260 Running A $300k Firm Half-Time!

This Firm's gonna run 300k this year. Half time. Mmm. We're roasting it today. We got a whole bunch of information about how this firm, how they got there, and a few bits of next advice. Honestly, maybe they should be roasting us. Cause this sounds pretty darn good. Come on in. Today we're roasting a firm. Okay, this firm, they submitted their goodies to me anonymously last week. You want a chance to be roasted, gang? Write down in the show notes, there's a form, pop the deets in there, have some fun, and you might get something helpful out of it. So let me give you the background on this firm. Their revenue is made up pretty much a third. A third, A third of advisory, tax and accounting. They say they barely do any bookkeeping or payroll on an ongoing basis in terms of the actual work that's being done. But it is a third of their revenue. Like how they I guess present it to clients. They're growing quickly, adding about 30,000 in annualized revenue each month. That's ridiculous. That is super fast growth. I can't imagine they're adding that much year round. It's a virtual firm, especially not if they're at if they'll do 300k this year, maybe. I don't know. Man, that's a lot of growth. Virtual firm clients scattered around the country, but primarily California, New York and other 0% income tax states. They work with high income contractors within a specific industry. That is 100% of their clients is contractors within this industry. I don't work with non contractors, nor do I work with businesses that have have employees. The firm's only eight month old, but here's kind of the, the cadence as they are planning it and as it is developing. In January, they're doing a bit of prep for tax season, but are still doing year end tax projections. February, March and April, business and personal tax prep. May is wrapping up extended 1040s and getting back to client onboarding. June through August, mid year tax projections. September vacation time and more client onboarding. Probably at this point in September, all the business returns are complete. So no extension season stuff that month. October, they're doing year end planning and client onboarding. Oh, client onboarding ends this month, so they don't onboard anybody after October. Interesting. November, December, more year end tax planning, but mostly vacation time. I think there's bookkeeping happening throughout this. It's just not a huge volume. And if they are contractors without employees, that's not particularly complex bookkeeping. So maybe that's just not A big part of the workload. Pricing. They only have three packages priced for 12 months. All new clients pay 375amonth for initial advisory services. Usually like S Corp analysis, tax planning. With that package they also get a mid year tax projection, year end tax planning and they're 1040. They have two different packages for business owners. S corp owners at either 400amonth or 500amonth. They handle the S Corp filing, the books for those S corps and owner payroll. So three different packages at 375amonth, 400amonth and 500amonth. Billings monthly through practice ignition. No one off projects, just monthly recurring clients. Sales and marketing. I'm on a handful of quote Tax Pro recommendation pages within the niche and it feeds 95% of their pipeline. That's awesome. So that is like you know software companies like people in this space. When they have a landing page for recommended tax pros this person is on the list. Talked about this several times. This is a great way to get good work. I think some things like you know the Pro Advisor network and like we've seen versions of this, Xero has their own version of this. We've seen versions of this that either give you really low quality leads or nothing at all. But the more niche versions of these things from everything that I've heard are way more valuable. I shared before the story of someone who basically got to the top of that recommendation list for the go to software within a niche and they had more leads from that than they could ever possibly manage. Now leads are great and they'll pay pretty good money. It's never going to be as good as somebody that builds a relationship with you before becoming a client. When they come in day one and like they have heard a bunch of stuff from you. They understand how you advise, they understand your expertise. That's always the best way to bring someone in. But that takes time to build. If you have the combination of those two things where you are like one of the tippy top people in the space and those vendors are sending you leads, that's pretty awesome. For the sales process they do a 30 minute meeting but before that the potential client goes through a questionnaire and there's some filtering on there that will dictate whether or not they take the meeting. If they answer it the right way, they get the calendly link to schedule proposal is sent through Practice Ignition and then templated emails and portal slash software links are provided to the client for the initial questionnaire and data collection. Tech Stack Ignition Fireflies AI for meetings Content Snare for gathering information. Content Snare is like a request platform. RC Reports this is for S Corp Reasonable Comp Stanford Tax they use this for gathering 1040 information. Client Hub is their practice management system using Calendly for scheduling Loom for sending videos, Cognito Forms for the form on their website with the filtering questions using Ultra Tax and