Interview: Trevor McCandless of Fusion CPA

Parag Mamnani: Hi, everyone. I’m Parag with Webgility. This video is being recorded as part of our series called BeatIt. I’m talking to entrepreneurs and experts in retail on how they’re beating COVID-19. Today, I’m excited to introduce you to Trevor McCandless. He’s the founder and CEO of Fusion CPA. He’s got over 15 years of experience in finance and taxes. He’s an amazing entrepreneur, a serial entrepreneur and he likes to think about financial numbers very deeply so he helps a lot of folks find results in their everyday transaction. Please, welcome, Trevor.

Trevor McCandless: Like a clap right now.

Parag: Yes.

Trevor: Thanks for having me.

Parag: Great, thank you for being with us. We’d love to hear a little bit more about Fusion CPA and your background, Trevor.

Trevor: We’ve got 12 CPAs. We’re here in Atlanta, Georgia. We focus really on three core services with our clients and we’ve got a ton in the retail, multi-location to retail, e-commerce space, but we focus on tax compliance, tax planning, outsourced accounting, outsourced controllers, bookkeeping, that kind of work and then outsource CFO work as well.

Parag: Excellent. Being based in Atlanta in Georgia, I know they’re going through a very different sequence of events than most of the other parts of the country, do you serve a lot of local clients or are your clients all over the country and are you seeing a different impact across the US?

Trevor: It’s an interesting way to put it, interesting sequence of events, where the governor announced, I guess, that we’re opening some companies tomorrow. I guess tomorrow is Friday, then on Monday as well. We’re, the entrepreneurial community for the most part, I think we’re staying as is and just continuing to operate remotely. Our clients are all over the place, really they’re all over the place.

We’ve got, obviously, a ton here in the Georgia area, but, yes, the effects, it varies by state. I was on the phone with one of our clients in the e-commerce space right before this and he ships out and sells model planes and model boats. Some of the conversations that we’re having is, well for him, the CARES Act just came, have you dove deep into the paycheck protection plan, any idea?

Parag: Yes. In fact, that’s one of the topics I want to dive into today. It sounds like the House is– I don’t know, they already voted or they’re going to be voting this afternoon to pass the additional what, $450 billion?

Trevor: I thought they had passed it, but there could be another voting process, for all I know. Everything has been changing by the minute, by the day. The bill comes out and everybody is scrambling to interpret, over the weekend, what has just come out with very little guidance and it can be interpreted in a lot of different ways and then they put out a little interim guidance and then our calculations changed and then they put out a little bit of more interim guidance, our calculations change. The accounting community is losing it.

Parag: Sounds like despite the push on personal taxes that delayed timeline, sounds like you’re working double-overtime.

Trevor: Double overtime, triple overtime, easy. We actually, last week was April, 15th, so in honor of April, 15th, I took a day off. [laughs] I had to have a couple more drinks than I normally would.

Trevor: Yes, we’re working triple overtime. Fortunately, with the PPP program, I think we got it down now. We got the calculation down. There’s a little bit of nuances still going on with partnerships and self-employed individuals, but I think we’re on a good spot at this moment, we’ve been trying to be as much of a head of it in thought leaders in the industries as much as we possibly can.

That’s actually one of the piece of advice that I’m trying to give as many more times as possible is network with everybody you possibly can in your industry. We’re all coming at it with different perspectives of how to just get operations done, how we’re adding value to our clients and customers and, heck, even expanding our current products and processes. I’m trying to say, if you don’t have a mastermind, find one if you possibly can.

Parag: Sure, that’s great advice.

Trevor: I was just on another call probably with 20 other CPAs, all Georgia CPAs at about noon today, and we had kind of like a working lunch of what we’re seeing and it’s kind of fun debate that we all have. I don’t know if I answered your question or not.

Parag: No, that’s absolutely right. I guess I am curious, since you’re highlighting PPP, is that the bulk of your work at this point or are you also seeing retailers maybe prioritize things a little differently because I’m sure a lot of them have either already gone through some cost-cutting measures or are really starting to dig into their finances to find ways to really overcome the downturn?

