Side Hustle City
Step into Side Hustle City, the ultimate podcast for entrepreneurs, creatives, and anyone eager to turn their side hustle into a full-time passion. We bring you real-life stories of resilience, innovation, and success from diverse entrepreneurs who’ve made the leap from side projects to profitable ventures. Whether you're exploring entrepreneurship, looking for business insights, or seeking inspiration to fuel your journey, join us for valuable tips and motivational tales. Transform your passion into a thriving business with Side Hustle City, where dreamers become doers.
Side Hustle City
Navigating Payroll and Entrepreneurship with Noah Osterhage
Discover the secrets of transforming a side hustle into a thriving main business in our latest episode of Side Hustle City! We sit down with Noah Osterhage, the visionary owner of Payroll Partners, who took a leap from being a client to owning a payroll company. Noah opens up about his journey through the payroll industry, shedding light on the unparalleled advantages of Payroll Partners compared to giants like ADP and Paycor. Learn how personalized service and local expertise can make a world of difference in managing payroll complexities.
We dive into the concept of Entrepreneurship Through Acquisition (ETA) and how serendipitous moments can lead to major business opportunities. Noah’s story is a compelling mix of corporate America, owning pizza stores, and finally, finding his stride in payroll services. My co-host Kyle Stevie also shares his thoughts on real estate and side hustles, underscoring the role of hard work, continuous learning, and taking calculated risks in achieving entrepreneurial success. This episode is a treasure trove of insights for anyone looking to turn their part-time endeavors into full-time triumphs.
Economic downturns and unexpected challenges are part of any business journey, and Noah's experience during the COVID-19 pandemic provides invaluable lessons. We explore how Payroll Partners navigates data management, revenue fluctuations, and customer service, all while maintaining compliance across multiple states. Whether you're interested in expanding your business, retaining valuable employees, or simply understanding the nuances of payroll management, this episode offers a wealth of knowledge. Join us to leverage these insights and elevate your entrepreneurial journey!
As you're inspired to embark on your side hustle journey after listening to this episode, you might wonder where to start or how to make your vision a reality. With a team of experienced marketing professionals and a track record of helping clients achieve their dreams, we are ready to assist you in reaching your goals. To find out more, visit www.reversedout.com.
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Welcome to Side Hustle City and thanks for joining us. Our goal is to help you connect to real people who found success turning their side hustle into a main hustle, and we hope you can too. I'm Adam Kaler. I'm joined by Kyle Stevie, my co-host. Let's get started, All right? Welcome back everybody to the Side Hustle City podcast. And guess what guys? Kyle Stevie is actually here, so Noah is our guest today. Ostrich, is that how you pronounce it? Osterhag, Osterhag, you own a company, Payroll Partners. Here in Northern Kentucky A lot of people are familiar with payroll companies. They write your checks and send them out to you. For sure, Paycor is one here and that ADP is another big one I've seen on past paychecks that I've had. But what makes you guys different?
Speaker 2:That's a great question. Just had a chance to talk to somebody who kind of asked me like what do you do? And I thought that feels like an odd question, because I would think that anybody that's gotten a paycheck before would kind of-.
Speaker 1:But understand what's going on, yeah.
Speaker 2:But what I said was hey, start at the top of your paycheck and there's the gross wages, the top number, and then below that there's a bunch of deductions and taxes. Well, that's my company, or any payroll company, but that's my company. We're calculating those taxes, managing those deductions and then working to that net number on your paycheck and then we move the money and pay all those taxes and move the money into your bank account.
Speaker 1:Yeah, so most people should understand that, but how long have you guys been around?
Speaker 2:The company was founded in 2001.
Speaker 1:Oh, wow, 2001. Okay, and then you acquired the company at one point, right, yep.
Speaker 2:So it was just over five years ago.
Speaker 3:Oh, wow.
Speaker 2:Yeah, I was. I actually was a client first, so I didn't want to do my own payroll, or you know, didn't kind you were like yeah, kind of intimidated by it.
Speaker 2:The S corp thing you know I was a small business consultant and, just you know, needed to get that payroll done for the kind of the monthly quarterly thing is a one person S corp. So if you're in the CPA or the small business space, you know I'm talking about and I tried all the little QuickBooks, the Gusto oh, pain in the butt. Yeah, you actually have to. You know they're not going to help you do anything. No, you, you still have to put in the stuff. Like, yeah, you got to know something.
Speaker 2:So I went across the street and I asked my neighbor and I said hey, mark, how do you handle payroll for your small business? And he says I use payroll partners. And I said who? Like, I've heard of ADP and some of these other ones. Yeah, so he said that. I said okay. So I called, got ahold of the company, got several phone calls back, took really good care of me, were able to set up what I needed, and then it was done and I went, got on with what I needed to be doing to run my business and, interestingly enough, though, that running my business was helping other businesses with finance related past projects. Oh, so kind of consulting on the finance side, and we had a business I was working with that had a staffing company. They had about 50, 60 employees and every one of those employees was getting paid out of the home office. And I had just gone through payroll.
