#FASuccess Ep 196: Partnering With A Center Of Influence To Rapidly Grow In A Focused Niche, With Daniel Hannoush

What You’ll Learn In This Podcast Episode

• What One & Done Financial Looks Like Today [05:45]
• The Clients That One & Done Financial Serves [11:23]
• How Serving Chick-fil-A Operators And Support Staff Became Daniel’s Niche [16:35]
• How Daniel And Jim Structured Their Partnership [33:48]
• The Services That One & Done Financial Offers To Their Niche Clients And Their Modular Approach To Financial Planning [45:20]
• How Daniel Leverages Technology To Make More Time For Client Relationships And Provide More Impact [01:01:09]
• How One & Done Financial Charges For Their Services [01:12:40]
• Why Daniel Chose To Build A Virtual Firm And What One & Done Financial Will Look Like Moving Forward [01:23:25]
• What Surprised Daniel The Most About Building An Advisory Business And What His Low Point Was [01:30:09]
• What Daniel Would Have Done Differently, The Advice That He Has For New Advisors, And How He Defines Success [01:34:59]

Resources Featured In This Episode:

• Daniel Hannoush
• One And Done Financial
• CFA401K
• House Hacking: A Beginners Guide to Hack Your Housing and Live for Free
• The House Hacking Guide – How to “Hack” Your Housing, Live For Free, & Start Investing in Real Estate
• XYPN Podcast Ep #219: Adding 100 Clients This Year with a Team of 6 by Focusing On His Niche - The Career of Daniel Hannoush
• Ronald Blue & Company
• "Good To Great" by Jim Collins
• "Rocket Fuel" by Gino Wickman
• "Traction" by Gino Wickman
• "Living Forward" by Michael Hyatt
• "The Ensemble Practice" by Philip Palaveev
• #FASuccess Ep 184: Building A Premium Financial Planning Experience To Sustain A Premium Advisory Fee, with Reese Harper
• TD Ameritrade
• iRebal
• Dimensional Fund Advisors (DFA)
• Replacing The Data Gathering Meeting With A “Get Organized” Client Experience
• The Payroll Company (TPC)
• Calendly
• Salesforce
• Conga Orchestrate
• Pardot from Salesforce
• Salesforce Financial Services Cloud
• Redtail CRM
• PreciseFP
• DocuSign API Version

Full Transcript:

Michael: Welcome, Daniel Hannoush, to the "Financial Advisor Success" podcast.

Daniel: Thank you, Michael. It's an honor to be here.

Michael: I'm really looking forward to today's discussion. You know, as people who listen to the podcast know, we've got a bit of a thing around here about niches, and people that...advisors that specialize in certain areas. You have what to me is one of the more I guess distinct and unique niches that's out there, of Chick-fil-A operators – a particular business, a particular franchise – focused on just Chick-fil-A operators, and I know have had just absolutely explosive growth with that, like hundreds of clients in just a few years since you launched, all built around this niche focus with a partner who has a connection to the community. And just, I'm really fascinated with this kind of story of what does it look like when you kind of just come out of the gate all-in to a niche, and get that kind of rapid growth and all the challenges, of course, that come with lots of clients, and then lots of hiring and building teams and training and everything that goes with it. But I'm just excited to talk about – what I think is a little bit of a unique niche, at least relative to the traditional advisor world, where either we don't specialize at all, or we pick things like doctors, dentists, architects. I feel like Chick-fil-A operators is a little bit of a different kind of niche than what we usually hear about in the adviser world.

Daniel: Absolutely, I'm excited to tell the story here. And I can't take credit for how I've fallen into it; I'm excited to tell that story as well. I do want to say that we also serve the support staff, so it broadens it just a little bit – so the headquarters-type support staff employees that support operators – so really, the Chick-fil-A ecosphere. But yes, don't think of this as a mastermind plan from the beginning of the industry. I'm excited to share... I remember chatting with my wife when I first started about five years ago, and I was a generalist and struggling to pick my focus, and she was very wise in saying maybe get started, and see who you like working with, and go from there. So I definitely did that same thing, you know, should I go the doctor route, should I go the dentist route? My wife's a pharmacist. Should I go the pharmacist route? But in the end, I took whoever would have me in the beginning, and it's been an awesome growth journey since.

Michael: Very cool, very cool. So I think as a starting point, talk to us just about the advisory firm as it exists today. Let us understand what the business is now, and then I want to understand more about this journey into how you went from generalist to Chick-fil-A operator and support staff specialist, and how this evolved. But tell us about the advisory firm as it exists today.

What One & Done Financial Looks Like Today [05:45]

Daniel: Yes, it's really, really, really exciting. We've been in business...I've been in the industry for five years, but our team has been together probably four years. I think April of 2016 is when I met my partner. So today, we've got a team of nine people scattered across the U.S., completely virtual, which is really exciting. We were doing that before it was sexy, in terms of recent environments, but...

Michael: Or completely necessary, in terms of recent environments. Okay, so we're already operating virtually, so at least pandemic was not quite the disruption for you compared to some, I guess, at least in terms of running the firm. I would imagine it's a little more disruptive if you were a Chick-fil-A operator, but we'll come to that a little bit later.

Daniel: Absolutely. Yes, we certainly work very hard helping our clients in this situation, and dealing with the loan options, and dealing with cash flow and market dips and all that. But from an operational standpoint, we've been primed and ready and working, iterating on this virtual business, really, since the beginning. And I don't want to take credit for that either. It was the XYPN community, and articles you've written and posts you've had that really paved the way for this world. But we've adopted that from the very beginning, and we serve anywhere from 300 to 400 households. It's growing, and I'd say in the last month, it's really taken off, but right around 350...

Michael: Three hundred and fifty households. That's...for a firm that got underway – as you said– the team you named came together a little over four years ago, in April of 2016. We'll come back to this I think a little bit more, but that's a really, really big number. That's 75 to 100 clients a year, that's one or two clients a week, every week for four years since starting.

Daniel: That's about what it's felt like. And you know, for a while there, it was five to ten clients a month easy, and you know, there're periods of surges in our clients' lifecycles in the year. But yes, we're really blessed. I mean, just to give you an example, with the specialized niche, Chick-fil-A invited us – and this is right before the pandemic really took off – to go to their NEXT event, which is where they rented out two cruise ships...not one, but two massive cruise ships, and took everybody in the Chick-fil-A world: spouses, operators, support staff...so there was about, I don't know, I think the numbers were around 6,000 or 7,000 Chick-fil-A people, that may include vendors... But they invited us to come and tell our story, where we could talk to the entire network of Chick-fil-A people. So it's the relationship, it's the niche that has given us the high growth of clients. But just to paint the full picture, you know, we're approaching 70 million of assets under management, which is great – modest for the amount of households, but we're helping a lot of high-income folks who are on the way to building great wealth and having a huge impact. We're actively hiring all the time; we're always looking for great people. I think Alan – our most recent hire, a Kansas State financial planning undergraduate, Thomas Meek, had reached out to Alan looking for a virtual firm, and Alan connected us. We interviewed him, and he was a great fit. So likewise, we're always hiring, we've got a couple of job openings now. So we're continually growing. We are aiming to be a billion-dollar AUM firm in 10 years or less, so it's...less than 10 years at this point, 2030. And I'm trying to think what else... You know, virtual from the beginning, everyone works from home, five of us in Georgia, one in Texas, and three of us in Montana. I'm actually right here in Bozeman, Montana, right with XYPN headquarters, so that's a fun connection.

Michael: Yes, no relationship, just that happens to literally be where you are.

Daniel: I think Alan likes to take credit for it, but they were two parallel journeys that definitely were influenced by XYPN's gravitational impact.

Michael: So, talk to us a little bit more about this clientele who you serve. You're at 350 households, but "just..." I'll put that in air quotes, "just" 70 million of AUM, so the average client is about $200,000 of investable assets at least, which is – I think, relative to a lot of the advisor world – like a less affluent clientele than a lot of advisors are focused on, as firms often drift upmarket. So, talk to us a little bit more about this clientele, like is it sort of...is that a consistent number, or is it actually like, well, the median is much lower, but there are a few big clients in there that drag it up? You mentioned that they're high income, so presumably, that means this is also a group where their AUM is going to build over time because you are working with Chick-fil-A operators. You know, you're not working with people in their 70s who are a net withdrawal, you're working with business owners in their – I don't know, 30s, 40s, 50s, that are still in savings and contribution and wealth accumulation mode. So, talk to us a little bit more about this clientele. What exactly are you doing for them, what does the relationship look like? Is it even fair to think about it in terms of AUM, or do you work with them on a different fee model basis anyways?

The Clients That One & Done Financial Serves [11:23]

Daniel: Yes, no, this these are great questions. I'll try and take it a little at a time. We are definitely in the mode where most people are still saving, earning and just hustling. I mean, we've got a 71-year-old client who is making $1.2 million managing three Chick-fil-A stores, and just a heart of gold. We probably only have less than a handful that have actually retired, so that's...most of the people we're dealing with are still movers and shakers. And like I mentioned at the beginning, when we first started out, I would take anybody. My first client was a high school friend, who just graduated college and got his first job, and we opened up an IRA together. So you know, $5,000 to start off a Roth IRA. And we still have several pastor clients, so we've never had the philosophy of, you know, asset minimums. As I'm growing from scratch, now with my partner, Jim, we really didn't think about, well, what's the way to be the most profitable? We served the people who were in front of us, and I really think that we've been blessed as a result of that. If you talk about who the clients are walking in the front door now, and you talk about the fact that we've embraced our hedgehog concept, and we're really focusing on our niche – only serving Chick-fil-A and support staff – which we haven't really announced. We're about to. I changed the language on our website; we're going through a rebrand, and about to tell, you know, our existing clients, as well as future clients, that this is our focus. It won't be much of a shock, just from how we've been growing and what we've been about. So when you look at AUM – I'm trying to take your original question – you know, there's definitely some in there that are pastors, and friends and family that helped us start out over the five years that assets aren't necessarily there, or they're growing. But we just have a heart to really help those who need it, and we really think that we'll grow and be blessed as a result, and that's been our story.

