296 How To Grow Your Accounting Firm Beyond Upwork

Many of the folks who listen to this pod are running successful accounting firms and went through sort of the traditional journey from undergrad to maybe getting a certification to going to work for somebody else and then launching your own thing. But these days with gig work, we often forget how many accountants are hustling on platforms like Upwork or Fiverr or whatever other clones there are of the same thing out there. Today we are looking at a firm that operates on upwork and wants to grow past that. And, and I think this is actually gonna be increasingly common as we have a whole generation of people who are accustomed to doing some form of gig work. This giggery leading to grown like mature accounting firms that eventually grow off of those platforms. So today we are putting our coaching hats on. We're roasting a firm sharing some wisdom how to grow past upwork. So come on in and let's talk about. So firm roasting how this works. People submit details to me anonymously via the form that I will put down in the show notes, information about their firm, financial statements, all sorts of things. They gave me all that info anonymously and then we can give them some advice. Now the fun for the rest of us is it's much easier to put that coach hat on and look at their stuff and be like yeah, you should do all that stuff. Much easier to do that than look at our own firms. But let me read through this submission and I can tell you when I read this I was like, boy, this really puts in perspective the echo chamber that many of us are working within and reminds you of just the reality of like getting a single person firm off the ground. So without further ado, let's learn about this firm. Their revenue is 70% made up of bookkeeping, 20% made up of tax. But most of that is sales tax and payroll. They do very few 1120s or 1040s. It's just them, 100% me, DIY at all. Even the marketing unfortunately. Revenue the last six months was about 20k. They say only about 20k. They just moved from an itty bitty market to Texas. Their clients work all over the place. Local clients have always been rare. Specialization upwork is the only place I can find clients lately and it sucks. I'm not new anymore. I'm very good at problem solving and presenting top quality data. I'm just getting started again in 2024 after a break in 23 that caused me to lose all my clients and start over. That's rough. I often work for CPAs and support app developers overseas so this is an onshore US based person, but they're running some support I guess for presumably accounting Software developers overseas said I can manage 25 small monthly clients by myself. The Annual Cadence I get busy during the winter holidays pre tax season. Everyone's in a rush to do taxes but I mostly do the bookkeeping before a tax pro handoff. So busy around the winter holiday presumably as they're doing the kind of year end close pricing, it always works out to around 30 to $60 an hour. My rate is $45 currently down from 50. I developed a good flat rate fee estimate calculator as well. You getting some perspective here you high and mighty firms? Billing post pay monthly or upwork, escrow in advance, sales and marketing. I make myself available at all times. I meet everyone on Zoom first to see the balance sheet, transaction volume, reconciliation history and tax history. 90% of work is on upwork, but it's not as good as it once was. I've got links to their websites to their website here. It looks fine. It looks like everyone else's website. Nothing that super differentiates it but honestly that's the case with most $10 million firms. Technology they're all in Google Drive. QBO money thumb. What is Money thumb? Oh like extracting transactions from bank statements. Maybe Excel, Adobe Acrobat, Drake, pto, Zoom and efin. I focus on bookkeeping and I upsell income tax forms if I'm comfortable with the person and bookkeeping as in like a small solo llc. That is how I started. That's what I'm comfortable with. Pains I can't find any clients right now or land them when they do come in. I have a few but I'm at less than 50% capacity. My teeth are now broken and I need to fix them really badly. I'm worried it has become a turnoff when I meet every potential client face to face. Enjoyment. I love learning about each new business I encounter. I see a lot of neat stuff I don't know about you. When I read this boy, it kind of grounded me to the reality or reminded me of the reality of of being in a tough spot, not knowing a way out and having to do what you got to do. We love to get on our high horse and say like no, this or that is ridiculous. The reality is this entire ecosystem is a food chain and where you started is generally going to be wildly different than where you are today. And when we point our fingers at other people and say this and that man, you could have pointed your finger at yourself five years ago and said the exact same thing, myself included. What was I doing five years ago? I think I owned the firm at that point. I had never really posted on social media and somehow now I make a podcast because people think I'm an expert in this stuff. Twelve hundred people will listen to this episode today. And five years ago, I was a schlub running a firm that didn't know anybody else running a firm. If that doesn't tell you how quickly things can change and how much of an expert I'm not, then I don't know what will. But all that is to say everybody started somewhere and even, even the