Speaker 2:I learned just enough to be dangerous, that that's not right Cause, if you didn't know, just a quick aside Pennsylvania, ohio, Kentucky and Indiana have 93, 94% of all the local payroll taxes in the country, districts in the country, really. So if you, if you grew up in tennessee, you have no idea what we're talking about. When we talk about county, city payroll taxes. It's not a thing I.
Speaker 1:I just assume, being here my whole life, that this was nationwide. Now this is very abnormal. So you grew up in kentucky. You and Kyle.
Speaker 1:You know not a lot of people when they think of Kentucky think of you know tons of entrepreneurship, right, even in Ohio. You know we don't cross the border very much, right, like you've got all these things that help small businesses get off the ground. They there's a lot of support, I would say, in Ohio. Just being somebody who's done startups in the past for small businesses, small business ownership, I know all the programs. Even though I have a business over here, I'm not as familiar with what's going on in Kentucky and I'm all about starting something like buying a cash-flowing, working business, modernizing it, making it better. But not a lot of people think about that as an option. They think they have to start from scratch and go to one of these organizations in the state to help them out. Try to get some free money if they can. But talk about your journey Like what led you to want to purchase an already existing business that you were actually working with.
Speaker 2:Yeah, so sorry I finished the thought we were on Cause. I think it'll help get to the answer. Um, I was working in a consulting capacity for a business that had their payroll basically messed up with one of the big national companies, um, so I called payroll partners back and said, hey, I was a one person deal, but how about a bigger company? Can you work with us on that? And they said, yeah, sure. And uh ended up having um brought seven or eight different businesses to payroll partners that I was working with. So um got to know the owner of the company and, um, you know, we I was talking to a guy that I was working with and invested money with, and uh, he said, hey, how much is paychecks worth? So I looked it up. I said I think it was like $30 billion. He says so there's a company in Northern Kentucky with a better mousetrap than Paychex and you don't want us to invest in that.
Speaker 1:I was actually invested in Paychex, like in the stock market. I remember yeah.
Speaker 2:So it could have been 18. It could have been it was seven or eight years ago. My brain's shot today, but anyway. So we were talking to the guy and owned it and he was looking for some help because I think what? Where he was with a great small business you've probably talked to a lot of people that are in this spot he was in that entrepreneur ceiling right. He had every hat, every direct report was all on him and he really didn't have time. If he was selling, he wasn't operating. If he was operating, he wasn't selling.
Speaker 1:He was, he was trapped right, he's working on the business, not in the business, or yeah, that very classic thing.
Speaker 2:So he, he looked us for some help. We, we bought into the company, but really no sooner than we did that he, he kind of wanted to to not be a part of a growth company anymore. He's like you know what it sounded good. Now I'm seeing what we're going to have to do. Um, and wanted to sell the whole company and uh, essentially what happened was it took us four or five months to sort that out and essentially I was just the last man standing. Uh, the the other guy that I had had been working with was not in a position to buy another company. This guy was definitely going to leave and so that left me. If the company was going to stay in Northern Kentucky, say a privately held thing, and not just be sold to a Paychex or a Paycor, I was going to have to buy it Wow.
Speaker 1:So how did that process go with buying a business? I mean, you're a young guy, banks don't usually like us, so how did that work out?
Speaker 2:Yeah. So again, this was kind of a Saturday afternoon conversation that he was going to sell the business and within 45 minutes I was on the phone with a banker friend of mine and we figured out how I was going to put together an SBA deal and take over the company, so go from a really small piece of the whole thing and 45 days later it happened. So almost it wasn't 45 days, wow. Yeah, it wasn't something that I set out and said I have this, this vision of owning a payroll company. I just wanted to own something at some point and was just out there doing things until something broke my way.
Speaker 1:Well it the opportunity presented itself and you took advantage of it, which was what a lot of people don't do Right.
Speaker 2:You know, I was thinking kind of all day how I would tie in with side hustle Because I did some. I just met Dave Knox from Blue North.
Speaker 1:Yeah, I just had an email conversation with him yesterday.
Speaker 2:Yeah, and he clued me into a thing, eta, like entrepreneurship through acquisition, and honestly I had never heard that acronym, but I guess that's exactly what I did. How, what was I going to say? The?
Speaker 1:the the way you purchased the business.
Speaker 2:Yeah, it wasn't intentional. I just wanted to put myself out there to do things and you know, from from a young age I think I mean there's stories with my mom's, my grandpa, about you know me wanting to ask him about business and entrepreneurship in second grade.
Speaker 1:Was he a business owner?
Speaker 2:Yeah, he, yeah, he did a lot of different things. Okay, a lot of different businesses. He's 94, still around, but doing a lot less these days.
Speaker 1:Well, good for you, man, 94 years old, you got some good genetics there, yeah years old.
