’ll talk about in a couple of questions of down. What are the big steps did you take back then to be to even systematize the business?

DARREN: Once I figured out what we wanted to sell, once I had built the system, that I wanted to deliver this, the next big step really was getting my employees on board. And like you mentioned, and we can talk about this a bit more later, [Unintelligible 00:18:04] decided they wanted to fit in that system in some place, not so much so. I’m building the system, I’m training my employees, because the last thing I wanted to do was be the only guy again who’s going to go out and convert on my existing clients into this new system. My team to get on board with this system so they could convert my clients into the new model.

OWEN: I totally understand this. When you’re actually trying to first of all know the product you’re selling, second thing is how do you deliver this product itself, and then getting your employees on board and even getting your pre-existing customers on board to fit that new model. I’m wondering when you were creating the systems how did you even back then prioritize what orders or steps to take. How did you decide which systems to create processes for, which ones to create processes next?

DARREN: That’s a great question. What I did is look at what the process was for every service that we were going to deliver. From the prospect first contacted our office, what did I want that experience to be like, to what technology was I going to use to serve them, to what was the product going to be like on the backend. I think your question is how did I prioritize…

OWEN: Where you focused your attention…

DARREN: Where to go first, and what I really wanted to do was look at the client facing components. These are the things the clients were going to see from me. I had to really clean up our image to match this new model that I was creating. So I wanted…

OWEN: Sorry to cut you short but that’s funny because you’re making sure the customer gets this well packaged experience whereas behind the scene it could be [Unintelligible 00:19:56].

DARREN: It’s probably the case in a lot of situations but you had to figure out. Do I build the backend or do I clean up the frontend? And I don’t know that I have an opinion which one’s right Owen because both of them have to be done. I used to be in this coaching group a number of years ago and the guy that led the group talked about this concept of front state, back stage. This was a concept that really made sense to me. He really related this to the concept of a Broadway play. The actual play itself is front state. That’s what all the customers see and that has to be spot on.

OWEN: The show must go on.

DARREN: Yeah. But if the backstage is not a well-oiled machine, the front stage is not going to work very well. So it’s not like you can say, “I’m going to look really good but my back end’s going to be a mess.” They both have to happen.

OWEN: I guess the priority is front stage but also making sure that you’re also greasing the wheel on the backstage so that the front stage don’t fall off. I think you also mentioned something that stood out to me during the pre-interview is you said that another way of figuring out what the focus on was the most painful aspects of the business, where were you experiencing pain.

DARREN: I still deal with that today Owen. Whenever we look at a system or process we look at solving for pain points. Back when I was first putting systems and processes in place you’re exactly right. We looked at where were we experiencing the greatest deal of pain. And an example would be an awful lot of small businesses out there use a product called QuickBooks, right? And QuickBooks for years and years, and even to today was a CD-based software that you’d put on a machine. As an accountant, I have this client that’s not very good, as an example, running QuickBooks. That whole system lived on their machine. And the greatest pain point for us as a firm was getting access to that data. In the old days people would make backups and they’d bring in the accounting firms and the accounting firms would massage that data. And then they had to get data back to that.

OWEN: So there was friction, the whole thing is friction.

DARREN: Good point. Probably always the greatest pain point for us was anytime we were not able to collaborate with a client in real-time that cause friction for us. Whether that was delivering a tax return on the backend or getting a QuickBooks file on the frontend, probably the very first pain point I solve for was removing the friction that was taking place in dealing with customers.

OWEN: And you also mentioned something that you also did. You have had an off-site one week retreat with your team. How did that help from the start when you were trying to systematize the business?

DARREN: We do that every year. I take our entire team now. It’s certainly getting more expensive but we get a lot out of it. I take 32 people to an off-site and we do a whole week. What we do for that entire week, even today as we look at what are the pain points in the organization and then we solve for those. So we’re sort of making sure that backend and the frontend is well oiled before we go out and create lots of new stuff. We’re constantly working on our business. This is not one of those things that you set it and forget it. There’s constantly new technologies, there’s new ways of doing things, just things happening. You have to constantly be massaging that.

OWEN: Back then, how exactly do you document procedures and processes for your business? What tools did you use back then?

DARREN: Probably in the old days it was Word. Today you have things like OneNote or Evernote and things like that. Today we use OneNote that we share among our team. So we have all of our processes and procedures well-documented in OneNote.

