583 He Sold His Accounting Firm To His Son (And It Actually Worked)

Generational accounting firms are actually super common and you can understand why. How cool would it be to build a business, then hand it over to your child? Nepotism for the win. But as you may imagine, these can get messy from the parent hanging around indefinitely because they've got nothing else to do to the kid having grand ambitions but being blocked by the parent. This can create a ton of friction at a stage of life when you probably want to be like spending quality time together, right? Who wants to spend the final years with their parent fighting over accounting firm tech decisions? But today we're talking with a father son duo that seemingly is doing it right. And what is the most Canadian succession plan I've ever seen? They found the perfect balance of supporting each other and building their firm. YBL stands for your bottom line. And today you'll hear from them. One, how the firm came to be because they never anticipated going into business together. Two, where they set boundaries on work conversations versus family conversations. And three, how to navigate the parent getting in the way versus the kid having their own ide for how to run the business. This was one of the most fun interviews I've ever done. I think you'll love it. So enjoy this conversation with Mike and Ross Libby.

Mike and Ross Libby. Dude, I've been so looking forward to this. Thanks for being here.

Thanks for having me.

Our pleasure.

One of the biggest like generational firm success stories I've seen because there's a lot of examples of the opposite. But real quick, why don't we, why don't you each give us kind of an intro to like 60 second intro to, you know, Ross, tell us about your background and what you do now.

Got my CPA back then CA in 84 and started YBL in 2004. Brought in a couple of team members to help on a subcontract basis as we started. Mike joined in 2010 and then in 2015 we found he was in the same place that I had gotten to. And so we then started expanding from there and now we're a team of. In the 30s you go back to.

It was 2010 when Mike first went to work for the firm and he was the first employee of the firm, right?

Yeah. Yep, that's correct.

How much or how little like planning and rules of the road sort of conversations happened there or was it just like, hey, you go, go do this thing for me?

Well, even in the very first weekend before he started, we had a big long conversation about the possibility. I had always thought that he was going out and sort of sew the proverbial wild oats elsewhere. And you're talking about work.

Right.

We start.

We started get to know him to understand what he's talking about, that's for sure.

So we started exploring what that would look like. And, you know, we. We realized and stated right off the bat, you know, you got to be able to still disagree and yet be friends at the end of the day.

Yeah.

And that separation doesn't work for everybody. Right. I mean, I went out looking for jobs, and they kept asking me every single time, hey, we see on your resume here, you used to work for your dad a little bit. Why don't you work for your dad? And I didn't have an answer. So I went back that one day after college, before university, and I said, why don't I work for my dad? And we talked about it like you said, for that weekend. Then Monday morning I started, and rest is history.

That's interesting. But this was your first employee, so you're not only learning how to manage an employee, but also like, it's your son.

Well, I had been in the corporate route previously, and so I. Lots of management and so on a little different when it's my.

So.

But it became. It was very important to us right from the get go that that was not part of the working relationship. And, you know, my wife and I often comment, you know, he walks into the office and we're Ross and Sue.

Yeah.

We are not mom and dad. It's never happened in like 15, 16 years. And yet when he walks into the house at home, it's mom and dad. I don't have to worry about that because he's always Mike, you have to

turn it on and off. I mean, other than our last names and such, we have other team who are part of our family that don't have the same last name. People would not know. There's just no difference from that perspective. So it's interesting.

What topics are off limits at Sunday dinner?

Nothing. In fact, we actually get in trouble by my brothers often that we're just talking too much about ybl. So YBL is off limits, if anything.

Okay. Does that get to a problematic level where it's like, do we have time and space to. I don't know, does the relationship become too wrapped up in that potentially?

Honestly, I would say no. We are very good at turning it on and off. And we didn't used to be. And so we kind of had some. They would make some jokes, okay, enough like, no more ybl. And. And so we've kind of learned from that perspective that, you know, we shouldn't. But you're right. I mean, could we talk endlessly about ybl all night, every Sunday, dinner, whatever that might be? For sure. It's easy. Why not? We're right beside each other, and we don't get to do that during the day in the nine to five. Right. So. Exactly. That's why we go to different conferences and stuff and spend some extra time.

The way you talk about it is. Yes. If nobody else is in the room to annoy, we will talk about it until the end of time. And we wouldn't have it any other way. Like. Yeah, yeah. And that's fine with you?

