C3 Consolidated has a simple mission: acquire firms or create partnerships. With years of accounting firm background and experience, they apply what they’ve learned about process workflow, business organization, and growth to make those firms more profitable and better organized so clients and employees are happy.

Needless to say, they are very good at what they do. But what makes them choose one firm over another?

If you seek to sell your firm one day, you’ll be very interested in seeing what Orin Wilson, Dave’s guest for this week, has to say about profitability in accounting firms. His insights can help any firm hoping to be acquired or sold.

In this episode, Dave and Orin talked about:

• What C3 Consolidated does
• Low and high performing firms
• The quality of a firm’s staff as a factor of purchase
• Workflows to improve a firm’s profitability

Links:

• https://www.linkedin.com/in/orin-wilson-cma-cpa-90186a39
• https://jetpackworkflow.com/time-tracking-software-accountants-cpa-firm-bookkeepers/
• owilson@ideabusinesssystems.com

Would Your Firm Be Acquired by C3 Consolidated?

Very few of us imagine ourselves ever doing what Orin Wilson and his people over at C3 Consolidated do, acquiring and partnering with firms, making them more profitable, and selling them at a higher value. So what juicy meat can we get from Orin in this episode?

Low Performing vs High Performing Firms

Orin tells us that when C3 first began the acquisition game, the assumption was that they’d be better off partnering with low-performing firms, companies that obviously needed help to really succeed. After all, such companies would be valued lower and be easier to buy, and there seemed to be the biggest potential for profit.
His determination for performance was how much profit margin a potential acquisition had. His metric was:

• Low performers – 25-35% margin
• Average performers – 36-44% margin
• High performers – 45-50% margin

Only the top 5% of firms have a margin higher than 55%. As it turned out, choosing low-performing firms to turn around wasn’t the best option. Why? First, low-performing firms needed so much help that they took a lot more time to straighten out. These firms would take 100 days or more in turnaround, while mid-or-high-performing companies could be ready in 30 days or less.

Second, low-performing firms usually had deeper problems, issues that were previously unforeseen. The owners would often sweep problems under the rug instead of addressing them upfront. These unsettled issues would continue to linger below the surface, causing mayhem.

The lesson was that high-performing firms were more valuable for purchase. How do you avoid being labeled as low-performing? To start, look for real solutions to problems instead of short-term fixes and avoid sweeping problems under the rug. They can lead to huge profit losses in the long-run and make you look like a poor or cheap buy for another firm.

Staff Relations

Another huge issue Orin noticed in low-performing firms was the relationship management had with the staff. Employees are the life-blood of a business. If they are not working together well, or if they are resistant to management’s directives, the company is sure to fail, or at least lose out on large amounts of profit.

Orin puts employees into three categories: engaged, indifferent, and resistant. Are those that are indifferent or resistant doomed to always be that way? Or can management help them become more engaged? While it’s true that some employees will always be indifferent or resistant, many become that way because they are not happy with something happening in the company. Or they may feel that they are not really being heard by their bosses.

Good communication and leadership skills can help staff become much more engaged. That’s why C3 looks at the leaders and management first before trying to help a firm. The lesson is easy to see: Communicate with your employees. Make them feel you are listening to them. Be a great leader, and you’ll have great followers.

Assessing Business Workflow

One of the first things Orin and the others at C3 do after buying a new firm is to apply a workflow system to their organization. While they may consider other solutions, typically they recommend and begin implementing Jetpack Workflow. Why? Because many firms, even those that look high-performing, often have little to no workflow in place.
In fact, once systems are put into writing and reinforced through practice, companies often increase their efficiency in a big way.

On top of that, when workflows are written down and organized, it’s easier to see where things can be improved and made more efficient. Waste can hide in a system that is unclear. But a written system makes it easier to find small issues and fix them quickly.

For example, Orin and his team make sure all communication is done through Jetpack Workflow. Then, when a task is late, he can go back and see where things got off the rails. Can a change be introduced to prevent that delay from happening in the future? Such critical problem solving would be impossible without a written workflow system.

There is another great benefit to using Jetpack Workflow to record workflows. Many companies will have the same people work in the same department for years and years. But what if that one person the firm can’t live without is unable to continue to do the work? Who will take over, and how will that person know what to do?

