All Xero Gravity episodes
Hosted by Elizabeth Ü
“Having insight into what the customer wants and needs is important, yet we don’t want to lose sight of what we as human beings need.”
That’s surfer and entrepreneur, Meryl Johnston.
Having fun beyond work is serious business to her. So much so, that when she co-founded Bean Ninjas, she made it her personal working goal to only work a 20-hour week.
12 months on, that reverse-engineered workday means her team of 7 global employees set their own hours. Even more compelling — her and her partner’s goal is a million dollar business. That’s it.
So surf over to Xero Gravity 65 for Meryl’s take on how to make your small business a real part of your life, versus consuming it. On the slate: metrics (including tracking your hours), working remotely (in say, Bali), recurring subscriptions, and why clients love the business model too.
Small Business Resources:
Host: Elizabeth Ü [EÜ]
Guest: Meryl Johnston [MJ]
EÜ: Hi everyone. I’m Elizabeth Ü and this is Xero Gravity.
Meet Meryl Johnston, co-founder of Bean Ninjas, a global online accounting and bookkeeping business. She’s a passionate surfer and she started her business with the goal of working no more than 20 hours per week.
MJ: We’ve created systems and built a team around our business so that over time I’ve gradually been able to reduce those hours. That’s our main goal, to prove to ourselves that we can run a million-dollar business, but beyond that, it’s more about enjoying the work that we’re doing and enjoying our lifestyle.
EÜ: I’m really impressed with Meryl’s commitment to what really matters to her and how this allows her to quickly address business challenges. Meryl shares insights on achieving work/life balance without sacrificing quality service for her customers.
MJ: I’ve created a business based on the lifestyle goals that I’ve had and I enjoy the work that I do, but the idea was that I could also have a life outside of work and have time to surf, to travel and spend time with friends and family.
So at the moment I’m probably working 35 to 40 hours a week, so still more than I’d like, but we can see that we need to put in those hours to create systems now so that in the future we can gradually scale ourselves out of the business.
I like working in short bursts of intense focus and then having a break and moving onto something else. I think it helps having structure to a day and also working on something that’s interesting and motivating is actually enjoyable.
EÜ: And how transparent are you when you’re hiring new staff, about the fact that you’d ideally like to be working a lot less than maybe they would be working?
MJ: [Laughs] So we’re quite upfront about what our goals are and we, we’re very transparent. We, so we write a lot of blog posts about our progress and our goals. So we actually write a quarterly report which shares with everyone the number of customers we have, our monthly revenue, our churn rate, our response times and so we’ve found that by sharing those metrics, first of all it makes us focus on those, but also other people are interested and wanting to support us on that journey. So we love that transparency aspect and with our team we’re clear about what we want, but we also offer flexible hours and the ability to work remotely for our team. So if someone wants to go and live in Bali for a month and work from there, as long as they can hit their deadlines or they’ve trained someone else as a backup for them if they can’t do something like process a pay run, then we’re fine with that. So we want our team to have flexibility to do the things that they love as well.
EÜ: And when you say ourselves, who is involved in those management decisions?
MJ: So I work with a co-founder called Ben. So he actually lives in a different city to me in Australia. I live on the Gold Coast and he lives in Sydney and together we run our bookkeeping business, Bean Ninjas. And it was quite interesting, I actually met Ben in an online mastermind group where we were working on other businesses that we had. So I had a consulting business and Ben was running a tax practice and we were in this mastermind group to work on our businesses, and over time we realized that we had similar lifestyle goals and that we actually would be better off joining forces and working together rather than continuing on with our other separate businesses.
EÜ: Well, I’d love to hear a little bit more about that moment when you knew that you had to throw in the towel as an employee. Was that a gradual shift and you knew it was coming and you worked your way up to that or was it more like something that you looked out and saw that the surf was amazing and it was still 8pm and getting dark and you were in the office?
MJ: I think it was a gradual buildup of frustration. I didn’t mind putting in the hours occasionally to get something done well but it was the grind week in, week out of putting in those hours, but also feeling like I wasn’t part of a team that was working together for that.
I think it’s fine to work as an employee. You’re learning from good people and you’re building your skills but there’s no reason that while you’re working as an employee that you can’t start something on the side and I think by launching something and trying to run a business, you learn so much.
If I had continued on with that entrepreneurial side back when I was 20, 21 when I was starting out as a young accounting graduate, I feel like I would have been 10 years ahead.
EÜ: A part of what is so compelling to me about your story is all the work that you’ve done to really understand what you want to make sure that the business is serving you because it’s such a slippery slope. Sometimes we have all of this insight into what the customers want or what the customers need, or even what the business needs and we completely lose sight of what we as human beings need.