Yeah, absolutely. We. I would say it's really a 9010. Most of the time. We're absolutely talking about business, like I said, because there's just not enough time in a day to talk about business, generically speaking. So any time we get, even when we're away or even we're on flights together, or we're just hanging out or we're doing something or at the cottage and nobody's in there in the room, we'll quickly pivot and start talking about why.

Bathroom.

Exactly.

For better or worse, it's just very quickly, let's say we got this issue or all the time.

So back in 2010, did you tell me before this that you were literally living in the basement? Literally living in. And you were working from home before. That was cool, Correct. Okay. What did the office environment look like then? You. You're just walking up stairs for work or.

It was a very, very easy commute, that's for sure. So, yes, I was living in the basement suite. Just fresh out of college, got the job, working for him. Go upstairs, hang out, just work. I mean, we had a big living room or a big family room where we had two desks kind of on an angle like that together. So our backs were backs toward each other. And it just worked tremendously well. It worked very, very well. And honestly, you do miss some of that, understandably, from a remote perspective, we still do have an office, even though it's just us who go into it and a couple other teammates. And even now we have a window between our offices, so we just quickly open that up. Shoot. Whatever we need to do first.

Sewing your seeds now. Shoot. This is a family podcast. I know you told me before that you went fully remote in Covid Ross. Like, has it been hard for you, like, this experience of working in the same room shoulder to shoulder and him hearing you take calls and like, just that level of like kind of being lost in the remote environment. Like, has that been a struggle at all for you?

There's elements of that that I miss. Mike still comes into the office one day a week. Sue's in four days a week. I'm in every day. I'm now at the stage where originally, when we moved into our first office in 2016, I did not want to be at home at all. We made the decision, I was out when Covid hit the team, knew, you work from home, I'm going to be at the office. Anybody who needed to be at the office could be and had that option. There's elements of that that I know, the walking, you know, to get a cup of coffee and getting accosted by four people with questions and issues, that sort of stuff. Mike and I, you know, if we're not in the office together, then we connect up via teams or whatever as well.

And so it's. I mean, we got very lucky that we'd set everything up to be remote prior to anything happening. So we basically ripped that band aid off and we were able to kind of reap the benefits of, of that situation. So we've just exploded kind of ever since.

Knowing what you know now, is there a more like robust version of that planning conversation that you would recommend? Like what? Are there a couple of bullet points or rules of the road that they ought to establish initially?

No. So, I mean, ultimately I have a six year old boy right now and it would absolutely be my dream for him to take it over one day. But interestingly so, if you go back to when I was in high school, there's not a chance in the world that we would have ever worked together. I don't think think there's anything he could have technically done differently during that process to kind of mold me into knowing and understanding that, hey, you know what, I would love for you to take this over. And honestly, he probably wasn't thinking that either, even when I went to school. And so I didn't even really understand when you're talking about high school or even prior to that, what he did or what he was doing. And I actually went to college originally for accounting because I thought it was easy and it wasn't. It was not easy at all. I found that out the hard way. And so after that, again, I didn't really put two and two together that this would potentially be my path. Obviously, very grateful it turned out that way. But how do you have pushed me more in the earlier years to say, hey, I'd love if you did this or work like it was not even on the table, not at all. I really didn't understand what he was doing. So I don't actually know what I personally would do differently for my son. Whether it's push him more into math or push him more into this or just completely let him see what I'm doing. He's very interested. He's actually incredible at math, but that doesn't necessarily mean he's going to be an accountant. And for me, I don't love the numbers on a day to day basis anyways, focusing on operations.

Interestingly, you know, when he joined it was neither his expectation nor mine that this was where we were going to end up. Evolutionary process became, I joked initially he was my exit strategy. And then gradually it became less of a joke and it was like. And all of a sudden now I'm beginning to think about it without, you know, making any, you know, conscious overtures in that direction. But he was learning more and more about the higher level workings of the business and that sort of stuff. Then took over the HR side and took over more and more stuff and it's like, okay, that could work if that was what worked for him. But from my perspective it was always, it was a happy happenstance as it came along.

I'm curious your take on this because commonly how this can transpire is you have someone who's in Ross's shoes and you're like, hey, I'm nearing retirement, I need a plan. I have a child that's off in industry doing something else. And it's a little more of a mid career shift where it's like the coming in with the expectation of you're coming in because of succession, I guess

part of the plan.

Right.

Would you give any wisdom to how to manage the balance of like, hey, here's the business thing, but this is also like the most like precious, important relationship I also have in my life.