Michael: So did you grow across the board that way, or is this just, yes, we had a smattering of other clients early on, but now out of 350 clients, 300-plus of them are in Chick-fil-A, and there's just a few dozen of the others?

Daniel: You got it. Yes. We're going to endearingly refer to them as legacy clients, I think, but yes, it's... The initial – I would say the non-Chick-fil-A folks were probably that first year, and probably primarily from my side before I met my partner, Jim, who I'm excited to share about. But yes, I would say 90% of our clientele is Chick-fil-A, 99.99% in the past year, growth-wise, has been Chick-fil-A, and we just realized, okay, this is where we can truly be the best in the world at, and really get laser-focused on our messaging, on our process, and fine-tune and build what they need. And the impact that they have in their communities. It just seemed like a huge win, you know? Our mission is to grow wealth, to empower purposeful living and giving, and we found that this clientele fits that perfectly. Their mission, their vision, we're aligned. We enjoy working with them, it's fun, the impact that they're having with their communities, it's great to be a part of that. So yes, I would say they're super high-earning individuals. You know, I don't blink an eye when I see a 20-year-old just starting out, making over a quarter of a million. They just handed him the keys, it doesn't – I don't blink an eye at that. I would say most are in the $400,000 to half a million range, and depending on the number of stores they're managing – I mean, three stores, you know, we have clients making well over a million a year. So that just means that they have the ability to have a great impact. And we focus a lot on generosity, that's the heartbeat of why we build wealth in the first place, and so we feel like our clients get that as well, and so we get to help remove obstacles and really empower their generosity.

So the other thing, Michael, is that we set up 401(k)s for all these operators. They get to make the decision on opening up benefits. Each store owner/operator makes an independent decision, so there's really an arm's length between corporate. It's not like a massive corporate plan. Although there is one for the support staff, each operator makes their own. And so we've got over 250 – or close to 250 retirement plans – 401(k)s, pension plans that are formed, and that means thousands of participants that are a part of that as well, and we're not counting those people in our client count. But it's a hockey stick growth. If you looked at our AUM just a few years ago, we started at zero – really at the end of 2015 – you know, we expect to be at a billion in less than 10 years, with just the exponential growth that we've activated in the last few years.

Michael: So, help me understand a little bit more, I guess, just where all these dollars come from. Perhaps just my own ignorance, I...

How Serving Chick-fil-A Operators And Support Staff Became Daniel’s Niche [16:35]

Daniel: Have you been to a Chick-fil-A lately?

Michael: Yes, I mean...yes, and you know, the kids love going there. In fact, we frequent them quite a bit with our family these days. You know, I guess I just wouldn't have thought of sort of fast food franchise owners as being, like, hundreds of thousands of dollars of free cash flow per store, times the number of stores that you can buy and leverage yourself up at. Just like, those are some really big income numbers moving through. So is that just kind of the reality, like the Chick-fil-A formula and franchise and brand is strong enough that if you get to work with them and set up a store through them, just like, this is the recipe for success that they put forward?

Daniel: I would say that their model is very unique, and it's very, very limited capital requirements needed to set up a restaurant from the operator standpoint. It's much more like a Harvard entrance, where very – like less than a percent, or, you know, a very, very small percentage of people that apply – thousands and thousands of people apply, but very few are selected. And if you're selected, after a rigorous process, Chick-fil-A pretty much handles – there's a very small cap – you would scoff at it. I mean, just a few thousand dollars to get started, and I believe they give it back to you when you're done. It's really Chick-fil-A has a great model, and the store volume is just incredible. So like I said, I don't even bat an eye at these numbers anymore. And when I think about it in terms of other people and myself, it's just mind-boggling. And so the planning opportunities that come from that are just tremendous, and that's really exciting.

Michael: Which I guess just speaks all the more to why it's such a powerful niche, right? So you have a major franchise that's built, a great brand figured out its formula for success and how to deliver on it, and even goes so far as to extensively, massively vet and evaluate every single one of your potential future prospective clients to make sure they're really, really, really likely to be extremely successful...before you get an opportunity to go work with them, and be successful as their financial advisor.

Daniel: Well, what's even better...you got it right on the head, but I'd say, Michael, half of our team – like on my team – have a Chick-fil-A background. So, we actually use their vetting process to determine who's a good fit. I had a colleague ask, you know, "How are you finding these great people?" And honestly, just being in the Chick-fil-A ecosphere, there are great people that they attract, good, solid people that are...you know, our core values resonate so well with, and our mission. So yes, I would say, and I'd love to chat about this more, but our approach in growing the team has not been to find the industry professional. I mean, myself and Jim, my partner, we come from other industries, and most of the team came from something else. And it was the right culture fit, it was the right aptitude to learn, and the desire to grow that we recognize – and quite frankly, as a young company with our AUM, with our revenue – that we could grow a nine-person team so quickly, just by prioritizing people who get the vision and can learn the financial planning stuff, right? But if they have some sort of affinity towards Chick-fil-A, if they have a background there, it really helps. But you know, an affinity towards our culture and mission, and an aptitude to grow, and that's been our formula for success.

Michael: So, help us understand more now of how you chose...like, how you found and chose this niche. Because you said you started out as a generalist five years ago, did some stuff, picked a niche, bada bing, bada boom, 350 clients in four years.

Daniel: We could just stop the podcast right there, Michael. That's it. I mean, that was the story.

Michael: There you go. Riches in niches, the end. But as you said, right, the first part is the hardest, okay. But how do you pick one, right? As you said, you started out as a generalist, really struggling to pick – your wife said just try it for a while, see if anything jumps out at you. So, how did you go from getting started as a new financial advisor who was a generalist, to now I'm in this thriving Chick-fil-A niche? How did you find it, how did you pick it, how did you get started? When did that path turn from generalist to specializing in Chick-fil-A?

Daniel: Yes, I would say that it was organic, and I do not get the credit for it. I feel very blessed. But really what happened, part of my journey – and there was great struggle in that first year. I got to share a little bit of that with Alan on the XY podcast. But just a few years, even leading into launching into the profession of just – some people would call it turmoil – so you know, I can share a little bit of that journey. But I don't know that I would have picked this. I know I would not have, and I'll share how that came about. But really, I was kind of getting into the story. What I was alluding to is that I started out interviewing at Ron Blue while I was a chemical engineer, working in another industry. I thought, okay, the way I'm going to branch into this is working at Ron Blue or a major – you know, a firm that I agreed with their values and whatnot. My partner Jim had also applied in his history at Ron Blue, and both of us, for various reasons, did not get the position that we were applying for at the time. Funny enough, both of us found out that Ron Blue came back and reached out to us later, and we had already developed in our careers and were pursuing other opportunities. But long story short, people at Ron Blue heard my story and heard Jim's story, and it was a specific person who invited us to meet for a little networking event. And so I met Jim, heard his story, and really the bottom line is that I'm a business builder and entrepreneur. I built our first website and a lot of our systems, and I'm sort of a recovering do-it-yourselfer. And Jim had a 20-year career at Chick-fil-A. He is passionate about serving people in that way and had an incredible reputation and brand at Chick-fil-A, which we can talk about. But my capacity – and his network and relationships and desire to serve people well – there was affinity. Like we were both using eMoney at the time. He was just doing it for free at night, you know, while he kept his day job at corporate. And so there was a period of time in which we developed a partnership. But long story short, it's meeting Jim and his network...

And I tell you, I struggled for a year and a half, probably got to a million and a half of AUM by myself with 20 households or so, that was my story and would be an organic progression of that if I didn't meet Jim. And Jim had this incredible network of clients who were begging him to... You know, basically, his job within Chick-fil-A was to help operators make more money in the business, right, to be a financial consultant, to get better profitability, to manage waste, to deal with team members, and he created video content for the entire network. So he's a guy who is known for caring. He would sing happy birthday and anniversary, workiversary to basically the entire chain – 5,000 videos going out for happy birthday and anniversary. Not to mention all the video content he created to teach operators how to make more money in the business. So, he was well-known. He always wanted to – you know, help people on the personal side – but Chick-fil-A would not take on the fiduciary liability of that, and so they always referred that out. And finally, he realized, well, I've got to do this, I felt called, so he started doing it for free, on the side. And when we met, I was basically the catalyst, the activation energy – you want to do it, I can make it happen, you've got the network, we're – you know, a wonderful partnership, and that is what enabled us – and we didn't even go out from there and say, okay, we're only serving Chick-fil-A. We kept an open policy, you know? If you – I love – I think you've been a part of the framework for identifying, you know, if you see our value, you're willing to pay our fee and you're motivated, that's who we served, right? We didn't have asset minimums, and quite frankly, we didn't even have fee minimums. We've learned, okay, if we're going to grow a business, we've got to charge a minimum fee. So, that's kind of been an organic progression. But long story short, I didn't pick it. I was fortunate enough to find Jim, and we have iterated from that, and to this point where today, we literally this week are saying we're only serving Chick-fil-A. And that's coming from reading "Good to Great," and really diving into that hedgehog concept, which probably, many of your viewers know that well.