Speaker 2:You got some good genetics there, but yeah. So I mean, you know, I think I can remember building spreadsheets and having like financial thoughts about business going back forever, so that kind of morphed into. You know, I left corporate America to start that consulting business and work with some privately held businesses that some people I knew were investors in and they gave me that opportunity and so I kind of parlayed being a spreadsheet financial analyst junkie into investment opportunities, into the opportunity to then become an operator or an owner.
Speaker 1:Nice, I love it. And it also takes guts to be able to say hey look, right now I don't own a business. I'm going to have to borrow money to buy this business. Probably that's scary, and you just did it in 45. I, like you, just jumped in or I could think about it. Yeah, yeah, Like they say uh, you know the, the, the pool's not going to get any warmer by waiting Right. Sometimes you got to jump in and do it.
Speaker 2:Yeah, um, I, I, along the way I had tried a few different things so I had had gotten some experience. My cousin and I bought a couple of pizza stores about 12 years ago, did that for a few years. Um, it's pretty hard, hard to sell pizza. But you, but I, I take every experience and and and view it as something that you can build on right, like no, nothing. All experience is cumulative, I think, and nothing's really wasted. So what I learned there was really hard to be another, what I call a me too business.
Speaker 1:So you know we're selling pizza and says everybody else, yeah, I got Tom Manahan's book from Domino's pizza in there. You know it's just like. You know he built a giant, giant business out of it. But yeah, I mean, you got your, your pizza place and in five minutes down the road there's another pizza place that does commercials.
Speaker 2:Right, everybody's got a nine dollar pizza or whatever.
Speaker 1:Yeah, they got an app and everything else, and here you are just trying to sell local pizzas, right, right so so again, I think that was a good experience of you know.
Speaker 2:getting that chance, after a series of financial analysts and type jobs, to work with seven or eight different businesses in multiple capacities got a lot of exposure and experience there as well. So another thing that I would tell anybody is take the experience over the job title, over the salary Like I guess you have to hit the minimum salary to live on but always take the opportunity to learn more, do something harder.
Speaker 2:That's a good yeah, good advice. So I put myself in those positions. I you know, side hustled, in the sense that I was always, you know, grinding on a spreadsheet, grinding on an idea, thinking about something, always willing to work. I guess you'd really it's kind of cliche, but I'd say I'm always willing to outwork the competition. Yeah, you know, if somebody is going to work 60 hours, I'll work 70.
Speaker 1:That's that Kentucky spirit, so just got to do it. Yeah, you take a swig of whiskey and then you, uh, you just get it going. The numbers get so much better when you have perfect. Kyle agrees with that, I think Kyle's uh, kyle's a T. He's been a TQL forever.
Speaker 2:So he's, uh, he's grown up with tql. What? Were you the 100th employee or out there around there, somewhere, around somewhere? I was like 917 or something. Were you there? Yeah, it was my my first uh kind of real job or something kind of like a weird office. Were you in, uh, the main one in, uh, milford?
Speaker 3:oh, yeah, I got kicked out of there pretty early.
Speaker 1:Oh bummer kyle's doing okay, though, kyle. Kyle figured it out. Now, kyle, his side hustles are investing in other businesses. I would say he's got. Uh, yeah, he got the building right down the street, the republic bank building. He's a co-owner in that and they're rocking that out with that restaurant up on the rooftop awesome spot yeah, once they got it going, you know, once everything started working out and there's some construction issues and stuff like that.
Speaker 3:But someday I'll, someday I'll, be able to reclaim some money from one of my investments.
Speaker 1:It'll be glorious well, you got that right.
Speaker 3:Now that ford thomas investments, all right well, I have it and it's cash funds. I don't take a monthly, it's not.
Speaker 1:It's not replacing any income yeah, I don't have this, with a lot of stuff I didn't, I didn't have it I didn't have the quite success our, our frontiers had with this stuff yeah, well, I mean you gotta, you gotta do as many little things as you can, in my opinion, like I mean I still I rent my car out on taro just to show people that it can make you money, it pays my car payment. I mean, last month I think I made 1400 bucks, 1500 bucks just ran out my car and just taking it to the airport, dropping it off. I mean there's people out there that are do Uber and it comes back to me, you know, and I, I just live right across the river. I don't even I could ride a scooter back to my house if I wanted to. So it's.
Speaker 1:It's one of those things where it's just like all these little things add up right, if you can replace your, if you could get rid of your car payment, that's people's second biggest expense. Probably, you know, without student loans If you can't and a lot of those are getting canceled right now but if you've got a, your mortgage right, you got a house, you got an extra room or something. Maybe you rent that out or go buy a four family. Instead of going and buying that $800,000 house right out of college, just go buy a four family and move, move into one of them, but an $800,000 house out of college.
Speaker 1:I didn't but there's people out there, believe me, they got to be in the school district. They got to. I see a lot of people in those expensive neighborhoods that look pretty young, pushing, pushing babies around and I'm like, wow, how do these people get this stuff Like? Is it maybe their parents had money or something and got them into that neighborhood? And then I look at the home prices and I'm like those people got to be in their twenties and they're living here Like something's not right here like something's not right, like it's anything like.
