Building a Million Dollar Firm: Q&A With Joe Carufe

Building a Million Dollar Firm: Q&A With Joe Carufe

Joe Carufe was part of “Building a Million Dollar Firm,” a Power Panel at QuickBooks® Connect 2017 moderated by Joe Woodard. Here are highlights from his part of the discussion.

1. Tell us a little bit about winning the first Firm of the Future award in 2015?

We were a bit on an island, so to speak, out there in Knoxville, TennWe made some friends with a firm in Atlanta early on that helped give us some guidance and feedback, but we hadn’t really gotten involved in the industry community until then. Firm of the Future (FOTF) brought us to QuickBooks Connect, where we met wonderful people from other firms, app vendors and the awesome team at Intuit®.

2. What might be a hard lesson you learned through the FOTF experience?

We thought there would be a windfall of new sales … but at the end of the day, we were unable to capitalize on the publicity because we missed the messaging. Our prospective clients aren’t any more likely to use our service because we have "FOTF winner" on our website if we have the right outreach programs in place. We stopped selling and deployed an inbound marketing process. But, because we are in a trust service, we didn’t build enough brand awareness to secure their trust to the extent that they would pick up the phone and call us. Because we stopped all outbound sales, we didn’t even add enough new clients to replace the clients that churned off our service that next year.

We still heavily focus on branding, messaging and inbound efforts, but our philosophy of sales has changed. If we want to grow, then we must be a prospecting organization as well – until we can figure out how to get prospective clients to come knocking on our door, we must knock on their doors.

3. What is something positive that came from the FOTF experience?

We reengineered the company out of the optimism of thinking we were going to scale at mass. We budgeted to double that next year. What that did is make us think like a scaling machine. We re-thought everything, deployed new technology, buttoned down the hatches on existing technology, hired the right people and did all the things on the operations side we probably should have done all along but were too "small" to need. We have the confidence to scale now, which set the stage for massive investment in our sales process because we now have the capacity to serve those new customers.




4. How does Two Roads scale from a sales perspective now?

We started Two Roads with what most people would say is a traditional sales process. We had one person in the firm take business owners to long lunches and coffee breaks, sharing the Two Roads story and asking for referrals. Some cold calls, walk-ins and networking events were mixed in, and we added a couple clients a month. It worked. We grew, our operations team kept the back door shut, our brand grew and we were off to the races; but the sales were very unpredictable. We’d have a massive influx of business at year-end and then summers with no new sales. Capacity planning was impossible, and our onboarding team would be bored one month and screaming for support in other months.

Now, we are combining what we feel is the best of both the inbound/branding/marketing side of sales and the outbound traditional way of selling. We’ve kept the best elements of branding and messaging and have added targeted outbound outreach to those prospects. So, instead of receiving a cold call, email or walk-in from a salesperson, they would have seen a Facebook or Google ad, or have watched a Two Roads webinar, before having a real Two Roads person contact them.

5. With growth, you’ve obviously had to add team members along the way. What advice  would you have for those in the crowd who have employees or will have employees soon?

Having more people typically adds more challenges. You don’t get to keep all the money and you lose control of your product. You have to create systems and procedures that weren’t there when it was just you, or just you and a couple other people you had on speed dial. Our team is everything. You must protect your culture – you must fight for your team and tell them every day that they are the real champions because they are. Without them, you are nothing. You will go back to "solopreneur land" or worse, and have a divisive and draining environment for you and the employees in your firm who are just waiting around for the next best thing.

Your team will create the culture – all you do as the leader is nurture it. Fan it, help it along and then continue to protect it. Two Roads is not about me or any one person, or a leadership team, or the owners; it’s about the entire team working together to accomplish big goals.

6. Something being talked about quite a bit is hiring and retaining millennials. What would you have to say about that?

Check out my Intuit e-book on hiring and retaining millennials – half my team is millennial. I think they are some of the most creative, hard-working, generous and best employees for our industry. It just takes a different lens to see their true potential. Be prepared to meet with your team more often than you meet with your clients. You put apps on auto-pilot. But, unlike apps, you don’t set and forget employees. Millennials are especially sensitive to making sure their work matters in the world. If you can unlock the passion of a millennial, you will find one of the hardest-working, quick to listen and learn people on your team.




7. Niching is a great option for solopreneurs or small firms who can really build expertise and even a brand around one industry. What would you say for firms like Two Roads who are industry neutral right now, or maybe too large to make a change like that?