Planner CS for tax prep, Grunt Works for 1040 workflow, QuickBooks Online, Gusto for payroll and Canva for visuals. Their general workflow for client onboarding. Clients receive a portal invite and two questionnaires for tax planning and S Corp analysis. These services are completed within four weeks of them becoming a client. For tax season. They send out the Stanford Tax Invites. That's the software they use for intake. They review the data that the client submits, download the file, make edits to it, and then send it to gruntworks to be prepared. Then they do a little review process and a recap video that goes to the client that they need to watch prior to signing the 8879 for tax projections. They send out a choose your week to have the work done sort of thing through Cognito forms. This will be the week they receive the questionnaire and have a week to complete it. The following week is when they'll complete the work. The when the firm will complete the work and provide a video review. The week after is their dedicated time for a meeting if needed. Interesting. So for this tax planning meeting the client picks a week incognito forms. That's the week that they have to complete the questionnaire and get all the info. In the next week the firm does the work and then the next week is held open. If the client wants to meet during that week, that seems pretty smart. Pains and what they enjoy Here are the pains. 1. Handling the volume of interest while maintaining my current base of clients. What a problem to have. I know I need to work more hours during the week, currently at around 20 a week, but the kids schedules make that hard man. Keep the Keep those boundaries. I didn't have this on my list of suggestions, but none of these things should compromise those boundaries. You will never look back and say I'm sure glad I onboarded more clients even though I missed a couple days running the kids to school. Like that's a trade off that you will never be proud of yourself for making. Foreign this episode is brought to you in part by Live Flow. You know a really wild way that some people are using Live Flow. So Live Flow connects all of your quickbooks data to Excel or Google Sheets. There's just a little button in Excel or in Google Sheets and you get a dropdown of every company you have access to in QBO and all the reports. And you can pull that stuff into Excel one time, make it keep updating all that really wild way people are using. This is for month end closes for their clients. So you have basically this, this spreadsheet or set of sheets in like a workbook that is a template you've created and all you gotta do is connect it to a company and it'll pull all the different sheets in. You need to do the review from balance sheet P and L GL reports, all that in a templatized way that you can do the exact same way for every single client. And it creates this really like rich standardized work paper instead of having to dump out like a whole bunch of PDF reports or something to put together those work paper. That was how we did it. We had like a standardized file structure and you would run various different PDF reports for all these things and then annotate them. But that was all a manual process rather than creating like a big old Google Sheet or Excel workbook that has all of the reports that you want and it's a single template so you can do it the exact same way for all of your month end closes for all of your clients and and it pulls that stuff instantly. Pretty darn cool. We normally talk about the client facing ways to use LifeFlow, but I know some pretty smart firm runners that are using it just for like closing clients books too. Turns out when you can liberate your data from QuickBooks and get it into a spreadsheet, there's some handy things you can do with it. That's Lifeloo. Learn more about that one. Check out the link in the show notes. This episode is sponsored in part by cloud accountant staffing. You ever had a problem finding staff? No. Okay, keep going, skip ahead, move along if you have had any issues finding staff. Cloud account staffing is a great way to find talented folks in the Philippines to join your team. I've talked about it many a time. I was doing this four or five years ago. I came into it with all the spooky scaries you would expect hiring offshore folks for the same time, for the same time, for the first time. Is there a stroke in here? I can't hass talk. Today we started pulling Philippines hires into our team and it completely changed how we approach hiring. Cloud accountant staffing makes that super easy for you to find. Talented folks. In fact, I got a resume right here along with a video intro of a real person Cloud Accountant Staffing's recruiters pulled for a firm. This person got their Bachelor's in accounting in 2018, went straight into audit. Good for them for getting out of that. Spent the last four years doing accounting Month end close stuff. Full cycle for western Companies selected among 30 staff for exceptional performance. Wow. ARAP Management Payroll Month end close financial statement prep 1099 bless their heart. Finding resumes like this in the States is like pulling teeth and as soon as you find one, it is hungry hippos for every single person that can get their hands on them. Like I said, we got away from this by hired folks in the Philippines. We still need a people onshore, but we went from exclusively hiring onshore to like one to one onshore and offshore. You're going to have a whole bunch of embarrassing questions. It