Speaker 3:Is there anything like fort thomas? Their parents probably sold them their house they had and just took a hit on the.
Speaker 1:That's a good point yeah, that's how high park and stuff like that, yeah, that's how they get them. But some people I mean you look at things right now in the country. I mean you deal with payroll all the time. I mean you've got debt is crazy right now for people, and folks are asking for more money. You know the fast food employees, particularly those guys are all looking for opportunities right now to try to find ways to make money.
Speaker 1:Sometimes you just tapped your employer out Like they just can't do it anymore and people think that these you know the guys that own these franchises are just bankrolling tons of cash. And we had franchise people on here. They're like hey, you don't really don't make a whole bunch of money. I'm in a Dunkin' Donuts operator. You might make a hundred grand, depending on the location, but it's not like you're making tons of money. So people don't really understand that. Employees don't really understand it when you have that mindset. One of our goals on this podcast is to get people to kind of shift from hey, I'm a, I'm an employee and this is what I'm going to be all my life too. Hey, there's other opportunities out here to make money. At some point you did that.
Speaker 2:Yeah, um, I uh. Part of the way I tell that story to people, or the lens that I use, is that you can only grow your career inside of a company that's growing faster than you want to grow. Otherwise you will like. If you think from like, if you, you know, if you're $10 doubles and then double like at some point, you, you are the entire revenue of the company, right? So if the company's not growing, you're not going to grow. If the company's shrinking and you're growing at some point, that's an intractable situation. Yeah, so yeah, I think a lot of people do think I think there's. I just saw a joke, I think something to the effect of oh, started an LLC, now a millionaire, you know like.
Speaker 1:Oh yeah, that's, it.
Speaker 2:Oh yeah, it just happens, right yeah. But I think that you know I think more people are thinking along the lines of you know a side hustle or an alternative source of income, and I think you know we kind of see that. Actually on the way here I had a phone call. Or you know one person, business who you know stepped out and is consulting on large tech implementations and an opportunity to you know make a very good salary and now you know big enough to be an S corporation and have a payroll.
Speaker 1:Oh, wow, yeah, so they're LLC now and you're trying to switch over, right, okay?
Speaker 2:Yeah, so you know just the uptick and you know we'll do a payroll for. You know we have hundreds, if not more than hundreds, of you know one person S corporations. Our largest clients have two or 3000 employees and operate. You know multi-state operations, so we can do both but and operate. You know multi-state operations, so we can do both but the uptick in the small business payrolls that we see you know looking for that. You know quarterly or the monthly payroll filing, certainly that's increasing in demand, which would tell you that people are looking for those alternatives.
Speaker 1:Ways to make money and stuff, which that's interesting, and I love talking to you guys because you're like feet on the ground, like you know what's happening. You see, all this stuff like why the economy is doing bad. If it's doing bad, are we in a recession? All this other stuff. It's businesses like yours that are ahead of it. And have you seen it? Just being in this industry for a while now, have you seen, if you do have a gauge on how far ahead you are, like you'll start seeing companies letting people go six months maybe before it really becomes a problem, or do you? Or or they start ramping up again and you're like, hey, economy must be picking up. People are ramping up.
Speaker 2:Um, we probably have that data. Um, and I'm the data nut at our shop. If anybody is, I just don't. Uh, apply myself into that data and I'm the data nut at our shop.
Speaker 1:If anybody is, I just don't apply myself into that data Sell that Some data brokers out there would scoop that up, maybe even the government.
Speaker 2:Yeah, I won't, I don't play that game. I tell I have a lot of you know, we have a lot of clients and some of them are pretty good friends. And I tell them hey, there's a, there's a pretty good, you know, chinese firewall there. I don't care what you make, I don't care what your company's doing, it's none of my business. I look at our revenue and our client count. But we would have data that would tell us if we wanted to look at it. You know new, higher volume or you know average payroll dollars, things like that, and I've looked at it in the macro sense from time to time.
Speaker 2:The last time that I scrutinized it would have been during the pandemic at the beginning of the pandemic and I thought, you know, I'd owned the business for less than a year and I thought I had just committed financial suicide, when every you know the world is shutting down, no one's going to get paid, you know. So, you know we were looking at those volumes and you could definitely see, so we lag, you know, really like payroll kind of legs from like the moment somebody would be laid off two weeks or so because oh sure, right, You're going to get your last paycheck.
Speaker 2:So you know. So for us, the volume drop. When the world shut down in the middle of March, our volume declined heavily like the second week of April, wow. So you just see like 20% straight off a cliff.
Speaker 1:Holy God. Yeah, that must've been scary.
Speaker 2:Oh, I thought I told you, I thought I you know you were done.
Speaker 1:You were like I'm done.
Speaker 2:Like you know, married four kids. Wife stays home and I levered up and bought a business and died in the first year.
Speaker 1:Yeah.
Speaker 2:Crazy. Yeah, that's what happened.
