Charles J Read is a Certified Public Accountant (CPA), U.S Tax Court Practitioner ( USTCP), member of Internal Revenue Service Advisory Council (IRSAC), and the Founder of GetPayroll.
Charles is an accomplished senior executive and entrepreneur with more than fifty years of financial leadership experience in a broad range of industries and the author of four books with the most recent one being, The Payroll Book: A Guide for Small Businesses and Startups.
Listen to this informative Publish. Promote. Profit. episode with Charles Read about using a book to sell a boring business.
Here are some of the beneficial topics covered on this week’s show:
– How payroll is more complicated than simply writing your employees checks.
– Why writing a book isn’t to make money off its sales, it’s to get clients.
– How the penalties can be as high as five figures if your employees aren’t paid correctly.
– Why your book should be a reference guide instead of a novel.
– How writing a book is a great way to get booked on podcasts.
Connect with Charles:
Links Mentioned:
thepayrollbook.com
getpayroll.com
Guest Contact Info:
Twitter
@GetPayroll
Instagram
@getpayroll
Facebook
facebook.com/GetPayroll
LinkedIn
linkedin.com/company/getpayroll
Rob Kosberg:
Welcome everybody. Rob Kosberg here with another episode of our Publish. Promote. Profit. podcast. I have a great guest for you today that I think you’re really going to love. Charles Reed is a CPA, US tax court practitioner, and a member of the IRS advisory council. So, pay attention. If you don’t want to get audited, he’s the guy you need to listen to. He is also, of course, the founder of GetPayroll. He’s an accomplished senior executive and entrepreneur with more than 50 years of financial leadership. He’s the best-selling author of four books, and most recently The Payroll Book: A Guide for Small Businesses and Startups. Charles, thanks so much for being on the podcast. Great to have you on today, my friend.
Charles Read:
Rob, it’s my pleasure. Thank you for having me.
Rob Kosberg:
You have 50 years of experience in financial services. How do you stay awake at night? It’s so exciting.
Charles Read:
If I have problems sleeping, I always have my book to read.
Rob Kosberg:
All right. Fair enough. I appreciate a good laugh. So, let’s dive in. I’d like to talk first about you, about GetPayroll and then relate it all back to your book. So, tell me who, in particular, you serve with your or business? Obviously, with your experience, you could serve anybody but who do you focus on serving as an ideal client?
Charles Read:
Our target market is the under 50 employee market, small businesses. In government terms, very small businesses. We service some bigger ones. We service up to three or 400 people, but what we go after for marketing is the small guy, the small business that doesn’t get a lot of attention, that doesn’t get the service that they need, that doesn’t have a big enough staff to handle things like payroll. With payroll, it seems simple to just write paychecks. That’s like saying, well, cooking, you just need a fire. Well, no, you need a fire, you need pans, you need food, you need ingredients, you need recipes, you need cooks, you need all these other things to make meals. So, fire’s not enough. Well, writing checks is just the beginning. That doesn’t even begin to touch the tax aspects. So, our average client’s about 17 people. The boss still runs it. He may have somebody else write the checks, but there’s nobody there that understands payroll. Nobody understands the tax aspects and the problems that occur. That’s where we come in. If you get somebody like 500 people, they’ve got a payroll expert, they’ve got somebody that understands it, that’s there in the HR department or the accounting department, and he oversees payroll and he’s a tax expert on employment taxes and so on. You’re paying him 80 grand plus, maybe up to $150,000. Well, we fill that in at 30 bucks a week.
Rob Kosberg:
You mentioned very small businesses, government terminology. Quantify that for me. So, what does that look like?
Charles Read:
Government says small business is 250 and under, employees. Micro business, a lot of people put at five. We have clients that are just single people. They own their own corporation and they have to do taxes. So, not a big deal. We’ll gladly take care of them, but our target market is the under 50, the competition. At 100, it starts to get really, really vicious. Our major competitor, one of our major competitors has a salesman that calls on every 100 plus employee business at least four times a year. They offer them literally anything to get the float. It’s a different business at that point. We don’t choose to compete there. We like to take care of the small business; the small business owner and we’ve got clients who have been with us for 30 years. They’re friends. We get invited to weddings and birthdays and funerals and all these things, because you can’t be in somebody’s pocketbook for 30 years and not develop a relationship.
Rob Kosberg:
No doubt. Talk to me about the payroll book. You’ve written four other books besides that; this is your most recent. What was the thinking behind writing that book? You’ve already said who it’s written for, the small business and maybe ideally very small business. What can that business owner expect to get out of it? Talk me through why you wrote it and from the perspective of the reader, what they can expect?
