Transcript of The Hidden Compliance Wall That Blocks Small Businesses From Big Contracts | Ep. 328 with Kandace Swaisland Founder of KAKSCORP New

So, Candice, we talk to a lot of entrepreneurs, business owners, people doing 2 gajillion, people doing a million, and then there's people obviously that are starting up. And I think if you ask most business owners, entrepreneurs, they're always about scaling. All they want to know is they send us messages all the time. They're like, bring people in that can teach me how to scale my business. But what you say is something very different, and that we are getting it wrong when we say all I want to do is scale my business.

Yeah, uh, there's a common misconception that has been created in the zeitgeist that scaling is about growing and growing as quickly as you can. That's not necessarily what scaling means, and I think we need to understand what it means before we can do it well, scaling actually means doing more with less, not growing as fast as you can.

Wow. Okay. I, I like what you're saying because I think we make a lot of mistakes when we try to scale to the moon really, really fast. And I fell into that. I scaled really fast, but it, it actually destroyed my business before. So how should we be looking at this?

So I've always taught consistent, but more importantly, credible growth. A lot of people don't understand the barriers to entry when they enter an industry, so they're not prepared for them down the road. I find that people start their business generally for 4 reasons. I've, I've brought it down to 4 reasons. Um, the first is that they see a problem in the market that they want to solve and that's the best way to start, right? But solving that, does that require you to be a big business? Potentially not. Uh, the other reason is they— it's, it's part of their family. Like, their family raised a business and now they want to raise a business. That's how they see the world. But the last two are kind of red flags, and usually the people who fall into the scale fast situation Uh, is they want to say they started a business and they want to say they have a big business, so therefore they want to go to the barbecue and say, yeah, I'm— I've got this business and it's worth $25 million. Uh, and that's their motivation. Uh, but the final one is they thought their boss was making too much money for them, right?

So they said, okay, well, the, the company makes $1,000 a day. And I'm only getting $400 a day. So I want to get that $1,000 a day. I want that more money from the work that I'm doing. But that's the biggest red flag because they don't understand the barriers of entry. They don't understand what it costs to acquire the clients. They don't understand the certifications and licensing and the complexity of that. They don't understand the insurance or the taxes that go into delivering that service, uh, the hours it took to actually book that in, in the overhead, uh, the cost of keeping the client once they've done one job and bringing them back. And then of course the, the cost of defect, which is if, if you have an error, you have to build that into the cost, and you're inevitably going to have error. So when people go to scale their business, because they're not focusing on a problem that they're trying to solve and they're focusing on internally, I want to make more money, or I want to say that I have a big business, they try and scale really, really quickly, as fast as they can, because that's their motivation.

Whereas if you're trying to solve one particular problem, you're really happy if you solve that for 5 people. You're like, yes, I was able to do that. Or if you solve it for 100 people, you're like, that's fantastic, because that's the goal, and that's actually what people pay for. So that's the— that's what I believe scale has come to, is it's a very surface level, very generic, grow my business at all costs, grow my business at a sacrifice to myself, to my family, you know, be a millionaire in 6 months by doing 100, 120 hours a week. Uh, that's the messaging we get online. That's the representation that we have. But fundamentally, if you look at businesses that do very well in the long term and survive, they are growing sustainably and they are building credibility along the way.

Yeah, it's, it's one of those things you think, I'm making my boss millions of dollars. Let me go do this on my own so I can make millions of dollars. But then you realize. How difficult, challenging. You said so many great things there. So many costs that we don't know, we don't see. So they're not really making millions of dollars necessarily. And when it comes to net profits and other things, and obviously there's so much that goes into it, but there is that excitement. I think we get so excited when we see like money as the motivator, but then when you're in it, it's so much different. What was the motivator for you?

The motivator for me when I started Caxcorp was that I say, uh, in, in a very Australian terminology, I saw a lot of people getting ripped off by the way that the economy of compliance functions. So my background is economics, but I eventually went into standards and certification. Which is essentially the cornerstone of governance in any country. So I work closely with global certification, but what I saw was that there is systems people and there are tech people and there are strategists and economists, and they're all in these very unique niches, right? And what ends up happening is if you're a small to medium-sized business, you don't get the benefit of being able to work with all of those niches because every SaaS product, product out there, or every compliance product out there, is built just for one very narrow niche, and it forgets everything around it, which is, is great for sales. Like, people say the riches are in the niches, but what you end up with is 10 different SaaS platforms that you use to run one small operation and potentially a whole heap of consulting fees. So a good example of that is the construction industry, right?

