Founder's Story - Helping eCommerce, tech, and digital business owners improve their financial fluency | Ep.52 with Rachel Scava

Episode Date: June 19, 2021

Rachel Scava is a businesswoman, attorney, and leader with over 10 years of experience in operations and specializes in company development, team building, remote work, and hybrid work model management, and scaling business growth. She is currently the COO at Fully Accountable. Her most recent mission is helping eCommerce, tech, and digital business owners improve their financial fluency and operate their accounting back office as a profit center. Since Rachel’s time at Fully Accountable, the company has received multiple awards including two years in a row on the INC 5000 list, noted as one of the fastest-growing companies in America, and CFO Tech Outlook as Top 5 Outsourced Accounting Firms. FullyAccountable is also listed as one of the Greatest Places to Work. For more info on guests and future episodes visit KateHancock.com --- Support this podcast: https://podcasters.spotify.com/pod/show/ibhshow/supportOur Sponsors:* Check out PrizePicks and use my code FOUNDERS for a great deal: www.prizepicks.com* Check out Rosetta Stone and use my code TODAY for a great deal: www.rosettastone.comAdvertising Inquiries: https://redcircle.com/brandsPrivacy & Opt-Out: https://redcircle.com/privacy

Welcome to Inspired by Her, the podcast that will give you the inspiration, motivation and tips for success from some of the top executives, CEOs and influencers from around the globe. With your host, serial entrepreneur and named one of the most influential Filipina in the world, Kate Hancock. Hi everyone, this is Kate Hancock and welcome to the show Rachel Scava. Hi Rachel. Hi, thanks for having me Katie. Yeah, like oh my god, I love the background, the ink 5000, one, two. You know that lead with vision is really powerful. I know, it's one of the big things we live by here is making sure that you have a vision and leading through it. I love it. Now, everyone, Rachel is the CEO of Fully Accountable.

They help e-commerce, tech, and digital companies. She's a businesswoman, attorney, a leader with over 10 years of experience in the business world and specializes in operation, human resources, team building, company development, and business growth. So excited for you to be here. I'm excited. Yeah. So Rachel, tell me, what was your journey like to get where you are? Totally. So, you know, I had no idea what I wanted to do when I graduated from college and I was actually a lobbyist at the time and it was like, eh, I don't really love idea what I wanted to do when I graduated from college. And I was actually a lobbyist at the time. And it was like, I don't really love it.

I wanted to be more involved in just people and impacting them. So I actually went to law school and as kind of like a stepping stone where my very first year, Vinnie Fisher, who I know has been a guest on your guys's podcast, um, had come to the school and was like, give me your number one kid in your business class. And that happened to be me back in 2011 and 2012. And I've been working with him ever since. So started as an intern and worked my way up through, you know, doing everything from running to get the coffee to all of the legal work, the HR, now running the day-to-day here at Fully Accountable.

Wow. That's amazing. That's so inspiring. And you've, how long was that? It took you before, like, how long was that journey? Yeah. So, you know, one thing that I really enjoyed was, uh, him and his business partner both took a big chance on me back in 2014 when they started

fully accountable. So, uh, he had just graduated law school at the time. I was very new in the business sense. I really only understood the HR because that's my background is HR and corporate. And I was like, I can do this. Like I'm, I'm a systems and a procedures person. Like we can build this business on the backs of people by one of the mantras we live by is it's okay to have a gravel road, but pave your way behind it. So let's lead down the path and just pave our way behind it with good systems and efficiencies. And so they took a chance on a young girl that wanted to run the business and, you know, not over titling, but just letting me go in there and make decisions and scrape my knee a little bit, but learn from it and the best on the spot training that you could ask

for. Wow. Now take me back to that day when, um, did he offered you the position or did you ask him, tell me what was that day? Yeah. So I'm a big asker. Um, I knew that they had the role that was there, but I was like, I know I can do this. I'm definitely not going to be the tenured person, but I basically sold myself back like, Hey, here's what I think we need to do. Here's why I think we need to do it. And I think I'm the person to do it for you guys, um, with your guidance and your help and kind of giving me, you know, Vinny's a very big picture, um, masterful at leading and inspiring and help mentoring people. So mentor me along the way, but I can do this. And I love when I saw one of his presentation, he talks highly of you, you're so detailed oriented. Almost drives him nuts to a sense. Yeah.