Well yeah, there's a lot, a lot went behind even with him having been, you know, us been side by side all those years. And there was you, you made reference to that when you were talking about COVID The a lot of learning just by osmosis that happened. Whether we're talking about the accounting, the tax or the people management, the hr, all of those different elements. And it's funny, I hear my own voice coming back every now and again through the window. It would have been much more difficult in my head had it been he'd been working corporately and then was coming in to do it for me, it became very natural. I'm not saying it would be impossible, but I would want to have had lots of time to be able to sort of grow that and groom that and so on. We had that naturally. So certainly the longer. If somebody's got that kind of route in their process, I would want to have a lot of time to do that just to make sure that there's that transference of knowledge and information and so on.

What should that Runway be? Is that like, is that five years? Is that 24 months?

Like, what would you say my knee jerk reaction was? Three to five years?

Okay.

Yeah. Again, it's going to be different for different people listening.

Right.

But yeah, I wouldn't want to see it faster than that. I wouldn't have wanted in our case if it played out that way.

And I was also fresh out of school. And so he was able to mold me in the way. Absolutely, you got it. And I think that certainly worked to our benefit, understandably that I didn't go into industry and have this kind of thought process. And then he had to kind of fix that thought process to what we might have ended up being. But we grew it alongside together being his first employee. So there was that much more of opportunity as opposed to, should he have been running a 1050, 100 person firm at that time? To insert me there at that point, that would have been much more difficult.

Now you've bought the firm from Ross now, right? How does that even work? How does that transaction come together? What does negotiation look like when you both lawyer up? What does that look like?

So it was, it was interesting. It was very good. It was very seamless. And certainly not everybody's situation is going to be like that. We were almost too understanding of both sides. Right. I'll always joke that I overpaid for, for the business and I didn't get enough and I still feel that way. But ultimately what ended up happening was we were talking to specialists, how do we structure this estate, freezes, etc. Whatever that ends up looking like. But how do we make sure that I'm happy and he's happy? And ultimately we actually spent a lot of time wondering how much that I brought to the table original. And so say we ended up at 5050 because I was there so early, it actually didn't matter from a government or CRA perspective, completely irrelevant. So we focus a lot of time on that seeing, okay, where would he have been without me? And so on and so forth. Regardless of whatever that percentage ended up being. And then it came down to, okay, well, how do we make sure that we do the most tax efficient thing from his perspective? Because for me, I mean, that was important. I wanted to make sure that he was taken care of, all jokes aside, regardless of the purchase price, and that he or that we structured it in such a way that we could ensure that he wasn't just taking a major tax hit out the gate on that. So with that, we were so flexible. When we were speaking with the specialists, they were like, you guys need to figure this out, like, what do you want? And there was a big tax law change that ended up coming at the start of, I think it was 2024. And so that was our deadline. Like he was going to pay considerably more taxes at that point if we didn't get this done prior to that. So that was actually the kick in the behind that we needed to say, okay, well what do we do? What do we want? How do we need to structure this? And so talked to all of the appropriate specialists, made sure that everything made sense. We got a third party business valuation because I could have got one, he could have got one, but we felt that it was fair and it was appropriate for what we were looking at. And so that was a purchase price. We determined the structure behind the scenes, talked to the specialists, got everything figured out just in the nick of time before the tax laws were changing, and that was that. And so if you want to separate it from the standpoint of what literally changed within the business, literally nothing. There were actually people that didn't know that I purchased it for a year and a half. And so I started speaking about it at conferences. And I wasn't hiding it from anybody. It was just we didn't want people to have this perception of oh, Ross is gone, or oh, Ross is leaving. Because everybody knew that I was really the one that was running the business, running the operations, making the high level decisions there anyways. So we didn't want any perception from that to be that, okay, Mike's purchased it or this is what's happened and so Ross is on his way. Not at all. He's a very, very valu. Part of the team, understandably. And that's not going to change for the foreseeable future until I have to kick him out and he's old and senile and stuff. But I keep telling him, push me

out, kicking and screaming when I'm 80.

But nothing changed. Nothing literally changed because I was already running the business for at least four years at that point. So it's really just signing the paperwork and we're like, wow, okay, that was interesting. Literally nothing changed except for the first name on the paperwork as opposed to the last name.

It was funny when we had a number of our team that had come with us to a big event in downtown Toronto and part of the motivation was just the independent learning. The other part of it was Mike's one of the speakers and his subject was succession and he was talking interwove our story into that. And easily half of the team who heard that were like, oh, I didn't know that.