I wish I had met Jason Blumer earlier! There is so much wisdom in niching. Branding is easier, your target is smaller, efficiency can happen faster, and referrals can be easier and more natural. We’ve gone back and forth on picking a niche, but are probably a bit too far down the path. So, instead, we are focusing on verticals. Our team is large enough to have vertical leaders who can study particular industries. We can still get the operations strong by limiting the industries we target in our sales and take on without having to confuse or risk the rest of our customer base.

A universal rule with finances is trust. I don’t care if you have a hyper-niche … you still have to gain the trust of that business owner who is entrusting his or her nest egg to you. You can build trust with branding and expertise, but the best way is face-to-face. That is why a local bookkeeper can still win over national bookkeeping services.

8. What’s your target market?

Tennessee. Scale with trust. Our systems and team can serve across the country. Our team works remotely and we use all cloud apps, but the baseline of trust has to be there. We can get there on a call, but it’s easier if there is a localized/cultural connection. It doesn’t quite build trust by calling a New York City baker and saying, "Hey y’all! We’d like to do y’alls books," but we sure can say to a Tennessee business owner, "Go Vols!"

This is a shift from just targeting quick service restaurants anywhere in the U.S. That target is much bigger obviously, but we just end up burning up time. There’s enough business in Tennessee for us to hit even our long-term goals. There are 500,000 businesses in Tennessee. We need a fraction of a percent of that to hit our 10x goal.

9. How do you know how much to invest into salespeople?

It’s important to align your growth goals with your sales investment. Most are good enough to grow organically through referrals, but if you want to get to one million+, there will be some aspect of sales investment – either in personal sales coaching, ad words, marketing or hiring a salesperson. Make sure to build a business model that supports this investment. We have 36-month agreements with new clients. We can spend three months of the revenue on commission acquiring that client and it works in our model. We don’t make a dime on that engagement until month six. Pretty scary, right? Not when you build the model and start adding volume. You have to work the plan, though. Track the metrics and review the budget versus actual. That is our plan that we have faith in. Yours will look different, but it’s important to build it, test it and explain it. Explain it to stakeholders, to your spouse, to your banker and to firm friends. Have people poke holes in it or confirm it. Then, go for it!




10. What’s something you don’t hear a lot about in our industry that you wish was talked about more?

I hear a lot about automation, value pricing, retaining talent, marketing and sales, but one thing that doesn’t get the attention it needs is measuring our own businesses. Metrics matter – if you don’t measure it, you can’t fix it. Value bill yes, but track everything that goes into that fixed fee. We’ve discovered so much about our pricing model, our products, our team, our training process and more by tracking the details of our fixed pricing engagements. Yes, we still track our time in six-minute increments, document our conversations and review our entire client list each month. We cannot pursue excellence without knowing where we aren’t excellent. If you want to grow, you must measure progress.

11. What importance would you put on staying engaged with others in the industry?

Read blogs, articles and e-books. Watch Joe Woodard’s YouTube videos. Read Karbon’s magazine. Stay in touch with other firms. Where it makes sense, join Thriveal, Woodard Institute or Rootworks.

You need others around you to compare and contrast notes and help push you to your goals. I asked a mentor what the #1 factor to his success was in building a $20 million IT firm. He said being in a peer group and having others look at his business each month did the trick.

I’m a Karbon Academy lecturer, helping Karbon with educating other firms in achieving efficiency. Process is something I’ve always enjoyed, so it’s just a joy to be a lecturer and have the opportunity to share some lessons I’ve learned. But, it’s more about meeting other great firm owners out there and growing together. I’m always learning new tips and tricks, or absolute game-changing advice, from those around us, and it doesn’t matter if someone is worth $100,000 or $100 million in revenue.

12. How does Two Roads interact with third-party apps?

We believe our vendors are like family. Automation and efficiency is a game-changer for our firm and for the industry as a whole. Our core values spread to our app partners like Intuit,, and Karbon. I believe it’s important to be patient, kind and helpful to those who make such a huge impact on our business. What we have as practitioners are the real deal interactions with the end­ users that interface with those apps. I’ve been on advisory panels, done Q&A sessions, and I’m an active writer on the QuickBooks Online and FOTF blog. Those things do help our marketing, but I also want to play a part in their success, even if that means offering up friendly emails or calls concerning where the product might be improved. When our app partners thrive, we all succeed.

There are times when I just need to talk to a firm that has already implemented an app I’m looking at. The best app vendors will have a list of advocates they can refer to. I met Jeremy Allen by asking Fathom Reporting if they had a power user who was similar to me and already using the product. That was almost two years ago, and Systems Six has been a great friend to us ever since.