If such tasks are written down in simple steps, anybody could step in and take over in the event of an unexpected change in staff.

The lesson? Write down and organize the workflow for each task, big and small. You’ll easily be able to fix errors, improve efficiency, and protect your firm if a staff member leaves for another opportunity or has some extended vacation.

Orin and his team have perfected taking accounting firms and making them much more profitable. You may want to be acquired by C3 or another similar company, or you may simply want to become more profitable and efficient. Whatever the case may be, you can learn many great lessons from Orin’s perspective regarding accounting firm acquisition.

RELATED LINKS: 

1. Grow Your Accounting Practice Through Acquisitions with 0% Risk
2. Start a 6-Figure Bookkeeping Business in 7 Days
3. Chapter 1: Increasing Efficiency to Increase Capacity

In this world we live in, the value you put on yourself largely dictates the value others assign to you. If you’re looking to get paid more and land higher-paying clients, you may need to take a step back and analyze your mindset.

In this episode, Michele Riffe of Sherwood Financial and micheleriffe.com talks about how she thinks about value pricing over the classic hourly paradigm. We also see why she hasn’t tried to grow out a large company with an army of employees under her, even though she has landed large enough clients to justify such steps.

In this episode, Dave and Michele talk about:

• How Michele got into Value Pricing
• Her influences, both people and books
• How to ask for more
• Why Michele doesn’t have a huge team of employees

Resources About Michele:
https://sherwood-financial.net/
https://micheleriffe.com/
https://www.facebook.com/michele.riffe.5

Resources About Value Pricing:
https://jetpackworkflow.com/value-based-billing-paperless-flat-cpa-firm-jason-blumer/
https://jetpackworkflow.com/how-to-implement-value-pricing-with-jason-blumer/
https://jetpackworkflow.com/how-to-implement-value-pricing-with-ron-baker/
https://jetpackworkflow.com/charging-enough-for-your-accounting-services-mark-wickersham/
https://jetpackworkflow.com/tag/value-pricing/

Think Deeply about Value and Your Goals

How much should accountants be paid? Is there a universal hourly rate? Should large businesses pay more for their accountants than small businesses do?

These are the kinds of questions both clients and the accountants that serve them think about on a regular basis. Setting the right pay is an ongoing struggle for many.
Enter value pricing, a different way to think about pay.

What if you charge, not for an hourly rate, but for the solution to a client’s problem? What if you identify the major pain points a certain client is concerned about and put a price tag on solving those particular problems?

We’ve talked about value pricing a few times on this show in the past. In the links above, you’ll find links to our interviews with Jason Blumer, Ron Baker, and Mark

Wickersham, as well as our complete “value pricing” category, where you can find even more information on this fascinating topic.

For Michele, there isn’t a single value-pricing strategy that applies to all clients or situations. Instead, she chooses to cherry-pick from among several leading philosophies, choosing the best strategy for each client. This keeps her flexible and able to help a variety of clients.

How to Charge More

You may be wanting to charge more for your services as an accountant. But how do you manage it? How do you prove to others that you are worth more per hour than the next accountant?

You don’t.

Because thinking in terms of worth and hourly rates is a race to the bottom. Filing paperwork is a commodity, and there is always someone out there that is just as good that can do what you do for less money.

That means you have to stop thinking of yourself, and selling yourself to others, as a commodity. Instead, be a problem solver. Be a solution.

Tasks are cheap. Solutions are worth much, much more.

When you look in the vast world of Corporate America, as Michele Riffe has, CFOs get paid much more than accountants. They don’t get paid by the hour; they get a salary.

Why? Because what they offer large companies and corporations isn’t a list of tasks. They provide unique solutions to company problems. They provide a philosophy, an attitude that will change the course of the company.

When you pitch to new clients, you can choose to think and act more like a CFO than an accountant. You can simply say, “This service is worth this much to your company. So that’s what I want to charge you.”

The secret is in the sell.

And, as Michele puts it, that requires you to have a great deal of confidence when you walk into that meeting. If you aren’t sure of your worth, if you haven’t carefully prepared for your ask, then, when you have to put a price on your services, you’ll give yourself away.

As Michele describes it, you have to give that price tag with a straight face. You have to mean it.

And you have to know that you can follow through on what you are promising the client.

