I had the pleasure of interviewing Giuseppe Salamone, Co-Founder of Varo Team, a fast-growing accounting, bookkeeping and CFO startup headquartered in Miami, Florida. At age 24, Giuseppe became a Finance Supervisor for JP Morgan Chase, responsible for various multi-million-dollar reconciliation projects. He later worked as a Financial Controller for a $65 million-dollar healthcare company before beginning his entrepreneurial journey in 2017 when he founded Varo Team. Initially, serving just two clients as a solo practitioner, he quickly scaled his business to serve hundreds of clients nationwide within 18 months. Giuseppe’s experience and entrepreneurial mindset qualifies him as an insightful source on leadership in the world of finance.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
For starters, I never thought I would become an accountant even though I’ve always found joy in changing chaos into cleanliness and confusion into clarity. I was born and raised in Northern New Jersey and obtained a bachelor’s degree in International Relations from the University of South Florida with the intention of working for the United Nations.
Upon completing my undergraduate, I travelled the world and got the chance to live in Thailand, South Korea and Australia, before returning to San Francisco and getting a job in accounting. After a few years, I relocated to Miami and continued down the accounting career path and decided to commit to the profession. I went back to school and obtained a Master of Science in Accounting from Southern New Hampshire University.
I was then hired to work as a Financial Controller for a large healthcare non-profit based in South Florida. I gave it five years there when I began to explore the possibility of starting a bookkeeping and accounting firm to support small businesses.
I did some networking and the response was…overwhelming! Word spread quickly and in our first 18 months of operation, the company expanded from a one-person shop serving two local clients to an entire team of professionals meeting the needs of hundreds of businesses nationwide.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
There have been many mistakes, but I don’t really think any of them were very funny! As a first-time entrepreneur, I had no idea what to expect. The last three years have been a roller coaster of ups and downs.
My biggest challenge has been understanding the right time to hire and choosing the right talent. I’ve found that managing staff for someone else is very different than managing staff for your own company. Lessons learned from mistakes made in this area are to check references, ask the right questions, and do not be afraid to test skill sets. People often claim to be experts, but when it comes time to deliver…they can’t.
Is there a particular book that you read, or podcast you listened to that really helped you in your career? Can you explain?
I would recommend Fix This Next by Mike Michalowic. It is a fantastic book for any business owner and talks about what you should focus on to become more efficient and take your business to the next level. I’ve implemented a lot of Michalowic’s suggestions.
Aside from books, The Cloud Accounting Podcast hosted by David Leary and Blake Oliver is probably the single most important podcast that anyone in my industry can listen to. It focuses on bookkeeping and accounting, and technology relevant to the industry. I get a lot of great ideas from what they discuss and evaluate.
Are you working on any exciting new projects now? How do you think that will help people?
Our new tax service offering is very exciting for us! This is the final piece of a puzzle to provide solutions every small business needs to be successful. We already have the bookkeeping, accounting, and CFO services in our finance stack and by adding tax services, we’ve now closed the loop. All these services work together. By having them under one roof it allows for seamless flow between professionals who will have a complete picture of the business. This positions us to work efficiently and provides the best advice to our members.
Thank you for that. Let’s now shift to the central focus of our discussion. Extensive research suggests that “purpose driven businesses” are more successful in many areas. When you started your company what was your vision, your purpose?
My vision for the company has always been to lead the future of accounting through technology by pairing technology with experts and thought leaders. The industry is changing rapidly, and our vision is to lead the way into the future.
Just think about how many technology options there are out there! The bookkeeping and accounting spaces are no different, and there are new solutions coming to market constantly. How is a business owner supposed to decide which technology solution will work best for their business? How do they know if two pieces of technology will “play nice” together? We make sure to stay up to date on the latest and greatest tech solutions and how to make accounting processes more efficient for our members.
Do you have a “number one principle” that guides you through the ups and downs of running a business?
My motto is: Consistency is key. I find that forming good habits is the best way to be successful in any small business.
Patience is another vital quality. In today’s world, a lot of people are looking for instant gratification. The press is saturated with unicorns that become overnight successes, but at the end of the day, those are few and far between. You need to be in it for the long game.
Lead generation is one of the most important aspects of any business. Can you share some of the strategies you use to generate good, qualified leads?
Our lead generation strategy has undergone a number of changes. In the beginning, it was boots on the ground: networking, shaking hands and forming relationships with other business owners. This has always been a key part of the strategy, but in the wake of the pandemic, that in-person networking aspect has disappeared.
