This transcript is from the "Up in Your Family Business" podcast hosted by Todd Rimer, co-owner of Element 212. The episode features Kyle Masengale, VP of ASAP Payroll Service, a family-owned business operating since 1989. Kyle has been with the company for 10 years, focusing on sales and marketing to drive business growth.
The conversation begins with Todd introducing Kyle and ASAP Payroll, highlighting that the company has built its reputation by focusing on what they do best - payroll, onboarding, and HR services - rather than trying to be everything to everyone. Kyle is the son of the owner, Tom Masengale, and represents the next generation carrying forward the family legacy.
Before diving into business topics, Kyle shares personal stories about being a season ticket holder for Indiana Hoosier football and the Indiana Pacers. He and his father attend games together regularly, with Kyle mentioning his goal to visit every NBA arena (currently having visited 11 out of 30). Kyle also discusses his early work experiences, including working at restaurants and nearly purchasing a Quiznos franchise before joining the family business.
The main discussion focuses on ASAP Payroll's business philosophy of staying true to their brand by focusing on core services rather than expanding into related fields. Kyle explains that while they could offer additional services like employee benefits, insurance brokerage, accounting, or retirement planning, they choose to concentrate on being experts in payroll and HR. This approach allows them to maintain high service quality and build referral relationships with specialists in those other areas.
Kyle emphasizes the importance of proper payroll management, noting that 33% of employers make payroll errors costing billions annually. He discusses common issues like misclassification of employees as 1099 contractors and the serious penalties that can result from Department of Labor or IRS audits. ASAP helps clients avoid these problems through automated systems that ensure compliance with tax requirements and proper documentation.
The conversation also covers the importance of proper onboarding processes, with Kyle explaining how ASAP automates documentation requirements like I-9 forms, W-4 forms, employee handbooks, and other compliance paperwork. This helps protect clients from potential penalties and legal issues.
Looking to the future, Kyle mentions that AI integration is coming to their software systems, including a feature called "perfect payroll" that will automatically flag unusual payments. His goal is to grow the company to over 1,000 clients while maintaining their high level of service through good systems, processes, and people.
Throughout the podcast, Kyle consistently returns to the theme of staying focused on what they do best rather than chasing every dollar or trying to be everything to everyone. This philosophy has allowed ASAP to build strong referral networks with complementary service providers and maintain their reputation for quality service.
Introduction to Kyle Masengale and ASAP Payroll Service 00:00:04
Todd Rimer introduces the podcast and welcomes Kyle Masengale, VP of ASAP Payroll Service. Todd explains that ASAP is a family-owned business serving clients since 1989, with Kyle having been with the company for 10 years focusing on sales and marketing. Todd highlights that ASAP has built its reputation by focusing on what they do best - payroll, onboarding, and HR - rather than trying to be everything to everyone. Kyle is introduced as the son of the owner, Tom Masengale, and part of the next generation carrying forward the family legacy.
Kyle's Personal Interests and Sports Passion 00:03:19
Kyle shares his passion for sports, particularly his dedication to Indiana Hoosier football and the Indiana Pacers. He explains that he and his father have been attending IU football games and tailgating for over 10 years. Kyle reveals his deeper passion for the Pacers, having attended games since he was five years old. He mentions that between 2011 and the pandemic, he only missed about four home games. Kyle also discusses his goal to visit every NBA arena, having already been to 11 out of 30, including recent trips to Los Angeles to see both the Lakers and Clippers venues.
Kyle's Early Career Path 00:06:06
Kyle discusses his early work experiences before joining the family business. He mentions having a lawn care business with a friend when he was 12-13 years old, managing 15-20 yards during summers. Kyle also worked at McDonald's starting at age 14 and considered buying a Quiznos franchise when he was 21-22 years old. He shares that wrestling was his main sport growing up, which he participated in from third grade through senior year of high school. Kyle explains that he always had a knack for sales and doing his own thing, which eventually led him to join the family business.
The Origin Story of ASAP Payroll 00:09:16
Kyle explains how his father started the business in 1989. Originally, ASAP stood for "Accounting Services Automated Payroll" as his father had an accounting degree from IUPUI and was planning to be a CPA. The business began when friends asked for help with payroll, and the idea solidified when his father saw someone using a payroll service. Kyle describes how the company evolved from processing checks manually at home to offering comprehensive payroll, time clock, and HR services. He explains that they decided to drop the accounting services to avoid competing with accounting firms and CPAs who could refer clients to them for payroll.