Trevor: March 10th always stands out to me as the day that COVID slapped us all in the face. Surely thereafter, I think I put out a video called the 3 Forces Of Agile Execution In a Downturn, of understanding our metrics, our leading indicators, if we need to make moves and do a reset, if revenues drop 20%, we’re taking a look at our fixed maybe labor costs and if revenues continue to dive, if they are diving, for some they’re not diving, about 20%, 40%, we need to make decisions very quickly about adjusting any fixed cost we might have and having open real conversations with leadership as well as all the employees because it really is–

Everybody is saying we’re going through this together, but it’s so true. It rings true every single time it’s said. It’s a lot of transparency with employees, partners, vendors, the whole mine, I think it’s just worthwhile.

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Parag: Diving into all of the line items, especially the big ones in terms of payroll and vendors to figure out where to make the cuts. You do spend I think a lot of– From what I understand, a lot of your clients are retailers and you mentioned some are seeing the downturn. Overall across your customer base, would you say that the declines are being balanced by the upswings or do you feel like there’s a different pattern there?

Trevor: I don’t think they’re being balanced by the upswings, I think the declines are the declines and we’re hoping that they’re short-term in nature. It’s kind of, what can we do now? It’s, let’s get lean, operate lean, but also, I think there’s reason to be optimistic as well. This is a time, I think we’re all from a personal family standpoint, we’re getting out maybe walking around the neighborhood as well and we’re actually very grateful for that.

It’s an interesting dynamic going on there, but it’s also the same thing that we can do with our businesses in a time that we can look internally at our processes from an operation standpoint, it can be our training processes. We have a lot of clients that do that in a very ad hoc way, in a very hands-on way which is fantastic, but we can still hire people while obviously doing remote and we can develop processes from day one of training all through day 30 to day 60 and we can document that now if we’re looking for things to spend our time on.

Then it’s also, another thing when we’re seeing—the question was are we seeing the downturns and upturns evening out. I think it’s a doubling down of marketing efforts as well in analyzing our markets. It can be as simple as our marketing newsletter that we’re working on, like when’s the last time you truly segmented that database by industry, by customer tab, by buyer persona? Talking through just the different marketing moves that can be made and– I’m curious, have you ever heard of a book called EOS Traction–

Parag: No, I haven’t.

Trevor: -by Gino Wickman? Fantastic book. We actually send a copy of that book to all of our new clients so we can talk the same language, but we use the framework of traction when we’re doing a lot of our management consulting around these three forces of operations, sales and marketing and finance. It’s a time to look internally and we can beat all of our numbers up and beat our processes up in each of our departments and see if we can make them better. I’m optimistic about that.

I get pumped about being able to address the– And it can be sometimes the elephant in the room of do we have the right people in the right seats? Are our marketing efforts aligned? Do we have KPIs and scorecards that we’re monitoring on a weekly, monthly, quarterly basis to achieve our 12-month goal or our 36-month goal? Does that make sense?

Parag: Yes, it does. I think in several of the interviews something that’s really stood out to me is the creativity that really helps entrepreneurs get off the ground is what really comes to light during these challenging times because they really just find ways to trim the expenses, find creative ways to just optimize. In fact, I spoke to a large retailer, well, I guess they’re are a small business but $10 million-plus retailer across multiple channels and they’re using this downturn to actually invest in a rebrand and finding new demographics that they can target.

I think what the struggle really is, I would say, it’s that mindset which is why we in our campaign is all about beating it because you first have to really get over that mental block and the shock factor of what’s happened in the economy. There are really a lot of silver linings out there assuming, of course, that number one you’ve got your team and everyone’s in really good health and then second, as a business owner you have a strong sense of your finances, your fundamentals so you can start to think longer-term and actually try to capitalize on the moment.

One challenge though I think is really for those that have brick-and-mortar locations. Do you have retailers with physical locations and how are how are they managing this crisis?

Trevor: There’s ones that are stuck, all the restaurants. Obviously, you can do your takeout and to-go but it’s much more hard for them to diversify and bring other revenue sources in. I think a lot of our client base, we just eat, drink and live this, we’re diversified and selling online, all of our clients are. We’ve got one client, 15 location, the company is selling hair extensions. The walk-in– Fortunately, they have a ton of online business but they’re probably in eight different states. That walk-in business is obviously gone and people aren’t buying as many hair extensions right now.