And again, we weren't hiding it. It was more just, I don't know, I don't know what our thought process really was. We didn't feel the need to scream it at the top of our lungs because nothing was changing and it was really just okay, now I officially own it.

So it wasn't like you were Mr. Libby until this happened. And now. Okay, for now, call me Mr. Libby. And he's Ross.

We've always been running the business from an operational or I should say high level standpoint, regardless of if I'm the one making the overwhelming majority of the decisions. So, I mean, it just, it works very well.

That's cool. This is about the most Canadian succession I could imagine.

It is.

I haven't even said sore yet.

So even just getting to a number. So use a third party getting to a number.

Yep.

Maybe the stickiest part of this is like from Mike's perspective. Yeah. What was my contribution to the business?

Right.

Like, did you end up with any sort of framework to that? Did it come down to clients? Like, how did he get to something reasonable?

Like, Mike alluded to this earlier in terms of Canadian tax law, that was completely irrelevant. Now between us, I'm talking about your deal.

Like, Mike's got to get his Ross well.

And that was the thing is how do we make sure that we're treating it fairly for both of us? Recognizing also that Revenue Canada says this is the way this deal is. And so in terms of any valuation is going to come with a range. That range allowed us a little bit of flexibility to be able to play

within that generational differences. It's hard to walk into any office environment and have kind of the traditional partner class of folks and then the youths come up and buy them out and there not be friction there. Let's find the nasty stuff.

Let's dig up the dirt.

Let's dig up the dirt. Your team's not watching this, so let's get into it. Even just basic generational differences and work expectations and all of that. Where have you bumped into that sort

of stuff from a generational perspective? I would say that, I mean the big obvious one is technology. So he was. One of the biggest things we did was in the early days, about eight years ago we implemented carbon. So that was, was gigantic. So that was a major, major overhaul for us, understandably. And that's. I spent hundreds of hours looking for the best option for us and that worked and thank goodness it was the best option for us and I still certainly stand by that. But training and having him understand that technology, not that he's not tech savvy, he's actually more tech forward than people at this lovely age. He is, I would say one other generational piece and I don't know if it's actually generational or not, but would be the emotional aspect. And so I would consider him to be considerably more emotional about some business decisions than I would be. That's not to say that I'm not thinking about it from an emotional perspective, but I'm not afraid to rip a band aid off, whatever that decision might be. So I mean if you've got somebody who maybe isn't a perfect fit for the team or isn't even a great fit for the team, it's very difficult to make those hard decisions. That much more for him than me.

Probably more personality types than it is about generational type stuff. I'm a baby boomer, tail end of the baby boom. So for me it's been. I've had a lifetime, 45 years of 50, 60, 70 hour work weeks plus and the eight to faint kind of career. That's what I knew and that's what I understood. I'm just now getting used to the fact that it doesn't have to be that way. And so that's been a big shift for me. Me is taking that time to pull back and making sure that my team can do a lot of the stuff that before I was the only one who did.

Were you wired that Same way, Mike? 60, 70, 80 hour weeks? Was that.

I wouldn't say wired. So I was certainly working those 60, 70 hour weeks during tax time when that was just what you were supposed to do. And so that's changed. And so really I've spent the last few years working on working myself out of a job. So much so that I've been able to kind of start another business at the same time. Well, YBL is always going to be my primary Focus. I've just been able to unlock that much more time to be able to focus on anything and everything else that I certainly want to. And so no short answer, it is. And that might also be because I have young children, right? I have a two year old, I have a six year old. So I value, and I appreciate that time at home. It's not to say that he doesn't, but if he's bored, he's just going to end up start working again because he loves it. He absolutely loves it and adores it. Whereas I certainly value that much more time at home with, with the kids. So no, I don't want to work 60 to 70 hour weeks to the

point of Ross loving it. A lot of, a lot of the sticky situations like this that I hear of is the Ross in the situation. He loves it, doesn't have a lot else to do and he just loves it indefinitely. Like, is there a, when you did the sale, like, is there a plan? Like was there like an expectation of like Ross is going to be around this long? Like this is the framework. Like, do you need to have any of those conversations up front, you think?