people listening to this who, you know, I would think are really impressive or they have these level of pricing that we would all be like, wow, there's a firm five times your size that looks at that and just laughs, right? Like, so we are all in an ecosystem, the whole average pricing things and how people like to dunk on those studies. Like, I don't care about that. All that matters is getting from where you're at today to getting to something slightly better and making friends along the way and finding people that can help you get to that thing that is slightly better. And increasingly, as folks come into the profession from gig work, like, as I was doing some research for this, I was like, if I title this how to grow your accounting firm beyond upwork, this is probably going to find a ton of new people. Because I usually talk way up here to honestly, folks that are running more mature firms like I was $5 million practice with a decent sized team. But the distribution of quote unquote firms out there, there's a huge volume of people just doing gig stuff. And we love to look down our nose at that work. But just like how the Jackson Hewitts of the world and the H and R blocks of the world and the QuickBooks Live bookkeepings of the world, I think are only going to serve to bring more people into the profession. Gig work probably going to do the same. So how do we support folks coming in here to get to something sustainable? Because right now, for this person, the business is not operating at a level where this can be your thing. You got to have another thing. You're splitting time at this point. Okay, five tips that I've got for this person specifically, folks, if you have insights, drop that stuff in the comments. As we talk about a lot here, that's helpful not only to the person who submitted this, but for all the people who skim through those comments and like, oh yeah, that totally Applies to me too. Like that stuff is so gold and. And when you have the courage to not lurk and to share, oftentimes you're gonna make a new friend. You're gonna learn something too. This episode is sponsored in part by liveflow. Boy, if you've been around this podcast, you know we have run a lot of Live Flow ad reads. You cut this podcast ad feed and it bleeds Live Flow ad read. In fact, you know what we should do? Hang on. I had a whole ad read for this, but I just got a better idea. You know, we should do. You know we made that Jason bot that's like connected to all the podcast episodes and you can ask it questions and It'll go across 280 episodes and give you answers. Let's just make. Ooh, let's make a bot. That's just all my Live Flow ad reads. Then I can just ask a question. I have this workflow problem. How could Ly Flow help me? I spent a bunch of money on a reporting platform. Is this something that LifeLow could have done for me instead in a spreadsheet? Because that's where I'm actually happy and comfortable. What's the easiest way to connect my spreadsheets to my client's QuickBooks data? In a single click. And the chat assistant would be like Live Flow. No it wouldn't. It would be like, oh man, I hear you. Oh, that's a real tough situation you got yourself there. Here's what you're going to do. And it'd be like a two paragraph long way of just saying Live Flow could be good content though. We should put something useful in this ad read Live Flow. It's the easiest way to liberate data from those client QuickBooks file files. Whether you're in Excel Google Sheets, you get a little Live Flow button. It's like an extension. You click that guy and you can run all your favorite QuickBooks reports. Sync that data into QuickBooks like a 1 time sync or an ongoing like rolling sync. Do like some, some kind of real time reporting stuff. Great way to get data out to stakeholders who you don't want to have access to the QuickBooks files. Also be a banker, an advisor, employees of the business, quite possibly even the business owner themselves because they keep breaking things. That is Live Flow. To learn more about that one, check out the link in the show notes. This episode is sponsored in part by Makers Hub AI this, AI that. Listen to me, I'm the captain now. The biggest thing that is going to impact our accounting workflows over the next 12 months and it's already impacting them now in my opinion is AI vision models. It is the ability of AI to look at something and understand it and pull stuff off of it. And it is already much better than anything OCR has ever done, even picking up like messy handwriting. But when you combine AI vision models with large language models, they can do a bit of reasoning and like fill in the blanks and make a make a little decision. The combination of those two things means we can pull things off of documents and put them where they need to go in a much more automated way. And the company that is crushing this for accounts payable right now is Makers Hunt Up. We've done a few demos of their tool on on my main channel, kind of like finally delivering on the promise of automated extraction for invoices. Like people have been telling us that this could be fully automated for a long time. Feels like we just got like a way bigger step closer. Going to be particularly powerful for the hairy accounts payable workflows where we got to pull a bunch of item detail off of some invoices. We did some wild examples in the last demo day video we did did with Makers Hub chucking super gnarly humongous invoices at it and it lifts like hundreds of lines of item detail