558: Outsourcing Your Back Office with Dida Clifton
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Welcome to the How of Business with your host, Henry Lopez. The podcast that helps you start, run, and grow your small business. And now, here is your host. Welcome to this episode of the How of Business. This is Henry Lopez, and my guest today is Dita Clifton. Dita, welcome to the show. Thank you for having me. I'm looking forward to this conversation. Dita Clifton is the founder and CEO of The Office Squad.

The Office Squad is a company dedicated to transforming the way that small businesses manage what we generally speak to or generally refer to rather as the back office operations. And we'll discuss what that means. So we're also going to get into her entrepreneurial journey, very interesting journey, and what this is all about, potentially outsourcing some of, if not all, of your back office responsibilities.

You can find all of the Howa Business resources, including the show notes page for this episode and learn more about my one-on-one and group coaching programs at thehowabusiness.com.

I invite you to consider supporting this show on Patreon, and also I encourage you to subscribe wherever you might be listening so you don't miss any new episodes. Let me tell you a little bit more about Dita, and then we'll get into our conversation. Dita Clifton is a business owner and a champion for small business growth with over 23 years of experience supporting business owners across America. As I said, she's the founder of The Office Squad.

a franchised operations support model, and Dita combines her knowledge of efficiency, her military-inspired operations background, with a deep understanding of small business needs to deliver all-in-one back-office solutions. Dita aims to change the way small businesses grow by helping owners operate more effectively, enabling them to focus on vision and growth. From her unique 10-point business assessment to comprehensive administrative and bookkeeping services,

The Office Squad Franchise Network embodies Dita's mission to transform business ownership from struggle to freedom, one squad at a time, as she puts it. So with that, Dita Clifton, welcome to the show. Thank you. That makes me sound like somebody. Like you've accomplished something, yeah? Yeah. If nothing else, it's surviving all those years of doing business and helping others do business. Just to be here. It's an honor. Thanks. I appreciate that.

Well, I always like to start at the beginning, especially with your interesting background. So tell me briefly about your early years. Did you go into the military when? Before school, after school? Tell me about that, if you will. Right out of high school. Right out of high school. We didn't do college. We went to the Air Force. And I didn't have a tech school, so I went straight from boot camp to a fighter squadron in Alamogordo, New Mexico. Okay.

So I walked into a building full of fighter pilots. Wow. And what did you do when you were in the Air Force? What did you do at least initially? I was in operations tech. So in a fighter squadron, there were F-15 pilots flying active duty F-15. So there's a great big desk in the middle of it. And I worked behind that desk answering phones, talking to them on the radio, keeping schedule of what airplane they were in and where they were.

So just kind of held down everything, made the coffee, took out the trash, you know, all that stuff. And so obviously right off the bat, you get exposed to operations, to managing things, to keeping things in order.

Absolutely. In that environment, I suspect, not having been in the military myself, fairly structured. Very structured, which is where all this came from. Right. A lot of SOPs and ways that things are done. And so you learned that right out of the gate. Yeah. And there's a huge sense of urgency that I brought with me to the office squad. Tell me about that. What do you mean by that? It's training for war.

And I was in it in the late 80s, and we weren't at war. But in the military, you're constantly training for it. So everything was in a hurry. And you had to get them out the door and make sure they had everything they needed. And it wasn't waiting on the phone for things like we do in the civilian world. Things just don't happen as fast anymore.

And when I got out, I just wasn't used to that. - Also there, I gotta believe some of it involved actually somebody's possibly their lives at risk, yes? - Yep. - So the stakes were high. - Yeah, again, we weren't at war, but you know, every time

one of those guys steps to a, you know, multi-million dollar aircraft and puts his life in there. You got to make sure that everything is going okay. All right. So you served, I think it was six years. And then what did you do after your service in the Air Force? I got out of the service and became a military spouse and volunteered a whole lot. And traveled different posts or...