MJ: Absolutely, and so that was a learning experience I went through after a couple of years running my consulting business. And I was bending over backwards and thinking about my customers and how could I help them and trying to do everything that I could to make sure that they had a great experience. And if that meant answering calls on the weekend, if that meant a job coming in last minute and me staying up late and missing out on a social event to get that done, that’s what I would do.
But it made me question, “Well, why am I doing this with the consulting business? I’m having the same frustrations that I had as an employee, that I don’t have…
MJ: …control over my schedule…
MJ: …that again someone else is dictating to me when I’m working, and it was difficult to switch off.
So I reflected on what would I actually, what would be my perfect business and then with Bean Ninjas I reverse-engineered that.
EÜ: But what are some of the other aspects beyond control over your schedule that were really compelling to you when you were setting out, you know, your North Star for all these criteria that would make a successful business to you?
MJ: So some other factors were having consistent cash flow. So with consulting, which is often project-based work, there are big spikes when there’s projects and it can also be hard to manage a pipeline of leads at the same time as concentrating on project delivery. So I was looking for a business where there was recurring revenue, so some way of having customers on a monthly subscription and producing that work consistently. It would make it easier to hire the right staff and the right mix of staff because of the consistency of the work and also not worry about peaks and troughs.
EÜ: So do you have a regular system so that you’re checking up to make sure that you’re actually making progress along these really amazing points, that are so important to you and are valuable in your business?
MJ: So we have some key metrics that we track. So with our business with customers on monthly subscriptions, the main metric is monthly recurring revenue which is basically just the dollar value of customers that are on subscriptions. And then we also track churn which is when a customer leaves, so what percentage of our customers have left out of total customers, and that’s very low for us so that’s a big focus point. My business partner and I actually complete timesheets, and the reason for that is partly from an accountability point of view just to make sure that we’re staying focused on the right areas, but also to restrict the hours that we work so that we can track and make sure that we don’t want to be going back to the “we were happy to put in 80 hours a week to launch the business and get it off the ground.” We’re in this for a lifestyle as well for us and also for our staff. We want them to have a great lifestyle too. So we actually track that to make sure that no one’s working too many hours.
EÜ: What have you seen in terms of the types of employees who you’re able to attract?
MJ: I think it helps us to attract great employees. A lot of our bookkeepers also have recommended that their friends or their colleagues also apply to work with us and so for us as a service-based business, our staff is really what drives it. So having a pool of talent that we know are interested in roles when they come up really helps us. And we’ve also developed an in-house training program because working with us is a little bit different to a typical job where you would go into an office. So that suits some people but sometimes it’s not a good fit.
EÜ: Right, and I’m curious if you have a lot of your same staff working in similar roles like, you know, anyone can cover for anyone else or is it the kind of thing where you have specialized roles and certain people are providing a certain type of service or working with a different type of client or… how does that work?
MJ: So that’s evolved over time. So when we first launched, Ben and I did everything and even we didn’t really have defined roles. And so the first step in creating roles was us actually splitting out our areas of responsibility, and we put Ben in charge of operations — so delivering bookkeeping service. And I was in charge of sales and marketing, and our first focus was to create systems for the bookkeeping side of things — so create or set up a project management tool in a way that suited our business model; write a lot of standard operating procedures and then gradually train a team of bookkeepers.
EÜ: Well, you mentioned earlier that you really wanted to be transparent as far as your lifestyle goals and the numbers as a way to attract and motivate employees and maybe other partners. Have you found that that’s also been effective in attracting new clients?
MJ: I think so. Just to give you some insight, our target market are entrepreneurs or business owners who are running a business online. So our targeted market hangs out in online groups and on a lot of content as well. So our strategy has been to be active in online groups and be really helpful, not pushing our product but just getting to know people and helping out where we can. So we’ve edited books, we’ve tested out new products and given feedback, we try and use the services of people within these online groups where we can. And another aspect of that has been creating content, useful content, so not content trying to sell our services, but writing blog posts about, as you mention, about our progress and sharing lessons learned.
EÜ: And I have to ask you: where did the name Bean Ninjas come from?
MJ: So when we were thinking of names, we wanted something that related to accounting in some way. So we thought of bean as in bean counter and then we didn’t want to be your typical bookkeeping or boring accounting firm or bookkeeping business and we thought, “Well, ninjas is a good reflection of us being in the background, being experts at what we do, but also it’s a little bit of an internet kind of term that might resonate with our target market.” And we gave ourselves a week to launch the business, and so in that week we gave ourselves a couple of hours to come up with a business name and that was where Bean Ninjas came from. So also in that week, we created a website, we made the logo and we found our first paying customer.