Michael: Yes, the – oh, I'm trying to remember the exact analogy – the fox knows many things, but the hedgehog knows one big thing, I think it was. So the whole idea for it was great businesses know one great thing that they're really great at, and they crush at it, and that's what makes them huge.

Daniel: Yes, it's the intersection of what can you truly be the best in the world at, what can you actually build a business around, and what are you passionate about? And you know, missing any one of those things kind of disqualifies the whole concept, but if you find the intersection of all those three things, boom, you've got an idea and you've got a niche. And so for us, we found it, and we are going to embrace it and stop... You know, we had the hardest time just closing the door, worrying about what that would do, but we are going to focus.

Michael: Very cool. Very cool. And so I'm struck by just the story and the connection and the way this comes together for you and Jim, that I mean, at its core reminds me of frankly, a long-standing – well yes, there's a little bit of Alan and I – but it reminds me of the long-standing approach that, frankly, we've always been counseled towards in the advisory business, which is one of the best ways to build your business is through referrals with centers of influence. You know, you just did it a little bit differently and more powerfully because A, you found, I think, a very unique center of influence, right? We tend to think of accountants and attorneys and mortgage brokers and people like that who are more directly tied to the financial system and might refer business to us, you found sort of a unique center of influence within a particular niche, which is the guy who was the go-to trainer for all the Chick-fil-A operators for 20 years, who knows everyone in that community, as you said, so has a unique center of influence role in that community. And just, you kind of went one step further because you didn't just get referrals with him, you made him your business partner. You're building the business with him, I guess, in part because he wanted to go more the financial advising route as well, so it blended well. But just, there has to be sort of an essence of, yes, this whole centers of influence thing can be really powerful, but you don't only have to look in traditional realms, like doctors – not doctors – lawyers and accountants and mortgage brokers and such. And you don't just have to set these up as referral relationships or even solicitor arrangements, you can literally go into business with someone. If you've got a shared vision around who you're serving and what you're going to do for them, you can build this together.

Daniel: Yes, and I would say – Alan characterized our relationship really well in the formula. If you were looking at it – and maybe distill out Daniel, Jim, Chick-fil-A – it's finding a really big influencer, call it a celebrity, call it not... You know, he likened our relationship to yours and his in that you were the celebrity that helped bring that initial gravity and weight and instant credibility and things like that. So if you were to try and reproduce the formula, perhaps it's going to an area where there is a big key influencer, and make them a partner. I mean, I'm not saying that was what I was out to do, but... You know, some people say, well gosh, are you going to be able to reach your billion-dollar AUM goal with just Chick-fil-A? I think it's really a no-brainer, not a problem at all. But we also have a secondary...

Michael: I mean, how many Chick-fil-A franchises or operators are there?

Daniel: Yes, there's, I think there's roughly – and Jim knows these numbers much better because they change – but it's roughly 2,000 stores. Not all those – you know, some of them are multi-store operators – so I would say just under 2,000 operators, just around 2,000 support staff, and they add probably 100 per year of new store openings or operators. And Chick-fil-A has their own internal goals of doubling, at least, in the next 10 years. So we probably have 10% market share as it stands now, and that's of Chick-fil-A's current environment, and if they double or triple, then I think we have plenty of room to grow.

Michael: I mean, even just doing that kind of math on this, you know, if there are 2,000 stores, and a store owner can make a quarter of a million dollars out of a store, there's $500 million of annual profits spinning out of Chick-fil-A franchises. So you know, if your target market has half a billion dollars a year of free cash flow, you don't really need to capture a lot of it to make this math add up for some really big numbers in that community, right? And that's before you get into oh, and by the way, they want to double it, so in 10 years there'll be a billion dollars of free cash flow savings coming up from the Chick-fil-A operators. I mean, just those numbers to me are enormous. And obviously, that's before you get into their spouses, and any other wealth or assets they have, or anything else they might be bringing to the table, right? That's just literally the market opportunity from the growth and free cash flow of 2,000 Chick-fil-A stores. And as you've also noted, 2,000, home office staff that support the Chick-fil-A ecosystem as well.

Daniel: And if you wanted to get wild and crazy, and again distill out the essence – if you were to reproduce this model, you know – we can see if ever there was a need to pivot, we could reproduce what we did with Chick-fil-A: find another vertical medium, find an influencer, even make them partner if we need to, but you know, pick another brand and do this again. Basically, we take a franchise model and go vertical with it, and become specialists in that arena because there are so many opportunities in this way of planning. And again, 250 retirement plans, it's worked out to where even if an operator or support staff – or let's just say an operator has an existing financial advisor relationship, that's fine. You know, the fact that we know Chick-fil-A – we know the language, we know the systems, we are third-party vendor-approved within their Chick-fil-A networks, we're on a very short list that Chick-fil-A has – you know, they're not calling us...you know, anything other than they've vetted us, and operators can choose our services. So even if they have an outside advisor, when we talk about 401(k) plans, that's such a specialty that again, they can keep their financial advisor for their personal stuff, if they so choose. We're happy to take them on, but there's no pressure. You know, we can set up a retirement plan and impact all 100, 200 employees that they have, and it's just an incredible service opportunity.

Michael: So I'm wondering then, when you decided you wanted to come together with Jim and create this, how does this business actually get created and launched? Like, were you 50/50 partners, was there, like, no, no, no, I'm going to build the business, I want more than half? Or he comes to the table and says, look, I'm the one that knows all the people, I should have a little bit more of a stake? Like, how do you... Anyway, it's one thing to say, hey, we should work together, then you know, you sit down and have to quickly get to the nitty-gritty of what this actually looks like. How did you actually pull together a partnership?

How Daniel And Jim Structured Their Partnership [33:48]

Daniel: That's a great question. And Jim and I both had our own RIA setup, so I had a firm, and Jim had a firm that he was operating, again, really charging nothing just because that was his passion, and wanted to do it, and wanted to serve people, and to meet compliance. So we came at it with two existing entities and said, okay well, how are we going to do this? We engaged a lawyer. We were very amicable from the start, so we spent some time really vetting, and you know, spending time with each other at our homes, meeting the family and that sort of thing. But we just were aligned on our values, our faith, the way we serve operators, the technology we use, the feel, and the approach. There were so many things that aligned that made the process simpler, and we just went at it from a 50/50 standpoint, hard-nosed, even to the point where we engaged a lawyer, they were telling us, okay, someone needs to be 51%, somebody to be 49%, and what happens if you don't agree and there's a stalemate and the entity stalls? And we just said I understand all that, but we just don't feel comfortable creating this sort of dynamic because we both bring different things to the table, and we don't do the same things. And in the beginning, I definitely worked harder building infrastructure and getting things ready, Jim's bringing the network, and so how do you put a price tag on that? But you know, there's an element of speed of trust, where we trust one another. And if we can't be 50/50 in trust, then I think that would...you know, maybe we shouldn't be partners in the first place. So yes, we created a legal document together, you know, took an operating agreement – we had the same attorney, and we just said, look, we want to be equal, we want it to be fair, so help us make this language as mutually beneficial as possible, and that's the route we took.

Michael: But it sounds like you did come to the table with I guess very different roles and styles. Like Jim's the celebrity that's known in the community, you're the one that really wants to be the integrator, the business builder guy. So, talk to us about how you carved this up from a...I guess like a duties perspective of, okay, we're making this thing together, now, who does what? We're 50/50 partners, but obviously, you can't...you don't necessarily, literally 50/50 everything, so how did you carve up who does what, and how it works?

Daniel: Yes, in hindsight, today we have books like "Rocket Fuel," which you guys recommended, we have "Traction," we have a framework to think through different roles and responsibilities. At the time, yes, we did not have the luxury of carving up, "Well, I'm going to work on this, and you work on that." It was just the two of us, we didn't have any employees, and at the time, again, Jim still had a full-time job at Chick-fil-A corporate. We met in April of 2016 roughly, he finished out his 20-year career, and left December 31st. So it was about six months or so of hustle, and most of it was me putting in a lot of sweat equity, building websites, building infrastructure, working on the compliance stuff, and, you know, Jim working hard with the relationships, and bringing that to the table. So once we launched One & Done together, that's when that question maybe had more weight, okay, who's going to be doing what? And thankfully, we're so opposite – it's clear on the integrator, and there hasn't really been a desire on Jim's part to – you know, he doesn't like getting too far into the weeds, and so it's hard to think about... You know, at the time, we both met with clients, we both just about did everything with more of the business management on my side. Jim was definitely doing a lot more client meetings, and to this day, the majority of his time is client-facing. You know, he's the reason why clients are coming to us now, we're trying to pass on the ethos that Jim has to the brand, which is a process and takes time. But right now, it's very much Jim's company. Regardless of what name we put on there, people are coming, they know Jim, they remember the videos, they want to see his face and his goofy jokes, and so he's the one doing a lot of the client – you know, the time that I'm spending client-facing actually has dropped dramatically as I've more embraced the integrator role in building the business and building the team and the accountability chart.