As the business has grown, having a good web developer who can improve the SEO scores has been essential. Once we became a larger company, a strong sales team also proved to be a big factor in improving our lead generation.
And one simple but important tip: Make existing customers happy, who go on to make referrals.
If a fellow CEO would ask you for advice about whether to bootstrap or to look for VC capital, how would you help them weigh the pros and cons of that decision?
I’m a firm believer that if you can grow a business without investor funding…then you should. Holding onto equity is important because nine times out of ten you’re going to be doing way more work than the investor, and by relinquishing that capital you might be giving away a lot more than you’re receiving.
One question you should ask yourself is…are you in a capital-intensive industry, where access to capital is a necessity? If the answer is yes, it could be worthwhile to seek out funding. Another reason to accept funding is if investors bring additional expertise or contacts to the table that you need to grow. I advise sitting down and making a list of what the investor has to offer, and to decide whether or not it’s worth giving up a slice of that equity pie.
What measure do you use to determine the value of a company? What advice would you give to other leaders about how to get an optimal evaluation of their business?
Honestly, every business is different, and the way that you determine the value of a company depends on the industry. One standard way to determine value is a multiplier of gross revenue.
How the times-revenue method of calculation is applied depends on the industry. A tech company might be a 3x revenue business. While a professional services firm like VaroTeam might be between a 1.3x and 2.2x revenue. For retail, for example, the times-revenue Method may not be applicable, because the cost and distribution channels in the sector work so differently.
What would you advise to a founder who initially went through years of successive growth, but has now reached a standstill. From your experience do you have any general advice about how to boost growth and “restart their engines”?
Once you’ve hit a plateau, it’s essential to evaluate your business model as a whole in order to pick up growth again. Sometimes the simple solutions are the best, like talking to existing customers and asking what additional services they might be interested in. The same goes for a product-based business; you should find out what kind of complementary products customers may want or need.
The next step would be to bring in professional experts or advisors. Sometimes a fresh set of eyes can help to give a new perspective and bring something to light you didn’t see before.
You should also look for inefficiencies as opportunities to cut costs, unless you’re already running a very lean operation. However, there is often an overemphasis on cost cutting and not enough emphasis on innovation and developing new product lines and revenue streams. We like to check back frequently to make sure we are focusing more on the latter.
What are the most common finance mistakes you have seen other businesses make? What should one keep in mind to avoid that?
I have seen a lot of bad record keeping and bookkeeping. The problem comes when people attempt to take on accounting and finance jobs within their organization to save a buck but end up making a mess that costs ten times more to clean up later. If you don’t understand bookkeeping and accounting, you should undoubtedly hire a professional from the outset.
The worst mistakes that I’ve seen are people that have done their books themselves and then based huge investment decisions on erroneous sets of financial data. They ended up falling apart and nearly going bankrupt. I’ve even seen people getting into trouble with the IRS -it’s a very high-risk area!
Ok, here is the main question of our discussion. Based on your experience and success, what are the five most important things one should know in order to succeed in the modern finance industry? Please share a story or an example for each.
Firstly, no one claps for the entrepreneur! It’s a lot of hard work with not much reward, because everyone notices your mistakes, but there is very little recognition if you succeed.
Secondly, do what you do best and outsource the rest. For example, I outsourced marketing because I don’t know anything about it, and I didn’t try to pretend otherwise. That outsourcing got me a marketing professional who took the company to a #1 ranking on Google organic search in my home market, which propelled us to another level.
Another tip is: know your finances inside and out. You should review them on a regular basis, and constantly evaluate where your money is going to have a deep understanding of your costs.
The fourth point is that you should develop a solid network of strategic partners, especially if you’re in a professional service space. You should even align yourself with competitors, it’s great to bounce ideas off each other. Make friends with as many as you can!
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
I eat a lot of ice cream! It’s important to shut off work at some point. You should take at least a day for yourself every week. Many business owners think if they turn their heads for a minute, everything will fall apart. However, there are almost no emergencies that can’t be fixed tomorrow.
Another great tip is to do plenty of exercise and connect with others — it really helps to reset my energy levels.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
I think I would start a school or accelerator program that could help train and teach small business owners on how to succeed in starting and growing a company. I’m really passionate about education because I taught professionally for a few years.
There’s a huge need for something like this. In fact, I’d like to make it affordable or even free to small business owners that might not have access to start-up capital. These businesses could really do with the support.
How can our readers follow you online?
You can follow me on Twitter @giusalamone, or on LinkedIn at Giuseppe Salamone.