Most people in the construction industry, by the time they hit $200,000, they have up to $20,000 in licensing and certification that they need to win any bigger project. Right? Not something that someone thinks of when they, they go to start a construction company. They don't think, oh, you know, 10% of my entire revenue is going to be dedicated to just this so that I can win any bigger work, right? So they buy a safety platform, then they buy an environmental platform, then they buy a project management platform, then they buy this and this, and every single one of those platforms is an expense of its own outside of that 10%, right? So a huge chunk of what a small to medium-sized business has to do to crack the threshold into bigger work is basically just fork out a lot of money. So I thought, we can do better than that. We went out and we invented essentially a program that is holistic and leverages self-build platforms. So things like Asana, ClickUp, Monday.com, things that we can build a customized platform in. And we built a program that basically has everything a company would need to cross that threshold without buying all these different stacks and, and having all these different, um, different requirements and different consulting services layered on top of their already expensive process.

So we've really been able to decrease, one, the pressure of the bureaucracy, uh, to cross that threshold, but also the general cost of barrier to entry. So that's the problem we're trying to solve, is, is make a few of these, uh, consultants and SaaS platforms obsolete. And that's our ISO 1 program.

So when you're looking into these companies, and like you said, you were taking a lot of these digital applications or options and combining them in one, which is always great. I feel like I have so many subscriptions and like lately I've been using Claude and I have probably 1,000 different Google Sheets that I've created that I never— they look— because I'm like, Claude, just make me another sheet, make me another sheet. And I'm so excited, but then I never use the sheet. I don't even know where the sheet is. I can't find it. But when you're looking at these companies and you're seeing what, what they really need? What specifically is so like blatant that, oh my gosh, these companies need this?

It's exactly that, you know. It's, it's the, it's the— we, you know, maybe I can use a company as an example is probably a better way of describing it, uh, and it, it applies to small and large businesses alike as well. I worked with a $100 million company that had invested more than $2 million in adopting Dynamics 365, right? And they were really excited about it. They chose the software generally because its popularity in their industry. You know, construction uses Procore, sales uses HubSpot and Salesforce. But after a year of trying to force everyone into the system, it was essentially unusable and people were back on the spreadsheets that they were using originally. Because sometimes a spreadsheet is good because you can customize it, right? If I need to add a column for this, I just add a column for this. I don't have to go back and run a whole new tech solution for just a simple change. And that's where these self-code, self-build platforms come in, is rather than forcing you into one category, they allow you to just create on your own very simply. Um, but not only— so not only did they have that whole $2 million bill, every time they had to adjust, they had to pay someone to adjust it, or they had to go without, right?

And that's what forces people into this kind of spreadsheet base, or they add another tech onto what they're already doing, another subscription, another payment to manage one small part. Of the process, right? Eventually they actually dropped that because everyone went back to their spreadsheets. They regressed back to a previous system that was working for them and they didn't even use Dynamics 365 anymore. Now that's not to say Dynamics 365 was a bad system, it just wasn't the right system for them. But when I came in, it was well after that. It was probably a few years after that. But the trauma of that experience was still well embedded into their culture and well embedded into the behavior and into the resistance around any new technology or any SaaS platform. But what was really shocking was that the company had not created a clear strategy. They had not mapped a single one of their processes, and they had very precarious reporting structure. So I could see pretty clearly that they hadn't done the groundwork of designing the system. So then when they put a system in, it just scaled chaos. Because systems don't fix your problems, they scale your problems.

They make your problems be seen— well, they just make your problems run faster, essentially. Uh, It's like money, right? Uh, technology is like money. It doesn't make you a better person. It just makes you more of who you are. That's what technology is to a business. It doesn't make you a better business. It makes you a better— whatever you are initially, it makes you more of that.

I think we're seeing that with what I'm hearing with enterprise when they're trying to implement AI the last few months to a year, that they're finding it wasn't necessarily— at least in the US, they did studies it wasn't really making their employees better. But I think what you said is it, it's not the AI applications, LLMs, whatever they're trying, it's the implementation. And it's kind of like just throw it in there. And I imagine if you're a small business, it's one thing, a couple people. But if you're an enterprise with thousands of employees, and then you have, you know, many layers of management, that's going to have to do it. Hopefully they didn't regress to Windows 95, by the way. You said spreadsheets. Next thing you do is you're going to go back to Windows 95 and you might go back to typewriters. We're going to go back to typewriters, but glad that you're there to help them. So when, when a company is looking at what it's doing, let's say you're not working with them already. They're looking at what they're doing and they're trying to figure out what, what should we be looking at to know?