like almost instantly the same text impacting our 1040 workflows as well in a really exciting way. But if you sell accounts payable to your clients or if you're exploring doing this, I think AI has changed how profitably we can do so. To learn more about Makers Hub, check out the link down in the show notes. So five tips from me and then I want to see your your suggestions in the comments as well. Number one, marry an interest with your expertise. The quickest way out of this hole of being just like everyone else is to be perceived as the bookkeeper, the tax person, the whatever it is for X. You want to be the person for a specific type of individual right now. And gig work platforms like Upwork are the the roughest version of this right now. People don't know how to differentiate differentiate you from anybody else. They can literally skim down the list of hundreds of people who purportedly can do the exact same work and what are they making buying decisions off of like average review rating or something like this, which is all just a kind of a gamified thing of of who can optimize for that. The best they're looking at that they're looking at hourly rate. They Might be looking at country because that's important for folks. But in a like platform like that, it is inherently homogenized where you're going to have a really hard time separating yourself from everybody else as opposed to starting to build a network to be the person for, I don't know, online fitness coaches like something very specific. And this is where taking something you already are interested in or, or taking something you maybe already have some expertise in can be a real hack to get you into that space. So I've shared before, after I graduated from college I spent like five or six years doing rally racing, which was like a super fun thing. I did it while rallying, working in firms. And so I just, I know a ton about that stuff, more than any normal person would. Something from my past that I was super passionate about. And I still love that stuff. I enjoy hanging out with those people, I enjoy talking about it. It is something that is ingrained in me that if framed the right way professionally, in my opinion is a competitive advantage. Because when we're all going to spend decades presumably doing this stuff, much more important than like your natural skills or natural ability is how much time and effort go in goes into developing your skills. And because this isn't my second grader turning up at a track meet where it's just a bunch of kids and the fast kid's going to win. Like, because being a grown up professional is not that. It is about what are all the decisions and investments I've made that have gotten me to here. Then when I have something I'm passionate about, where I will go home and I'll read about it at night just because I want to, Because I love that thing that is setting me up for success, where I'm going to be ahead of other advisors just because I have that passion and that passion is a gift, that passion is a competitive advantage. So screw the folks that say don't make your hobby your job. I also agree there are things that maybe may not sound like fun things that can become fun when you become an expert in them. A hundred percent that's a thing. But if you don't know where to go, if you have no options, what's the thing you're going to do anyway? Like what's the interest that you have if you could spend all day talking with those people and it didn't feel like work that is worth going after. So think about marrying an interest with your expertise to start becoming the person for X, for a specific type of entrepreneur who has a need for what you do second tip from me, build confidence. So much of this is about the confidence that we can come across with. This is something that I, for whatever reason, it comes easy, easily to. It comes easier to me, I think, than other folks. I can sound very convicted in what I'm saying often, sometimes to a degree that isn't helpful because it'll actually like in the, in the scope of running my firm, I would come in and I'd be like, yeah, this, this, this, this. And they're like, well, I guess he's like 100% on that stuff. And that's just how it's happening. And I'm like, no, I want feedback. I want you to like, tell me what you think. But you just come in with so much enthusiasm that they don't think you want to know what they think. Right. And it's a skill that helps with content production, probably. It was a skill that definitely helped with sales and with client relations. But it's something that can be learned, that can be developed. We're not at the second grade track meet where you are just going to turn up for the rest of your life with whatever you were born with. You got plenty of time to develop all the skills you need. Nikki Glazer, comedian. You may have seen her at that Tom Brady roast. Oh my gosh. So hilarious. I heard an interview from her the other day. She used to be so afraid of public speaking and now she's an absolutely prolific comedian. In middle school, she would shake like so violently when she would have to get in front of people just in a classroom to speak that she couldn't do it. And they had to make accommodations for her in all of her classes to do different things, like give the speech outside of class just to the teacher, like turn the lights off in the class so she couldn't see them or present with her back to the rest of the class. This is a person that is now a prolific standup comedian who was not born with