Finding the sweet spot with Dan Luthi from Ignite Spot
Dan Luthi, Partner at Ignite Spot Accounting Services, finds the $2-$10 million range to be the sweet spot for his firm’s clients. That’s where clients find the most benefit in their fractional CFO and bookkeeping services.
By focusing on providing a quality client experience, Dan finds that referrals flow naturally. When clients are happy, they talk you up.
Dan notes that his client base has seen some of the trends of the greater macroeconomic environment. Post-COVID, some have consolidated with larger organizations while others have closed altogether.
Sometimes the first name isn’t the one that sticks.
That was the case for Dan Luthi and his work at Ignite Spot Accounting Services. Originally, the firm started as ‘Dashboard Accountants’.
But as it turns out, Dan and his partner and firm founder, Eddy Hood, weren’t the first to think of using ‘dashboard’ in their name. Rather than dwelling on the dashboard itself, they eventually decided it was more important to be the launch pad—or ignition spot—for their clients.
“Our goal was always to be that trigger and ignition spot for our clients, helping them to grow their businesses by having good financial information. And it just evolved into Ignite Spot from there,” Dan says.
That good financial information piece is mission critical. When business owners have the keys to their own data, they can make informed decisions on how to move forward.
Karbon Co-Founder and host, Stuart McLeod, chats with Dan on episode 63 of the Accounting Leaders Podcast, covering the sweet spot for choosing clients, how referrals and relationships go hand-in-hand, and some of the macroeconomic conditions in a post-COVID world.
Finding the sweet spot
While Ignite Spot doesn’t focus on any singular vertical, Dan acknowledges that the firm strikes a certain balance with each client. The tipping point is businesses falling in the $2 to $10 million revenue category.
“It's not because we don't want to work with people who are smaller or bigger. [$2 to $10 million is] a size where they need efficiencies, operational consistencies, and recommendations. That's where our fractional services come in and shine heavily and where we can really make a difference for them,” Dan shares.
To best serve those clients, Ignite Spot’s tech stack includes Dext, Bill.com, QuickBooks, and more recently, LiveFlow. Since Ignite Spot started as a dashboard-based company, LiveFlow is especially exciting.
As far as the makeup of Ignite Spot’s workforce, all 22 employees are fully remote. But that wasn’t always the case.
When the pandemic first hit, half of Ignite Spot’s team members were already remote. That made it less of a challenge for the rest of the employees to pack it up and head home. Today, most of Ignite Spot is concentrated in Utah and Florida.
Stuart asks how the Florida team handled the recent hurricanes. Dan was impressed with how the team came together to support each other.
“It was awesome to be able to see the rest of the team rally and make sure the clients are taken care of in that process. We try to balance so everybody can be able to take care of their needs, whether it's natural disasters or family,” Dan says on the podcast.
Ignite Spot’s thoughts on referrals
Ignite Spot attracts new clients through two different marketing strategies.
First, Dan says they create web content to draw organic traffic. The articles his team writes and publishes are focused on delivering practical advice to help small businesses grow and succeed.
But like any accounting firm, referrals are the meat and potatoes of new business. The happier your clients are, the more likely they are to gush about you.
“You can push hard, leading them to be a referral, or you can create a culture of it due to the desire that the client has from just the relationship,” Dan explains.
“By making it a priority to provide a quality experience for clients, the referrals flow naturally. And that’s worth more than any forced referral program.”
Recommended reading: 5 strategies to double your referrals
The shifting trends in small business since moving into a semi-post-COVID world have been surprising. Dan said he’s seen the trends reflected in his client base.
Some clients have taken recent steps to get acquired by larger organizations. Getting through so much on their own showed that they’d be stronger together.
“They were able to take away some of that heavy burden that they were managing on their own, and even take care of their team. Having those people be absorbed by another organization holistically and not be laid off made that situation so much smoother,” he says.
Others weathered the roughest storms of the pandemic, but came to the end with a different perspective.
“We had a handful of clients that just closed their doors. It was a really long two-year stint, and they wanted to move on to something else,” Dan says.
Stuart agrees: “A lot of people are burnt out across the world. There's no doubt about that. Particularly in the tech industry, valuations are through the floor, and jobs are disintegrating.”
Dan adds to Stuart’s point, suggesting that while unemployment is low, fallout in the tech industry could make unemployment creep back up. Dan notes that manufacturing and service-based industries are performing well while tech struggles.
Still, these are challenging times.
“On the media side of things, when someone voices an opinion, stocks drop through the floor, even though it has no material value on what that company was actually producing. We've become leveraged on opinions and context versus the deliverable that people can actually produce,” Dan observes. “My hope with all this inflation and all this change, we find a balance in that.”
A bright spot
Recently, Ignite Spot added fractional controller services to its fractional CFO and bookkeeping offerings. Dan hopes the firm will continue to grow its offerings.
“We want to continue developing, expanding and providing the best quality product for our clients that we can,” Dan says of the next three to five years for Ignite Spot.
And in today’s climate, financial visibility is more important than ever, boding well for what Ignite Spot provides.
“Financial transparency is one of the most important factors for a small business. Detail provides much clearer actionable functions. And the sooner we can provide that for our clients, the more they can not stress about what 2023 will bring them.”