Where we need to get to the next level? What should they be looking at, doing, testing? Is there something an enterprise should be doing right now to see if they need your help?

Yes, if they need my help, if they generally means, do they want to go into a, uh, create a system and be in the digital space and use technology to support that system? If I'm looking at, you know, are you ready to do that? If, if you're thinking about it all at all, then, you know, you can go and watch one of my webinars. I, I do free digital transformation done properly. Uh, you can go to caxcorp.com and sign up for that. I've got one coming up, I think it's the 29th if you're in the US, uh, it's the 30th if you're in Australia. Uh, and I essentially give the process away for free. You can have a look at that and see if it's something that you're ready for. But if you want to ask the question, am I ready for digital transformation? There is 3 things that we go through prior to the digital transformation before we even pick up any technology or even start to look at technology. Is, uh, the first thing is, of course, you can't digitize chaos. So does your company have a clear strategy and clear understanding of who they're servicing.

So they need to understand what matters, who decides, and what success actually looks like for their business and then for the digital transformation itself. So a simple test is if you can stand at a whiteboard and explain how work moves through your business from decision to action to results. Unless you can do that, you're not ready to automate. Uh, because like we said before, software doesn't create clarity, it just exposes an absence of it. Uh, then you need to understand what are the bottlenecks in that system and what's the duplication. When you're doing digital transformation, you're trying to take things away, not add more. So seeing where the bottlenecks are in that process and also where the actual activity is happening, right? You might have your system, but Like I said before, you might have this spreadsheet on the side that everybody is working from to move around the system so they can actually be organized. You need to go and say, where are those spreadsheets? Where is the, the list on someone's notes app that they're using to actually maintain their job every day, right? Uh, because like installing new software without redesigning the process just makes your problems run faster, and then calling it transformation.

And then the third thing you need to look at is who is your team and how are they going to respond to digital transformation? So this is the part that most leaders underestimate. The hardest part about digital transformation isn't actually technical, it's emotional. There's a fear of transparency, right? There's a fear of being replaced, right? If we do this, Is my job going to be replaced? Am I actually just setting myself up to make myself redundant? That's a big fear. Fear of losing influence, right? If somebody prepares a report that goes to a board level, that makes them a very important person in their role. If you take that away with automation, that person is going to feel like they're losing their influence within the organization. And then the there's the fear of, especially middle management, of being exposed. Because leadership tends to push problems down, and then your base-level workers don't really bear responsibility of issues. They're more just there to do their piece of it. So your middle management especially are going to fear being exposed for issues that were probably not theirs in the first place or shouldn't have been controlled by them in the first place.

So every system change is a behavior change, and behavior change doesn't happen because of software. It changes because leadership sets expectations and they really hold the line.

I couldn't help but think about something as you were saying this. I worked for a company before, larger corporation. The most annoying thing was doing quarterly business reviews or the QBR. Like they made us do so many things that were what, what I would say are pretty useless. And like we would take so many days, months to stress out about something to do a presentation that in the end didn't even matter, was never used, nothing. It didn't make any sense. I always thought like, this has to be one of the dumbest things that these corporations— I feel like they would make us do so many things. Like I'm like, like you're saying, couldn't you just be digital? Or could, you know, could there be a better way to do this? Process and it's like 50,000 employees and like we all hated doing these things. But was there a time where you, I know you transitioned from consultant to founder, if I'm not mistaken. And was there a time though where you were like, you know what, I'm going to go back to being a consultant or I'm going to go back to having a job because this entrepreneur, founder, It seems great, but now I'm working 345 hours a week.

Um, yes, it— you definitely have your moments of weakness where you go, okay, because having a job is an easier way to make money and a lot of time a more profitable way to make money than being a founder. Like, if— I don't know what the stats are like in America, but in Australia, if you average out how much a founder makes or a business owner makes, it's actually only like $50,000 to $60,000 a year. And that's Australian, not American dollars. So, so, you know, with the level of skill set you had, you probably could have worked a job for $100,000 to $150,000 a year and ended up being more profitable. Um, I was very fortunate to have that understanding before I came into the space. It wasn't kind of a a shock to me because I've been teaching businesses as a consultant how to scale for a long time. Uh, but I've definitely had those moments. Like, uh, it's like I'm not perfect because I have done it before and I chose to do something different. Doing something different is always going to be harder than doing the same. I could have just repeated what I was doing at previous consulting firms.