OWEN: Awesome. My listeners always like to know books or mentors that help you during that stage of when you were… Let me ask the question like this. At the time when you were trying on working on systematizing and automating the business that we’ve talking about, what books or mentors that had the most influence on you and why? I think earlier you mentioned E-Myth but you also mentioned some other books too.

DARREN: Sure. I would always say the two books that had the biggest impact on my business life were the E-Myth, but also The 7 Habits of Highly Effective People. I actually ended up being a facilitator for the Covey Group back Stephen was still alive. I got to know him. I became a facilitator of the 7 Habits. Because it’s one thing to read the E-Myth which really tells you, “Hey, I’m a technician. I need to be a business owner. I need to systematize. I need to [Unintelligible 00:25:11] my products. But there’s a whole another side of your brain that says that you actually can make this choice. You actually can make a decision that you’re going to be proactive, that you’re going to begin with the end in mind. What kind of business did I really want to have? Did I want to have one that controlled my life, that made my wife unhappy with me and my kids think that I lived in the office? Or did I want a different one? So I wanted to begin with the end in mind. The next step of that is putting first things first. I learned so much from Covey and Gerber both in those two books.

OWEN: I’m assuming that that 7 Habits book was more like understanding the mind game and the tricks your mind plays on you, right?


OWEN: That’s kind of what it was. And so, we spoke earlier about some of the challenges and I said let’s wait until this point to actually talk about how you even solved them. One of the challenges you mentioned earlier, you said that you were changing the product, what you sell, and you also changed how you delivered the product. But one of the challenges was getting the employees on board. Let’s talk about how you solved that challenge?

DARREN: Back when everything really depended on me, my normal workday was go to the office, shut my door, and get my stuff done. Because if I didn’t get it done I was going to stay late or get in early the next day. You’re not spending much time when you’re so inwardly focused on helping employees become better. The problem just keeps getting worse and worse. The less you train other people, the more business that you get, the more it depends on you. It’s a vicious cycle. I think one of the challenges is, “I want to create this new brand, this new image of my firm that says that we’re really tech savvy and we collaborate in real-time on everything. But sometimes you have employees that are not very tech savvy, who don’t want to portray the brand as you want to portray. Up until this point because you’re not focused so much on them. But now you got this new business model that you’re wanting to advocate. There’s just this whole training and culture that needs to evolve. You have to spend time with your staff, really training them on this new model and why you want to do this, and how is it going to positively impact their lives?

OWEN: I’m assuming that part of that training helps to get them on board. But there are also people that maybe were not the right fit, so I think you mentioned something about changing those people, removing them from the team, and getting people who were right for the team based on the new product and the way you want to deliver it.

DARREN: Yeah, another great book is Jim Collins, Good to Great. He says you have to get the right people on the bus in the right seats. That’s really important. But I think one of the biggest challenges that small business owners have is they’ve never taken the time to figure out what they want out of their business. They never created a vision for their business. I think I mentioned to you when we talked before in the pre-interview that we do a lot of research around small business envisioning. What we find is that 95% of accounting firms have not ever taken the time to even figure out what vision that they have for their firm. If you think about that, if the owner has no idea exactly where their firm’s going to go how challenging is that for their team to get on board with.

OWEN: They don’t have the road map because the road map is not even in the mind of the owner.

DARREN: Yeah, and so as you hire people, if you don’t show them the road map, with a lack of road map they’re going to meander wherever they want to meander. It just creates frustration in you because they’re not getting it, but you never tell them what it is, you know what I mean?

OWEN: I totally understand. I think the second biggest challenge you’ve mentioned during the pre-interview was the issue of existing clients moving into this new model. I want to talk about how you solved that problem.

DARREN: As we’ve talked earlier, if you were starting from scratch it would be easy but that’s usually not the case, right? What I had to do was I use Microsoft Excel and I made a list of all of our customers and ??I broke them out into broad categories based on the service offerings that we were going to be offering. And I said, “Okay, I’m going to take an inventory of where all my clients currently are in my business processes today. And then I’m going to go over here on the right side of the spreadsheet and I’m going to put my ideal system, and headers across the top. I want them to be collaborative accounting system, whatever that might be. I want to articulate my new model. When I finish that spreadsheet I had a picture of where I was and a picture of where I wanted my clients to be. And what I had to do was take them one at a time. I had to train my staff on what my new system was and then I had to give my staff members the authority, the power to help me convert them one at a time into my new model. And to be quite honest, given the client base that we had at the time, it took us about 3 years. What I found in this conversion process was the first thing I can do is never take on another client that didn’t fit… That’s the low hanging fruit. And then there’s also the low hanging fruit inside of your practice which I would estimate at about a third that would do whatever I ask them to do. And then you had this other third that was kind of, “Show me how this…”

OWEN: Why are you doing this, yeah.