will feel unattainable, confusing. That's totally normal. You do it just by getting started and learning. Learn more about Cloud Accountant Staffing. Check out the link in the show notes. Number two Struggling with whether to implement one to many services for some of my advisory offerings. Ooh, will the one to many services offering hurt my chance of converting them into ongoing clients? So, like getting a degree of coaching, Will that make a person less likely to become an ongoing client? Does that matter? Overthinking modern Accounting Firm concepts to death Basically. Number three, I don't actually like doing the work. Whoops. I just want to focus on the business. I know this will come in time, but being swamped with client meetings and onboarding work means I never have time to focus on bigger picture stuff. I worry about whether I can trust someone to take this over since so much of this revolves around my own very specific knowledge. That's the. That's the struggle, man. That's why some people actually don't niche is they're like I know all this stuff, but nobody else on my team knows this stuff. How do you delegate when the bill of goods a client was sold? When they came in the door was you? Most of my suggestions are kind of centered on that last what do they enjoy? Number one, I love business development, implementing ideas from your podcast and others. Number two Seeing success in my endeavors to modernize processes and use new technology and methodologies in the work that I do. 3. Creating complex templates for everything I do in order to speed up production and minimize screw ups. Okay, overarching guidance here. This person and I like highlighting firms like this to show what's possible. This firm has set some awesome boundaries. 20 hours of work per week. They're going to do 300k top line this year. Say what you will about the accounting industry, it's not a bad gig, right? Boy, that's not a bad gig. And their main problems is having too much work to do, having too like too many leads. So much of the, the, I mean like almost all of the struggles of running a firm are just so self inflicted. We won't go too far down that rabbit hole. Okay, my first suggestion here, they don't like doing the work. It sounds like they're either like a manager or entrepreneurial type. This is a very good thing to acknowledge about yourself. When some people hear that, they think, well then you shouldn't run a firm. The reality is to run a great firm takes a collection of a bunch of different types of people. And I became this type of person as well. After Preparing taxes for 10 years, I was like, I don't wanna do this anymore. And I went back and got my graduate degree thinking I would go find something else to do. But then I actually learned that I'm really good at more of the running the firm stuff than I am the doing the work stuff. I was like mediocre. I was serviceable at doing the work. But the firm strategy, attracting people, all the other aspects of running a firm I super enjoyed. And this is only a problem if you don't build the right team around yourself for the type of person that you are. And so the biggest hole I see in this firm right now is like a doer who can capture a bit of your industry expertise. And that's kind of the blocker here is how am I ever going to delegate this stuff if this person doesn't have the same expertise in context that I do? The way I'd recommend approaching this is finding somebody that's already within the industry or already has knowledge of it. Hot take here. They don't even have to be an accountant necessarily. If they are, great. But look for either an accountant that you feel like you can bring along with this domain expertise or a non accountant that already has a ton of that industry expertise. Either show them how to be an accountant or build a team around them that can do the technical stuff. And this person, this is going to be your right hand person. I don't know if this is a good analogy not, but Mr. Beast the YouTuber was talking about basically how he developed his right hand person and they pretty much lived with him for like three years and it's gotten to the point where they make decisions by and large the same way Mr. Beast does. And it is a great way to scale his impact. And now that person is developing more people to do the various things that Jimmy used to be stuck doing himself. I do this, I have a gm and this is more or less what I do with my gm. Just the more stuff that I can pull them into and get them exposure to, the better. They don't live with me, but they're sitting in on meetings, they're in my email inbox. They are a part of everything that I do. They're usually traveling when I'm at conferences as well. Is Jake Kesnik, if you've met Jake. And so this whole problem of how do I ever delegate to someone and them get that domain expertise, it is a tricky thing to do, but is something that you need to start investing in someone today. Because if the goal ultimately is to maintain the same level of freedom, you either just, you can turn off the spigot, which is also a totally valid thing to do here. Just stop taking new business or slow it way down to maintain these boundaries in its current state. Not a bad gig. But if you want to keep going and add more people to the mix, add some complexity to the mix, there are definitely some trade offs there. But it can also be tremendously rewarding to create an amazing work experience for someone. Arguably the most rewarding thing I ever did was bringing