Charles Read:
I get questions all the time and we get some of the same questions over and over, from small businesses that are clients or potential clients. There’s nothing out there in the marketplace that answers those questions. The nearest thing is The Payroll Source, and it’s published by the American Payroll Association. It’s $600, for a reference guide. Well, small businesses aren’t going to spend 600 bucks. So, I said, “Let me write something that will fill that gap for small businesses.” They don’t need some of the things that’s in The Payroll Source, it’s just for big businesses. So, let me write something for my marketplace that gives them the information they need to understand about payroll. It’s designed to give them an understanding of all the aspects of payroll. It’s set up in three sections. The first one is all the laws and entities and penalties and everything else. Second section is how actually to do a payroll. If you’ve never done one, I’ll walk you through it, step by step. The third section is all the ancillary things, workers comp, handbooks, illegal aliens, PEOs, technology, and so on. It’s really a reference guide. It’s not something to sit down and just read. It’s to have on your shelf so when you have questions come up or you need information. That’s why we wrote it. It took it a lot longer to write than I expected. It took two years.
Rob Kosberg:
I certainly don’t think that you ever expected to sell 100,000 copies of The Payroll Book, right?
Charles Read:
It’s not to make money. The book is not to make money. It’s to get clients.
Rob Kosberg:
You mentioned before that you get questioned all the time, certain questions and so you wanted to make a reference book. Talk to me about some of the questions that you get typically from small business owners and that you answer in the book.
Charles Read:
A couple of things. For very small business and startups is, “Well, I’m just going to pay people as 1099ers. I’m just going to pay them as independent contractors.” Some people just say, “Well, I’m just going to pay them under the table,” which is fraud. You don’t get the choice whether they’re an independent contractor or an employee. There’s a whole body of law that goes back hundreds of years, that determines all of that, and it changes. March of this year, a new rule was supposed to go into effect that the Trump administration had promulgated. The Biden administration canceled it and said we’re going to do something different. They haven’t done it yet. It changes and you don’t know. US Department of Labor says 70% of businesses misclassify employees, either as independent contractors versus employees or as subject overtime and not subject overtime. The penalties can lead into easily five figures for a small business. They can be devastating. That’s one of the big questions is, “Can I pay these people as independent contractors?” We go into it in detail. Another big question is entity. What entity should I be? Should I be a sole proprietor? Should I be a corporation? That’s the first chapter in the book, is entity selection and how it affects payroll. As a sole proprietor, you’re never on payroll. You may have people on payroll, but you’re never on payroll. You don’t take payroll. You’re not allowed to. You can take money elsewhere, but you don’t do it as payroll. There are all these things in how you want to establish it. The next biggest thing is I got this letter from the IRS and they want money. I’ve got this tax penalty. What do I do? In many cases we can get it abated, particularly the first time. Sometimes multiple times, because there’s ways around it. People don’t understand what they need to do to avoid those penalties. My analogy is simple. When I grew up, Pele was the best soccer player in the world, maybe the best soccer player of all time, wonderful athlete, still around. If you take him to put him in a New York Yankees uniform at second base, he’d be absolutely lost. He doesn’t know the rules, the game, the field, the equipment, the players, nothing but he is still a great athlete. So, if you take an entrepreneur, he’s a chef, he’s a manufacturer, he’s a dog groomer, he’s a lawyer, he’s a doctor, whatever, he’s really good at what he does. He knows that really well, or he wouldn’t stay in business but when it comes to employment tax, he’s Pele at second base. He’s lost. That’s where we come in. The book is designed to do two things, to give them a lot of basic knowledge of what goes on in the payroll, and the second thing is, when they throw up their hands, my phone number’s in the book.
Rob Kosberg:
I’m an entrepreneur. I have a small business with a dozen employees and another group of 1099s, and I’ve had to deal with all of this, and it’s challenging. The thing that I like is, you’ve taken, and forgive me, I mean no offense, but you’ve taken a very boring subject matter, and one that no entrepreneur wants to get involved in, not only is he Pele on second base, he doesn’t want to be on the field. He doesn’t want to be there. She doesn’t want to be there. You’ve taken that subject matter and you’ve put it into a reference guide, which isn’t meant to be a book that’s read, cover to cover. It’s meant to be a guide when people have questions. I think that’s brilliant for a couple reasons. I think it’s worth noting because if you’re listening to this and you’re thinking, “Well, my business is really boring, and I can’t write a book on this because it won’t be interesting to anybody.” Look, if you answer questions all day long in your business, there’s your book. We’ve done books for accountants, we’ve done books for roofers, we’ve done books for landscapers. These are not books that are meant to be read cover to cover, like a novel, they’re reference guides. I love that you did that. I think it’s a really, really smart use of your energy and your efforts. Congratulations on that, Charles. I love it.