Speaker 1:Yeah, that was in. So but the thing thing is is what people don't understand is situations like that come up for owners so you can't really tap out the owner like, oh, the owner's making all this money. Let's tap him out like, oh, we want another two dollars an hour, three dollars an hour. Eventually you got to close the spigot, like there's only so much that happens. You got to fire somebody, you got, or you got to, unfortunately, let people go. Uh, if if to go, we see it in California now with the with the minimum wage.
Speaker 3:Replace them with automated, with automated service, whether it's a robot, indians or Vietnamese or Filipinos or whatever, they'll find ways to save money.
Speaker 1:I mean, it's just what businesses do, it's just the nature of running a business. But the problem is you never know when that 20% decline is going to come. You need a padding in there and you need to protect yourself, because you're the one that gets paid last.
Speaker 2:Yeah, I've always told people that you know my family will, you know, has and always will come last at our company. We've been, we've been in a pretty good spot. So you know what we do has been rewarded in the marketplace because we're a customer service first outfit and our, our unique lane is that we have, we license the big company technology from UKG but we deliver it with a local service team. So we're essentially a value added reseller for the third largest payroll software company in the country. Wow, so we compete.
Speaker 2:I mean, you were looking at our website so you do all this stuff for all these people. You know that's not something that we coded or that's you know, native in a closet in a Fort Wright, that if we get hit by a tornado it's it's over. You know that's that's UKG's software. We just get to deploy it for our clients with with service. We do all the work, we configure it. We do everything except code the software. So I go up against all the big national payroll companies with a differentiation around customer service. So for me it's all about having those people and we've been in growth mode and just clipping some great growth rate over the last four years. So I've been a little fortunate in the sense that we've been oriented towards growth and retaining people and rewarding our better players on that run now. But you're exactly right, though At some point a certain job is worth a certain number, and I want my grandpa always told me there has to be a profit for the employee to have a job If.
Speaker 1:If you don't make a profit on that employee, then there's no point in having what is it typically like 2.5, x or something I think it was with the uh, their payroll in revenue. Like did you need to make an order to like keep them around?
Speaker 2:There's some, there's some general rule of thumb around it there, probably is I, and that conceptually makes sense to me, Um, but you know, I think you could, when you're in growth mode, you might look at it and say I'm I really want this person and I'll, you know, I'll absorb some short-term pain on that, or margin compression.
Speaker 1:I guess you know they're a winner.
Speaker 2:They're a winner. I need to get you know through this phase. But eventually and I think another one of those things I think about is like the, the boom and the butt, like I think businesses go through oh, cycles, for sure yeah, I see it that way.
Speaker 2:Okay, we have to. We centralize, then we decentralize, or whatever it is right. So we're in an expansionary moment in our company's time, so a little looser, but at the same time you have to be prepared, or however you'd think stack ranked or who's valuable, who's not, like those kinds of things come up. Those are tough decisions. Yeah, you have to be, but that's a heavy as that.
Speaker 1:It's like a baby. It's like baseball. Like you might like a guy who's playing center field for you, but if he's hitting sub 200, at some point you got to have a tough conversation with them and put somebody else in there.
Speaker 2:Right. I think it's a great analogy. I one point I was talking with my partner, if you will, the COO of the business. She's been with me from the beginning and that really does the. If you do the EOS model, she's the completely the integrator. And I'm just this crazy visionary guy. I hear you about that, yeah, but so I'm interested in this. The analogy here for me of how much we're operating like a professional sports team, we have a, you've got the salary cap and you've got to fit resources on the field, like it makes a lot of sense and that you have to make, you know, tough decisions and maybe you know at different times, uh, you, we have different departments within our group. Maybe at one point you have to shift resources there and then base our football terms. That's the offensive line.
Speaker 1:I mean I want T Higgins and Jamar Chase on the same team, but I don't know. Is the receiver position even worth that much anymore Running back we already know running back's not as valuable as it used to be, and now receivers seems like it's kind of doing that. But T Higgins is a great guy. I agree.
Speaker 1:He bought my subway in Newport one time. I love T Higgins, but Kyle I mean Kyle might've had a conversation Like look T man, we love you, but this we can only afford. So much Like that's Kyle's attitude. I'd send Kyle in to do negotiations.
Speaker 3:I always thought Joey Votto would have been Joey V years ago. I don't know. You're 28. You're coming off a knee injury.
Speaker 2:You're MVP two years ago. We're getting ready. Yeah, never signed him to that 220, whatever it was.
Speaker 3:It's the Cardinals and the Steelers versus the Bengals and reps. I mean, look at how the Steelers and Cardinals treat their stars Like once they get to the 31, they got a very, very limited amount of ropes. They 31, they got a very, very limited amount of ropes they're willing to give them. And then, if you want to get crazy, you paid market rate at that age and it's just not happening. That's why pooh holes went to the angels.
Speaker 1:Oh man, yeah we gotta be able to draft.