people into my firm and developing them. But this is probably my top recommendation if you know you want to go down the path of bringing more people into the team and delegating more of this work. Because the biggest risk I see in the business as it stands today is, is you getting stuck doing the work and you just not wanting to do the work. Money is great, but money beyond a certain threshold ultimately doesn't impact happiness all that much. And so while you can look at a business and see all these opportunities, you also gotta see the risks. What is the risk that you are just gonna be fried? The risk that you can no longer do this or that you're not going to enjoy it? That's something that we need to be be mindful of. Not just the opportunities, but the risks that stem from you being at the center of everything. So it seems like the best thing for the long term health of the business is to start thinking about how do I not be at the center of everything. Is there somebody that I can bring along? The second note I dropped down here in terms of it's Hard to even call them suggestions because they're doing great here always be second thing here is always be thinking about who's great for you, like what client is great for you versus who is great for the firm. And this firm is already niched in a way that's obviously super beneficial because they're like the, you know, being recommended on all these other platforms and have more intake flow than they can even deal with right now. But the trap that most firms fall into is like you get to kind of the where the constraints really hit for like a single person who's managing a bunch of client relationships with the team, you know, wherever that is, say it's a million in revenue. You kind of hit that wall where it's like, man, if I'm going to manage all these relationships, something's got to change. I got to break something out of challenge. Some assumptions I have about how this should work in order to get to that next step. And what that usually looks like is changing the makeup of the clients that you bring in. Because in most cases for the first say, you know, million dollars of, of annual revenue they bring in. Those are clients that are a great fit for them, they get along with them. Their problems may align with a specific non accounting or tax expertise that you have. But the notion of delegating that is really hard just as this person is explaining. And to get over that hump means to begin bringing in clients that are great for the team instead of great for you. And you know, the very first touchpoint a client ever has for the first time is someone else in your firm. And if they can't speak confidently to what the problems are for that client, and if you are the only one that can do that, then you can never get out from under that burden right now for this firm because they're already niched in a really interesting way. You almost have to reverse engineer the solution where you're going to hire and build a team and develop a team around the expertise that you already have. Normally what happens here is you change the makeup of the type of clients you bring in to be something that your team can serve because you've already got something really valuable here. I think it probably just means putting more investment into considering what is the type of team, the makeup of team that could solve all these problems. And in the short term the that right hand person that you develop like might just be the band aid for all of that, where they can come in and do a whole bunch of that stuff. And especially at this size, but longer Term, even if you develop this right hand person, they're going to hit their limit as well and this person's going to have a ceiling. So what is a reproducible way of creating that next person that has domain expertise? What information do you expose them to? Do you bring them to industry conferences with you? Do you get them subscribed to the same YouTube and podcasts that you are, where you're learning about this space? As long as the clients you bring in are only good for you and only and not good for the rest of the firm, you're kind of trapped there, right? So what does it look like to build a entire firm that is just very embedded in that community? It probably means getting more selective about the type of people you bring into the team. Because that office, you know, be it physical or virtual, the con, the conversation always needs to be this, this industry in order for your team to have the same confidence talking about it that you do. They have to be just as embedded as you are foreign. This week's episode is sponsored in part by Makers Hub. Makers Hub is one of the coolest examples I've seen so far of awesome new AI tech, like making your life way easier, which we're all ready for, right? Stop telling me about AI stuff, tell me how it can save me a pile of time. So they're a buildpay platform that is using AI vision models to take OCR like so much further than traditional OCR ever took us. It feels like for about the last decade we've been being told fully automated bill extraction. So it's removing human manual entry. Haven't people been saying that like forever? Makers Hub set out literally to be like, could we actually do this now with vision mode models? Now I did a demo day video on the main channel a week or two ago demoing like some crazy complex use cases super hairy invoices that Maker's Hub just gobbled up and spit out without breaking a sweat. Now, they're exceptionally good