So at the time, it was just a hodgepodge, and there were definitely points of frustration, you know, what felt like work was being done in different areas at different times, and you know, I would be staying up all night to build. But now, we've certainly gotten to a point where it's clear that Jim has the chief growth officer role. You guys helped us on that front, really carving accountabilities and whatnot. I'm the integrator. I am letting go of things. As I said, I'm a recovering do-it-yourselfer and an engineer by training, so I'm letting go of the vine. And we have an incredible team now. We hired very quickly, so September of 2017 – we launched January of 2017 – September of 2017 was our first hire, even though, again, the revenue is not there. And even – I mean, I'm happy to share, our revenue is probably going to be north of $800,000, maybe $900,000 by the end of the year. That was our original goal, the pandemic sort of knocked it out. If you look at our revenue and our AUM, you think, well, why do you have a nine-person team, you know? We're doing the ensemble book, and that's our vision, is to build that ensemble practice, and so we've certainly hired ahead of our time. And the purpose of that really, Michael, is so that people can work on their accountabilities, that we can really get in our lanes, and before that, it was just a hodgepodge of everyone doing everything. Does that make sense?

Michael: Yes, it does. It does. So, you're looking at that transition that I think comes from most businesses as you go, I think particularly – maybe to some extent from five to ten employees, but particularly when businesses go from ten to twenty employees, where everyone's roles suddenly start getting a lot more specialized. The analogy I heard for it the other day was like you, you go from a team where everyone's a Swiss Army knife, into a team where everyone's a specialized kitchen knife and starts fulfilling very specific functions in the business. Because as you get large enough, it's like, okay, I need someone who's just going to be really awesome at this, these few operations tasks. Well okay, we have so many clients that do that so many times, we actually do need someone just dedicated to that. I'm like, all right, well, if we're going to grow to the next level, we need someone focused on marketing. Well okay, then we're going to hire a full-time person on marketing. And we need someone to help grind out all these plans, well okay, we're going to hire a full-time paraplanner. You go from that shift where you get to a certain size and mass, and in the business, most of the team goes from being generalist, Swiss Army knife type folks, we all do everything, into increasingly specialized team roles where you get someone that's great at this, and someone that's great at that, and someone that's great at the other thing for whatever the business needs as you're going to that level.

Daniel: We're just getting there now, Michael. And even the rate of hiring will probably even pick up because we're getting clarity on the accountability chart of what are those specific roles that we need and can forecast talent needs and stuff like that. So yes, to summarize, in the past, we didn't have a good, clear picture. Jim was just bringing in the relationships, bringing in the clients. The growth, that was Jim's brand and his efforts, and I was making sure clients – we had processes in place, we had systems, we had ways in which we would keep the people, and not let them come into a house of cards. A very popular phrase that we keep plastered – if we had an office – and I don't want to butcher it now, but when your ability exceeds – or let me say it – when your visibility exceeds your ability, it destroys your credibility. And that is our mantra. You know, bringing in five to ten clients a month, and now at 350, like, holy cow, like...

Michael: When your…

Daniel: Go ahead.

Michael: When your visibility... Sorry, I'm really struck by that. When your visibility exceeds your ability, it destroys your credibility, right? If you're bringing on too much business and you can't deliver on it because your visibility exceeds your ability, you lose all your credibility, and you lose all your momentum.

Daniel: Exactly. And that was the pressure and the tension, when I'm seeing, holy moly, we're bringing on 100, 120 clients a year and it's just Jim and myself, who are doing the planning, who are doing the process, who are keeping them happy. And we certainly... You know, there have been a couple of points in our timeline where we did hit pause and say, "Okay, we cannot take any more planning clients on, we've got to get strengthened in our process to be able to deliver that Starbucks experience where it's fully systematized, but it feels personal, but we don't want to have any clients drop the ball." When you have one client a month, you can really focus on, okay, where are they going, and where are they at in the process? But when you do modular planning, where you're taking people at different rates of speed through our services, I was very much concerned about, okay, how do we make sure 100 clients are moving at different paces, and no balls are dropped?

Michael: And I would think particularly, an issue in a close-knit, niche community like yours. If you guys drop the ball and give poor service and don't deliver well to your clients, word gets out pretty fast. Yes, Jim was awesome, but this new thing he's doing, it really sucks. Don't go buy it. Right? Like, if a little bit of that word gets out, you're in trouble real quick.

Daniel: It's unreal. We've made mistakes. Don't get me wrong, we have made – and there's a couple that are – you know, you think about it, and you cringe, and word spreads so quickly. There are operator forums, there are people texting and whatnot, and I heard this, and I heard... And sometimes we get the feedback, and sometimes we don't, but it is a double-edged sword, you know? It's a very tight-knit community...

Michael: So when you're good, it's good, and when you're not, it's not.

Daniel: You got it. Then I lose sleep. You got it.

Michael: So, talk to us a little bit more about what you do for clients. And just again, I'm even struck, just – I get the opportunity and the sizeable income they've got, and the huge savings they can do on an ongoing basis, but just the average client size you are at – you are not at a client size where you can do 30-plus hour, super in-depth, comprehensive financial plans, the math is not going to work well to grow the business at $2,000 or less of average revenue per client. So, talk to us about what do you do for your clients at the end of the day? Is this mostly about setting up 401(k) plans because that's their need, or are you doing a lot of other investment work, are you doing a lot of broader financial planning work, is it all Chick-fil-A specific advice stuff? Just, when a Chick-fil-A operator hires your firm, what do you do for them, and what do they get?

The Services That One & Done Financial Offers To Their Niche Clients And Their Modular Approach To Financial Planning [45:20]

Daniel: Yes, great question. One thing that we don't necessarily do, if you think about what we're doing, we're not going to enter the Chick-fil-A – what do you do in your job? If you take someone like a Reese Harper with Dentist Advisors, they're serving the industry of dentists, so they're not serving a specific brand. We're fortunate enough to where Chick-fil-A has a – you know, the support center has business consultants and financial consultants who do what Jim used to do in that, helping operators in the business. So a lot of the practice management stuff, we don't have to enter into, and we probably would be stepping on some toes because they've got a team internally that helped them there. Does that make sense? So, we're not helping them with practice management stuff. It's really when you draw a box around – we will definitely weigh in on entity structure, you know, making the jump from sole proprietor to S corp, the pros and cons of that from a taxation standpoint, where does your compensation need to be relative to your profits. But I'd say there's a black box around take-home pay. We certainly enter into the space of, you know, how much W-2 versus profits, but there's a black box around take-home pay. And so from there, our three main buckets are financial planning, investment management, and retirement plan solutions. So we are adding tax prep, we actually have a beta group this – you know, about 20, 25 households. In the 2020 tax year, we're going to do roughly 20, 25 returns, maybe 10 business returns, and so that will be an ongoing added service to our financial planning clients. But you know, we're doing comprehensive financial planning, we're doing investment management, and we leverage DFA. We're at TD Ameritrade, and we've got Capitec and iRebal, and a lot of systems in place to help us manage portfolios. We do vet private equity opportunities. A lot of our operators love that kind of stuff, you know, direct placement of real estate. I'll help do a cash-on-cash return analysis, or evaluate cap rate to compare if this is a decent investment, you know, I personally love real estate. But from a firm standpoint, it's mainly for liquidity and retirement, you know, the DFA long-term investing. And so that's the value we add there, we do the typical rebalancing and all that kind of stuff.

But financial planning-wise, it's a modular approach. If we had to deliver a comprehensive, full financial plan in the first month, we would not be able to grow at the rate at which we're growing. And I think you can clearly see that.

Michael: Right, you would bottleneck around just the amount of time it takes to produce...

Daniel: Absolutely.

Michael: ...five to ten new financial plans every month, if you were doing full financial plans for every new client every month.

Daniel: Yes. So instead we do a modular approach, where we – and we actually are about to implement a change, and I'll talk about that. But right now, you know, we do an onboarding, where we get organized – I love your article about that, if anyone's looking for that, that get organized meeting – and then set up the eMoney profile, we do an initial planning meeting where, you know, what are we planning for, how can we be successful in three years, and begin with the end in mind sort of thing, the "Living Forward" book, that life plan, you know, what is it that we're planning for? But then we launch into topic-by-topic so that clients actually make progress, so the pressure is not on us to deliver this fancy 100-page, 150-page plan, it's more like, okay, the topics that are of interest, let's break them down. And we do the homework, the pre-work, the analysis as we go, before the meeting, during the meeting, and after the meeting as homework, and that helps us actually implement as we go along, and we drive change. There are downsides to that, Michael. Like when clients don't book meetings, we don't progress, right, and we can sort of stall. And that's a concern for us, which this recent change that I'm about to get into will help us address that. But point blank, we do modular comprehensive financial planning. And then on the retirement side, you know, we've got a turnkey system there. We help them analyze which of the plan designs makes the most sense, we help them set up, we've vetted a service provider. I've got a tremendous partner in the industry that I'm happy to share their contact info, if anybody's looking for a good 401(k) provider. They helped teach us in the early stages, you know, because I don't have any credentials or training in the retirement space, and we kind of learned as we went.

Michael: And so who is it that you're working with, then?

Daniel: Yes, it's The Payroll Company, TPC, and Angela is the director of that department.

Michael: It's literally called The Payroll Company. I thought you were saying, you know, "We're working with them through their payroll." Like yes, but what's the payroll company? No, no...no, it's actually called The Payroll Company. Okay.