Yes. We moved about every two and a half to three years. We got to Nellis Air Force Base in Las Vegas in 2001. Right. So during all that time, you didn't have a job outside of the home? Not really. It's hard to keep a job when you move every couple of years. Right. Yeah. So I did a lot of... I started my own little gift basket business and I started...

I did a lot of volunteer work. I opened some thrift shops and he was stationed in the former East Germany for a while. And I taught them how to open a thrift shop. And I just did a lot of really cool things and raised a couple of kids. Yeah, there's that. So what leads you to the office squad? Was that shortly after you then became more permanent in Las Vegas or was there something else in between? Well, well,

Once you get to know me, you know that I don't sit idle for very long, always trying to do something. So shortly after he got to work and the kids got in school, I started a little bookkeeping business from home when the virtual assistant thing just started out. Interesting. And why bookkeeping? Did you have an accounting background as well?

No, by the way, anybody can be a bookkeeper. Right. Don't have to have school or lessons or license or accountability or anything. I know it's wild, isn't it? It is. So I learned QuickBooks during a lot of my volunteer work. I volunteered to be treasurer and I started thrift shops. And so I knew how to use QuickBooks and I can start a business. So I did. I built my own website and I started faxing. Remember faxing? Yeah.

faxing a little info sheet to people that were advertising for bookkeepers. Oh, okay. So that's how you landed your initial clients. Landed my first clients. And then I would drive to their place and back their QuickBooks up on a little stick, you know, and take it home. So I did that for a while. And I quickly realized that business owners needed a whole lot more help than just bookkeeping and

Right. And they were a lot like fighter pilots. They needed a whole lot of support and they really didn't care about anything but flying. They all wanted to just do their business and please take care of all this other stuff for me. Right. It's noise and it's painful and it just gets piled up, right? Right.

So that's where the office squad came from. I just kind of started adding things to it, moved out of the house, and it just kind of grew and grew. How many years has it been? 23. Wow, 23 years. Excellent. When you think back to then, did you have, I mean, obviously you had dabbled a little bit, as you said, while you were traveling, but did you have aspirations or did you think you'd have your own business one day? No, it was kind of an accident. Yeah.

I saw a need for it. I saw people would come to me and their bookkeeper had moved

moved or wasn't answering their phone calls or didn't have time for them anymore or did their books wrong and wasn't going to fix them. You know, they were just, excuse me, getting, you know, screwed. And I didn't think that was fair. Yeah. You know, so. It's happening even more so now. It's so hard to find reliable bookkeeper or reliable CPA for that matter. It's not easy. You know, I realized that anybody could be one.

And I just wanted to fix that. I didn't like seeing that some business owners didn't have what they needed. And I thought that I could fix it. Of course, all that discipline that you had, the application of rigor, following a process, because in accounting and bookkeeping, we do need to balance to the penny, right? Yeah. Not close enough. All of that has to have been...

those skills were there that kind of that characteristic that you had all of that applied. I have to think. It does it and organization and having your files set up, right. And knowing where to find things and, you know, answer, I started answering phones for people and moved out of the house and started adding things and receiving the mail and just, it just started adding stuff. Just grew from there. Bigger. Well,

One of the things that I'm curious about as I was doing the research is your daughter, Taylor. Am I pronouncing it correctly, Taylor? Yes, yes. She works in the business with you. And that's always a tricky thing, right? Having especially our kids in the business. What are a couple of thoughts or tips on how you make that work? Well, I don't know how much time we have, but I have two daughters. Yeah.

And they both work in the business or just one? No. Taylor's the youngest. The oldest was my first receptionist. And I fired her three times. So my my advice is never hire family. But then Taylor came along and she was always in sales.

And she's very good at sales. And I asked, kept asking her to come on and be my salesperson and she wouldn't do it. And then COVID happened and she, you know, she's in her thirties and she, the retail industry went, you know, belly up. And she said, is

is that all for still good mom? And I said, absolutely. Cause she's okay. Well, I'll try it. And she did an outstanding job and we knew going into it, you know, she was older. We went into it as grownups. And I think that made the difference. The first time that my older daughter did it, she was in high school and that's, that's a whole different ball game. You were a parent then here now with, uh, with her, with, with this daughter, you have an adult relationship now with her.