at big ugly invoices. So like I used to work with some retail flooring stores where you have these super hairy detailed invoices and you had to do the receiving just right to make sure you had the right quality quantities of all the items going into inventory. Makers Hub can process this stuff to like every little like granular level of detail that you need, not just the invoice amount, like all of the detail in that video. Actually we chucked 68 pages of like 64 Home Depot invoices, all with like multiple line item detailed, all These various different inventory items. It processed that thing in like less than than 30 seconds. It is the sort of thing that my clients would have like people just sat in a chair doing all day long and right now like we could come in and be like we're going to take that off your hands. We'll actually do the receiving part now. I just helped them with the bill payment part. We never got into the ugly receiving stuff. These days I would grab a tool like Makers Hub, come in and offer that service and honestly like automate 85% of it. Super cool. You want to learn more about Maker Sub? Check out the link in the show notes or head over to my YouTube main channel or just search Jason Stats Microsoft super cool. One of the best new AI things that I've seen. This episode is brought to you in part by Team up, helping you recruit top Filipino accountants without any ongoing monthly fees. The difference between Team up and all the other offshoring options. The Team up helps you hire staff directly. No middleman. You work directly with your new hire in the Philippines. Hire the person, not the company. Guys, gals, gang. Here's just a few reasons to hire directly. You have access to higher level talent. Makes sense. You have complete control over team culture and training. They keep 100% of what you pay them and it's a lot more affordable for you. So you can retain your team for the long term. Team up can source accountants with experience working at US or Australian firms familiar with tools like Xero, QBO and Dex. Also recruit specialist roles. Team leaders, tax specialists, administrative assistants. Thought experiment. What if you had an executive assistant for the first time this tax season? Just. Just throwing it out there. What would they do? Start at that email video I did on the main channel recently. Get help with that stanky old inbox. I digress. Team up recruits these talented folks for a flat one time fee of 5,4000 US American dollars. That's it. 4K one time. Somebody at Robert Half just did a spit take Robert Half reference. We ever gonna get Robert Half to sponsor this pod? Not anymore. And they can connect you with an affordable employer of record if you need help with payroll and compliance once you hire that person. Big fan of hiring in the Philippines. You know I did a bunch of that. Check out the link in the description to learn more about Team Up. Last suggestion I had here and I teased it earlier. Have this right hand person in your email inbox. Or just eliminate the notion that people have their own inboxes straight off the top. If you're trying to Bring somebody along and they can't have access to your email inbox. That is such a massive blind spot to the types, to the things that take up your time and attention throughout the day. We spend so much time on email. It is where clients raise concerns, is where clients ask technical questions. It's where like the delivery of most of our work happens. Such a huge percentage of our days are dictated by just whatever happens in the email inbox. But for some reason we maintain this like propriety, like, oh, it's our own personal inbox because it has your name on it. Whatever lands in any inbox in your firm needs to be a shared responsibility. If it's not, then you're putting people on an island where they're both going to do things in non standardized ways. Approach email very, very differently across each person, but also kind of like be left to fend for themselves. Oftentimes in a way that's unfair. This right hand person, get them in your inbox day one. The impact that they will be able to have in the very beginning will be very different than what they can do long term. Don't get too stuck on when we're, when we're thinking about this and whether this is going to save you time. The reality is delegation never saves you time. Immediately it is work to delegate. And so if you wait until you're at capacity now, you don't have the time to delegate. And that's kind of like a not helpful death spiral. You get stuck in there where you never have time to even get yourself out of the situation. But when we're thinking about bringing somebody in our inbox, oftentimes we're like, is this really going to save me any time? In this case, I would argue it's probably not about saving you time long term. I want it to save me time for sure. But it's more about the alignment of the people within your practice that you want to be helpful to you. If they're able to be in there and actually see the stuff that's happening every single day, they're going to have their own ideas for how they can help. They may be able to like literally help directly from that inbox, like draft a message or something like that. You know, the extreme example is, is Mr. Beast literally having somebody with him and go everywhere with him as he takes meetings and does everything. Admittedly in a small firm like this, like, I want to do something pretty close to that. I don't want to live with somebody that's, that's