Speaker 2:Well, kyle, right and same with your business worked out really well for the garden oh, it did work out for the cardinals, that's right you do have to, and I think that's a great point. You have to draft well, to build the and that's the rest of the analogy for the sports team, I would say, you have to, you have to have a mix of you know we talked about that. You go out and you hire a veteran player. There's a couple of things that I find difficult about that. One, you're going to pay top dollar. Two, you're going to introduce question marks around culture and fit.
Speaker 2:You know some people, you know, I think in their mind, they, they've, they've already done it, they've put in the work Right, and so now they want to manage a team or lead a team that they tell how to do the work. And I'm in a stage where I need people. I want to come and get their hands dirty. We have work to do, so you know. So if you hire somebody that has the you know the been there, done that experience at a pay core across the river or something, will they, you know, come in and actually be able to hit the ground? Do they understand our culture around service? Do they understand our and I'll be honest, we're like one for eight.
Speaker 1:Oh man, yeah, it's tough, right, it's tough. People are tough, like just dealing with people, dealing with different personality types in the same building. A lot of times, you know, even on a Zoom call, like you could have people who just completely disagree. They come from different aspects, you know, maybe politically even, and now you've got to manage that culture so it doesn't one person or two people don't become a cancer to the entire organization.
Speaker 2:That's right. So I try to move on fast. If we've made the wrong hiring decision, but in terms of you know drafting, same way that you know a good draft if you have a Joe Burrow on his rookie contract, you have a Superbowl window. If you hire some really outstanding, you know younger people that don't have high salary expectations and can and want to work really hard to build their career at the beginning, you can kind of catch lightning in a bottle with that and I think that's been a big part of our.
Speaker 2:Our success is, you know, with our pretty rapid growth of last four or five years, has been able to depend on some, some really good people that might, you know they may not have all the polish and the glitz and the glamour of that would attract a large corporation to want to hire them. But you give somebody like that a chance to small business or closely held business and give them a chance and show them that you're, you believe in them, you want to see them succeed and build a career. They give you a lot back in return.
Speaker 1:Well, kyle, a TQL too, I mean you were. You guys were a startup at one time. I'd say you were probably still kind of a startup when you got there, even though you were employee 100, people don't understand how big TQL I mean the second biggest freight broker in the country. Right now they're a big, big company and when Kyle started they were still relatively small a hundred people's, not. It's still a smaller business, I would say your borderline medium-sized business.
Speaker 1:But how have you seen it change? Because I think for you you're challenged by these. People can go to a pay cord, they can go to an ADP, they can go to some of these other payroll service companies or they can try to scalp them from you. Good employees that you have, they could try to scalp them from you. Kyle, have you seen that at TQ? Have seen kind of the culture change is it? Is it harder to keep employees around? Because now you're a big company, you're not this like scrappy startup that people want to work for, like they're excited it's growing? Oh, I got a chance to grow with the company because I think that's your benefit, right, that's where I'm at. Yeah, completely where I'm at. So what do you think, kyle, is that. Have you seen it change?
Speaker 3:well, I, I think I did. The major shift happened in 2008 with the first real major economic downturn. That happened while the bill, while the company was uh, you know in existence. But I mean no way. He was a operations analyst, so he understands how it works there. It's a start. It's an entry-level sales position. Basically, it's built off of its entry-level sales guys, and entry-level sales are based off of numbers and whether you hit your numbers or not, that pretty much dictates whether you stick around. You may go into another role, but someone's sales number numbers got to have to be able to pay for your position. So in that regard, it's kind of stayed the same. It's still the same mentality of you know, you, uh, you earn what you get and you get what you earn.
Speaker 1:So yeah, maybe you're not the best analogy, but well, yeah, it's not.
Speaker 3:It's not similar to like going to a Fifth, Third or a bank that starts where you're not customer facing or you're not sales numbers, where you're actually more like process.
Speaker 2:Where are you at in getting these files completed or this loan approved or whatever? In that regard To your point, adam, though, I think how many Kyle, how many brokerage firms have spun out of TQL? So maybe they didn't leave to go to work for CH Robinson, but they, you know, but they went and started what? 75 competitors.
Speaker 1:Yeah, that's crazy, I mean somebody could technically do that for you, but I'd say what percentage of people are actually, I mean how many people through the door at tql versus the number of people that actually went out and did that. The percentage has to be relatively small compared to the overall numbers of people. Sure, because I'd say 90 percent of people just want a job.
Speaker 3:I mean the barrier of entry. The barrier of entry is way, way, way higher for payroll than it is for freight brokering. I mean freight brok. You pay your bond and you do what you're trained to do. When you're doing payroll, you have to know tax law. You have to have connections with people that are good CPAs. You can't just you got a lot of overhead expenses that have nothing to do with direct action in the business. It's more along the lines of keeping you compliant with all the regulations and all the laws that you have to follow. In that regard, you can't be a moron like me. I could leave TQL and I could start a freight brokerage firm, because really all you need to do is be able to hustle and outfight your competitor. In that regard, it's any business, but there aren't a lot of nuances, as many nuances as there is for what Noah's doing.