DARREN: And they’ll eventually go, and then you have this last third that they were not a good fit for our business. They just weren’t a good fit. And so you have to make those tough decisions. In our case, do not do work for them anymore. If they didn’t want to fit our system then we weren’t going to do work for them anymore.

OWEN: I totally understand that. I think you also mentioned then it’s part of the model was that you wanted to empower more of your employees and a client wouldn’t have access to you as much because you were empowering the employees to replace you.

DARREN: One of the things I like to tell the firms that we work with is one of the best decisions I ever made was to never go into a meeting by myself. Because whenever you go into a meeting by yourself with a client there’s an expectation that get set that I’m going to do the work. And so when I made this decision to never go into meeting by myself, and I learned this from somebody along the way. What I did at every meeting, every time I took on a new client, I took one of my staff members in and I set the expectation when we left meeting that that person would follow-up with them. And if they needed something else they’ll let me know. I’m creating this business, people don’t call me anymore, they’re calling that staff person or this other staff person. And all of a sudden I’m seeing some freedom. That’s kind of intoxicating. You want more of that. You want to gain more and more freedom. It takes time, but one of the ways you do it is to set the right expectations upfront.

OWEN: I like that. I’m wondering, we’ve talked about the two challenges, but I’m wondering, were there other challenges that we haven’t talked about that come to mind that you want to talk about?

DARREN: There’s so many challenges along the way, but I think probably one of the biggest ones is having this mission statement that says this is what I want to be. This is the kind of clients I want to serve and this is how I want to serve them. And having the ability to say no, the chutzpah, when somebody comes along that’s not a good fit. Because it’s really easy to say, “Wow, that client…”

OWEN: With all the money…

DARREN: He could pay me a bunch of money. And the next thing you know everything breaks down. Your employees realize that you weren’t serious about this whole thing and…

OWEN: I say that because having the system and the model, and now somebody comes who doesn’t fit that model and you accept them because of the money. It’s good for short-term, but in the long-term that also tells your employees that this new system you want us to follow, you’re not even serious enough to even play this game with so why should we take it seriously. I get that. Given all these challenges that you mentioned earlier, why did you even say committed to the goal of systematizing and automating your business?

DARREN: It’s what I did. You have a wife and you have kids, and it’s not like you can just chunk it and go somewhere else. And certainly staying in the model that I was in was not an acceptable thing to me. I think the process of systematizing was what I would call a short-term pain for a long-term gain. You just got to buckle down. If you create a system and you teach somebody else how to operate that system, there’s power in that, there’s leverage in that, and that’s really powerful.

OWEN: And moving forward in the story, at what point in time do you feel that the entire company was systematized and it could actually run without you successfully?

DARREN: Probably about 10 years ago. At that point I’m about 40 years old, at that time. And all of a sudden I get some opportunities to write a book with Michael Gerber, so he and I end up co-authoring one together called the E-Myth accountant. From that I wrote another book called The Intentional Accountant but I’m giving all these speaking opportunities around the country and around the world. So all of a sudden I’m not going to be in my office. What I realized that it was when we kept growing and things kept going, and we kept making more and more money and I wasn’t in the middle of it. That’s when all of a sudden you had this…

OWEN: You’re not in the office…

DARREN: Right, it’s still happening without me.

OWEN: That’s awesome. The current time now, one of the things we always like to do in this interview is go behind the scenes and give the listener a behind-the-scenes of how the business is currently working. I’m just going to use this analogy of a conveyor belt. I want to learn the different parts of your business and the specific systems that you have in each of them. Imagine your business like a conveyor belt. On one end is a service-based business like you mentioned earlier they probably help with their finances and they meet your model. And on the other end is that same person, they’ve gone through your service, you delivered the product to them, and they’re loving you guys, raving, and referring you guys customers. But behind the scenes that whole transformation is happening as a result of systems you have inside the company. Feel free to start from even the marketing or customer acquisition part. I just want to go through the different sections.