It's a perfect match. You have the visionary and you're like, you're the process person. Yeah. And I, the thing is we both believe in people and that's the important part, right? Like people in every company are going to be your biggest assets and what can we do and build around them to actually help them be a better version of themselves? Like if they're equipped to do what they can do at the highest level, they're not only going to do it better, but they're going to like their job a lot more. So we've just spent so much time dialing in on how we can help people, not only be a better employee,

but actually be a love what they do every day and be a better person for it. And at reach all these us, what kind of process do you use? Do you use any tools? Yeah, so totally. So we, as for tools, we use a lot of Asana for our different departments, but we've also built our own proprietary system in order to manage all of our internal processes. We do a lot of guru training. So we'll have knowledge bases for each department making sure. And then we're lucky to have a really great tech guy. So we can build training modules, then you go through a little bit of a quiz and we can figure out where your strengths and your weaknesses are. And, you know, figure out is this a weakness that's just a weakness that we need to learn and fix it? Or is this telling us,

Hey, you know, Katie is really good in this area. Let's help her thrive here. And we don't need to worry about her doing this other piece because Rachel on the team can handle that. And so really helping people find their niche of strengths and really just dialing those in for them. Wow. Love it. Now, Rachel, you guys are doing big companies number like above 10 million, right? That's the kind of client you guys. Yep.

Yeah. What did you learn? What are the missing piece? I mean, we're talking about numbers here. What are the common mistakes that companies are like not paying attention? Totally. So our, our main demographic is going to be somewhere between about one to 2 million up to about 25. And we see a big in that $10 million spot, like you're talking about, um, big things that they're looking at is everybody likes to know how much money they're bringing in, but how much money are you actually keeping? Um,

and what's your true profit margin? That's the one that people are always missing. It's always so funny, no matter the size of the company, we'll have an owner be like, hey, but I have more money in our bank account this month than last month, I must've done really well. And it's like, you did, but you also didn't pay a bill. So you really don't have as much money

as maybe you thought you did, right? So that would be number one. And then the second piece of it is KPI benchmarking for your industry. So what should your labor costs be? What should your cost of goods sold be? You know, sometimes people are like, I'm a really lean team. I don't have a lot of overhead for team members. And it's like, but if you added one more media buyer, or what if you added one more marketing person on the team? Like, could you really ramp up sales and can you turn each department into a profit center? So

we try to look at each of our departments of how can you make each of these profitable by taking KPIs and benchmarking and seeing, you know, where you should be and where you actually are and what's the difference. Are you up or under? Yeah, absolutely. And then, like you said, people are talking about like 10 X, the company where majority, how much is the average profit margin? Like what? Right. Right. So it's going to depend, you know, for a service industry, you want to be somewhere, a service company, you want to be somewhere between about 25 to 30% for a products business. You want to be somewhere between about 25 to 30 percent for a products business you want to be somewhere between 12 to 18 percent but it's not a ton of fun to make a million dollars and only have one percent of that as your profit right like that's not I'd rather make you know half a million dollars and have a 35 profit margin because you're keeping more. So, you know, helping people to understand the correlation to those two is a big first step for us. And what should a CEO look for? I mean,

do they have to look at their books? What are your steps? So what do you advise this company that you work with? Do they have to do it on a weekly basis or what kind of reporting they need to look at? Sure. So we do accounting for all of our clients on a daily basis. Um, so we're keeping you up to date so that if you ever need a report for something, we're ready to pull it and have it ready for you. I would say for a CEO, they need to be looking at, um, some sort of cashflow reporting on a semi-weekly or weekly basis to know kind of what's coming in and what's going out to know trends. They need to be looking at a financial statement at least once a month to kind of look at what

happened the month before. What I think they need most though is somebody on their team that's looking at it for them each day so that they can raise the red flags a lot earlier and not wait until that monthly financial statement comes out and they're like, oh crap, we lost a lot of money last month where somebody can say like, hey, we're really on the downward trend when it comes to sales. Did something happen? Is a funnel broken? Did we lose one of our main sources of revenue? Are we not, did we not close the deal that we thought we were going to close? Somebody that wakes up every single day that looks at the numbers that can tell you when there's a red flag so that you can address it early and not wait 30 or 45 days to deal with it. Love it. Love it. Now, have you been working with a company where they're in like in a 4 million, but they never really have any proper accounting? Is that

