Service before sales

Episode 2 of the Show has John Knight, Managing Director at BusinessDepot telling us about how he is modernising his accounting practice to provide customers with end to end help and support across the entire gambit of business problems. John talks about the success of his DepotX and DepotNext events as well as how he has created an unlikely nexus between accounting and marketing. His top tip? Service before Sales. Click below to get the full wrap.

John Knight, BusinessDepot

Interview Transcript

Mark Engelmann: All right, hi, everyone, welcome to this week's episode of the Go For Growth show. My name's Mark Engelmann, and I'll be your host today. I'm very pleased to have John Knight, the Managing Director of the businessDEPOT, in Brisbane, with us today. John, thanks for coming on the show.

John Knight: With pleasure, thanks for having me.

Mark Engelmann: Yeah, no worries. Look, I don't muck around too much, I just wanna get straight into things. Can you tell me a little bit about what you do at businessDEPOT?

John Knight: Yeah, okay. So my role, I suppose, is Managing Director here at businessDEPOT. The wider businessDEPOT organisation, though, is, as the name suggests, we wanna be the place to go, when you don't know where to go in business.

So, the foundational layer of that, we have an accounting advisory consulting practise. And wrapped around that, we have a marketplace of all the other services that you need in business, from HR, to offshoring, to marketing, to legal, all those other services. And that's the whole idea of the concept of businessDEPOT. Predominant work is still within that accounting advisory consulting space, because that's where the trusted adviser relationship seems to start with. So that's what we do at the Depot.

Mark Engelmann: Yeah, fantastic. And one thing that always fascinates me about talking with business owners, John, is getting an understanding and a feel for where they came from, and how they came up with their business idea. Can you talk a little bit about that?

John Knight: Yeah, my wife always reminds me, I first introduced her to the idea of businessDEPOT on a beach in Positano, and that was probably about 13 years ago now. So that's how long it sort of was sitting there festering. But, really, I was a full equity partner within a more traditional accounting practise, a great accounting practise, but it probably just wasn't for me. I was probably just a little bit stuck, within the tradition, and wanted to really turn that upside down.

So, really, how businessDEPOT came about is probably from my frustration. Probably from my frustrations that I could see how much better we could be, the trusted adviser, and how much more we could do for clients. And so, leaving where I was previously, wanted to turn the model upside down. Focus first and foremost on what other problems businesses are having. And be that place to go to find the solutions for those problems.

Mark Engelmann: Yeah, fantastic. So you've kind of, taken your accounting experience, and then tried to, I guess, offer more things in terms of the business advisory aspect to your customers.

John Knight: And I suppose that, yeah ... and that starts with what I describe as putting the trusted adviser relationship on steroids. Now, if you are truly their trusted adviser, they're gonna wanna talk to you about more and more different things. And so, if we can be the place to go, if we can be the connector, I suppose, that links them to those other supplies, those other professionals, those other experts that they need, then they'll trust us even more, too, with whatever their business problems are.

Mark Engelmann: Yeah, right, right. So this show, it's all about business growth. I'd like you to tell our audience what you think business growth is, and what it means to you.

John Knight: Yeah, I mean, obviously with growth, it's a different thing for every single person that you talk to. What are you trying to grow? So often, I get clients come along, and they talk about growth, and they want growth. But, usually, they're actually talking about top line. But, you know, being a bean counter by trade, I mean, top line's only one thing. I mean, top line's gotta turn into profit. And profit has to turn into cash for it to actually make a difference. I always use the saying, especially within the real estate industry, sales are vanity, profits are sanity, and cash is reality.

Mark Engelmann: Yeah.

John Knight: And at the end of the day, if that growth doesn't flow through all of that, it has to be strategic in some nature, that'll enable that to happen in future. Because people, when they talk growth, or, the way I think of growth is ... we're either looking to be better at something, or we're either looking to be bigger at something. But you only really wanna be bigger if it's gonna flow through to that bottom line, and flow through to that cash.

Mark Engelmann: Yeah, totally.

John Knight: I mean, I could figure, it might just mean you got bigger opportunities.

Mark Engelmann: Yeah.

John Knight: Being bigger, you might have opportunities, which will enable you to be able to link to more.

Mark Engelmann: Or on, conversely, bigger headaches, right?

John Knight: Precisely. And growth can hurt.

Mark Engelmann: Yeah, totally. So, what I really love about what you guys do at businessDEPOT is, you've really come out and embraced the whole help versus hype marketing idea. And you've got events like Depot X, and Depot Next, which you frequently hold.

John Knight: Yep.

Mark Engelmann: Can you tell the audience a little bit about those events, and what value is that they bring to your customer base?