weird. But I Want to get somebody as embedded into what I'm doing as possible. A trap for you, for people, if you are the big boss, is the notion that you have to design all of the systems and figure out how to get yourself out of this mess. And it's very rarely that I've been burned by pulling other people in, just giving them exposure, and asking them to help get you out of that mess. We do this all the time where we put it on, like, just on our shoulders. You listen to a podcast, you watch a YouTube video, and you're like, oh, man, this is. Yeah, this is a thing that we gotta do, and you're gonna do it. And as a result, it never happens. Whereas you can instead take this thing and put it in front of somebody else or a few people and be like, who's got good ideas on how we could do this thing? Or put them in charge of making that happen, and there's a much greater likelihood that it actually happens. Then how many things do you have on your garbage heap of great ideas you had that never got implemented? Probably a lot. So just generally, the more embedded your team can be in all of the work that your teammates do, particularly in the context of a small firm like this, where you're like, man, how am I ever going to get this domain expertise into the head of anybody else? They just have to be part of how you work every day. And when the biggest risk to the firm is your burnout and you're not wanting to do the. Which is no fault of your own, and it's a. It's a really good thing to be aware of, then how do I build a support structure around myself to mitigate that risk when that is the biggest risk? It means, like, I think you got to pull somebody in to be that release valve as soon as possible to begin developing that industry expertise. That one hits home for me big time. Like, the biggest risk to my business is me not being able to sit down and hit record is, you know, burning out. That is, I mean, any business built around YouTube and a volume of content, that is the risk. So as we, like, think about this, for my team, we have to get really particular and I have to get really selfish about the things. What are the things that give me energy and the things that don't give me energy, because this is in everybody in my business's best interest to optimize for. How can we turn up to shoots with as much energy as possible? How can we put a lot of thought into the riding to make sure that they're super engaging and entertaining and still valuable and not just content for the sake of content. In my business, it all boils down to like, am I going to burn out on this or not? And my business in many ways is similar to this small firm where I've really only got a few people on my team. But I do think we can, I think this can feel selfish sometimes where you're like, no, you just got to suck it up. Everybody's got a job to do and this is your job to do. When the reality is none of this stuff matters if you can't do it sustainably and like turn up with a bunch of energy and a good attitude to work every single day. If you're, if you're able to kind of get over that and be a bit selfish there, it's kind of the greatest part of running your own thing is being able to design the machine around the ways that you want to work or not work as this person's doing. Like being self aware enough to know, here's what I want to do and here's what I don't want to do. I'm not going to stumble into somebody else's org chart. I'm going to hire people around what my needs are so that I can do this in as sustainable of a way as possible. Because at the end of the day, what's more important than like, am I enjoying this? Like, is this still energizing for me? That's kind of, that's kind of all that matters at the end of the day. Especially in a small firm where you're not trying to design the ultimate massive machine. You're trying to run a cool business that helps people and have fun along the way. Speaking of having fun along the way, 20 hours a week. Nice work, man. I saw this one and I'm like, we got to talk about this because we have so many self limiting beliefs of what's possible. Can you imagine working 20 hours a week, most of you? It's like, I have absolutely no idea how I could do that. The reality is that is a genie that can be put back in the bottle. We talked with Geraldine Carter on the POD maybe a month ago. She's got her book down to 40 hours. Really good book. She's got a coaching community where she helps people get down to 40, but also a group that like where they get down to 25 or 20 or something like that. And she says the most common blocker that keeps people from going even further below 40 is giving themselves permission. They're worried about what the people they work with will say what will their employees say if they see that they're not working as much all these other things that get in the way usually because you've never seen somebody do it before and so it's a hard thing to imagine having not seen a template for it but man that's the beauty of small firms you get to make up the rules right but this person's crushing it. They just completed this form last week you can do the same down in the show notes I won't get to Everybody got like 40 or 50 firms in the queue there but drop your info in there and I may do a roast like this if I think it has something to add to the rest of the audience. You got any advice for this firm if this is something that maybe you went through like drop a comment down below thanks for coming and hanging today and I'll see you in the next one.