That’s where this PPP loan we’re able to have the conversation there, is like hopefully they’re giving us 10 weeks of cash. We have an 8-week forgiveness period calculation but we’re getting 10 weeks of cash that can hopefully stem this a little bit as we all hope this curve flattens and we can hope to get back to operations at some point. Go ahead.

Parag: One thing that you said, diversification is another keyword, the theme that stands out because the folks that are diversified across different channels have a lot more resilience. Curious, and I don’t know if you work with clients at a channel level but are you seeing any insights from your retail and e-commerce multi-channel clients on how different channels are performing, any categories that stand out to you?

Trevor: That hasn’t come up nearly as much, honestly. The multi-channel, the conversation as I was– I tend to ramble, that I was having earlier with our client that sells these model planes and ships, our conversation totally went to his supply chain. His importers are based out of Illinois and California and of course, they’re not essential so they can’t ship the goods. While his distributor is in Connecticut and so while he has orders on hold and pending through FBA Amazon or just orders he’s managing himself out of his warehouse, fortunately, his distributor out of Connecticut has plenty inventory at the moment so he just got another truckload in yesterday.

He’s managing the warehouse with his small team. Also, we get into another side of this conversation of the bill in that everything that’s been introduced is some of his warehouse people while he hasn’t laid them off, what if they go and try to apply for unemployment and unemployment is up to maybe $900 a week? They can make more on unemployment than they would working for him. This is an interesting thing, and we’re having that same discussion with some of the restaurant clients that we have.

Restaurants are not a focus of ours but we have a lot of serial entrepreneurs as clients and they sometimes openmore restaurants and bars and that’s just is what it is. That’s an interesting little dynamic that is also going on while we’re having the funding, small proportion of our clients have gotten that PPP loan. I think you probably saw the stats, maybe 6% to 7% of small businesses out there got funding. Hopefully, this next round of cash gets down to small businesses.

Parag: I was fascinated to see some of the numbers and how poorly executed the original program was. Nonetheless, the money got out there and I’m excited that whichever side of the political spectrum you lean on, it’s only a good thing that we have more money out there to support small businesses. The effect you just pointed out is a fascinating one in terms of unemployment benefits being greater than what you might make on the job especially for some of those associates. Do you have some ideas on how businesses are tackling that?

Trevor: You hope there’s a big loyalty factor. That your employees, if you’re in that position, are faithful to you and want to help and be in this together, beat it together versus sitting on a couch and collecting unemployment check. That’s what the hope is. A lot of employees at a lot of companies, not just our clients have been with these companies for a while and they want to get to work. You can only watch so much Netflix.

Hopefully, we’re working for companies that have a great culture and that we enjoy the people that we’re working with and it’s not so much like work. There’s obviously monotonous tasks that we all have, but we want to like the people that we’re working with. That’s what we’re banking on, that that’s what’s going to come into play. We’re not going to have to worry about it too much.

Parag: Loyalty is definitely key although certainly for businesses that have maybe already done the layoffs, it’s a very tricky time when– You need to obviously bring those folks back or save some of that payroll in order to get that forgiveness component of PPP but then you have folks that are maybe off your payroll that are able to enjoy, I guess, a greater salary for not working, which is just a crazy, crazy dynamic, like you said, just so much is changing so quickly it’s hard to figure out.

Trevor: At least in Georgia, I think of a potential $900 check that someone might get $300 from the state and $600 I think is from Fed. I don’t think back in this economic stimulus bill that was passed in the 2008, 2009 years, I don’t think there was a federal component to that. I think that’s really what’s thrown everybody in a loop here is that the state of employment of itself is barely anything. When you throw in the federal piece, that’s what’s unique about this scenario.

Parag: Seems like you’ve seen this story one time before. I’m curious as now you look ahead, I know you don’t have a crystal ball. Looking ahead into especially from what you’re hearing with your clients, you have a sense of timeline when you think business might get somewhat restored? Do you see some trends in terms of permanent change and consumer behavior that’s impacting your customers? Let’s talk a little bit about the future.