John Knight: Yeah, I suppose. So we got two core events. And they actually started with our Depot X events. And the X in Depot X comes from X Factor, and expertise. So, the idea being, that we started these events, because we wanted to share some of the X Factors of other people's businesses, and some of the expertise, other professionals have. And the idea of that was, you see all these different businesses they’ve got these great aspirations. But quite often, they come against these hurdles, these brick walls, these speed bumps, which are slowing 'em down, or stopping 'em in their tracks. And so, the idea is, maybe there's an expert that can share something, share an insight, share a story, that will enable you and your business to roll over that speed bump, jump over that hurdle, or smash through the brick wall.

So that's where they sort of started. We started them in our space, which was really good, especially in the beginning, because it meant people came into our space, and they got a feel for who we are, and our brand personality. But we then launched Depot Next at the beginning of 2016. And that was where we wanted to do a bigger top of funnel marketing event. And how I describe those, and why we started those events, was we wanted to add a whole new branch to the tree. We'd had great referral contacts, a great community we were already working with. But we really wanted to open it up to a much broader sort of audience.

And so, the main focus of the events are really around sharing insights, which is really, the stories, sharing expertise, creating an opportunity for collaborations. Actually, quite an important part of why we do the events, as well, because it brings together our marketplace members, or we call it, the collective members. It brings together our referral partners, our clients, our staff, brings 'em all together in one place. And if you can get 'em all together, then that also creates a bit of energy around the branch.

And if we can get all those things sort of happening ... so, what happens for us out of that, is, yes, there's positioning. Yes, there's awareness. There's those types of things. But it really creates that opportunity for the community to get us, to know us better. Whether they're coming into our office, or they're coming down to our powerhouse event, they're getting to know us, what we stand for, what we have to say better.

And we do get direct work out of every single one of them. Some of them more than ours. But in our game, we're finding the pipeline of conversions getting longer and longer. And so, I always talk about the marketing washing machine. And so, these events work really for us. If we can continually create these touch points with prospects in the community we work with, then we just have to be there at the right time for that opportunity to present itself for us.

Mark Engelmann: Yeah, great. And so how long have you been holding the events for?

John Knight: We started them as soon as we moved into our new premises here. So, since May 2014, we would have been holding our events. The big ones at Powerhouse only started last year.

Mark Engelmann: Yeah, great. And did you find it difficult, in the early stages, to kind of ... I mean, I've run events, heaps of people have run events. Did you find it difficult in the early stages to get people to come along, and participate?

John Knight: Well, I think the first one, we probably had about 40 people or something, rather?

Mark Engelmann: Yeah.

John Knight: And we were pretty happy with that.

Mark Engelmann: Yeah, it's great.

John Knight: 'Cause the room felt a bit of full.

Mark Engelmann: Yeah.

John Knight: And then, we got to the stage where we were overflowing.

Mark Engelmann: Yeah.

John Knight: So, the biggest one, where we had 500 people register, down at the Powerhouse.

Mark Engelmann: Yeah.

John Knight: And so, what I think's key there is, we wanted to make sure they weren't just another business event. So our focus at the events are what we call Entrepreneurial Spirits.

Mark Engelmann: Yeah.

John Knight: And so, yeah, they tend to be a bit more active. They don't wanna sit still for too long. So, both events, we do three speakers, 15 minutes each, short, sharp. And myself or someone else will sort of, do a bit of emceeing, a bit of thought leadership in between. And, I don't know, we seem to have been able to find a format. We've spiced up the speakers and the topics fairly regularly. And we don't seem to have a problem. We do use a bit of social paid ads, and obviously, social sharing, to get the numbers along, especially to the Depot Next events.

Mark Engelmann: Yeah.

John Knight: And that seems to work quite effectively, too.

Mark Engelmann: Yeah, great. So, I'm intrigued a little bit, John. You're a bean counter by trade, but often, when I talk to you, you sound like a marketer. Can you tell me a little bit about that?

John Knight: Well, I've never done any marketing training, or anything like that. One of my directors here, Jacob, he always says, "Well, John, you're the only one in the room who's created a brand."

Mark Engelmann: Yeah.

John Knight: And I suppose what he means is, you've actually, I've gone out and I've actually sort of had a vision, and implemented something about it. Look, I still love the numbers of the accounting, and the data, and what you get out of it. But I love the marketing and the branding sort of side it, as well. Just because, that's where I think, if we can change the experience, even if it's for the accounting experience, if we can change the experience around that?

Mark Engelmann: Yes.

John Knight: That, in my mind, is branding and marketing.

Mark Engelmann: Yeah, yeah, cool. And I think you guys are really, sort of, innovating that accounting space in that sense, right? There's the stereotypical accounting firm is kind of starting to fall by the wayside, I think. And more innovative firms like businessDEPOT, I think, are starting to take over in that space. Where do you see businessDEPOT going from here?