Speaker 2:Makes sense. Yeah, I think what you do see in my space is on the on the smaller end I'll see some CPA firms or bookkeeper bookkeeping groups that will hold out payroll for their clients and I think that they, you know, they probably view that and it's probably a very logical thing that, hey, I've started my business, I'm a one person band, I want every revenue stream available to me to try to survive and I think I get that. But then you see them that you know they get up a little bit and then they get caught and I believe I tell people payroll as a business that works at scale. It's not a business that works below scale and scale can be different. But you know even step function. But you know, for us with about 1500 clients, it's it's quite a bit easier to have departments and checks and balances and backstops that can make it work.
Speaker 2:If you're a one person, you know you're sick. How do your clients get their employees paid? Oh, it's, it's yeah, yeah, you, you get, you know. So you know one per I said just one person. That's not scale, um, I also think you know from a highest and best use of time if you're a CPA, um and you have this great high margin. You know, relationship with your client around consulting, around the tax return, around their, maybe their monthly bookkeeping or some fractional CFO services you know, don't introduce. Personally, I guess I sound like I have a vested interest, but I wouldn't introduce payroll because now you've you've added conceptually 38 deadlines 26 paychecks a week or every two weeks, 26 deadlines around payroll and then 12 tax deadlines every month and quarter. Why would you want to add 38 failure points to your business when you for right now you control it Like you know everything is
Speaker 2:and, yeah, it would be the lowest margin work you do for that client with the most risk to lose the high margin work. Yes, right. So we partner with a lot of CPAs that don't want to be in in the payroll space and we work with them across. Hey, if you want to um, you know, white label payroll as for you, or if you want to sell your book, we've done both of those. But more commonly they just say, hey, we just want this taken care of for our clients. We don't want to be anywhere near pay, and so they you know they were for us and that's why we take you know, kind of that whole gambit a lot of you know monthly, quarterly payrolls one, two, three person companies, and so we do a lot of those for our CPA friends.
Speaker 1:Yeah, what about companies like mine? For example, I run an ad agency for essentially a one man band too, but all the people that work for me are people that are formerly, you know, at agencies I used to work with, or you know people I've just freelancers essentially, where they've kind of priced themselves out of a job. So they don't even want to work for me and I don't necessarily want to pay them as a full-time employee because I may only need their skills for five hours a week, this week, 20 hours, next week, 30 hours a week after that. So I'm set up as kind of like a virtual agency where you know the Hollywood model.
Speaker 1:I guess, you know, I want the lighting director from Jurassic Park, I want the animator from Toy Story, I want this guy, you know, and I want to put together a team right, the right team, for that project. A lot of people, when they're starting their company, I feel like they they can't avoid it, like I can avoid it. They kind of have to hire people. If you're a spa, you got to have practitioners, right. Maybe you can do it for a certain amount of time, but then if you grow your business enough, now you can't. You just don't have enough time day, right, so you have to start hiring people. That's a scary time. How many of those types of companies have you guys work with and do you have conversations with them about how everything's going to work and and kind of settle them down a little bit?
Speaker 2:Yeah, that's definitely a big part of what we do and that's kind of the origin story of me finding payroll partners at the beginning when I had my business and was in that uncertain period. So definitely have a lot of conversations around. You know what we need from you, what we're going to do for you, how we're going to get you there, and I always tell people you know you have a business to run. Payroll is an important component of it, but it's not why you're in business. We're going to handle that part.
Speaker 1:You worry about yourself out of that. It's stressful dealing with people and you do some HR work too right your firm.
Speaker 2:We have HR software and kind of what comes with that is some light HR question answering things like that. We avoid the like HR consulting space where, where we would, you know, really take ownership of your hr department but you probably have people that you can forward on to them.
Speaker 1:We have a lot of partners in that space, a lot of good friends that we could, we could introduce to a client because a bad employee could like, literally ruin your company, ruin your mental health, make you feel like, why am I in this business? Doubt yourself? Oh for sure, yeah. So I mean it's tough and people don't understand that when you, when you start running a business, it's not just you know. Oh, I'm gonna start a business, I'm gonna make all this money. There's so much administrative stuff that you have to do. If you're a spa, I mean you got towels, you got linens you have to take to the cleaner, you got to pick up. It's not you just sitting there all day. Oh, I'm going to have five clients a day, it's going to be great. No, you're half the day You're going to be in your QuickBooks, you're going to be delivered. You know, taking towels and sheets out, folding them up, doing that. It's crazy. Like the amount of stuff you don't get paid for is if you were an employee.
Speaker 2:Uh, totally true and and uh, luckily, you know, for me, uh said I, I was able to acquire the business and it already had a nice base of employees and clients and I've just been able to build on that. Um, I personally don't know that I could get myself out of that trap. I'm very, um, I would, I would run very hard at doing all the things I needed to do and I think you could very easily I could see myself having gotten trapped in that, you know you have to know what's going on in every aspect of the business.