Initially the short answer is not really. We didn't really have those conversations up front other than a nebulous long term, that over time things would start to change in terms of my involvement. As things have progressed and I've started looking at my own situation and my goals, I often joke and I don't golf, not really. He's dragged me into it. I don't curl, I don't garden. I have a lot of hobbies that pull me in other directions and I love what I do. So if I wasn't doing this for work, I'd be doing it for fun. People look at me outside of the accounting world like I have three heads when I say that. But. But now there are other things that I do do. I'm the only accountant you will ever meet or that I've ever met who does community theater. And so that is something I really enjoy doing. My wife and I love to travel and we love to spend time with the grandkids. And so it's finding the pockets of time to do that and then gradually allowing that to take on more and more. First thing I had to do was get used to 40 hours a week because that was foreign to me.

Do you feel like that's been problematic with the team at all? Like different generation of people that come in with a different expectation or is that sort of compartmentalized to Ross? He can have his own expectation.

I would say compartmentalized. Honestly, there. Yeah, it didn't change.

Probably more a problem for me than it was for anybody else is putting that in the back of my mind that the rest of the world doesn't feel that need, because I just always thought that was the way it worked.

Yeah, I'm still struggling with that, if I'm honest. You guys have, like, such a smooth, easy story.

I know, I know. I wish there was more kinks.

Well, for other people's sake. I know. I'm thinking of, like, is it almost unrelated, like, how easy it is?

Unrealistic. Yeah. These guys are faking it. Clearly, they're lying. And I guess one of the things would be that he's just had so much faith in me that a lot of dads or moms or whoever that might be, just might not be able to relinquish that control.

Just put the coaching hats on, because every jet generational firm comes with a different set of challenges. I think common stuff that I hear from folks. I can't get dad to let me change stuff. Both sides of that coin. Like Ross, what would you say to the senior person in that situation?

For us, we had a long Runway, and so I was able to build up that understanding and that expectation that he was going to be able to handle it. And then gradually, it was like, okay, you make the decisions. Just bring it back to me before you finalize it. Etch it in stone. And I was good with that, so I didn't have to wrestle with that.

And I think ultimately it became down to kind of picking battles. And we did have a lot of that time to be able to build that trust other than all of the years of my life. But from a working relationship standpoint, again, kudos to him for allowing me to make those decisions and putting that trust and faith in me. I think it would be very difficult for a lot of people when they. They perceive it as their baby. I built this from the ground up to relinquish any sort of control. And so it's going to be a very different story for everybody. Ours is alarmingly smooth, quite frankly, and we're very fortunate for that.

It's like Ross was changing diapers one morning and was like, this is going to be great.

That's it. That's it. I knew it from that moment. And so, I mean, it's really about that trust, faith, and picking battles. And so I would completely understand that it's difficult for the owner or the parent or whoever that might be. To allow their son, their daughter to make those decisions. But I think you have to give them a little bit of that leeway, you have to give them a little bit of that trust to be able to make those decisions. And understandably they're going to fall flat sometimes. But if the overwhelming majority of those are going well, I think you have to be able to kind of look forward to the future and understand what might end up coming from that.

What's your advice to the youth and the younger person in that situation though, where they feel like they're beating their head against the wall?

I think it really comes down to proving yourself. I mean, I. I think you need to make sure that when you are making those decisions or you are choosing to pick those battles, that you can genuinely stand by those decisions. I know that when there's been any time, whether it's software, whether it's hr, whether it's operations in the earlier days, it's. I would come to him and say, I fully thought this out and here's the reasons why and here's what could potentially go wrong. But I feel very confident and comfortable in this decision that I think we need to make for the. And if I could come to him with a straight face and say that I genuinely feel confident about this, then he would say, you know what makes sense, I trust you, let's do it. And again, if the overwhelming majority of those are positive and certainly haven't bankrupt your company, then I think that they've earned that trust to be able to say that, okay, I've well thought this out and I think that would really help.

It's funny, I'm trying to think of decisions as we got to the stage where I was transitioning. You create the framework, you go through the decision making process and then bring it to me. That's always sort of been my strategy along the way. I know there were times when we would have got to that point and maybe I would have logiced my way beyond to change it. I can't think of one. I can't think of a single one where he came to me and I went, yeah, but I'm going to overrule that and go another way. I'm sure there were even actually price

changes were a big one. Price changes. It just came to me. Price changes were a very big one. And giving kudos at the same time here, it's all your fault. To the lads on my left and right, you were a big part of that, quite frankly, just understanding and unlocking and kind of seeing what else is out there? And so from that perspective, we. I felt very strongly that we needed to do this because of that. And here's like, well thought out. Here's what could go wrong. Here's the churn, here's what we might lose. And again, the emotional aspect of him really tried to say, well, this is what could potentially happen. This is what could go wrong. We've had these clients for 20 years. How could we possibly. But then when you come down to the math standpoint, and here's if we increase it by X, we might lose Y. And here's the worst case scenario, at bare minimum, he does a fantastic job of certainly meeting me in the middle or at least coming up to as much as I'm comfortable with, depending on how strongly I feel about that.