And whacked a price tag on that and said, there you go. Uh, but I chose to try and build something that's almost anti-consultant. Like, if you think Big Four, you think, okay, I paid them a lot of money, they came in and said a bunch of words that I don't understand, uh, then they created a slide deck that said I should reduce costs and increase revenue, uh, and then they charged me $40,000 and I've never seen them again. Right. That is the, that is the consulting doom loop.

Sounds like a good business model though. Sounds like a pro— that now, that would be a profitable business model, although you're always chasing clients. Um, so how, how did you— because I think enterprise sales, or, or, or being a founder and looking at enterprise could be game changer for a lot of people. Like a lot of, you know, for me, starting out, I was looking at, you know, smaller. And then as my confidence grew, I then started looking at bigger and bigger because obviously those are like larger and larger contracts. What helped you? And I was a type of a consultant before that. And I learned a lot about things before I went into business. So like, um, worst job I ever had. I was miserable. but also best job for learning. Now, for you, what was in the beginning, what did you do to be able to get these enterprise contracts?

Well, first, when I was doing that consulting work, uh, like you said, it is a trial by fire. You learn about everything and you do everything and you work crazy hours, but in those hours you are working with companies and people that it's very hard to work with in any other context. So during that time, I was a real sponge, you know. I, um, I had an old boss say to me, uh, people shouldn't start a business, they should practice on somebody else's first. And that was really funny because he was actually my boss at the time. So I'm like, you're telling me to practice on your business? So that if I fail, it's not on me. So a bit counterintuitive for him, but it was good advice because I then was actually working as an auditor, um, which is another, uh, very similar to consulting. A lot of hours, a lot of workload, but you see over 400 businesses a year, like different types of businesses, and you're writing reports and you're assessing their ability to meet a standard every single year. And you'll— and if you do it right, you're learning about all of their different woes and all of their different responsibilities and all the things that make it hard for them.

And that was really the catalyst for me to start, you know, thinking about how to do this well, is seeing all these businesses struggle through their audits. So I really got the practice in there. And in doing that practice, there's a lot of people in the industry that realized, hey, I really care about this. So by the time I went through consult and then came out as a founder, I had a network of people who understood that I was very passionate about what I was doing. So that creates a lot of faith in handing the reins over on something or, uh, giving a piece of work to someone is knowing, okay, she's seen my problems, she's seen it over and over again. She came and talked to us every single year, and she gave us all these little, like, tidbits as she went through consult that helped me through that. I have faith that she's going to be able to actually deliver on this contract. So I had a real privilege in that respect, um, and also the network I had within the industry of people who would say, yes, she's going to do a fantastic job because I've seen her do a fantastic job before.

Uh, so if— but if you don't have that, you just have to do that one job really well and then the next job really well. It doesn't take long to build up. You don't have to see 400 businesses a year to get a bit of a reputation for just being amazing and passionate about what you do, uh, because at the end of the day, it's like people talking to people. Like, there's— it's not a big—

yeah, I like what you're saying because it's, uh I, you know, in the consulting part, the first day I started, somebody who then became my mentor later on, he tried to get me to quit because he doesn't like people in my role telling him what to do in the past. So the first call, tried to get me to quit. I did not. And then we built a relationship, but I learned a lot. Like you're saying, I learned a lot about what they want. So it's like easier to service companies when you, when you get the opportunity. I'm a big proponent too. If you can work somewhere that can teach you skills, like you said earlier, you're helping someone else's business. So obviously it's not your business that's going to fail. So I, I really like that. I think that that's great advice. But if people— Caxcorp— if people want to get in touch with you, Candice, how can they do so?

Uh, you can go to caxcorp.com. Uh, I have a podcast called The Business on Spotify, and you can learn more in-depth, uh, about— we've got an episode coming out, it'll probably release about when this comes out, about dysfunctional teams and how to heal that. And then, uh, you can also follow us on, on LinkedIn and Instagram at Caxcorp, uh, or at Candice Waiseland if you want to follow myself. Um, but, uh, probably the best thing that people could do if they want to learn more about this is sign up for the webinar that we have on the 29th. 30th. You can go to calcscorp.com, it's the first button on the page, uh, and you can learn more about the process of digital transformation and, and how you should do it if you want to do it by yourself, or if— see how we do it, because it's exactly what we go through when we do our digital transformations.

Amazing. Well, thank you, Candice. I learned a lot today. I'm excited. I'm gonna go look at some more enterprise clients. I'm, I'm excited. I want to I want to win them over and I want to, I'm going to come back to you and let you know how it goes. And then watch the webinar, KAKSCorp.com. But thank you so much for joining us today.

Thank you so much. And you have a great day.