DARREN:  For us everything starts with our image here locally. We’re known in our local community and I’m [Unintelligible 00:37:08], we’re known as being a tech-savvy accounting firm that services service-based businesses. Our website certainly puts that out there as well as all the marketing material that we have. Based on what I learned a number of years ago which was who I wanted to serve, what I wanted to do for them and how I wanted to do it, I know go fishing for that kind of client. Everything we do says this is the kind of client that I wanted to attract. And I think that’s really important. And so once we started tracking that client we have a very defined process that says when you make an appointment online, call in, or stop by to interview us as your CPA firm then we have a process that says this is how we welcome them, this is how we show… our on boarding process. That’s very defined for us. We clearly articulate the way the whole system works to that client. And before we finish that first meeting we get a buy in with this client who wants to operate inside of this system. And then we have systems that on board that client all the way through and puts them into a recurring revenue model. So that we get the same consistent outputs on the back side and also evens out our cash flow. We don’t bill by the hour, we bill by the product that we deliver. We have defined systems from the fishing for the right kind of clients, to bringing them into firm, to the processes and all the softwares that we use to service that client, the way we deliver our product on the backend. That’s kind of [Unintelligible 00:39:04] service-based business. Because people think they’re buying services but we privatized them.

OWEN: I like that. What systems do you know have in place that enable all your employees to know what they need to do. I love the way you answered this during the pre-interview is that you tie it all back to who’s your ideal customer?

DARREN: We have a 7-step process that we hope firms think through. We use this process internally ourselves. We call it the entrepreneurial thinking model. It starts with identifying the future you want. It’s that vision piece. It’s understanding as a practitioner what kind of future do I really want? Do I want a business that supports the life I want to live, or do I want a life that supports my business? We articulate the future we want. After we’ve done that the next step is to create a business model, the model in which you’re going to serve. Once you’ve created that model then you can start leading. Leadership is the third component, leading your team and your clients down the path that you’ve created this vision. You got this model, you start leading towards that end. After that you build a brand that attracts the right kind of clients which we like to call those, which is the 5th step is the ideal client. This leads you to the 6th step which is an ideal day, which is the way that you want to spend your day. And then when we wrap around that concept and refinement, because nothing is ever really quite done. It’s constantly being improved. Does that make sense?

OWEN: I like that because if your employees know exactly that ideal client and all the parameters around them, it makes them know it’s kind of like a guideline. Not necessarily tell them specifically step-by-step what to do but it gives them a framework within which to be whenever they’re engaging with a customer as the customer goes through the different stages of the process that you’ve built.

DARREN: We have 10-step checklist on one page that defines the ideal client for us. When somebody calls up or books an appointment, how do we get that initial lead? We go through that 10-step process to identify is this the right kind of client for us. You have to get 8 out of 10 of those for us to take you on.

OWEN: Can we make this more concrete for the listener? Are you comfortable sharing that 10-steps with us?

DARREN: Yeah. I don’t have it pulled up in front of me right now.

OWEN: No, we can wait.

DARREN: Let me find this really quick.

OWEN: Awesome. You guys are about to get some knowledge bump so I’m excited.

DARREN: You got to fill just a touch of time while I open this up Owen.

OWEN: It’s all right. If they’re listening all the way to this point they’re eager to hear that.

DARREN: They’re in, right? This is actually in a presentation I’m giving on Tuesday. I have way too many slides in this next PowerPoint that I have to… Here we go.

OWEN: Awesome.

DARREN: We call it our Ideal Client Rating Criteria. If somebody has an existing business Owen what I recommend is that you go back and you rate those, your existing clients into what we commonly refer to A, B, C, and D clients, right? An A clients get 8 out of 10 of these attributes, a B client gets 6 or 7, C gets 4 or 5, and D gets 3 or fewer. If we drop down and look at what these are the first one is integrity. The client has a high integrity and doesn’t pressure us to compromise our standards. That’s somebody that’s wanting to achieve. Values or advise is our second one, it allows us to be a trust adviser, seeks and acts on the advice that we give them. The third one is fees and payment. They pay us on time and we have these big arguments over fees. The fourth one is they buy multiple services from us. The fifth one is they’re cooperative in dealing with my team. The sixth one is their accounting records are clean. They’re not just a mess. The seventh one is influence. How much can they influence other ideal customers to come to us. The eighth one, we do track the amount of billings that we can generate out of this client. The ninth one is being respectful. And the last one is buying our core service offerings. Those aren’t necessarily an importance order, they’re the 10 criteria. So you got to be buying our products, you got to be respectful, you have high billings, have influence, keep good books and records, buy multiple services from us, and have high integrity and be cooperative.