You guys, it's interesting, Mike, before this, when we were talking about doing the interview, I can't remember how we got there, but you said, I think Ross listens to more of your content than I do now.

He sure does.

There's no way not to have your feelings a little bit hurt by that.

That's not to say I don't listen to four or five podcasts a week. Week.

Okay, that's almost too much. But, Ross, I feel like you're plugged into more progressive thought leadership on this stuff than maybe a lot of folks that are in the more traditional version of this setup. Where do you learn? Where did that start?

Well, probably true, not everybody is there, but I've always been progressive, if you will. I've always been out. I'm a firm believer in lifelong learning and personal development and so on. You know, you don't have to have the gray hair in my age to be able to, you know, teach people stuff. There's a lot of good stuff out there.

And I mean, it's all jokes aside, you do help support a lot of my arguments, so that certainly helps. And I mean, even all the stuff that we've gained for the realize community and the masterminds and stuff that we've kind of been part of just being able to be part of a community, whether that's with actual individuals or just watching your information, it helps to be able to see what's out there. And I mean, even in person, events, etc, it's been fantastic and eye opening to be able to see that, okay, here is what they're doing, here's what they're doing. And then filter all that down and see what makes most sense for you. It's unbeatable.

Ross, do you Remember when you and I first met?

When we first met. Okay, I'm remembering. Carbon. Next.

When I have this thing that I really stress about where anytime I go to in person events and I meet people for the first time. Time. Yeah. I just have this existential dread of me having a quick interaction and them having, like, a negative experience and, like, it keeps me up at night because this may be the one time this person ever talks to me and they listen to the podcast and all that. Was I that guy? They'll always remember that. But it's what makes it so hard at conferences to go to the bathroom.

Yep. Oh, yes, yes, yes.

So Mike had told me. He's like, dude, my dad's a huge fan, man. Stepping away. Stepping away from the john. And I see someone that is a spitting image of Mike Libby, just a bit older. And your face, it was one of excitement of like. Oh. Like all of a sudden, like, surprise. And it was still like ships passing in the bathroom where there's not a lot of cordiality, usually awkward distance.

And I was pretty sure I knew who you were.

And you were real sure you knew who I was. Was. And it wasn't until later that day, I think that we, like, got together and, like, you introduced me to Ross and I was like, the bathroom earlier?

And you're like, yeah, this is par for the course. That is just such a perfect story from that perspective.

Oh, my.

If you. If you know Ross, that, that just makes sense. Oh, man.

Okay. Coaching hat on other, other things that are common blockers for folks in this situation. Dad's got his clients. I want to build the future of the firm with my clients. Very, very different profile of people. Maybe, Mike, we start with you. Like, how do you help somebody begin building their own version of the firm?

So it was an interesting conversation we had probably a decade ago where I had already been working for him for I think would be about six years at that point. And as much as I'd done bookkeeping, payroll, personal taxes, corporate taxes, etcetera, I very much realized that, strangely, the accounting and tax piece was not really my future. Right. I was always going to be a major part of the business, but I had absolutely no interest in running the firm as a traditional partner model where you've got your book of business. 1,000 clients. 1,000 clients, and I'm just reviewing tax returns all day. That sounds terrible to me. I want nothing to do with that. And so I sat down with him and we basically had a serious conversation where I said, I need you to Understand that, that that's not where I would be taking this firm should I end up taking over this firm. Right. And so I said I want to run this as a much more modern practice where we've got people who are running operations and strategy and marketing and sales and those kinds of things and not one or siloed partners. And so while it took a little bit for him to wrap his head around that, that's really been one of the biggest unlocks for us. To be able to have me focusing on other things, whether that's again, sales, marketing, online, YouTube, those kinds of things, that's really, really helped our business. And I just honestly, I wouldn't be in it if all I was doing was reviewing corporate tax returns or any type of tax returns all day. I really want to focus on leveraging my time as best I can and dealing with kind of people as opposed to clients. Well, I love still certainly talking to some clients. And that's a big part of understanding how the business works. And you need to keep your finger on the pulse. I just don't want to do accounting all day.