Charles Read:
Thank you. We’re pleased with the book and we’re pleased with the results we’re getting from it.
Rob Kosberg:
That’s the next thing. How are you using the book? Obviously, you’ve already mentioned one thing. You have your telephone number in it. When entrepreneurs throw up their hands and say, “Why am I reading this book when I can just call Charles,” that is one way but how else are you using the book and tell me about you mentioned we’re getting great results from it. What does that mean?
Charles Read:
I’m using it as an intro to a podcast, very frankly. Here we are, exactly. That’s why you’re talking to me, because I have a book. We’ve done now probably 200 podcast interviews in the last year. We do three to five a week and on every one of them, as I will for you, I tell the interviewer that his listeners can go to thepayrollbook.com, enter the discount code would when we podcast, and we’ll ship a free book. So, I get their email and they get my book. We stay in contact. Very few of them ever cancel that email or say take me off your list. Very few of them ever do that because they have an interest in payroll and we continue to provide them content. In the payroll business, in selling payroll, there’s a truism. It’s never, no, it’s just not today. I have had clients come to me, I had one who’s a very good client now, brought me four major restaurants because I’d worked with his father 14 years earlier. He was doing payroll for these businesses. He got tired of doing it, he’s a CPA. He called me one day and he says, “Charles, you still do payroll?” I said, “Yeah.” He says, “Would you be interested in some new clients?” I said, “Oh yeah.” So, by getting in contact and knowing people who have an interest in payroll, and if they have an interest in payroll today, frankly in 10 years from now, they’ll probably still have an interest in payroll. Whether it’s where they’re at or where they’ve gone to. Lots of times we get clients that the accountant, the bookkeeper, whoever, has been doing payroll with us, leaves, goes to another company and calls us and says, “Hey, can you do payroll for me here?” Of course. It’s building an email list; it’s building contact with people who are interested in payroll. Nobody orders The Payroll Book because they’re not interested in payroll. I’m sure I’ve sold a few or given a few away to competitors but so be it. They can get it from Amazon for $22.50 at the moment. So, they’re welcome to it. I use it, we give it away at conferences, we give it away at shows. We did a business expo here in Dallas recently. We gave away a couple hundred of them. Again, nobody picks it up unless they’re interested in payroll. If they’re interested in payroll, sooner or later, they’ll become a client.
Rob Kosberg:
Give me some specifics, if you can. You said you’ve been on 200 podcasts. This is one of the examples that you used. You’ve been on 200 podcasts. At the end of every podcast, you give the listeners an opportunity to get a free book, because you know that if they’re wanting a free book, they’re not just trying to fill up a shelf. They have a question about payroll. Approximately, how many emails have you added in the last year from that strategy? Can you talk about specifics? How many new clients have come on through that email list and through a continual reaching out in the last year of those people?
Charles Read:
We probably shipped out 2,000 books. We’ve probably picked up eight or 10 clients in this year and we probably have four or five more online already for the first of the year because that’s a major time to change payroll services for the first payroll in January. An average client for us is about $1,500 a year of revenue. In the payroll industry, a client normally lasts around seven years. So, we’re looking at a new client would generate at least $10,000 of revenue.
Rob Kosberg:
So, you picked up 10. There’s a hundred grand right there.
Charles Read:
I give out a book that costs me a few dollars and for every few or 100 I give out; I pick up a $10,000 revenue. Our retention is much better than industry average because we provide really good service and we provide compliance that our competitors don’t. I’ve got clients that have been with me 30 years. At that point, you know what it costs me. I don’t care what it costs me to acquire them.
Rob Kosberg:
I don’t normally ask specific questions like that, but I figured with your financial experience, I bet you got some numbers for me. Thank you for doing that. You talked about speaking engagements as well, and conferences. Talk to me a little bit about that. Do you use the book to get the engagement? Is there a system you have in place to do that?