very common? Yes. I, we once had somebody mail us trash bags full of receipts and bank statements. So, I mean, we've seen it all. It's hilarious. And the thing is the P the part that people struggle with, with accounting or having accountant is they really feel like an expense line. And I can resonate with that, right? Like this person only tells me how much money I made. And if they're 50, $60,000 a year, that could be an extra 50, $60,000. I can keep my wife or my husband. We'll just do it for us. But there's so many benefits you can get by somebody who's an expert in the industry. One of them being just continual planning for taxes. So having a good chart of accounts,

right? So knowing that your business is putting all of the right expenses in the right spot. So at the end of the year, you don't have a big tax bill cleanup that you have. Another one is if you really want to scale and grow, knowing what cash you have available so that you can invest it in. Another one is, this one's really funny, but people don't realize that they should be taking a payroll a lot of times. Like you should be getting paid for the job that you're doing. And then you also get to get paid distributions at the end of the month because your company made money. So little things where you can

save money on taxes or growing your business or learning where to invest in your business, because that's where the most growth is, will turn your accounting, like I said, into a profit center. And it's worth investing in, especially because, you know, tax time rolls around and you spend a ton of money having somebody clean it up really quick for you. You save that whole bill by having somebody working on it regularly. Yeah. It's very common, especially for a solo entrepreneur. Like I made so much money. And then you ask, do you pay yourself? No. Like, I know like you have zero self-worth. It's common though. It's very common mistake, right? Like, you don't pay yourself. So you work for free. So you literally not making money. Right. And you know, right now we have a lot of people that are looking to maybe exit or people that are looking to purchase businesses. And that's one of the things we say is like, you do a job for your company that gets paid and that you should get reimbursed or not

reimbursed. You should be compensated for that because if somebody buys your company, or if you're buying a company from somebody, like you need to build in that expense so that you know that you can fill that so that somebody will do that job. But yeah, it's so funny. Like retirement planning is another one. How can we maximize retirement planning and benefits and other things that not only make the culture of your company better, but it also just puts you in such a good position for tax and legacy planning in the future that, yeah, the salary one's the one that always makes me. Yeah. And don't know but you can get the fair market value of how much is what people are paying you for the job that you're running right yeah yep yeah yeah yeah love it now Rachel let me go

back to your story I really love how you know you're female you have two partners that are male like like you must be a very tough person. Like, tell me, how is that? Like you went from an, you know, being an intern to like part of the company, like that is a really inspiring transition. Tell me. So I live by the idea of I'd rather take a risk than ask for permission. So,. So I'll give forgiveness. I'll say, I'm sorry if I did something, but I think that we, we don't learn from the things that we don't do. So I always approach my job or what I'm doing, be it mentoring or making a decision for the business of what am I looking to accomplish? And is it worth the risk of going

and doing it? If at the end of the day, it completely fails. And most of the time I learn more from a failure than I do from not doing anything at all, because I just don't know what could possibly happen. Like half the time I think A or B could happen. And I get somewhere around L or M some other variation completely. Um, And it's like, I learned so much through the journey. So for me, I just take every, you know, with two males as business partners, I take everything that I'm doing and I know their personalities, right? So with Vinny, he's very quick and very creative and very entrepreneurial. And so for him, I've got to be very like, ask the question, give the example, and then go and do it. Chris is a finance guy. So I always do data with him. Hey, here's what we did.

Here's why it worked. Here's why we're going to keep doing it. And here's where I see this going. And so for me, it's just been learning how to work with the two of them with two very different personalities. But they've done a good job also passing over authority. So I think at the end of the day, they don't want to do the job that I do, just like I don't want to do the job that they do. So we have a mutual respect for each other. Like I can count on you to get this done. And I think I've proven over the years that you can also count on me to get it done. And so because of that, we've got a good triangular working relationship. Wow. I love it. Now, Rachel, I mean, can you name a person who has had tremendous impact on you as a

leader? Oh, tremendous impact. Well, so first I would definitely say, so Vinny was definitely my very first mentor. I joined him when I was in school. And from a perspective of the things that I've learned, he's definitely been the biggest mentor that I joined him when I was in school. And from a perspective of the things that I've learned, he's definitely been the biggest mentor that I've had and continues to do so every day. Like I come into work every day and I learned something new from him, which is incredible. From a perspective of how I live my life and I mentor, definitely my grandma, because she always