Daniel: They're a cross-functional – like, they do HR stuff, they do payroll stuff, and they have a 401(k) arm. And so that's who – it's the 401(k) arm of TPC, The Payroll Company. And we have vetted the industry, man. I've got a spreadsheet with, you know, who's doing 3(16) services, what's their fee structure, who's doing the 3(38), you know, will they sign that the 55 – just basically a spreadsheet of comparing services and fees. And that's how we originally found TPC, is that they were one of the lower-cost providers that did the full service, including the 3(16) fiduciary oversight, but they were also one of the cheapest ones. And so we developed a relationship there, after some bad partnerships, I won't name them.

Michael: So you've got these kind of three pieces, we're doing the planning work, to the extent they have assets in a portfolio we're doing investment management with largely DFA funds, and then you've got the retirement plans section of what you do. So, I do want understand a little bit more around this modular planning framework, like you know, we tackle a topic or two every meeting, and then as we meet, we continue to progress through stuff. So, how often are you meeting with clients to do this on an ongoing basis? What does modular planning look like in practice?

Daniel: I would say the ones who are proactive, the ones who are, you know, actually moving forward, doing their homework and booking meetings, we encourage every four to six weeks. So it's possible that we'd be meeting monthly with clients, which is a lot from an advisor standpoint. But in the absence of that front load, and then really, in the absence of that four-person ensemble team, which we are just now rounding out, you know, the lead advisor, the service advisor, the associate advisor, and the client service associate, we're just now filling those roles, it's going to be amazing the throughput and the relationships that a single advisor can handle. But in the absence of that, and in the absence of being able to do these full financial plans up front, you know, we are meeting – again, with the ones who are proactive – monthly to every six weeks to see what you did, talk about the progress, and talk about the next action items.

Michael: Okay. And can you give us some examples of just what do you cover in a meeting, right? I think even for a lot of us, if we talk about modular, it's like, okay, so you do a meeting on retirement and a meeting on estate and a meeting on insurance and a meeting on, I don't know, college, and okay, so four months later, you're done with everything, and then they're through the planning process? Or does it stretch out even further than that? How do you actually break this down modularly? How modular or micro does it get?

Daniel: Yes, so again, this is the way that we've done it up until today. I would say in a couple – this quarter, so Q3 – we're going to be releasing our new method, and I'm happy to – basically from the learnings of the past, we've baked into the new one. But you'll find, Michael, that again, if you leave it to clients to go at their pace, a lot of times it takes a lot of effort, and you say the same thing. Okay, we did a retirement analysis and you're a business owner, you need to set up – and these are non-Chick-fil-A people specifically – but you should set up a SEP, you know, or a solo 401(k), you need to move your SEP into there, we need to start doing backdoor Roth's, and it takes two or three meetings of, okay, what did you do? Okay, you – if they choose to self-implement, like if they're not doing investing with us, they want to self-implement as an example – like five months later, they still haven't set up accounts, or they are still trying to do that, and so will spend the time to re-educate. And so it's a very reactive process, and so we really can't move forward until – so I would love to say that it just takes four months and you're done, but no, it can easily stretch from one to two years, just getting through the initial topics – all the topics that the CFP would recommend – you know, estate planning, tax planning, education planning – and there's an element of implement along the way, so it does stretch out. It's not like we hit the topic, hand it to them and we're done with that topic. No, we don't move on until they've actually completed the homework, and sometimes we'll meet again, and have a working session where we may call and collect the information. And that's worked okay, but we're getting better, And we're getting smarter. So if you want, we can talk about what we're going to be going to next.

Michael: Yes, I do want to talk about what you're going to next, but I want to understand a little bit more of just how this process breaks down. So how long are meetings, if you're doing these meetings every four to six weeks? And I guess then also for context, these are virtual meetings, because your team's distributed, right?

Daniel: Yes, so I would say the majority of our meetings are via Zoom, or some are even phone calls. Some people – we give them the option. So our calendars are up to date on our website, so currently, we don't batch meetings in certain times of the year. I can see the value in that, but with our modular planning and with such frequent meetings, really, we just block personal and professional time, and clients can book whenever they want via Calendly, and that's what happens. And we have basically hour-time blocks – sometimes they go, or if I don't have a meeting after, but really, the intention is for it to be an hour-meeting – yes. And if enough time goes by...

Michael: And so clients get a reminder, like "Hey, it's been four weeks since our last meeting, hop onto Calendly, and let's schedule the next one and check in about how you're doing?"

Daniel: Or, "Let's keep your plan moving forward. So you know, you haven't booked a meeting in a while, here's the link." Just about every signature we have and just about every communication says, "Hey, go ahead and schedule your next meeting." But we do proactively say, okay, it's been a few months, let's check in and not fall off the wagon.

Michael: And do you end up with the master lists, like here are the 17 things we're going to be going through over the next year or two, we're just going to be hitting them one meeting at a time over the next year or two? Or is the list itself more dynamic? I'm still trying to figure out where's the crossover between we got all the stuff we want to cover in your plan, we want to do this modularly so we don't bite off more than we can chew at once, and we do actually want to make sure we get everything at the end of the day, and don't leave any gaps open.

Daniel: Right. And there have been a few – I mean, honestly, most clients are still in transition, getting through that initial financial plan. You know, our vision is this sort of maintenance calendar mode that we get through the initial plan, and everyone moves there, where every month we're doing this, where we're monitoring and adjusting that. So I would say that we're kind of in a hybrid state of that right now. There are still certain things that are time-based that we hit all clients with, like IRA reminders, you know, end-of-year tax giving stuff, 401(k) reminders, so there are elements of the modular approach where, regardless of where they're at, it's time-based, we are hitting all clients at the same time, with "Hey, this is the action you need to take now." Or it's end-of-year and we've got all the retirement plans, and it's time to process the profit-sharing numbers, or this and that. So in the beginning, we show the schedule of topics, we allow clients to rearrange them based on what's most important to them. And yes, we sort of have this, again, loosely held, we know what we've covered, we know what we haven't covered, and we just take it reactively, okay, what did we accomplish in this meeting? Schedule the next one, and we'll progress. And the big keyword there is reactionary, and that's the part that I'm uncomfortable with, and that's why we are moving to a more prescribed process. And we take it on Salesforce, which is a beast. We've spent the last year customizing Salesforce and workflows in Conga to be able to better track where people are, to better display where they are in the process, and to – you know, instead of it being reactionary for the client to book a meeting, we're prompted saying, hey, it's been this amount of time and they haven't done anything, let's engage the client, specifically.

Michael: Yes, so that's the part you're building, and Salesforce is the CRM to actually be able to track, okay, here's a list of all the clients, here's the list of the dates they had their last meetings, if the date of the last meeting is more than 60 days ago, trigger email reminder to go out for the meeting. That's the sort of stuff you can program into a CRM like Salesforce, that I guess just ultimately lets you track and automate that. Well, I guess you may not automate the email, but at least you automate the reminder, "I need to check in with this client about what's going on".

Daniel: Yes. And if you ask me what do I think is a better way, you know, I would say: everyone get on your podcast from a few weeks ago, to Reese Harper and Dentist Advisors, and take a look at what they have done. And I'm so impressed, I really feel like what they are doing is what we've been striving to do, and they've got 16 years to perfect the process, not only for specializing the process around your niche, right, planning for your ideal client, and changing your process to that, but these micro-touchpoints. So we're actually moving to let's get that full plan done in the first three months, where we still have elements like get organized, you know, explore possibilities meeting, and then a plan delivery where we're going to say here's where we want to take you. And then launch into every month there are specific micro-touchpoints for the planning process, where we have specific ratios that we're calculating that help answer questions on liquidity and real estate holdings, you know, if it's tax time, we're going to have a monthly deliverable around that, and we move everyone through maintenance at the same time, through these micro-touchpoints each month. That's where we're going to be building out some systems and automation in Salesforce and Conga. Does that make sense?

Michael: Yes, it does. And so why Salesforce, of all the different CRM systems that are out there?

How Daniel Leverages Technology To Make More Time For Client Relationships And Provide More Impact [01:01:09]

Daniel: Yes, I would say I'm a very tech-focused person, you know, being an engineer. And another phrase that we hang our hats on is to automate the transactional, to elevate the relational. And again, I'm going to keep referring to Reese Harper, hopefully not too many more times, but you know, his philosophy is to let computers be good at what computers do, and to let humans do what – you know, let them excel at what they're good at. And so to me, when you think about experiences like Starbucks, when you think about, you know, a systematized white glove experience with a high volume of throughput of clients coming in the door, systems and processes have to be the way, and automation is a big deal. You know, what can we have our systems talk to each other to execute transactions on our behalf, to keep us organized, to do things for us? And to me, the flagship is Salesforce. We've done Wealthbox, we've done Redtail, that's what we're currently coming out of – and the workflow systems in Redtail are phenomenal – but there are still limitations on what can trigger the advancement of a workflow, what the workflow can do on your behalf. You know, we're also integrating Pardot, which is a Salesforce-native product, to leverage our one-to-many communications, and to have decision trees on the email campaigns. So part of the monthly process is going to be developing these email communications that take in client-specific information from Salesforce, populate reports, and distribute them all. If you don't have the systems and processes to do that, with all these touchpoints, that's a lot of bodies, right? And so I'm technology-first in terms of systems. Let humans do what they're good at, and let the technology really make sure no balls are dropped. Another philosophy that I like to work with our ops specialists is to let Salesforce do what we do better, let Salesforce do what we do with less effort, and let Salesforce allow us to do more – do more than what we're currently doing. So, those are kind of things with how can we leverage technology? And so to me, Salesforce – and we went straight to the Financial Services Cloud because it was the most customizable – the biggest price tag, biggest headache, but the future state of where we want to get to, we felt like that was going to support our long-term vision.

