Often the most successful business ideas are founded on the simple premise of identifying a need or gap in the market and developing a service offering that fills it. Detector Inspector have done just that and grown into a multi-million dollar business within about ten years. Rapid growth can be challenging for business owners and in 2014 directors Jordan Kagan Gescheit and Jason Radolnik engaged the services of Colin Wright as their freelance CFO (“ceefo”) to help guide them through this time of great challenge and opportunity. This is their story.
Tell us a little about yourselves and your business Detector Inspector?
JKG: Jason and I have known each other from birth, basically. Our parents are long-term family friends and we went to school together. When we were 19 and in our first year of university, Jason’s dad showed us an article from the Real Estate Institute of Victoria’s newsletter. It told the story of how a landlord had been sued by a tenant for getting injured during a house fire due to non-operational smoke alarms on the property. The final recommendation of the story was that real estate agents should hire contractors to test smoke alarms for their landlords to avoid a negligence claim.
From that story, a business idea was born. We bought ourselves a couple of ladders and some batteries, and pitched our smoke alarm testing services to real estate agents.
JR: We’ve always set ourselves six-month goals to achieve. We initially operated from our homes and continued to do this for several years as the business grew organically. Initially, the idea was to run the business as a form of pocket money while we were studying our business degrees, but we continued to achieve our six monthly goals, so we kept going and the business kept growing.
So when did the business really start to expand? When did you think, “we’ve really got something going here?”
JR: By 2010 we had moved into our own office and started to employ more staff. At this point the business really started to grow and gain momentum. Our core business, while focused on smoke detector maintenance, has always been about risk and compliance services for real estate agents.
JKG: We’ve always been agile in moving fast as opportunities arise to improve and expand our service offering. In 2010 Energy Safe Victoria mandated that landlords, agents and tenants had a duty of care to maintain gas appliances every two years. This came after two boys tragically died from carbon monoxide poisoning from a faulty gas heater in a tenanted property. We quickly moved to offer gas maintenance services to our real estate clients from that point on.
What led to your decision in 2014 to appoint a Ceefo virtual CFO to your business?
JR: In 2014 we participated in a mentoring scheme, and our mentor Steve Carey introduced us to Colin Wright and his business The Virtual CFO. We were growing rapidly, but while we had bookkeepers in the business, we really were flying blind when it came to understanding our cash position in any given month. It also made budgeting and forecasting very hard to do with any confidence or accuracy.
JKG: So this is where Colin came in. We needed help with our budgeting and forecasting, but we didn’t need, nor could we afford a fulltime CFO in the business, so Colin’s service offering was ideal for us. Having a virtual CFO helped us regain a better understanding of and regain control of our business.
How has having your own Ceefo helped you manage and grow your business so impressively over the last four years?
JKG: We would not have been able to expand as rapidly as we have without the information their management reports provide us. It helps us stay nimble as a business and make informed decisions quickly and with confidence. If you don’t understand your cash position at any given time you lack confidence in your decision-making, and a poor decision or poor timing can really hurt you.
JR: It helps you plan your capacity, stock levels and staffing levels. Having budgets also gives your staff and managers the freedom to make decisions with a clear understanding of expense budgets and sales targets. It provides motivation when you need it and validates their future goals financially.
JKG: In 2017 we took on venture capital for our business. They would not have agreed to the deal without the detailed financial budgeting/forecasting reporting that we had at hand. The VC people commented that the level of reporting detail we had at hand was similar to that of much larger companies they worked with.
Tell us a little bit about your Ceefo and how you work together in your business?
JR: Colin Wright has been our Ceefo since 2014. He is now an integral part of our business and understands the complexities of our business. Last year we grew 64% in top end revenue. We would not have achieved this sort of growth without Colin in our business.
JKG: Our financial accountant deals with Colin almost on a daily basis. We meet with Colin fortnightly and monthly to review our month-end management reports with him. He helps us identify any red flags in the numbers before they become an issue.
JR: An example may be “why are our COGS routinely higher in QLD than VIC?” We can address this question quickly with those concerned.
You’ve grown very rapidly and you now have over 200 staff around Australia. What’s the secret to managing this success?
JKG: We have a great culture in our company. We are fair and we want our staff to be happy coming to work in the business every day. That’s very important to us.
Where do you see Detector Inspector in five years time?
JR: Our three-year plan is to be the biggest smoke alarm risk compliance business in Australian with over half a million properties under management.
JKG: In five years we would like to explore international markets with the same model if opportunities exist.
Would you recommend Ceefo’s services to our businesses? Why?
JKG: Most definitely, without hesitation. It’s been a very good experience for us. We have gained so much knowledge. In can be a steep learning curve for both parties at the start, but once that’s conquered you see the benefits to your business multiply.
JR: Colin has brought a lot of wisdom and knowledge from previous roles into our business. He has given us lots of ideas to implement into our business.
Any last words to add?
JKG: Colin is a top bloke and I’d have him over for dinner any night of the week!
JR: We’ve all become very attached to Colin. We feel he’s very much part of our business and part of our family. Not an easy thing to do when you work remotely but he does it extremely well.
Simply click on the link below, take the 2-minute test, provide your response to each of the 20 questions, and you’ll receive a free assessment of the accuracy of your financial reporting. Learn what you need to know about your business that you don’t know now!
Jordan Kagan Gescheit and Jason Radolnik were interviewed in January 2019 by David Rosa for the ceefo blog.