Did that come as a surprise to you because you're wired more like get me into the work, man.

Well, and yeah, I grew up and saw the very traditional model. And so I guess the flip side, what made it easier than it might otherwise have been, is my recognition right off the bat that we needed someone to be able to focus the whole on the business as opposed to in the business. So by, by embracing that rather than fighting it. Yes, it was foreign to me. It made no sense initially. But then I went, well, okay, how do we work with that? Well, okay, you take all this other stuff off of my plate. Let me focus on, if you will, the higher level tax and administrative stuff, the reviewing, the quality control, the mentorship and so on. You handle all these other things and you help grow and evolve the business from. There was never. You've made reference a couple of times to your clients and my clients. I don't think it ever really worked that way other than the fact that 2004 through 2007, early days, it was very much if somebody wanted a tax return done, come on in, that was it. Or if somebody needed bookkeeping done, whatever it was, bring it in. And over time, we became much more selective and narrowing things down, niching a little bit and gradually just more and more it made sense. So yeah, it did come out of the blue at me, but I was able to pivot with that fairly quickly

and knowing that we didn't run it that he had his clients and I had mine. It was more of. He'd always done kind of the quality control of it all. And so I was able to disperse all of my work to different people, depending on kind of what it was doing. So we put this to the senior accountants, this to the CFOs. We hire an onboarder to take this piece, and this one goes over to that side. So that made it easier and more difficult at the same time that it wasn't just one person taking over my role, but it was difficult from the standpoint that I had to dissect exactly what I did and spent a lot of time on that. To say who makes most sense to take these pieces over and to be able to disperse it to eight people helped.

Okay, let me run one more scenario by you. And this is maybe the most painful one that I hear from folks. Let's start with Mike on this one. Dad said it'd be three years. It's been 13.

Yeah, that'll be an interesting one. So from my perspective, as it stands today, I am happy to have him here. As long as he is providing as much value as possible.

He's just another employee.

He's just another employee. Yeah. That's not hard for you, but a fantastic one. And it's not all jokes aside, but he brings a tremendous level of. Of support from a client service perspective. Again, we've talked about how much he loves it. Right. So he's still doing a lot of sales because he just loves schmoozing with people all day long. So I am. I am confident there will be a time where we will have to have a difficult conversation that says, you know what? This doesn't make as much sense for you to do this. And so he's aware, fortunately, that he does need to taper down and Certainly take that 60 hour to 40 to 20 to 10 at some point. Some point. I just hope he figures that out himself before I have to tell him.

Yeah.

So for the person in your shoes in this situation, not necessarily your situation, but a hypothetical situation, what's the advice to him?

Well, and interestingly, when you ask the question, in my mind, I broke it into two pieces. One was how we got to the point of transition here from me to you, and because we didn't start with an early expectation, and then because of the change in the rules and so on, and when we established the end of December of 2023 as our own personal benchmark for that, we hit that. I think, quite frankly, before either one of us really expected it, and so it really wasn't too much of an issue. Now, if we look at what happens in the 5, 10, 15 years, subscribe initially, you know, I, I think my expectations were probably that I would, you know, like I said, literally kick, pushed out, kicking and screaming. I'm. I do envision that, that, if you will, that winding down, but that's going to look very different than what, than what it would for most people. And again, part of that is the generational thing. That winding down for me first started by getting down to 40 hours.

And we about that regularly, like in our EOS, kind of quarterly meetings and stuff. We do say, what is he doing and what pieces can we slowly kind of pull off him and where can that go? Or do we need to hire what makes sense within kind of where he's at and where he foresees himself in the next few years? I'll keep coming back to. It's just fun to him. So he's going to keep doing it. But that's fair.

One of my most important parts right now is the mentorship and making sure that.

But

I oftentimes will have a member of our team sitting in on a call with me or listening in, or here's a recording of one because I want you to know this. And one way or another, I'm trying to make sure that all that knowledge gets dispersed.

Well, if the day ever comes, we got to have that conversation. You give me a call.

I was just going to say, can

you get back on? We're going to do it here.

We'll have a real over moment, live it in person.

Guys, thanks for coming and doing this.

Thanks for having us. Appreciate it, Jason.

Absolutely. My pleasure.