the tools that anyone would have said would have aided her to do that job. She's now, I think in her 40s or something like that. But there, I think our childhoods and when we see that stuff, we see the natural athletes and all these things where people are born with something, we see that and it has too much of an impression on us to think that we aren't capable of like willing in the skill set that we actually want to have when we're playing a long game. Where my second grade daughter ends up by the time she's 60 will be a product of. Of the decisions that she makes between second grade and turning 60, not the skills that she just, you know, it just inherently comes naturally to her. So things that we can do to build this confidence, because confidence will aid us in absolutely everything that we do, especially when it comes to winning business. Write every single day. I write a minimum of two hours a day, and it's why I have so much to say. In the course of writing, you actually find that you have. You have more to say than you do if you don't write. Writing helps to take a lot of kind of disparate, conflicting things that float around in your head and unify them into, like, something that. That forces those conflicts to kind of shake themselves out and resolve themselves. So it's a great way to sort of organize your thinking around all sorts of things. But if you're thinking about going into a domain that you love, carve out time every single morning to write about it. 4, 25 every single morning. I've got a little black book and I'm handwriting in it for about 25 minutes. That's like a personal sort of journaling thing I do to just kind of. I mean, a lot of it's therapy. It's just kind of like processing all the things that are going on or whatever it is. And usually from that, I go straight into writing podcasts, writing videos, that sort of thing, social media. But the more you write, the more confidence you're going to have in where you're at and how you feel about these things, so that when that client comes up and you have that opportunity to have a discussion with them, you are going to sound like a train that is, like, headed down the tracks, and you will not be stopped. That is what good clients want. An advisor who is going to take things by the rain and, like, have their back. Like, they want you to run with this. The more this confidence you can develop, in my opinion, the more compelling and persuasive of a person you are. And unfortunately, as accountants, where we like to invest in more technical skills, oftentimes it's not the technical skills that will cause a client to come and. And buy from you. It's how you made them feel in the buying process. It's how confidently you can communicate what it is that you do. So doing things that will develop that skill of confidence, super valuable. Number three, find a way to hang with others like you. I mean, we've had amazing little meetups spawn, just from the comments in these podcasts, of one person dropping a Comment, other people hopping in, those people meeting. Maybe the biggest confidence hack I ever had. And it all happened due to Covid. And Covid was what pushed me to go out and super engage online because we had all of this Covid legislation coming out so quickly and you had a bunch of really smart people on tax Twitter sharing that stuff like almost by the hour as it was coming out. And I had a firm full of 40 people who were doing their best to keep up with stuff. And I was perpetually the most up to date person with all of the best information to like a superhuman level where the team would literally say like, how do you just know all of this stuff? And I'm like, I'm not figuring it all out myself. I'm definitely contributing. But I've got this community on social media of a lot of really, really smart people and everyone's like, ah, Twitter. Like, that's dumb. Like, no, these are like people that are every bit as capable as anyone in my practice and they're all sharing really good information in near real time. And when I got plugged into that and started making some friendships and doing like mastermind groups and, and just kind of sharing what was working and what wasn't working with other firm owners, I came out of that with a profound sense of confidence in, I think I'm doing the right thing. And when we're dealing with clients all day who will like lob different things at us and make requests that oftentimes are unreasonable, it takes being grounded in. Nope, this is what my business is, this is what I stand for. This is the right answer and this is the wrong answer. That confidence makes you a better business owner. And like, I don't know that we talk about this enough. Also made all of this feel more sustainable because it was tremendously energizing to find those people I could talk with. Like, this is without those people. This is like a very isolating thing because nobody else has that depth of understanding of the struggle that you are going through. If you're hustling on upwork right now and it's not working out for you, Boy, imagine making five other friends who are struggling through the same thing right now and trying to take their accounting firm off platform. Having that little community of people you can talk with. Absolutely gold. So how do you do that? You be visible, you don't lurk. You've taken step one here. You submitted stuff to a form for some random YouTuber. No idea if he's actually going to like talk about my thing, but that's that's what you got to do every single