EÜ: Wow! That’s impressive. And that was really smart. I mean, these are tasks that can take people months.
MJ: Absolutely, and that’s, that’s something that I’ve had to learn myself back in the early days of accounting. I wanted things to be perfect and part of my audit training was understanding that for a particular business, a $5,000.00 mistake is not, the word was not material.
$5,000.00 might seem like a lot, but for $100 million business it’s not going to impact decision-making at all. So you just have to let it go. And so that also, combined with the startup methodology or mindset, which is about launching something quickly and then getting feedback from customers and adapting. Which means rather than having something perfect and then customers not even wanting that, try and launch much faster and then get feedback. And I think the key here is it’s not just feedback from anyone — because friends and family will tell you something is a great idea when maybe it’s not — but it’s feedback from people who will pay you, so paying customers. We launched in that week, we got feedback and then over a period of months, we kept refining that and understanding what parts of our packages customers valued, which parts they didn’t, and also what would be a fair price for different businesses in different stages.
EÜ: And how many clients do you have now?
MJ: So we have just over 70. I think we’re at 74. We have seven staff who are mostly part-time. They’re generally working around 20 hours a week.
So we just assumed that we would only be based in Australia and then Ben, my business partner, his background is international tax, so he’s got a lot of contacts in the US. So we had customers approach us, so we launched in the US and then we had feedback that, “Well, actually we’ve got friends in Canada who would love to use your service.” So then we launched in Canada and then someone else said, “Actually, I’m in the UK. Can you help us? We love what you do.” So we launched in the UK.
EÜ: Wow! So all of this begs the question: how big is big enough?
MJ: Well, for us, we’re not going for world domination or a huge business. [Laughs]
EÜ: [Laughs] No, you’re going for a 15- to 20-hour work schedule. [Laughs]
MJ: [Laughs] Exactly, yeah. So, I think for Ben and I to prove ourselves as entrepreneurs, we feel that we at least want to hit seven figures of annual revenue. So that’s our main goal, is to hit that to prove to ourselves that we can run a million-dollar business. But beyond that, once we get to that point, then it’s more about enjoying the work that we’re doing and enjoying our lifestyle.
EÜ: And as far as a succession plan goes, let’s say that all of this has happened and what’s your vision for who would be running the company at that point?
MJ: So I think Ben and I would still want to be involved. Our plan isn’t to build the business and sell it. It’s to build the business and then stay involved and run it with some involvement, but plenty of time for other things.
EÜ: Like surfing.
MJ: Exactly. [Laughs]
EÜ: [Laughs] Well, this has been such a lovely conversation with so many excellent tips for other people who are starting their own business, or even maybe thinking that they should put off starting their own business. And maybe your words or wisdom will encourage them to get started earlier. So thank you so much.
MJ: Yeah, thank you.
EÜ: Meryl, we’re going to finish up with our question countdown which is five quick questions and five quick answers. Are you ready?
MJ: I’m ready.
EÜ: What business book or idea has made the biggest impact on your life and why?
MJ: The 4-Hour Workweek by Tim Ferris. And it was that book that changed my mindset around first of all leaving employment and then the opportunities to run a business that could run without you.
EÜ: And what’s the one thing you can’t live without?
MJ: Exercise, but more specifically, surfing. That’s what clears my mind and makes me feel happy.
EÜ: And the most useful app on your phone right now?
MJ: So I actually don’t use my phone much. I try not to have anything work-related on my phone so if I had to pick an app, it’s probably Pocket Casts to listen to podcasts. But if I had to pick my favorite, I love technology so another tool, but it’s not on my phone, is Calendly which is a meeting/scheduling tool. And I found that saved a lot of time going backwards and forwards with people trying to organize meetings. They can just book directly in my calendar.
EÜ: And in one sentence, what’s the greatest lesson you’ve learned throughout your small business journey?
MJ: Avoid perfectionism and just ship it, which we talked about a little earlier in the show, which is basically launch something and then get feedback.
EÜ: And finally, what skill do you want to enhance this year?
MJ: I want to work on my storytelling skills. I’ve only learnt to write blog posts over the last 12 months and I’ve been working on that skill, and I think the art of storytelling is so important for writing good content, but also in marketing generally.
EÜ: Meryl, thanks so much for joining us on the show.
MJ: Yeah, thanks a lot. I really enjoyed it.
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EÜ: That was Meryl Johnston, co-founder of Bean Ninjas.
Thanks for listening to Xero Gravity. Make sure to join us next week because we’ll be chatting with Emily Moon and Kelsey Carlstedt. They’re the best friends and business partners behind By Grace Designs. So don’t miss that one, and we’ll catch you then.