With that confidence, you’ll land much larger clients than before.

This isn’t to say you’ll land everybody. Many clients still think of accounting as a commodity, and that’s okay. They aren’t the right client for you, so you move on.

Should You Build a Large Team?

The goal of many firm owners and independent accountants is to one day expand their business to include a team of multiple employees, perhaps dozens of people. And then you’d need the physical office, the infrastructure, the organization and meetings and insurance, and so on. That is a very large goal to have!

Of course, if you actively want to build and grow and hire, there is nothing wrong with that goal, as long as you are sure that’s what you want.

Sometimes, Michele points out, people hire new employees because they feel they have to. They feel overwhelmed with work, for example, so they make their first hire. But

if that first employee isn’t trained well to work in sync with you, they may also be overwhelmed in a short time, leading you hire again and again. Before you know it, you have an extensive team, and much of your time is now spent in hiring and firing, training and managing. Unless you really dream of doing those things, you may end up feeling stuck.

The alternative? Make the conscious decision not to grow simply for the sake of growing.

Michele has outsourced contract workers on an as-needed basis, people that can help her do things she doesn’t specialize in. But since these people aren’t employees,

Michele’s business doesn’t needlessly grow.

The lesson: Grow your business (or don’t) purposefully. Don’t hire unless you need to.

There are many more fascinating points Michele and Dave made in this episode, but you’ll have to give it a listen yourself to get everything!

RELATED LINKS:

1. How This Firm Increased Efficiency 30% By Switching to Fixed Price Billing
2. How to present value pricing and advisory service to clients?
3. The Mindset of a Successful Owner & Partner: The Sandi Leyva Interview

Once upon a time, accounting and tax firms depended on newspaper ads, magazine spots, a well-curated Rolodex of business cards, and good-old-fashioned word of mouth to get new clients.

Times have changed, though, haven’t they?

In this modern Information Age, people are still using the older methods but with a significantly less rate of return. Today’s billboards and magazine ads are on social media. And these days, networking events are slowly being replaced by social networking on platforms like Twitter, Facebook, and LinkedIn.

This week’s guest, Adrian Dayton, is an expert on using social media to network and market as a professional.

In this chat between David and Adrian, notice just how powerful social media can be if you’re willing to put in the work and put out new content.

Main Points from this Episode:

• Adrian’s story
• What is social media?
• How to start out on social
• Being a Specialist and not a Generalist
• What to share
• How to make LinkedIn think your content is high quality
• How often should you post?
• How to get 10x return on your time

Resources:

• adrian@clearviewsocial.com
• https://www.forbes.com/
• https://clearviewsocial.com/
• https://adriandayton.com/

How to Use Social Media as a Professional

When Adrian Dayton brought a new client to his firm just by answering a tweet, he was sure he’d discovered something special, a tool professionals can use to grow their business, attract new clients, and develop a brand that the entire world can see.

His superiors weren’t nearly as impressed, however. When Adrian wanted to teach others in the firm to use Twitter to find new clients, he was told that the company was too traditional to do such a thing. In fact, not long after, he was dismissed from the firm.

That setback, however disappointing, didn’t detour Adrian. In fact, his enthusiasm only grew as he delved deeper into the world of Twitter, Facebook, and LinkedIn.
Today he’s an expert at helping professionals from a variety of fields establish themselves online in social media.

Let’s look at three main topics Adrian covered in his chat with David, points you can start applying right away.

Being a Specialist, not a Generalist

Many professionals hear that they should be on social media, especially LinkedIn because it’s been designed specifically for business, and they create a profile for themselves or their company.

When making a profile, however, there is a temptation Adrian suggests you avoid: trying to be everything for everybody.
In other words, you should aim to be a Specialist and not a Generalist.

What does that mean?

If you say in your profile all the small tasks you’re able to do, you’re just muddying the impact of your brand. If you’re an accountant, potential clients will assume that you can do simple tasks that involve payroll or taxes. Listing those things won’t help you as much as you’d think.

Instead, what if you highlight only one of two things that you specialize in?

Are you an expert in a certain area of taxes? Or do you specialize in helping a certain kind of business? To you have tricks up your sleeve to help make businesses leaner by helping them better manage their money?

Whatever you specialize in, proclaim it loudly on social media. It will help you stand out from the crowd.