day. Be visible, talk about what you're doing and those folks who are doing similar things will find you and only serves to aid you in your journey. This episode is sponsored in part by Teamup. What if you went out and you hired an offshore person and they took some sensitive information, they did something bad with it, they stole. Oh, worst case scenario, right? How do you manage that? So to start, some advice from Team up here. According to Team up, the number one and number two mistakes accountants make. Number one, thinking of your overseas teammates as, quote, offshore staff. Thinking of them as as something else rather than just an extension of our team that is subject to the same rules and restrictions and controls as anybody else that I hire, whether they're onshore offshore. Mistake number two, making global teams more complicated than they really are. The three things Team up always says one, it's just people to build relationships of trust over time. And three, what would you do if you hired an Arizona? Wow, why the heat for Arizona? Not, you know, Florida or something like that? You hire somebody in Arizona, you probably don't stay up all night worrying about them, right? And the same should be true with your team in the Philippines. Hire the right people, get to know them personally and give access to non sensitive info first. Feel like there's more a question of internal controls. Like we are accountants so we don't really rely on trust so much, right? We don't just fling open the keys of the castle for anybody to come get it. That's not an ad copy. That's my take. If somebody in the Philippines is going to steal from me, it's because I put them in that position. Just like if I hired anybody across the country instead. Focus on the positive. Don't get too wrapped up in fear and scarcity. Be logical about thinking through those problems and coming up with solutions for them. To protect yourself not only from offshore hires, but the rest of your team as well. Learn more about Team Up. Check out the link in the show notes. Thank you to Team up for sponsoring this episode. This episode is sponsored in part by Stanford Tax. And I'm sorry if I sound upset today or a little emotional. I just got the news that we lost someone that was very near and dear to all of us. If you came of age in this profession doing tax work, Stanford Tax, they just killed the paper organizer. You know, the paper organizer you print out of your tax software and you send it out to your clients. It's big and it's dumb and it doesn't make any sense. And I ask them a bunch of pointless questions, but it's dead and it's never coming back. Okay, Stanford Tax. It gives you a modern way to gather the same information using pro forma info from your tax software. Like it will actually intelligently ask the questions that need to be asked, taking into account that pro forma data so that on January 3rd every year, you aren't cleaning out the local staples printing out umpteen reams of paper organizers, only to mail them to your clients and never get them back. We did a demo day of Stanford tax on my YouTube channel where you can see how it works out in five minutes. If you're still using paper organizers, please stop. Please, please just stop it. I know you're still working on extended 1040s, man, this is the time to be kicking the tires on new tax tools. So you're not going in blind to next tax season. So you know exactly what you're working with and what'll work and what won't work. So by the time you get to next January, you are absolutely humming. Okay, if you do tax stuff, check this one out. Stanford Tax. I'll put a link in the show notes. Tip number four look to partner with other firms to shore up expertise gaps because it is really hard to be technically proficient in a. I don't know if I should say in a one person firm because you absolutely have one person firms who can be tremendously proficient. But be mindful of how you're technically developing because I can tell you like all of my technical skills came from. Not all, but a lot came from my colleagues. There's tremendous freedom to be had in running your own firm, but that doesn't mean that you have to be on an island. And for folks who want to be solopreneurs, that probably looks like finding other solopreneurs who have expertise that is different than your own, who are open to having conversations and helping you with certain engagements where something may be like a little more than you should be handling. Don't feel like you have to put all of this on your own back. Find a way to have touch points with other firms to continue broadening that technical expertise alongside all the other soft skills. They're gonna make it come across better in sales meetings and stuff like that. Number five, which I alluded to real hard in the first one. The path out of this is to build a very specific niche. And you do that by being relentlessly visible in a specific space. People out there who run accounting firms, small accounting Firms, if they're on social media, if they're looking for Anything accounting on YouTube, they can't not find me. Go search anything accounting related on YouTube and oh my gosh, do you see my dumb face? So many results in the YouTube feed. So often winning something like this is done just simply through sheer force of will. And doing it more than anyone else would think is reasonable. So how can you do that for a specific space? Finance advice for independent crab fishermen, Crabbers. What do they call the people