leads with kindness and that human nature is good and that we want to find the best in people and is a very value driven, stands to her morals. And she just is very value based. And that's how I try to live my life as well. Like I'm not going to try to get a sale for somebody just because it's going to be an extra engagement for us each month. I want to make sure that the company that I'm selling to is going to get value and they're going to actually understand what they're getting and we're going to provide something to them that they need. And so it's unique for the salesperson to frequently tell the potential customer like, no, I just don't think we're a good fit for you. But that's how I think that we do a better

business because we're honest with our customers and we only want to make sure that they get value from us. I'm not just trying to collect a paycheck from them every couple of weeks. I want to make sure that they're waking up each day being like fully accountable has done something for us that I'm really thankful for. Now, can you share an experience, like the worst experience while running a business that you've had to overcome? Oh, sure. So I think the hardest part about running the business for me when I was definitely young was really understanding that there's a lot of risk when you start running a business. So I, you know, I always laugh. There was a point in time where we needed to invest in people because we were having massive growth, but the way that we were selling was requiring us to do multiple hats at multiple times. And I was running payroll at one point in time. And when I was done, I did all the calculations. I looked at the bank account and I was like, I have $10

and 48 cents left in the bank account after we run payroll and being like, we make just enough money that next time I have to run payroll, I have $30 left in the bank account. And just like learning that the risk is worth it. And if I needed to hold a paycheck to make sure that a team member got paid for myself or Vinny, like we knew that we were doing something that was going to be much bigger than ourselves. And that two days later I could cash my check and it would be just fine. But just the stress of like getting up every day and grinding for those first 18 months was crazy. Like

you had people that didn't know the stress that you were under and you're having a bad day and you're like, there's $10 in the bank account. Like, right. Like, what are we going to do? But, you know, six years later, here we are having a record year again. And really a niche in the marketplace that, you know, we really are providing value to people every single day. I love it. Now I have to say that you guys have the best email marketing out there. Like, it's like, it's like, you guys really know what you guys doing. I feel so lucky to have the people, the girls that run our marketing department are great. You know, they are always looking how to be new and creative and on the edge of something. And we're not a marketing firm. So for us to be,

even an accounting firm to be sending emails is pretty, uh, unique. Yeah. And they're, I mean, they're on the cutting edge of some stuff, right? Like we're in Facebook ads, we're doing many chat where, you know, you name it, like they're doing it and it's really great. Wow. I love it. Now, knowing what you know now, what would you do differently? Oh, that's a good question. Knowing what I know now, I would, at the beginning part of my career, one thing I had to get over was there were a couple people that would do the old, I've worked in the industry longer than you've been alive. And I would let that get to me, right? What I know now is you don't, it's not the length of time in the industry that you know what you're doing.

It's the experiences that you've had that you've learned from. So I think I let that weigh on me too much or I would give too much credit to comments that really didn't mean anything, right? At the end of the day, my age did not make a difference of how well I could or couldn't do something maybe didn't have as much experience but you know I was able to impact and come up with ideas just the same as they were

um so I probably wouldn't let that stuff bother me like it had that's very hard too because it feels like you constantly have to prove just because I look so young. I went through that in so many industries too. Totally. Yeah. Like I remember I was in this broker's conference and they thought I was a daughter of one of the broker. Like, no, I actually work here. Right.

Yes. Yeah. I totally get that. The other piece for me was because I had been an intern for about three years before I really came on full time, a lot of people still treated me like an intern, which from that perspective, I didn't care about, but they lacked some respect in the authority area, which at the end I overcame. I like to think that I let a lot of things roll off my back and not get too bothered, but I worry too much about what they thought about me.

Like, do they think I'm doing a right job or do they just have some baggage? Cause I used to be an intern, right? Like I would always think that maybe they thought I wasn't, wasn't good enough or I wasn't able to do it. And that's why they were doing the things that they were. But you know, at the end of the day, their opinions, while they're their opinions, they didn't change the way we were running our business and we've done just fine. Okay. So tell me what, what are the things that you've done? Like that's very difficult, like earning everyone's trust.

You were an intern and became a CEO. What are the things that you have to make an adjustment? Yeah. The first one was definitely getting Vinny and Chris on board with telling people that they had to come back to me, which they did. Nothing on their part, but there was such a transition phase where they'd have to be like, no, you have to go ask Rachel. No, go talk to Rachel. No, go talk to Rachel. And even though they knew the answer and we were creating an extra step, it really got people to see that they believed in me and that they were giving me the authority. And in turn, people then started respecting it. The other thing was learning that while I like everybody and I would consider all of my team, I'm very friendly with all of them.