Right. And we, we knew what we were getting into and she raised our revenue a quarter of a million dollars the first year she was in it. And she's still, she's the CEO, CMO and she does great. So I think you, you have to be an adult about it. And, and my office staff, I,

I asked all of them, you know, and they, and you have to not play favorites. That's the tough, that's a tough one. Yeah. Yeah. Yeah, it is. The staff has to know that my daughter is going to come in and this is what she's going to do. And if you see any issues, please let us know. Yeah. They're not, they're not afraid to hear it. It's got to help that. I don't know. Maybe some of them were there when you fired your other one, so that they know you're, you're serious, or at least they've heard of that, right. That you're not beyond firing them if you have to. Well,

none of those people are there either. Cause that's a big thing you have to learn too. You can't be friends with the people you work with. It's such a big learning lesson. You know, I, I, the way I used to put it is you want to be friendly, right? But the whole thing where I say, well, this is a family. No, it's not a family. I mean, it's a family of sorts, but yeah,

you are the boss and there is a line there that we have to manage is my experience. What do you think? Yeah, I have a couple of millennials that run my company now and it works great because I'm in Texas and they're in Vegas now. But it used to be they would come in my office and gang up on me and I would listen for a little while and we would discuss it and then I would go, okay, here's what I think. Get out of my office. Okay.

And then they would, you know, we agree to disagree and that's fine. That's right. But at the end of the day, there's one boss, right? And you have to make decisions. Yeah. And if they can live with that, then they stay. And if they can't, then there's the door. Understood.

All right, let's start to get to it a little bit more. We've talked about it already, and I mentioned it in the bio, but tell me a little bit more about when you look at your clients, what are some of those common operational, administrative, back office challenges that they come to you with?

Well, bookkeeping is the main thing that we do. And my philosophy is bookkeeping is not accounting. And I think there's a misconception with that. People think that bookkeeping is something that you do at the end of the month or maybe at the end of the year. You just take all of your stuff to the accountant and somebody data entries it magically. You have your tax return. But bookkeeping is actually operations.

It happens every day. It's a check. It's an estimate. It's an invoice. It's a phone call with a customer. It's a phone call with a vendor. It's what happens every day. They call it full charge bookkeeping for a reason. Accounting is looking at numbers and thinking about the future and auditing and that stuff.

The office squad does bookkeeping. We make sure that the receipts are in right. We make sure all the documents are organized. We put your P and L on your balance sheet together. We look at it with you, make sure that the numbers make sense for you and bug you until you get us what we want and need to get you what you need. So we do a lot of nagging. My oldest client's been with me for close to, gosh,

Wow.

then that it kind of clicks and they get it and they stay and they stay a really long time. What's what's in those three months? What's from an operational perspective? What's one of the key habits that you're helping them develop? Well, they have to pause and listen that the things that your bookkeeper that the people that are trying to do a job for you need, you have to listen to them. You have to, you have to get those things for them or give them the power to get those things. Yeah.

And do you think that they haven't done that because they've seen this as a, again, a back, I mean, even the name of it implies that something that's not important, I'll get to that eventually, that can wait. Yeah. Bookkeeping is not important until it starts yelling at you, right? Until it's tax time. Right. Or as long as I got money in there. Or until you're navigating your business blindly because you don't have that data to tell you what's going on.

As long as there's money in the bank, I'm fine. And now you've got it where you can get up in the morning and you can see in your phone that you have money in the bank and you're fine. But what's going to clear that day? What do you need to pay next week?

What you need is a dashboard and QuickBooks has it. You can get, if you could get up in the morning and pull out your iPad and look at a dashboard that says, okay, this is what you have in the bank. This is what's going to go out next week. This is what's going to come in. Then you have a clear picture and your bookkeeper can do that for you. If she has, he or she has the right information and it'll do it automatically. I have no problem with AI. I love hooking things up and making it work.