Michael: And again, it's worth reinforcing that when you're staring down adding a client or two a week, five to ten a month, seventy-five to a hundred for the year, again, it creates a whole other level of pressure around how you're systematizing to be able to track and monitor everything, and all the different stuff that's going on and running through, because that's a lot of volume. You will lose track of it quickly if you can't figure out how to track all of it effectively in a CRM system, and automate as many pieces as you can – that can be automated.

Daniel: Yes, you can meter, you can slow the flow of clients, and make sure that you can service them well. But when you have, like you said – you know, if you are moving clients through your services and they're done within three months, that's one thing. But you've got clients who are on a one- to two-year journey just through the initial process, and you've got a hundred coming through each year, you can see where balls can be dropped. And to prevent that, I think you've got to place a lot of investment in infrastructure, or headcount, one of the two. And we certainly are not shy to advance the team, but I want to make sure that we're letting technology do what it can do, and then free people up to have relationships and to have an impact, and not feel this burden of manual tasks.

Michael: And for those who aren't familiar, what is Conga, and what role does Conga play in this?

Daniel: Yes, so we thought, okay, if I'm going to spend $20,000 a year on Salesforce and Pardot, okay, we don't need anything else, right? We've taken the price tag, we're just embracing it. But unfortunately, what you find when you enter Salesforce is that you still may need to invest further in software. There may be functionality – you would think that, okay, Salesforce, when I pay for the Financial Services Cloud, it should be at least able to do everything that Redtail does and more, right? That would be my assumption. That's what I entered into the space thinking. But I found that that's not true, and the concept of a workflow is so challenging from a Salesforce standpoint. There are ways to do it with tasks and action lists, but the way we think about workflows, like that Redtail accomplishes, or even Wealthbox, that does not exist in a clean-cut, easy manner. So we've actually spent the better part of a year trying to figure out how do we do workflows in Salesforce? And Conga has a slew of suites – or wow, it's a suite of services, the one specifically is Conga Orchestrate, and that's the one where we're actually building our workflows inside of, that is native to Salesforce but presents a sort of visual editor to build out what is complex in the way of workflows.

Michael: So at the end of the day, Salesforce I guess has the underlying flexibility to be able to facilitate workflows, but just the software itself doesn't actually do it well and effectively, so you had to buy Conga as an overlay to build the workflow sequences and structure the way that you actually wanted it to work.

Daniel: Exactly. Exactly. And we explored really every other way to do it, and I was in disbelief at spending that much on Salesforce, and we had to go out and get another way. And I probably took six months of our ops specialist, Anthony's, time trying to figure out the best way. But in the end, Conga was the best investment in order to sustainably build and manage workflows going forward.

Michael: And so I'm just going to ask – you take Salesforce, which is more expensive than Redtail, add Financial Services Cloud, which is more expensive than that, and then had to go by Conga. So do you now regret and wish you went back to Redtail, or is there now at least, with all these dollars, something that you get out of it? How do you weigh all these extra dollars plus extra dollars plus extra dollars pieces of Salesforce against... What are you doing or getting out of it that you weren't able to get from Redtail, that makes all this cost worthwhile?

Daniel: Yes, and to be honest, we're a year into it, and we still are having our foot in both CRMs – we still have not turned off Redtail. And the reason for that is we went out and got a consultant pricing to just do all these customizations... So, you have to do a lot of customizations. If you go to an Accelerate or TD's option or Orion's option, you're going to get a lot of things customized and thought out and built out for you. For me, the vision was to begin with the end in mind, and we wanted fully customizable complete control. You know, if we want to be a billion-dollar firm, there's going to be a ton of these processes to automate. I wanted complete flexibility; I believe it is more robust, I still believe that it's the most expensive route. And once you get onto the platform, it's not like okay, you've arrived, congratulations, here's the confetti. No, it's like, go find a consultant and pay them $100,000 to customize it for you. So we actually went down that path and got a quote, and spent $3,000 to $4,000 just paying someone to evaluate our business process to then propose how to customize Salesforce for us, in which case they offered a proposal of $60,000 just to basically get the most basic functionality that we had in Redtail going, reproduce that. That was not our future state wishlist items. And so I hit pause on the consultant, that was about the time that COVID happened and cash flow dried up on the growth front, and we just said, you know what, let's continue to build this out ourselves. So Q3 2020, we will launch – we have Operation Kill Redtail, and unfortunately – PreciseFP doesn't know, but we do have Operation Kill PreciseFP. We've found native solutions that do more of the customization and automation. So if anybody's wondering, we're using DocuSign, the API version, to allow us to automate the account opening process and really just have Salesforce drive a lot of behavior. I really can't stand, Michael – we collect the information through clients, and then we have to transcribe it into other ways. The systems don't perfectly talk to one another, and that just drives me nuts from an efficiency...and it doesn't make sense. So, Salesforce will allow us to do anything we can – anything you can dream of, you can build there. And I'm not a Salesforce – I don't have a referral code, or I don't get paid by them...

Michael: I think for most people listening, you're scaring them off with the cost of what it takes to build all this stuff. But I guess that's also part of the point, you've got to be excited about the vision of what you're going to build if you want to spend the dollars and resources to build pretty much whatever you want in Salesforce. Because you can have your vision, but it will cost you. Choose accordingly.

Daniel: Absolutely. And you may even need a dedicated headcount. So we have an ops specialist on our team, who now 100% of his time has been Salesforce management. He was doing other things in the past, but... And so ongoing customization: you either have to have a relationship with a developer and pay them their fees, $200 to $300 an hour to customize it, or you start a Salesforce administrator onboard, and so Anthony's working through reaching levels of certification in Salesforce. In the end, Michael, the reason why we're doing this – and Jim, my partner, he scratches he head sometimes and wonders did we go on this too soon for the price tag – but to me, the vision is we both agree that we need this long-term, and going to where we want to go, billion-dollar firm, supporting the client load that we want to, it is the right decision, it's just going to take time to build it. And so just like we hired ahead of our time, I think we've adopted technology ahead of our time, and I think in the next year, we will reap the benefits of this tremendous investment.

Michael: So talk to us for a moment about how you guys are actually charging for your services between this. Like we do the planning work, but it's ongoing, modular, and at least relative to a lot of firms that are fairly meeting intensive. You've got an investment management offering to help them with their portfolio, you've got a retirement plan offering as well, so how do fees work for you guys? It this like three services, three separate fees, you choose what you want? Is it one big bundled thing? Are you AUM, are you flat fee, are you monthly? How does the fee structure work with all these different services?

How One & Done Financial Charges For Their Services [01:12:40]

Daniel: And we've wrestled with that, and there are changes to that. If you hear one thing, you'll hear that we're iterating and growing, and everything's on the table to get better at. But currently, clients can engage us for any of the services independently. It's not uncommon for there to be a retirement-only client, so setting up a 401(k), it's not uncommon to see a 401(k) and investing, excluding planning. So we've got 350 households, we probably have 90 or so that are engaging us for financial planning, that can be independent of the others. Future state, that's going to be different, and I'll talk about that in just a minute. But currently, we do an upfront fee of about $2,000, and we charge $250 a month, and it's just an ongoing retainer. So in years two and three and four, they're paying us about $3,000, I think, for ongoing planning. That works. We certainly have clients now, before we set these prices, where they're paying $50 a month for the same sort of access, so those are kind of the legacy, early adopters. New clients are $2,000 upfront $250 a month. Investment management is separate, we do charge AUM, it starts at 1.25% and goes down at various asset levels. I think half a million it drops to 1%, and so on and so forth, down to $2 million and above is 0.75%, I think. Something like that. The 401(k) space, it's asset-based, and we pretty much charge new plans $1,500 or so, $1,550 to get onboarded and to go through the initial analysis. And we've developed a proprietary tool to really get laser-specific, including information about the Chick-fil-A cost-sharing and who pays for what, and so we've developed that tool that really helps us streamline onboarding. But $1,550 upfront, and then 75 basis points of assets in the plan. And so, if you look at our AUM think, I have some of those numbers in front of me, but AUM in retirement space at the end of 2017 was less than $2 million because they're starting up all these micro startup plans with no assets. But fast forward to the end of 2019, and we've got $28 million. There's really this hockey stick scenario, and it's going to continue to be that way because we've started introducing things like pension plans, where we've got one client who's 71-ish years old, three stores, and they're putting away just between, him and his wife, $700,000 to $800,000 a year into a cash balance pension that lowers their taxable income in one year. Not to mention what they're doing for team members. And so you think about these startup plans and this hockey stick, where you add profit sharing and the operators are putting away $200,000, $300,000 a year...

Michael: Because again, these are high-income businesses.