Charles Read:
We’ve not done a lot of speaking engagements because of COVID. The book’s been out for just over a year and COVID has been just rampant. Those things are beginning to pick back up. My operations manager’s wife was a keynote at one here in Dallas, just last week. She’s in education. So, they’re beginning to pick back up. We’re on the speaker’s bureau, we’re on the payroll speaker’s bureau with the APA. I expect to start picking up some speaking engagements from associations and so on because any association that’s made up of small businesses, payroll has to be a big deal. We do a lot of insurance agents; we do a lot of other people. We do a lot of dentists for some reason. It wouldn’t surprise me to get a speaking spot at a dental conference, because we do a lot of them and insurance conferences. We used to do speaking at the Underwriters Association conferences and we’ll pick that up once they start having live, in person ones. We do the rotary clubs. We were doing all of those before COVID hit. Now, the meetings are virtual at the moment. My rotary club meetings, I’ve just gone back live on a limited basis. We’ll get back into public speaking and it is a perfect intro to public speaking. We are a published author. We are published with a major publishing house. All these things add up to give us credence. If they want to see what we look like, I can give them well over 100 videos from podcasts where they can see what I am, what I say, what I sound like, as well as actual public speaking engagements that we filmed, because we try to film everyone we do. Those are the things. The book gets me in and then my performance gets me repeat business and additional business. All this is designed to bring in business. If it didn’t bring in business, I wouldn’t have done any of it. I’d be doing something else.
Rob Kosberg:
Are there any other things that you’re doing with your book that would be helpful for people that are listening? We mentioned podcasts. Any kind of media and PR, which is free, is fantastic. You mentioned speaking. Is there anything else that you’re doing? Are you doing any online advertising or marketing of your book? Talk to me about that.
Charles Read:
We have constant ads on Facebook and LinkedIn. We’re looking more at LinkedIn to try and up that success a little bit. We’re getting a great deal of success out Facebook. I don’t use it personally, but professionally. We’re on there to do it. We take excerpts from the book constantly and publish those. We’re doing content out to our email list every week, several times a week. We are constantly trying to get media. We issue news releases. We did a big one on the book originally when it came out and so on. Anything we can do to publicize the book and us and me as a thought leader and our ability to provide compliance expertise for our clients, we’re doing constantly. We also do some fun videos. We did a godfather parody and we have a Christmas thing.
Rob Kosberg:
Charles, you’re working hard to make payroll fun.
Charles Read:
In the book, I put in a whole bunch of horror stories. You laugh at them and you go, “Jesus, how stupid could people be?” I tell people these stories because they are fun stories. It makes the reading a little lighter than the Encyclopedia Britannica. I try to make it fun and we do fun videos. We do a lot of serious ones, but we do some fun ones. The most current one, Santa leans over to the side from his computer screen and says, “Hey Chuck, what’s FUTA?” Which is FUTA, which is federal unemployment tax but it’s just hilarious. Of course, Chuck is the new commissioner of the Internal Revenue Service. I sent him a copy to see what he’d say about it. I met him a few times when I was on the advisory council. I had lunch with him a few times. So, we’re having fun.
Rob Kosberg:
Congratulations. I love what you’re doing. I love how you’re using your book. That’s the whole key. I think you’re a great example. Again, not to offend, but you’re a great example of someone who’s taken something that is not exciting reading, but you’ve made it fun and you’ve made it a resource. It’s a resource guide. Any business can do this, and you’ve already expressed how you’ve brought in six figures of business your first year using your book in conjunction with free media.
Charles Read:
Thank you. I’m all in favor of it. I think everybody should have one. Have your own book. This is my business card. I carry a box of these in the trunk of my car. I can hand them out anytime. On top of that, we have a box that’s designed for this, it’s a blue box matching the cover, and it has advertising on the box. It’s very recognizable. Don’t just ship it in a plain brown wrapper. This is not pornographic. We have questions on, “What’s the $13 billion problem you have,” which is of course employment tax penalties. We try to make it interesting as possible. It is a boring subject. I realize that. It’s very dry. It’s not boring to me, but it’s very dry.
Rob Kosberg:
It’s important. Small business owners need this info.
Charles Read:
If you’re in business, payroll’s critical. It can kill you if you’re not careful. People have been put out of business because they didn’t handle it right. The penalties and the IRS are not very forgiving.
Rob Kosberg:
Well said. I love it. Charles, thank you. You have a free gift. Where can we send them?
Charles Read:
It’s a special deal for your listeners only. Thepayrollbook.com. If they will go there and enter the discount code, podcast, we will send them a free copy of the book, no shipping, no handling, a free copy. If they’re the least bit interested in payroll, we’d love to send them a copy.
Rob Kosberg:
I love that. So, any small business owners listening, obviously go to the link, enter podcast, is the discount code. The book is free. Otherwise, you could buy it on Amazon for 22 bucks, but would you do that when Charles will give it to you for free? Thank you for being on the Publish. Promote. Profit. podcast. People know where they need to go when it comes time for payroll. So, thanks again for being a part of things.
Charles Read:
Thanks for having me, Rob.
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