But you've got to take the time to get all that stuff set up and someone needs to monitor it. Yeah. This is Henry Lopez with a brief break from this episode to tell you about our sponsor, Bamboo HR. Bamboo HR.

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What are you seeing is the impact of companies, businesses that have remote or virtual teams? How does that potentially exacerbate all of the back office operations? I am not a big fan of remote teams. My team works in a building together in Las Vegas. What are the reasons you don't like it as it relates to the impact on back office operations?

I don't mind a hybrid. So we have the girls can work, girls or guys, can work from home when they need to, if they don't feel well or the kids are home from school or they have the option to do so. I can work remotely from Texas because that's where I am. So we have the power to do that. But they only get to work remote after they've been with the squad for a year. You work together, you fight together, you go down together. And...

Tax season and the things that happen when it gets really busy around January, February, and March is really hard in our industry. And I'm sure industries all over have the time where it's, you know, there's a hard time where everybody has to pull together. Reception helps the bookkeepers and admin prints statements. And we all work together to make things happen.

And we have a sense of urgency. If somebody calls and needs something and Susie's out on vacation and nothing can happen until Susie gets back, that's not acceptable. Somebody else needs to know how to do it. So at the office squad, we cross train. There's never one person that knows how to do it. We will get it done. So anyway, there's a bar in the middle of an office squad.

coffee bar in the daytime, and sometimes there's cocktails at night, and we do networking. So it's a whole different camaraderie around this world that we work in. And yes, you can work remotely from home, but the camaraderie of how we work together is very important to me. Okay, let me ask you this question.

Why in your experience with your clients is it better for them to outsource these tasks of bookkeeping and other operational tasks to you rather than them hiring somebody, hiring a bookkeeper in-house and doing these things in-house? Why is it for the clients that you serve, why is it better for them to outsource it to you rather than them staff it themselves?

Are they going to hire one person and teach them everything? No, let's say I have a team. I'm at the size where I could justify hiring a team of people to do bookkeeping and other back office functions. That's fine. If you're big enough to do that, we have clients that we've grown big enough and they've left us and done just that. And that's fine. So is the sweet spot for you?

the smaller businesses where I don't have that resource and I don't want to invest in that resource? Correct. What's the best practice that you would recommend to business owners to at least minimize the potential for embezzlement within your group to happen? Not your group, but their employees. We have three sets of eyes on things. Whoever's putting the data in is not doing the reconciliations. So there's two sets of eyes there. And then we have a lead approach.

bookkeeper that oversees the stuff at the end of the month and looks it over a third time and looks at all the reports. And then as an owner, what, in your opinion, even if I outsource to you, what should I not let go of? In other words, what am I still responsible for as far as what the bookkeeping produces, the financial statements, if nothing else?

What do you think a business owner should still be involved in to make sure they've got their finger on the pulse of where the money is going? Always sign your check. And you don't always have to physically sign them. We have clients that, you know, we have a, we can print their signature. We have a signature stamp and we have ACHs. But what we do is we send them a list of what needs to be paid and they

The gentleman that I told you we've been working with for 15 years, he'll say, you know, pay so-and-so. He'll just call and say, pay so-and-so this much money. And then the bookkeeper will send him an email that says, you told us to pay so-and-so this much money, please approve in writing. Yeah.

The email's back. I've been doing this for 15 years. I told you to do it on the phone. Why do I have to write it? There's so many stories of that. People committing fraud and others committing fraud pretending to be somebody, right? Yeah. So every time, there has to be a written approval. And

You know, he's still, you know, every time. He doesn't like it. Yeah, he just, that's just him. But, you know, he loves us. Everything that leaves must be looked at and approved in writing. You think we should look at our balance sheet on a monthly basis? Yep. What are we looking for there? What should a business owner be looking for at a high level?