Daniel: So 75 basis points, there wasn't a lot of revenue in the early years, there won't be, but it's a long-term play. I would say that revenue per client for us is really low now, but I'm comfortable with it because we're still iterating on our process, we're still getting smarter, and how we can do more for clients, and so assets are exponentially rising. We're almost at $70 million of AUM, where just a few years ago, we started at nothing. So, we didn't buy any books of business. We plan to be at $85 million by the end of this year, and $1 billion in 10 years. So there's sort of an element of us understanding we're getting underpaid, in some ways our services could improve once we have these systems and processes in place, and we're comfortable being at a lower price per household now. But we're very quickly transitioning to a model, like with financial planning. Again I'll reference Dentists Advisors, they're doing a great job of it, of maybe it's $5,000 a year minimum fee, and if you bring assets, great, it's an additional fee, but we'll credit your monthly – you know, your monthly rate will go down. So instead of paying $500 a month, you may pay $400, depending on the assets. Currently, if you bring over $750,000 of assets, we don't charge for planning. And we do give credit for the assets that are in the retirement plan for the household. So not total plan assets, but husband and wife, if they have a couple hundred thousand in their retirement plan, that counts towards price breaks in the other departments.

Michael: But it sounds like you're – yes, it does. Get to a certain asset threshold, and the $250-month planning fee gets waived. Except it sounds like you want to, I guess, either raise the planning fee – maybe raise the asset threshold for that offset, or some combination of the two?

Daniel: Yes, so we're going to go to a minimum household fee. So we don't want to say asset minimums, but along the lines of what we said earlier with someone who's motivated, someone who sees your value and willing to pay your fee, that's who our ideal client is. And on top of that, our Chick-fil-A niche. But for us, it's going to be $5,000 minimum for the planning investing. We're going to call it sort of this outsourced CFO role, where we're doing financial planning and investment management, and they're not separable. And so instead of it being an all or nothing, once you reach an asset level, we're going to have price breaks along the way where we maybe knock off $100 instead of an all or nothing. So the person who's paying the most, who's got $600,000 of assets plus the full planning fee, and then when they get to $750,000, boom, the planning fee goes away, instead, we'll lower the planning fee...

Michael: Phase out the planning fee over time as it comes up, which is really just sort of like a steeper graduated fee schedule sort of thing.

Daniel: Yes. And so then we're not begging clients to bring assets over, but we're basically charging one way, whether or not you bring it over, and you'll get price breaks if you choose to bring it over. Does that make sense?

Michael: We start at $5,000. If you want to bring over $1 million dollars, you'll start getting a discount on planning fees and minimum fees as your AUM fee ramps up. So you'd still pay a little bit more because you're a bigger client, but you're getting faster breakpoints because you're winding down your planning fees as your AUM rises.

Daniel: Yes, that's exactly it. And you know, our services are going to get more interesting when our plan is to offer tax prep. And so that's only going to be if you're a financial – we don't want to be an H&R Block, so we don't want to just crank out tax returns for non-planning clients. We've already got the information, it's already part of our process to do planning, so it's just a little bit more effort – I mean, it's a lot more effort, but we're going to do tax prep as well for our planning clients, so that'll be an additional fee on top of that. And then right after that, our plan is to offer bookkeeping. So if you think about a business owner, if we can help them get their bookkeeping in order, we can do their taxes, and then we can be their CFO that handles their personal and business finances through this process, where every month we're doing a little bit of touchpoints, I think that's going to be a stellar process for our ideal client.

Michael: Yes, and they're all running businesses, so they all need – they all have to have someone do their small business accounting. It's a necessary on-demand service for them. So it just gets more straightforward to say we'll do that for you as well.

Daniel: Yes. And I think a big learning that we've had, Michael, is instead of going into this lab, and concocting the best plan and the perfect way to do all this, ask your client and build what they want, and learn and iterate. When you get a specialized area, you can get that specific feedback, well, what do you actually want to plan for? Does this matter to you? And if not, okay, we take it out, and next year, this month won't have this deliverable. We'll start really fine-tuning... Alan put it like you're laying the tracks as you go, and that's really – instead of going for perfection on day one, launch the minimum viable product, and iterate on it.

Michael: But I think the distinction is for the average advisory firm, where we have clients all over the place, right, we accumulate all these different clients over time, you know, if you ask 50 clients what they want, you get 50 different things that they want. And then you have to pick which thing are you going to do that only a couple of them are going to use, so you usually pick the things that the top-level clients would use, and you end up with an A-client offering that's different from the rest, but it's hard to systematize them. When you've got 300-plus clients who are all Chick-fil-A operators, it's overwhelmingly likely that whatever you make for one of them is going to be something that the majority of them want. And so you can ask a few and make something that's relevant for hundreds, whereas I think for most advisors, one of the pain points around niches, and the lack of a niche, and the lack of efficiency that comes from it is it's really hard to find one thing that all your clients like because they're all so different. When you've got a consistent niche, if there's something that one of your clients likes, probably most of them are going to like it and you can do it on a sustained, repeatable, systematized basis.

Daniel: Absolutely. And when the client – when I get in front of an operator or support staff, I know exactly the pain points that they have. And I get excited to answer questions they haven't even thought to ask yet just because of the benchmark data that we've seen across others, you know? You hear things that other operators are doing, and then you can present that. And really, that was Jim's job as a financial consultant really, just what are other operators doing in the business to make more money in terms of cutting costs and being more profitable, and just leverage the shared information. There are some exciting things we can do as we embrace the hedgehog and really just say, okay, Chick-fil-A only.

Michael: So now talk just for a few minutes as well about the dynamic of building the firm itself, and why you built this virtually with the team all over the place. I think you said part in Atlanta, part in Montana, someone down in Texas, why virtual? I mean, obviously, it turned out to be fortuitous in the pandemic world that sort of forced it, but your virtual thing predated the pandemic. Why virtual?

Why Daniel Chose To Build A Virtual Firm And What One & Done Financial Will Look Like Moving Forward [01:23:25]

Daniel: Yes, so it works with our clientele, but I would say I was doing this from day one, five years ago when I launched in the profession. I had an office for a few months, realized nobody came to it, and I didn't have the cash flow to keep it up. There was an initial stigma, like "Oh, where do you work? Oh, you work out of your home, oh, okay..." and there would be that moment. And quite frankly, I've way gotten over that stigma. Even to this day, you know, even though we're running a pretty awesomely fun business, there's still a moment, "Where's your office," "Oh, I work from home," and you still see that sort of, like...you know, pre-pandemic, there was this sort of judgment. But in the end, some of the benefits are I can attract talent from wherever they are, right? We're not limited to geography or other life circumstances, we really can find the best people, and that's why our business has grown. There's another quote that your growth needs to be throttled by your ability to attract good people that get it, want it, and have the capacity to do it, as well as align with your core values, the right person, the right seat on the bus – "Good to Great" and "Traction." So that has been a very big strategic advantage because our team is – even in Georgia – they're scattered probably within a three- to four-hour radius, if you go from one end to the other. And then I'm in Montana, and we've got two others here, in different cities in Montana. The reason why we were able to attract Thomas from Kansas State, as a graduate who has now moved to Texas with his new bride, is that we aren't limited to a location. The clients that we serve are all over the U.S., so even though headquarters – Support Center – is in South Atlanta over near the airport, operators are across the country. And quite frankly, they don't care to have to travel. And there are some that Jim meets with at Support Center there. He's got access to go to Chick-fil-A Support Center and meet clients there, and he can meet for coffee locally...

Michael: Which is based in Georgia?

Daniel: Yes, it's the south side of Atlanta, right near the airport in Hartsfield. So that's where Jim lives, and that's where a lot of Chick-fil-A people live. And quite frankly, our clients fly in and out of the Support Center, so if we were ever going to have a headquarters, it's going to be right there near Chick-fil-A, which we're wrestling with at the moment. But for the people that need to meet in person, Jim is there, and that's who they want to see anyway, and he's happy to drive up to the Support Center. But I can work from anywhere, Michael, and I can work from my phone, and I can manage a nine-person team. And it's been really exciting. We've been in an RV for two out of the last three months, and I still meet with clients, and I still run a level-10 meeting from Traction every Monday, and I'm still playing the integrator role. And quite frankly, it's allowed for time and financial freedom rather than having the burden and cost of a physical location, and that's kind of, in a nutshell, why it's been fun. I'm not sure where we're going to go moving forward.

Michael: How do you think about this moving forward? You have some very, very large growth aspirational plans, there are certainly businesses that I think struggle more with doing the virtual thing when they're larger...at least just more people makes it a little bit more complex than when we're all independent and smaller. So how do you think about this going forward? Are you envisioning, hey, the virtual thing worked in the early years, but it's not going to work from here, or are you thinking, no, we're going to scale this thing to a billion dollars virtually?