I can't be best friends with each of them. So learning to remove the element of like, it can be friends. We can go get a drink at happy hour after work. But I can't let the emotion of friendship get in the way of making hard decisions. So you can't keep somebody on the team that's massively underperforming under the theory of they're my friend and I feel bad letting them go or giving somebody hard feedback because they're my friend and I feel bad letting them go or giving somebody hard feedback because they're my friend and I don't want to hurt their feelings. And I think when people saw that I was willing to be very objective, that also gained me a lot of respect. Wow. Love it. Now, can you give me a

timeline? Was that the first 90 days of that transition period is the worst, right? Oh my gosh. I would say it probably took six to nine months really to get everybody. Yeah. The first 90 days was tough though. Like, you know, you see everybody walked in where our offices are right next to each other. So everybody's in his office and then you see him kind of like slump over to mine. I'm supposed to ask you this question. I'm like, well, really it's your question, but yeah. So I would say, but it took time. Right. And you know, human behavior was not used to it. They were used to being like, Hey, here's the groceries we need and here's the legal documents and whatnot. They weren't used to having to come and ask for

permission or brainstorm an idea. So it was having to relearn for both of us. Yeah. Love it. Now, Rachel, five tips that you would give to an aspiring entrepreneur. Five tips to give to an aspiring entrepreneur. One is don't be afraid to go and ask people for things. So don't be afraid to pick up the phone and, you know, whatever industry you're in, get somebody to be a test client or get somebody to wear your product or anything. Like just don't be afraid to pick up the phone. I think there's such an art in connecting with people and people will say yes more often than you realize.

Like I don't think general reaction is to say no. Number two is identify what your weakness is and don't try to be better at it. Supplement it. So Vinny is a visionary. He's not a detail follow-through guy. And I think the way we've worked so well is because I'm a detail follow-through person. And rather than him trying to be something he's not, we've come together. And as a two-person team, we do way better than either of us would as a one-person team. Three would definitely be know your numbers. Like you're going to run a better business when you have better data. So the more granular, regular data you can look at on how your business is performing

is only going to help you be better. Number five, invest in your people. Like your people are your business. And if you invest in them, they'll invest in your company. Like you said, our marketing girls, like they're two girls out of marketing, but they wake up every day wondering what more can they be doing for our marketing department? You want that across all parts of your company. And number five would be when in doubt, if everything is breaking down, focus on sales. Love it. Love it. Now, Rachel, what's your favorite book of all time? Favorite book of all time, probably The Great Gatsby. The Great Gatsby. Now, how do you want to be remembered?

I want to be remembered as kind and as somebody that's stuck to their values. Both of those things are very important to me. I think you can make a lot of money. I think you can do a lot of things. But if at the end of the day, people don't think you were kind or provided value, I don't know that you made the impact that you wanted to. So kind and values. What's your BHAG, your big, hairy, audacious goal? Big, hairy, audacious goal. Oh man. Well, I don't know. That's such a good question. I don't know that I have an answer to that. Yeah, I feel on the spot. No, I don't know. I'm not a big like bucket list goal type person. Because for me, usually if I decide something I'm going to do, I follow through on it. That's my nature of who I am as a person.

I guess things that I'm excited for. So like this year I'm getting married, I guess my one goal would be, hopefully we'll get there. Right. With weddings and you know, we're in Ohio and everything's pretty crazy, but yeah, I don't know that I have a big hairy audacious goal that I'm looking for, but yeah. Love it. No. When are you getting married? Well, congratulations. Oh, thank you. Well, I guess next year it's August. Yeah. It's going to be an outdoor or in like, where's the yeah. So, yep. It's half indoor, half outdoor. So it'll be a little bit of both. Love it. Rachel, where can we find you and your company?

Yep. So we're fully accountable as an Akron, Ohio. Our website is fullyaccountable.com. And if you guys need anything, you could email me at Rachel at fullyaccountable.com. Rachel, thank you so much. It's so much fun having you here. Thank you. Bye, Rachel. Bye. Thank you. We hope you enjoyed the show. Don't forget to rate, review and subscribe. And visit katehancock.com so you don't miss out on the next episode.