that do crabbing? I mean, find something really specific that, that you also may have a passion for and is interesting to you and flood social media. Flood YouTube with good stuff, like, not with crap, with really solid stuff so that you are unavoidable. Like, if they are out there at all, they can't not see you. Now, where we often get stuck here, is this like chicken and egg problem of like. Yeah, but I don't know anything about crabbists. How do I become an expert in that thing if I. If I don't have any of it? You want to know a version of that that happens every single day is generalist accounting firms taking their first crabber. They don't know squat about it, but the fact that they help a whole bunch of other people emboldens them to think, oh yeah, we can help this one more person. And there is some truth to that, because in reality, this crab fisher's person, their stuff is probably not all that different than the landscaper client you're doing as well. But the person that's going to become an expert for that, for that specific type of person is gonna be the one who starts with 1 and then does 3 and then does 5. And at that point, you're miles ahead of that generalist firm who's just doing a couple of them. So it doesn't take as long as you'd think. And I would argue this is part of the value too, of marrying this with an interest of yours. If you know more about that domain, you know the questions to ask and the things that they're actually bumping up against. If you don't, and you're a generalist, you're just asking the generalist questions and maybe cruising right past stuff that is important but very specific to that. So do you need to know what you're doing? Like, do you need to have a certain level of technical proficiency to do this stuff responsibly? Absolutely. But consider what level of technical proficiency the generalist firm has who just brings in one E Commerce company or something. Like that, right? Always remember your internal identity, what you think you are capable of will perpetually lag behind your external reality. The things that other people see in you and think that you're capable of. So it takes time for us to prove to ourselves that we are capable of something. And for normal people, that self identity that lags behind what you're actually capable of. If you are interested in something and you go home at night and you read about it and you totally geek out on that stuff and you listen to the podcasts about it and all that, you are a whole lot closer to being a great advisor for that type of person than the generalist firm or then the generalist person on Upwork who's just going to pull that client in as yet another client. Now this person mentioned that they love learning about these people's businesses and going deep on it. Like that is the, that is the joy of doing this stuff. It's such a gift to see into so many different types of businesses. Imagine being a CFO for one company and turning up and just seeing into that one company every single day. That never sounded fun to me. Compared to a decade of working with all these different SMBs and getting to see so many different situations and meet all these interesting people. It is such a cool profession. Not for plunking in journal entries, but for the people that you meet along the way and the relationships that you build and how that makes you actually an incredible entrepreneur. To spend all day in constant contact with other entrepreneurs. There's so few of these people in the world. You go to the grocery store, almost everybody there clocks in and clocks out for somebody else. But to have a job where you get to work with entrepreneurs all day long, that's super, super cool. But it comes with some very real trade offs, especially when you're getting started. I would hazard a guess that there are just as many gig work accountants out there as there are accounting firms. That every one of those people basically is a one person accounting firm. And a big percentage of them could evolve down the road to be many people accounting firms. Or they'll just keep doing the gig thing because that's what they enjoy. But if you aspire to outgrow that, find a way to marry an interest of yours with your expertise, start building that confidence, hang with other accountants like yourself, partner with other firms to shore up expertise gaps so that you can build a super specific niche. Become the go to person for that need. Oh yeah, golf caddies. That's Tom. He's got that stuff on lock. That's what you want to be and then you're totally off platform. You're setting your own prices. There are no substitutes. Like you get to make the rules. Good on you for raising your hand and saying who's got ideas? Where do I go from here? A lot of smart people listening to this. Drop that wisdom in the comments. If you're listening to the audio only feed, your player will have a link to the YouTube video. Pop in here. Drop a comment if you have something to share. And if you want to get your firm anonymously roasted, check out the link in the show notes. Maybe you'll be next. Tomorrow we are going soup to nuts. Building a new niche from scratch. Basically what this person needs to be doing to get off platform, but hyper practical examples of a whole ton of different strategies you can do to separate yourself from the rest of the pack. It's something that new firms ought to be doing, but just the same mature firms need to be doing as well to get more specific higher paying work. I'll see you there. Toodaloo.