Daniel: So if you look at our 10-year vision, which comes from "Traction," working through that exercise, we have on there a billion-dollar firm to remain virtual, with an optional, sort of, resource headquarters for us near the Chick-fil-A area. That's how we've been...I would say in the last month, we have gained clarity around Chick-fil-A being what we're going to serve exclusively. And I would say that kind of like the V for Vendetta point with the domino, you know, the single piece that triggers this entire change of thinking, I would say that move has moved some things in my brain, wondering okay, would we be more strategic having resources right there next to headquarters, where clients fly in and out of? Can we build a culture with fifty people on our team the same way we do now with nine? And those are all very good concerns. We've posed the question to you and Alan, why did you guys move from a primarily virtual-based XYPN business to needing a headquarters there in Bozeman, Montana? I would say what is our strategic advantage in keeping us this way is the entrepreneur operating system out of "Traction," where we have very specific strategic documents for team members, we have personal and professional financial goals documents, where team members are articulating their desires and wants and their career paths. We have EOS for weekly meetings, quarterly retreats, mini-retreats, and an annual retreat. So we just flew the entire team and their families to Bozeman this past January, so it was an incredible experience where we got that in person. So it's that systematized people process, and hiring the right people who you trust. Trust is our number one core value. So I don't micromanage, even though I'm acting CEO from an outward perspective, and there's no middle management, everyone technically reports to me in our current state. But we have a system of trust, we have documents where everyone knows exactly what their responsibilities are, we have quarterly rocks that tie to the one-year plan, that tie to the three-year picture, that tie to the 10-year vision, so everyone's aligned, and know exactly what they're expected of. And we just moved to 100%. – or unlimited vacation, which we got from you guys, as a demonstration of trust. So I think trust has to exist, and quite frankly, I do think we could get further along than others in a virtual environment. But I am asking the question, okay, will we grow faster and more effective by having at least some sort of physical presence there, next to our ideal clients' headquarters? So, more to come on that. But as far as our team is concerned, we're not making any big decisions, hopefully, in the next two to five years, but it is a question we're still wrestling with.

Michael: So, what surprised you the most about trying to build an advisory business?

What Surprised Daniel The Most About Building An Advisory Business And What His Low Point Was [01:30:09]

Daniel: What surprised me the most? That's a good question. What surprised me the most? The first couple of years were absolutely the hardest. And so I've always been an entrepreneur, I've always been a business builder, an empire builder, but just really how hard the first year would be was probably the most shocking. Right now it's a joy, and the only thing that surprises me are pleasant, we're in a really good rhythm now. But those first few years, no cash flow, no clients, no experience, trying to have a work/life balance, trying to allow my wife to stay home with the kids, where I was building a business from scratch and watching our newborn at the same time...I think people underestimate what it takes to persevere in the first year to two years. Hopefully that answers your question.

Michael: So, what was the low point for you in those early years?

Daniel: I mean, that was a low point for me personally and my marriage. And to paint the picture, I transitioned from chemical engineering to working in food manufacturing, went full-time, got a Master's in Wealth Management, and was doing a full-time Master's. In that time, I'd launched a landscaping business from scratch with another guy to learn business. We developed two teams and crews, and commercial accounts, and I sold the business when I was done. But working pretty much 60 to 80 hours a week in that business, not making any money because I was just reinvesting everything while going full-time Master's, and my wife was pregnant with our first child, and she was a pharmacist, and I'm not making any money... I went two years without bringing a dollar to our household during that process of the Master's, launching a business from scratch, finishing the Master's. And so even that first year of...you know, so at the end of that process, finishing the Master's, launching a business from scratch, our first child was born, that same time period my wife had to work full-time. So she was working 40-plus hours a week, 50 hours a week, not able to be with her child...

Michael: Because at the end of the day you're getting started and bringing no dollars home, so the family formula was she had to work to support the family while you were building the business.

Daniel: Not only was I not providing, I had expenses. I bought eMoney from day one. If you get an idea of my early adoption of tech, so I had expenses for six months and no income. And we didn't have a runway built up of a nest egg, we just cashflowed the whole thing, and thankfully she had incredible income. But she had to work when she wanted to be home with the kids. And I was watching our son, our newborn, while building a business from scratch. And I would say no time, no money, stress, new baby, and wife working when she didn't want to. That was a very dark time, you know? I gained weight during that period of time because I was just sitting and working...and yes, I would say, Michael, that that culminates to the low point in my career there. I think that's it, looking back on it.

Michael: And so what pulls you through that?

Daniel: That's a good question. I mean, to be honest, in the aftermath, we have certainly invested more in the marriage, you know? We did counseling; we sought counsel from friends and we were very open about our struggles. Thankfully, the business picked up financially. That was a big stressor. But just the grind of making it one client at a time, and revenue picking up, and hurdles, finally about a year or so into the business we were at a point, and it was post-meeting Jim that Ashley got to come home from working, we had our second child. I think that relieved some tension there, just grinding the business and growing the clientele, and understanding that, hey, these years of turmoil have taken a toll on our relationship, prioritizing that, and investing in that in the years since then, investing in my relationship with the kids. That's been the only way to have come out of that period.

Michael: So as you look back, anything you wish you'd done differently in those early years? What do you know now you wish you could go back and tell you from five years ago when you were getting started and coming out of the Master's program, with no clients and no cash flow, trying to figure out what to do?

What Daniel Would Have Done Differently, The Advice That He Has For New Advisors, And How He Defines Success [01:34:59]

Daniel: I regret nothing about our process now. I'm thankful for where we are now, I'm thankful for the growth, I'm thankful for our team, I'm thankful for my partnership, I'm thankful for the clients. I wouldn't change that process at all. If I look at someone else who says should I start a business from scratch, going and getting a master's, and career-changing with no clients, no experience, I'd say no, don't do that. Get a runway, go work with a firm, come up with a better transition period, it's not worth the stress on your other key accounts. So we were going through the book "Living Forward" as a firm, developing a life plan, and we were so out of balance in those early years, with the business and everything else bankrupt. So that part, I guess I could say that I wouldn't do again. You know, you can grow more slowly, or take a different path. But we do enjoy our time and financial freedom now as a result of those financial sacrifices in the early days, so that part...you know, our kids are experiencing things, we're driving across the country, we're able to work from wherever, now we're really reaping the benefit. But those early years were pretty difficult.

Michael: So, any other advice you would give younger and newer advisors coming into the business today about where to go or how to get started?

Daniel: You guys beat the niche drum pretty hard, niche, niche. And I...

Michael: It's got to be niche. It's got to be niches because it rhymes with riches.

Daniel: I think that was the determining factor with our team in how do we pronounce it, niches, riches, there we go. I strongly believe now, seeing the success we've had, I don't want to prescribe, but when you can find – and it doesn't matter – it's really the hedgehog concept. So it's not just what you're good at, it's not just what you can build a business at, and it's not just what you're passionate, right? Because you could be passionate about something that you can't sustain a business on. So, it's really the intersection of all three of those things. But if you can find that, that is going to provide laser-focus on what should you build, who should you involve, what does your team look like, what are your core values? If you can wrestle with your hedgehog concept, what can you truly be the best in the world at, and embrace that, I would say do that sooner rather than later. Get the book "Good to Great," the hedgehog concept. I also recommend "Traction." If you truly want to build a business that will outlive you, the sooner you can identify what you are building, right...you guys have said it many times, you can build the wrong business and be really successful, and I would be afraid of that. So if you can go through a life plan exercise with "Traction," identifying what your business is that you're trying to build in 10 years and then you backtrack from there, you're going to grow much faster. So I would do some soul searching, figure out what your hedgehog concept is, and embrace it, and then pick up "Traction" and start systematizing the business to outlive you. I don't want this business to be dependent upon me, I'm trying to work myself out of a job. I want it to outlive me, I want it to serve clients well beyond my time here. And so for me, that requires some investing in the infrastructure of the actual business.

Michael: All right, I love it. And for folks that are listening, if you want reference links out for some of the books that we're mentioning here, "Good to Great," Gino Wickman's "Traction" and such, this is episode 196, so if you just go to kitces.com/196, we'll have links out for all that if you want to find these, so you don't have to pull over and scribble it down while you're driving or anything. So Daniel, as we wrap up, this is a podcast about success. And one of the themes that always comes up is just that the word ‘success’ means different things to different people. And so you're on this incredibly successful trajectory for the rapid growth of the business, but how do you define success for yourself at this point?

Daniel: Oh, I love it, Michael. I love how you ask everyone else, and this is – I love it. So for me, success is to have financial and time freedom. Not just financial freedom, but time freedom to focus on what matters most in life. So for me, drawing from the "Living Forward" book and creating a life plan to live in balance isn't necessarily to give each life account equal time and energy, but the appropriate time. So yes, and for me to live a life with no regrets, in which I prioritize my faith, my family, and to have deep, lasting relationships. And for the business success to me, professionally, it's to build a place where clients and employees thrive, and specifically one that will outlive me, so it's something that doesn't revolve around or need me to carry on. So, that's how I define success.

Michael: Oh, I love it. I love it, including I think that interesting piece at the end, of having it be a business as something that outlives you. It's not something that I think a lot of us as advisors come to the table thinking about. And not to be negative, but just a lot of us, I think we're just so focused on making sure this business works, and we serve clients, and they hire us and they pay us, and it earns a livable wage, and maybe we can even grow that a little bit over time, right? We're just sort of getting through the nuts and bolts and the day-to-day grind of just making the advisory practice work in and of itself, that to have that mindset of oh, and by the way, I want it all to outlive me at the end as you're three or four years in and have a multi-decade career ahead of you, I think, is just a really cool mindset to come to the table with.

Daniel: And Michael, if you'll allow me one more plug here in terms of what has influenced me greatly in the success topic, “The Ensemble Practice”. You did interviews with the author there, but pick up that book as well. And building a team environment that can outlive me really is dependent upon that ensemble approach, and not this siloed, or “eat what you kill”, but really, this environment where the whole team can thrive, that's a pretty big emphasis for me.

Michael: I love it. I love it. We'll try to have you back in a few years as you guys queue up on your billion-dollar threshold, and hear more about how this growth journey played out for you. Thank you so much, Daniel, for joining us on the "Financial Advisor Success" podcast.

Daniel: Talk to you soon. Thanks.