There should be no negatives, no negative numbers anywhere. And if there is a negative number, like, you know, a negative equity someplace, you know why it's there. You know, where's your AR? Is it an ungodly number? Why is it a big number? I'm a big believer in getting as granular as makes sense. And I know it can explode some CPAs' minds because it adds complexity. But

as granular as I need it as a business owner for that data to make sense to me. But what are your thoughts? As a business owner, I understand it, but less is better.

Right. Summarize for me, who's an ideal client for you? Tell me that again. Our ideal clients are companies that are under 5 million, under 50 employees. We do scheduling and dispatch. We love the small mom and pop, test control, HVAC, the companies where the husband and wife started it and the wife was the bookkeeper and now she doesn't want to do it anymore.

She certainly doesn't want to be blamed anymore for things. You know, let her go do something else. Exactly. We love those. Because those are, going back to that point, those are companies where they're better off investing in hiring another technician, let's say, than hiring a back office staff. Yeah. What's unique about us is you can have someone to answer the phone, a bookkeeper, a manager to kind of manage all of those people and

someone to help with all the paper in the middle for less than the price of one employee normally. So we also have, if you're in, as this franchise thing builds out, we hope to have an office squad in more communities. So you have one in your neighborhood and there's co-working and there's executive suites and maybe a little networking and meeting other business owners. Yeah. Yeah. That's a great idea to combine those two things.

I think the other thing I always tell people about these types of things, which are not your core competencies, right? So that, that HVAC company, you know, bookkeeping is not what they, that's not their core, right?

It's serving HVACs and serving their customers, right? But the other thing that you get by going with someone like you is you have now, you can bring to it diverse expertise and best practices because you're continuously learning from how others are doing it, how you're helping others. As opposed to somebody I might hire, they become siloed

within my organization. Does that make sense? Yeah. You have the bookkeeper that's been your bookkeeper for 20 years and you don't want to change it. And they become stagnant. Who knows? Whereas in your team, because of the nature of the business, you're staying fresh. You have people on board. You have more resources. You have access to resources that I'm never going to have as a small business owner if I build my own team. We have everything in the cloud. Yeah.

And you don't have to buy computers and you don't have to provide all that stuff. You don't have to worry about HR and salaries and all that fun. We have to do that. All right, let's wrap it up here. What's one thing you would say to the small business owner listening, you know, that HVAC business owner, the electrical contractor, whatever the case might be, as to why they should consider outsourcing these operations, the back office stuff, the bookkeeping and related tasks?

Vacation. I have an HVAC company that came to us for phone answering and she never got to go on a vacation until she hired us.

And now she's able to go to her home country in Cuba, I think. And she came back and thanked us that she got to take a vacation without having to worry about the phones. Yeah. So freeing up that time and allowing you to concentrate on, again, where the core strengths are, building the business as opposed to being bogged down with the

transactions of the operation. If the operation runs without you, then it has value and someday you might be able to sell it. Exactly. Well said. All right. Where do you want us to go online to learn more about The Office Squad? We have a great website at theoffice squad.com. So tangohotelechooffice squad.com. And you can email us at help H E L P at

theofficesquad.com. And I didn't touch on it, but you offer a discovery call for somebody who might be interested and wants to discuss potentially the services that you offer. Under services on that website, it's called COO service and it's a free discovery call. We get on the phone for an hour.

or 45 minutes and talk about what's going on in your business, what you're happy with, what you're not happy with. And I give you a little insight and maybe some help on what you could maybe do better. Dita, thanks so much for taking the time to be with me today and sharing this information. I appreciate you being here today. It was fun. Thanks, Henry.

This is Henry Lopez, and thanks for joining us on this episode of The How of Business. My guest today, again, is Dita Clifton. I release new episodes every Monday morning, and you can find the show anywhere you listen to podcasts, including at my YouTube channel, The How of Business YouTube channel, and at my website, thehowofbusiness.com. Thanks again for listening. Thank you for listening to The How of Business. For more information about our coaching programs, online courses, show notes pages, links, and other resources, please visit thehowofbusiness.com.