Trevor: Again, I think I’m optimistic but I don’t think that anything is going to change drastically back to normal until there’s a vaccine. Conferences, travel is a huge differentiator in growing business, making partnerships and connections with potential customers. That’s huge. Until travel and conferences, I had to cancel maybe like eight conferences I was going to go to this year. Just those casual conversations you have over a beer or something like that after the conference exhibit hall day is done, I love those That’s going to slow down pipelines. Until that is there I don’t think we’re 100% back to normal with a vaccine. It’s kind of adapting as much as you possibly can in the meantime. In our client base, I think the way that our clients operate and this is part of us just having conversations and doing proper management and business planning is that we’re diversified on how we’re bringing in cash and how our marketing. It’s not all just face to face, person to person. Timeline is harder to say, but percentage of revenues, until we get there, 60% to 80%, I think is might be that operational kind of numerical– Unless you’re in maybe the toy business right?

Parag: Right.

Trevor: If you can see I’ve got a Lego set back here.

Parag: Nice.

Trevor: It’s kind of a Lego tree.

Parag: I have a two-year-old and she’s already into it. Definitely likes it, but the toys are filling up. 

Trevor: [laughs] There’s going to be just a reduced revenue cycle until that comes about and that’s– I wish I had that crystal ball when that vaccine will come out, but business still has to happen after that. If we think of it if it is March 10th we had a week and a half of dead time where our employees and our families and us, we had just to get food and figure out what we got to do here. I think sales operations are going to continue. We’ve got to do it. People are still sitting around and we have business to do and progress to make. It’s fingers crossed, man. I don’t know if that answers your question?

Parag: Yes. No, it does. It did also speaks to your entrepreneurial spirit because by design we’re all– As a fellow entrepreneur, we’re all very optimistic about the future. That’s what drives us and it drives the economy ahead, right? This is why small businesses power the US economy. I’m just delighted that there’s more funds coming to the rescue at least for the next two to three months that these businesses can keep their doors open. I know we spend a lot of time in these videos talking about some of the positive stories because that’s where we want to focus on.

We really wanted to make sure that everybody understands there’s also opportunity here. I know times are tough for a lot of retailers whose stores are shut down. I’ve personally talked to some folks who’ve seen 80% plus drop in their revenue because of being in tough retail categories and non-essentials, but the more people are staying home it’s actually coming back. We’re coming back to a new life. We’re all adapting to the new normal. It’s fascinating you mentioned March 10th. That was around the time when we were all rushing to the grocery store not knowing whether– Certainly stocking up on TP apparently.

I don’t know, for some reason, everybody thought we wouldn’t have food and we wouldn’t have toilet paper. That aftershock is kind of gone. Now, it’s fascinating to see how businesses are adapting. I want to end with a couple of questions around– We do talk and work with a lot of bookkeepers and accountants. How are you managing this time with double, triple-overtime of work, and any advice you would have for accountants and bookkeepers out there who really want to help and who want to find ways to contribute during this time?

Trevor: How are we managing time? Take a day off. We still have weekends. [laughs]

Parag: That’s right.

Trevor: It’s a little easier for, I’d say, the accountants and bookkeepers that have probably been working virtually for a while. Half of our team had already been working virtually whether they were in Atlanta or not. Half our team was very in office-oriented. The tax team really– We like to get together and talk tax. It’s been a little bit more of an adjustment there. Advice is just take that time off because burnout is 100% real and none of us want to get burned out.

When I think back of why I even started my CPA firm, Fusion CPA and why I hired as quickly as possible is because I knew if I always tried to wear 8,10,12 hats that I was going to burn out and I was going to hate my job. That’s a disservice to our clients. What do you do when you’re burned out? You don’t answer emails, you’re short. We don’t want to operate like that. I would just tell them to just keep that in mind. Get that walk, health and exercise is huge. Just going for a run in the morning for me, it refreshes me. I’d say get outside and try to keep that and focus and eat sardines.

Parag: Well, that’s a good one.

Trevor: I loaded up on sardines at the grocery store. [laughs] My wife was like “We’re never going to eat all these things.”

Parag: Awesome. Trevor, this has been very insightful. Thank you so much for taking the time out of your schedule. Really insightful tips for both retailers and for bookkeepers, accountants out there. I hope everyone stays safe and looking forward to those conferences and travel being restored to normalcy so we can see you in person, Trevor, and grab some of those beers after one of those conferences.

Trevor: Love it, man. Thanks for having me.

Parag: Awesome. Thanks so much. Will talk to you soon.

Trevor: Bye. See you.