How to Make LinkedIn Like Your Content

LinkedIn is by far the most important social network for professionals, and making quality content is an amazing way to get noticed on LinkedIn.
In fact, right now, organic reach on LinkedIn is very high compared to other social media platforms. Posting articles or videos on LinkedIn is a powerful strategy right now.

But LinkedIn won’t automatically promote your posts. The website first assumes your content is low quality and will only show it to a small percentage of people. Good for preventing spam, but bad for getting noticed.

So the secret is convincing LinkedIn that your content is high quality. How do you do that? Here are a few pointers Adrian shared:

• Post regularly. You can post up to once a workday (or up to 20 times a month) without getting diminishing returns.
• Use tags to give your content a relevant category.
• Share your content with people that will read and like it (and perhaps share it with others). You can also tag people in the content.

By doing things like these, you can increase the reach of your posts. The more interaction you get, the more LinkedIn will be willing to spread your content.

How to 10x the Return on Your Social Media Efforts

The best way to get the most return on your effort is to post engaging, original content often. Sharing content that others have posted is a great way to increase the amount of content you put out, but it isn’t nearly as effective as putting out your own content.

How can you get more original content? Here’s one way. When you’re talking with a client, what questions do they ask you? What concerns do they have, and how do you help them? It’s likely that your other clients have similar questions.

Each question-answer combo could become a new piece of content. Simply write down a more thought-out version of the answer you gave your client and post that as an article on LinkedIn.

Alternatively, you could choose to record yourself (or get someone to record you) answering questions over lunch or at an event. That can then be broken up into smaller pieces of content.

One common objection people have about posting so much content is the amount of time they have to spend posting things to social media. However, there are tools out there that can help you schedule posts ahead of time. That way, you could get all your social media gruntwork done for the week all at once.

Some tools, like Hootsuite, are free to use but limited in features. You can also use paid tools like Clearview Social so all your employees can work together to put out scheduled content on various social media platforms.

If you want a free copy of Adrian’s book about using Twitter as a professional, send him an email, which you can find in the Resources section above.

RELATED LINKS:

1. Social Media Spotlight: Facebook for Accountants
2. How To Curate Content for Social Media (Accountants & Bookkeepers)
3. The Secret To Turning a Prospect Into A Long-time Client

Managing a firm with less than ten staff is one thing, but management strategies must change as that firm grows . Mergers are especially tricky, as many organizational and operational items need to occur.  You’ll find yourself needing better organization, strategic planning, and perhaps even an executive committee to keep everything running in the right direction.

In this episode, Dave sits down with Alan Long of Baldwin CPAs. Alan has helped grow his firm from a few employees to over 70 across multiple locations. We discuss the organizational and operational decisions he’s made to keep all those plates spinning at the same time.

Main Points from the Episode:

• An introduction to Baldwin CPAs
• How the firm’s structure came about
• Monthly Executive Meetings
• Communication to the entire company
• Using a Strategic Plan

Resources:

• https://www.baldwincpas.com/
• alan@baldwincpas.com
• https://www.boomer.com/

Growing and Maturing Baldwin CPAs

When Alan long started out with Baldwin CPAs, his firm was small and fairly easy to manage. That changed as his business grew and he started merging with other firms. The firm took on a more complex structure consisting of partners, managers, and executive members so that decisions and strategy could be communicated in an orderly, efficient, and effective way.

If you are growing a business, you know that growth comes with its own pains. You’ll need to think about structure and organization in new ways to keep your firm profitable and efficient. What organizational structure does Alan use? Could it be for you?

The Structure of Baldwin CPAs

Currently, Alan has an executive committee that sits just under him in the firm’s organizational structure. Under the committee are the partners of the firm, and under the partners are department heads.

One interesting thing about Baldwin CPAs’ structure is that there are no GMs for his different offices. Each location is not treated as a mini firm or independent business in a network of businesses. Instead, each location is a part of the whole. Each location has at least one partner, as well.

Why did Alan create an executive committee in the first place? Primarily because he plans to retire in the next few years, so he’s offloading as much of his work as possible to the committee. This helps them create a succession plan that will let the company run smoothly after he leaves.