Speaker 2:I said I you know, if, if, um, you know, if you wanted to start a payroll company, I think you're nuts. Uh, personally I wouldn't. I wouldn't do it now. I mean no, I know, now I wouldn't have it's tough, yeah, it's tough business, Um, but uh, it's a, it's a good business at scale. But again, I think you know, if you get to that, um, yeah, you can make a job for yourself, but then what? Yeah, and that's probably the same in every bit, right, Well?
Speaker 1:how many hours do you think you work a week?
Speaker 2:Uh, do we count golf.
Speaker 1:Golf is a. It's part of the job.
Speaker 2:Yeah, I've gotten my wife to catch onto that. That.
Speaker 1:This is, this is you got a golf shirt on, currently headed there after this.
Speaker 2:Yeah, I was gonna say um, so I, yeah, I I'd say I get, uh, most days probably 10, 11 hours, five days a week easily, and then it's just a question of how much has to get done on the weekend to get back to a reasonable starting point for monday morning yeah. So what is it? You know, 55, 60 easy and some weeks it's worse.
Speaker 1:Yeah, oh yeah, it's never easier. Yeah, maybe even tax time comes around and stuff and people were asking for things.
Speaker 2:Well, for us that's uh, that's January. December and January are our busiest months of December. Um, a lot of our small business clients are are running those one-off payrolls to make all their final adjustments, so we're burning it pretty heavy. In December we're also getting ready to a lot of clients make a switch for payroll on a clean quarter. So January is a clean year and a clean quarter, so the number one time people move. So we're real busy in December taking care of our current clients, getting our new clients ready, and then you flip the calendar to January and now the tax teams running downhill on the December close the fourth quarter, close the year end and W2s.
Speaker 1:What is who's your ideal client? So for people listening they're like, hey look, maybe I'm using one of these other companies right now, but I'm in Kentucky. I want to be with like a local group. I want to help Noah, I want to support his business. Who's your ideal client?
Speaker 2:I appreciate the plug, wasn't expecting that. We work with, broadly speaking, two different types of clients. The one that we've been talking about a little bit here is that smaller business that either you know just starting out or you know owner operator looking to not be very heavily involved in payroll. So we call it full service payroll. You know you can call or email our team. You have a dedicated rep and they'll help you do everything involved with payroll without you having to be very committed to logging into our system or doing anything.
Speaker 2:The other part of our business is that more mid-sized and upsized business. Call it. I mean really any number of employees. It could be 30, 40, 50 and up. Our largest are in the thousands and they're looking for the technology that we also offer that they can use to run their business, but they're looking for that layer of support. So our clients in that space, typically you know one or two people on a payroll or an HR team who don't have time to wait on hold who, who, who don't have time to, you know, wait three weeks for an answer. They want they want to have more of a service based relationship.
Speaker 1:Ah, okay, oh, that that's hard to keep up with too. As a payroll company, I mean I can imagine like you calling some of these other payroll companies and just being you company. I mean I can imagine like you calling some of these other payroll companies and just being you're on hold, you're, you're waiting a long time to get something back, just because they just don't have, they're not prepared for that, they haven't thought about that, they didn't grow into that kind of system, so they don't. They don't have the people and the resources available to do that If it's not part of their, their strategy from the beginning.
Speaker 2:Yeah, I mean the, the, the larger ones. They hold themselves out as tech companies. So it's log a ticket. Here's our FAQ, here's our community web page to search your own answer. My favorite parlor trick in the conference room of a potential client is to call our 859 phone number and have our receptionist answer the phone. Yeah, Two rings boom.
Speaker 1:And you're on the phone with somebody that can help you direct you wherever you need to go. Yeah, you know, two rings boom and you're on the phone with somebody that can help you direct you wherever you need to go. Right, that's awesome. Well, no man, this has been great. I appreciate you jumping on here. Guys, check out his website payrollpartnersnet. Great URL, great name, by the way, legacy, yeah, yeah, and it ties directly into what you do. You're your partner, right? So, yeah, definitely check out that site. And if you guys are in Kentucky, ohio, indiana, anywhere around here, tennessee, even though Tennessee is not as hard.
Speaker 2:Well, we still give service everywhere. We do all 50 states, Guam, Saipan, Puerto Rico.
Speaker 1:Oh, wow, okay. So some military paychecks, possibly Travel nurses, travel nurses. Oh, there you go, there you go. So, guys, if you're looking for some payroll help, uh, definitely hit Noah payrollpartnersnet guys. Thanks, noah, thanks for having me, thanks for joining us on this week's episode of side hustle city. Well, you've heard from our guests. Now let's hear from you. Join our community on Facebook side hustle city. It's a group where people share ideas, share their inspirational stories and motivate each other to be successful and turn their side hustle into their main hustle. We'll see you there and we'll Bye, bye, bye, bye, bye, bye, bye, bye, bye, bye, bye, bye, bye, bye, bye.
Speaker 3:Bye, bye, bye, bye, bye, bye, bye, bye, bye, bye, bye, bye.