John Knight: Yeah, well, today, we're probably best described as an accounting business with a community of other service providers wrapped around that. Where we want to evolve is, we want to turn that around, and we want to become a marketplace that you got to for business. It just so happens that one part of the marketplace is the accounting services that we provide. So, that's still obviously pretty critical. That's where our money's made.

Mark Engelmann: Yes.

John Knight: But we do, in the long-term, wanna start having the businessDEPOT brand as our marketplace. And we're starting to introduce the sub-brands within that sub-businessDEPOT accounting. We launched a legal practise a little while ago, so that's called businessDEPOT Legal. And over time, there'll be other sub-brands that fall under the wider brand of businessDEPOT. So that, from a strategic perspective, that's where we wanna take the model.

Mark Engelmann: Yeah.

John Knight: We want to get that right, here in Southeast Queensland first. We already do a lot of work down in Victoria. But we've sort of come to the conclusion, we want to get that right, before we start duplicating it. And we'll just service other locations remotely, in the meantime.

Mark Engelmann: Yeah, fantastic. Fantastic. So, we're almost getting to the end of the interview. My second to last question for you is, what's your number one growth tip, for businesses looking to scale, or grow their margins revenue, and maybe attract more market share?

John Knight: Well, I suppose the biggest tip that I'd give you there is that growth can kill, okay? I've seen many a great business idea, many a growing business, that can actually die. Because, when you grow, it costs money, typically.

Mark Engelmann: Yeah.

John Knight: And momentum's pretty important in that whole thing. But one of the things people don't realise is, you need to fund that growth. I mean, when you put more people on, it increases your working capital requirements. The more you increase your working capital requirements, you got to make sure it can fund that. And it's not a sustainable solution, borrowing that from the Tax Office. And it was something that we saw a lot of after the so-called GSC, I suppose, where people started to get back on the growth curve. But they didn't start to fund it.

They didn't start to put the money into the business, or realise, they had to leave some of that money behind, so that they can fund this growth that they're striving for. And, again, we could use the analogy of better or bigger. The best type of growth, or, depending on where you are, but ... as in, the stage of your life cycle, but ... often, we need to make it better, before we do get the bigger machine.

Mark Engelmann: Yeah.

John Knight: And I think that's probably a big mistake. And that's probably some of the mistakes that kills many a business is that they get too quick, too big, too quick, or at the wrong time.

Mark Engelmann: Yeah. Yeah.

John Knight: 'Cause timing's pretty important.

Mark Engelmann: Yeah. I certainly know, in my experience, that it's so crucial to really get your service offering right, and the back end of your business right, in terms of how you service your customers before you start to ...

John Knight: Yeah.

Mark Engelmann: I mean, I've heard stories all the time about people or businesses hiring salespeople to go out and try and bring 'em more customers, when they don't have their product right. And they end up just losing their customers.

John Knight: Yeah.

Mark Engelmann: Staff are unhappy, and it all ends up in a miserable mess.

John Knight: And it's hard. It's frustrating. Yeah, it's frustrating. Everyone wants to grow, everyone wants to get closer to their vision, closer to what they want to achieve. I get frustrated by it myself. We want to get there. But sometimes, you got to be investing in your systems, in your processes, maintaining your machine, or improving your machine, before you and go feed more through the machine.

Mark Engelmann: Yeah, totally. Makes so much sense.

John Knight: Yeah.

Mark Engelmann: So, John, we're nearing the end of the show today. I've got one last question for you. I just want you to share with our audience any favourite pieces of technology or services that you've been using at businessDEPOT, that's really providing you guys with some good leverage.

John Knight: Look, for me, it's hard to go past, is the overall suite of Cloud products that are out there now.

Mark Engelmann: Yeah.

John Knight: And, specifically for us, Xero Accounting Suite has enabled us to do so much more with our clients than, and at anything else that we've had. The fact that we can be travelling, we can be working remotely, with pretty much all of our data in the Cloud, there is no reason why we can't get the work done from anywhere, I suppose. And, you know, it's the little things. It's the little opportunities that that presents, not having to transfer data between clients' site, and our site ... yeah, it means you got less risk around that.

The fact that we can just jump into someone's client file and make the change for them means we've removed some of their headaches, and we've hopefully improved their data. Which means, hopefully, we can be more efficient at the end, when we do tax returns, or whatever business strategy advice we can provide. It means the real time data, the single point of truth, that just creates a whole layer of efficiency, which frees up time, so we can focus on better services.

Mark Engelmann: Fantastic. Fantastic. All right, John. Well, look, thank you for your time today. It's been great, having a chat, and ...

John Knight: As always, though.

Mark Engelmann: As always, yeah, and I'll talk to you soon.

John Knight: Right, thanks, Mark.

Mark Engelmann: Thanks, John, talk to you soon.