You may be looking at a very different structure for your firm, depending on what step in the growth process you’re currently on. If you try to create an executive committee too early, you’ll be wasting time and money, essentially creating too many cooks in the kitchen, so to speak.

On the other hand, as your firm grows and perhaps expands to new locations, you may want to look more closely at organizational structures like Alan’s, taking from those examples what you think will work for you.

Meetings and Communication

At Baldwin CPAs, the executive committee meets once a month to discuss the company’s metrics and talk about whatever necessary points on the agenda for the month.
Prior to the meeting, partners can suggest topics or decisions for the executives to discuss. Alan makes the agenda based on those suggestions. The meeting may last several hours, but minutes are taken and later distributed to all the partners of the firm so everyone knows what’s going on.

At the end of each year, a strategy meeting is held with Gary Boomer of Boomer Consulting. A strategy plan is made for the following year. Then, in January and February, Alan creates a PowerPoint and gives his presentation to each location in the firm, so everyone knows what’s happening in the company.

On top of that, individual departments will occasionally have team days so that department managers can better communicate with their people across multiple locations.
As a company grows, communication becomes much more important. You may want to set up regular meetings, weekly, monthly, or yearly (or all three), so that everyone on your team is on the same page.

When communication breaks down, everything in your firm breaks down. Problems can grow, like mold in the corners of a room, and go unnoticed until they are massive and disruptive. Only excellent communication can identify those problems when they are minor glitches, easy to fix.

Alan has designed multiple systems of communication for his firm. Yours will need similar systems.

Having a Strategic Plan

When you’re bogged down with the day-to-day tasks of running a business, it’s easy to lose track of the bigger, more important issues. A strategic plan helps you stay on track.

At Baldwin CPAs, Alan has developed a relationship with Gary Boomer of Boomer Consulting to help keep their firm on the right path.
But Gary didn’t originally want to work with Alan. Why?

When Alan first approached Gary about bringing some consulting to his firm, Gary told Alan that Baldwin CPAs was too small to really benefit from what Boomer Consulting had to offer. Alan appreciated Gary’s honesty and integrity.

Later, when Baldwin CPAs was growing and merging, bringing on new team members, Alan knew he’d need help, and he approached Gary a second time. Gary could see the firm needed some help in the way of a strategy meeting.

Once a year, Gary Boomer meets with Alan and the executive committee to work on strategy for the following year at the firm. They talk about metrics, about goals and challenges. They work on a mission statement and vision. They set up major milestones for the year to come, which they call their “big rocks” for the year.

This strategic plan is essential for keeping the company on track.

Do they always stick to the milestones in the plan? No. Alan admits that, from time to time, something new will come up that they have to focus on instead. The plan doesn’t dictate reality, and it doesn’t stop them from being responsive to changing circumstances in the firm. But that yearly strategy session does keep them on track to grow and mature over time.

Taking a day or two each year to think about the bigger picture is an excellent way to make sure your firm in on track with the goals you have for it. Even if any major goals are eventually abandoned, having that ever-evolving mission and vision will help you, and everyone in the firm, to stay focused on what’s most important for your company.

RELATED LINKS:

1. 5 Simple Steps to Transform Your Business Into a Radical CPA Firm
2. Automate Your Accounting Firm to 1500% Growth with Heather Pranitis
3. How to Improve Workflow Management for Accounting Firms

Today on Growing Your Firm, we talked with Louie Vazquez of Vazquez & Family, Inc. The firm has managed to grow from zero to $48,000 a month in just four years without taking on any debt. How was Louie able to do it? That’s what we’ll be asking him in this week’s podcast. There are some great sales strategies in this one, so be sure to take a listen! 

Summary:

• About Louie’s firm
• How he structures his team
• Why sales were his focus, and three tactics he uses for lead generation
• Why targeting only people who can pay you matters
• A way to let down leads how can’t pay your rates while still nurturing them
• And much more

Resources:

• The firm’s website: https://www.facebook.com/vazquezandfamilyinc/
• The firm’s Yelp page: https://www.yelp.com/biz/vazquez-and-family-inc-los-alamitos
• The firm’s Instagram page: https://www.instagram.com/vbandfinc/?hl=en

Aggressively Growing A Firm To Half A Million In Four Years

Louie started his own firm three years ago after working for CPA firms for four years prior. He felt like he had enough experience under his belt and capital in his pocket to start off on his own. The business has grown handsomely, from $ 92,000 the first year to averaging $48,000 a month this year. His target is to hit at least $500,000 this year. How was he able to grow so aggressively?