OWEN: I love that because it might not tell them especially what to do, but it just gives your employees a framework within which you’ll act upon. And it’s clear on what that framework is and tells them who the ideal customer is. It’s easy to just quickly identify that person is not even a right fit based on this framework or guideline that they’re working within. You’re talking about results, let’s dive into this a little bit. How do you track and verify delivered by your employees? I think you have a practice management system in place?

DARREN: Yeah, we have a practice management system where we track every bit of all the time that we spend our clients. We don’t build by time but we track time.

OWEN: Why?

DARREN: We bill a fixed fee amount.

OWEN: Okay.

DARREN: The value of technology Owen is in an hourly billing model. It’s zero because as you become more efficient in the use of technology, your billings go down on an hourly model because you should be able to do it faster. If you’re not in a fixed fee environment then there’s no benefit to applying technology for such a mission. And yet we know everybody wants to utilize technology so it’s really counterproductive. But what keeps most firms from going in a fixed fee environment is they have a perception there’s going to be risk to them because they don’t know how much something’s going to take them.

OWEN: That’s true.

DARREN: And the reason they don’t know how much time it’s going to take them is because they haven’t built a model and they don’t have the right client in the model. If I do a tax return for somebody, I know how long that tax return’s going to take me. I shouldn’t have to bill that client by the hour because they’re going fit our model. Do you see what I mean?

OWEN: I totally understand.

DARREN: So we have this practice management system that we track our time, we bill in a fixed fee model. We know what our realization is. We know what kind of services we make the most money out, we know which staff people we make the most money on, we know which clients we make the most money on.

OWEN: So the necessarily you guys tracking your time just so that you understand your capacity of what your employees can do?

DARREN: Capturing your cost. You got to figure Apple knows exactly how much it costs them to produce a Mac Book Pro. Although they charge a fixed fee for it they know how much that cost them to do that. So it’s just counting our cost.

OWEN: And you also mentioned that you also have a series of dashboards that shows what everybody needs to be doing across the office and tracks results.

DARREN: For every service, every solution, or every product that we deliver we have a series of steps in delivering that product. So you just think about tax returns as an example. You receive it in, we scan it, we prepare it, we may review it. And then we monitor the electronic filing of that. So there’s five steps in that process. And five different people may be involved in that process at any point in time. So we use a series of dashboards that when step one is done it triggers step two on the dashboard that says, “Hey, this return’s been received in, it’s time to scan it.” When scanning is done you check, it tells us the next step. “Hey, this return’s been scanned. It’s ready to go.” It keeps our staff from having to go looking around for what’s going on in the office. Everything’s right in front of them on the dashboard.

OWEN: Another thing that I love that you mentioned is about tracking the profit.

DARREN: That’s important to us. If I don’t know that the kind of service that makes us the most money. Let’s say that in a tax return service you get $300 on average an hour out of that service. Versus a payroll service, let’s say that you average maybe $50 an hour out of that service. Which part of your business would you rather grow?

OWEN: It’s logical. I love thinking of that.

DARREN: But if you don’t know those things, you feel like I might as well just do it.

OWEN: Yeah. I totally noticed that. Now that we’ve established that the business runs without you and you have a lot more free time. I’m wondering, which areas of the business do you focus on more now and why?

DARREN: Today, I would say 80% of my time is focused on strategy, the acquisition of the right client, and improving our own processes. I don’t do production work anymore. I focus on oiling the system, making it better. I get a big kick out of that, I like doing that. And then feeding that system with the right kind of customers.

OWEN: I love that, that’s awesome. What’s the next stage of growth for your business and what do you plan to achieve next, and why?

DARREN: At this point I think we’re continuing to expand outside the US. There’s still a lot of business to be had in the US for us. But I think the reason we’re interested in outside the US because it gives energy to our company. We believe that they should be fun. And I like to travel internationally quite a bit. So it’s just fun to affect other cultures and really gain an understanding of how much other cultures are exactly like ours. Pretty similar when I was in the UK or in Paris doing training, it’s kind of the same. It’s the same people having the same problems.