Staying True to the Brand 00:10:42
Kyle discusses what staying true to the brand means for ASAP Payroll. He explains that there's significant consolidation in their industry with many companies trying to be everything to everyone. Kyle emphasizes that ASAP chooses to remain focused on payroll and HCM (Human Capital Management) services rather than expanding into employee benefits, insurance brokerage, accounting, or retirement services. He states that nobody can be a jack of all trades, and they prefer to be experts in what they're good at. Kyle mentions that payroll is often a "Trojan horse" for larger companies to sell additional services, but ASAP resists this approach.
Resisting Temptation to Expand Services 00:12:21
Kyle explains how ASAP has resisted the temptation to expand beyond their core services. He acknowledges that he could hire specialists in other areas like benefits management, but chooses not to because problems in one service area could affect client relationships across all services. Kyle emphasizes that he's not threatened by competition and prefers to build referral relationships with specialists in other fields. He mentions that he frequently receives offers to get licensed in other areas like life insurance, but declines because he'd rather focus on payroll and maintain strong referral partnerships.
The Value of Referral Relationships 00:14:49
Kyle discusses the importance of referral relationships in his business model. He explains that by not offering competing services, he can build strong referral networks with specialists in areas like health insurance, accounting, and benefits management. Kyle points out that if he were to offer health insurance services, health insurance professionals wouldn't refer clients to him because he'd be competing with them. He emphasizes that there's enough business in Indianapolis alone to sustain his company without needing to expand into other service areas, and maintaining these referral relationships is more valuable than trying to do everything.
Onboarding Services and Compliance 00:19:31
Kyle explains the importance of proper employee onboarding processes and how ASAP helps clients with this. He details the required documentation for new employees, including I-9 forms, W-4 forms, emergency contacts, Social Security cards, driver's licenses, and employee handbooks. Kyle notes that many companies, both small and large, lack proper onboarding processes, which can lead to compliance issues. He describes how ASAP automates the onboarding process for clients, creating customized workflows that ensure all necessary documentation is completed properly, protecting clients from potential penalties from agencies like the IRS or Department of Labor.
Consequences of Payroll Errors 00:24:24
Todd shares research he conducted on payroll errors, noting that 33% of employers make payroll errors costing billions annually, with small businesses averaging $845 in annual IRS penalties for mismanaged payroll. Kyle explains how ASAP helps mitigate these risks by managing tax payments that are due on different dates and require different forms. He discusses how manual time tracking and data entry lead to significant errors and costs for businesses. Kyle also highlights the serious consequences of misclassifying employees as 1099 contractors, explaining that Department of Labor audits can go back 5-7 years and result in penalties for every infraction, including unpaid overtime.
Client Relationships and Service Approach 00:30:23
Kyle discusses how ASAP builds strong relationships with clients and referral partners. He explains that they assign dedicated representatives to each client who regularly check in on their business needs. Kyle describes how they help clients with related services by connecting with their other service providers (like 401(k) advisors or health insurance providers) to ensure proper integration with payroll systems. He emphasizes that even though they don't offer these services directly, they make sure clients are taken care of by referring them to trusted partners. Kyle mentions that their systems integrate with partners' systems to create a seamless experience for clients.
Growth Strategy Without Service Expansion 00:36:31
Kyle explains how ASAP achieves growth without adding new service categories. He mentions that they focus on adding new clients while expanding offerings within their core competencies. Kyle notes that there are many services within their payroll and HR ecosystem that have developed over time, such as timekeeping, applicant tracking, HRIS systems, employee reviews, and learning management systems. He explains that innovation for them isn't about creating entirely new business lines but improving their existing services through technology advancements. Kyle shares that his goal is to grow the company to over 1,000 clients while maintaining their high level of service through good systems, processes, and people.
Future Plans and AI Integration 00:41:35
Kyle discusses how ASAP plans to evolve while staying true to its brand. He mentions that AI integration is coming to their software systems, including a feature called "perfect payroll" that will automatically flag unusual payments, such as when someone accidentally adds an extra zero to an employee's paycheck. Kyle explains that this technology is being built by their software provider and will help prevent errors. Looking to the future, Kyle states his goal is to grow the business by adding a couple hundred more clients and surpassing the 1,000-client mark while continuing to maintain high service levels by hiring good people and implementing effective systems and processes.
Kyle mentioned his goal to visit every NBA arena, having already been to 11 out of 30. 00:04:25
Kyle mentioned his goal to grow ASAP Payroll to over 1,000 clients while maintaining high service levels. 00:42:58
Kyle mentioned implementing AI features like "perfect payroll" that will automatically flag unusual payments to prevent errors. 00:41:35
Kyle mentioned continuing to focus on core services (payroll, onboarding, HR) rather than expanding into additional service areas like benefits, insurance, or accounting. 00:10:42
Kyle mentioned maintaining and developing referral relationships with specialists in complementary fields rather than competing with them. 00:14:49