OWEN: I think one of the things I like during the pre-interview, you mentioned this analogy of a kid of who’s trying to sell and sell by himself, I guess he was selling cookies. And then one day his mom comes with 100 others. I think that was basically leveraging the other people selling for you guys. That’s kind of like the next stage of the business. Talk about that.

DARREN: It is. I’m glad you brought that up. I read this article. It was talking about this kid who had become an adult and became fabulously wealthy. But when asked what was one of the biggest learning experiences he had, he said that, I think it was a box of girl scout cookies or something he was selling for his sister. He was going to door-to-door trying to sell one box at a time. And what he found was when he gave the case to his mom, when she took it to the office when he was at school they sold out all the cookies. He sold 100 boxes of cookies. The learning for him was how valuable it is when you have a product that you can get other people outside of your organization even to recommend and sell for you how much faster your business grows. The next phase for us is to get other big players in the market place. We work a lot with a company called Intuit which is the founder QuickBooks. To advocate as a service provider, because with their megaphone being so much bigger than ours and some other vendors in this space as well. They’re helping us grow so much faster than we could ever grow one box of cookies at a time.

OWEN: I love that. As we come to the end of the interview, I think I want you to do two things. First is give the listener a summary of what we’ve talked about so far so that they can get to run their business successfully without them having to be there. And then also give them the very next step they should take to move towards that journey.

DARREN: Okay, if I go back and summarize I’m going to go back to my entrepreneurial thinking model and say I think the very first step is to go off with a pencil and paper or your laptop and figure out what vision you have for your business, what is it that you want this business to be. After you think about that I think the next component of that is to figure out based on what you want, what am I going to sell? How am I going to sell it, how am I going to deliver it? And then lead your team to help you in this process, create a brand that reflects what it is that you want, and then go find the right customers. Those I think are the main summary of everything that we’ve talked about. Let’s figure out our future, let’s get the right business model in place, let’s systematize everything, let’s go get the right customers to feed the system.

OWEN: Final question, I’m wondering, is there a question that you were wishing I would’ve asked you during this interview that you feel I didn’t get to ask you yet. It doesn’t have to be systemization or automation, but whatever you think would help to round out the interview as the listeners about to end it. What do you think that question will be? Post that question and the answer as well.

DARREN: I always like to think of what’s the value of… Why put all these effort to creating a bigger business? I think the value for me Owen is in providing for the work. I think of myself more as the caretaker of our business. And I’ve got all these people depending upon it, but I think of myself as a caretaker more than an owner. I try and do to create this really nice, fun, aesthetically pleasing environment that serves our customers and also our team. Covey always had this mantra, “You live, love, learn, and lastly leave a legacy.” It’s really fun to see other people and grow inside this organization. And you can help them boss them as well. That’s really the value for me.

OWEN: Awesome. And what would you say is the best way for the listener to connect with you and thank you for doing the interview?

DARREN: They can certainly reach out to me, shoot me an email. My email is I don’t mind giving that out Owen. If you want to find out more about what we do you can go to That’s our consulting company’s website. And our accounting firm’s website is

OWEN: Awesome. Now, I’m speaking to you the listener who has been listening all the way to this point. Obviously, I’m sure you like the interview. And if you want to give your feedback, please do leave us a positive review on iTunes, and to do that go to It will redirect you to iTunes so you can leave a positive review. And if you know another entrepreneur who will find this interview useful please share with them. And one more thing, if you’re at that stage in your business when you’re tired of being the bottleneck in your business and you want to get everything out of your head so your employees know what you know and can get work done the way you want it done, consider signing up for a free 14-day trial of SweetProcess. Darren, thanks for doing the interview.

DARREN: Owen, it’s a great time. I love talking about this stuff.

OWEN: And we’re done.

Noteworthy items Mentioned in this Episode:

  1. Microsoft OneNote for system documents
  2. The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change by Stephen R. Covey
  3. The E-Myth Accountant: Why Most Accounting Practices Don’t Work and What to Do About It 1st Edition by Michael E. Gerber and M. Darren Root CPA.CITP

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Here are 3 Steps to Take After Listening to the Interview:

  1. Figure out what your vision for your business is.
  2. Based on what you want, determine what you’re going to sell and how you’re going to deliver it.
  3. Lead your team, get them to help you, and find the right customers.

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