His Team

First, to help him handle his growth, he brought on a senior partner and hired four employees and two freelancers.

Here’s how Louie has divided up the responsibilities at his firm:

Senior partner: Prep review, accounting review

Operations manager: Bookkeeping, tax return prep, administration, onboarding

Administrative assistant: Onboarding

Two accountants, plus two freelancers to help them if it gets busy

He hired the admin and the operations manager first, which is unusual for a firm of his size. Most firms we’ve interviewed don’t hire an operations manager until they get beyond 10 employees. Why did he hire one so early? Louie was doing it all on his own and was doing so much work that his accounts receivable and invoicing started to slip. It became worth it to hire someone for a few thousand a month to keep on top of all that.

Louie says that most entrepreneurs wouldn’t hire at this point. They would see the extra work and plow through it to save money on hiring. But this was something directly related to cashflow. If he could get someone to stay on top of this task, the business would have more money, which could be reinvested into the business. It would also free him up to focus on more revenue-generating activities.

There is a point when you run a business that you start to value your time. You really start to see where time is money. If you’re spending more time on things that don’t generate revenue, that’s a problem. It’s at that point when it’s time to stop thinking about what to do next and start thinking about who can do it for you.

Sales Is The Key

At first glance, if you saw these kinds of growth numbers, you might think that Louie was taking on a lot of debt buying up other firms to gain their clients. But he’s not. His growth has all been through sales. What was his approach?

His first piece of advice for a new firm is to hit $100,000 a year. Once you hit that point, then it is time to think about bringing in staff and delegating responsibilities so you can transition from being an accountant to being a salesperson. Ultimately, as a business owner, that’s what you really are. You’re trying to sell your services.

So you have to start thinking about what you can sell and who you can sell it to. You have to think about how you can network to get in front of more potential clients. Here are three of his tactics to do this.

First, he goes to real estate offices at least once a week to do seminars on how corporations work and the tax advantages they can gain from switching to things like using an S-corporation. Through these seminars, his firm gets a lot of referrals from property investors who want tax advice. The ROI on this approach is really good. For about 10 hours a month, Louie can get clients that have a much higher lifetime value than what he would have earned at his hourly rate.

Second, he uses Yelp reviews. Yelp reviews provide social proof. They show to others that you’re doing good work. People trust the platform. Granted, you have to watch for bad reviews and respond to them but if you have a well-organized team and good workflows then bad reviews should be few and far between.

Third, and most unusually, he uses Instagram! He uses it as an ongoing newsletter for clients and leads by sharing tips on accounting, taxes, finances, business, and so forth through small videos. So far he has about 175 videos about a minute long that he rotates through to keep the content treadmill going.

He recommends that all firms should start sharing advice through Instagram, using Yelp to provide a base of social proof, and then get out into the community and show your value to your target niche by revealing how you can help them improve their tax or financial situation.

Asking Bold Questions

One thing that a lot of firms struggle with is bringing on clients that don’t have a lot of money but are eager for your business. Your urge to help them can make you cut your prices down so you can retain that client. Avoid this!

One of the jobs that Louie’s administrative assistant does when screening clients is to ask them how much they are grossing. If they are making too little, their focus should be on increasing revenue, not asking how to save the money they have.

In order to find out where you want that cutoff to be, you have to know how to value your services. Louie breaks down his services into small parts and attaches a fee to them. For instance, bookkeeping services is one and preparing a financial report is another. Once the potential client has shown that they do have enough money to hire you, then you can use your sales skills to show them how you can make them more money by hiring you.

What does he do with the low-grossing leads? The admin sends an email with the contact information to his partner, who then gives the lead a little bit of advice on how to grow their revenue along with a note saying to contact them again when they hit a certain revenue number. If they do need the help of someone ASAP, he’ll refer them to other firms who take on those kinds of clients. By doing it this way, it doesn’t shut the door in the face of the lead and still lets them down gently. It’s a great way to nurture leads.

If they do have enough revenue, one of the senior partners contacts the lead and explores possible services. A common one for Louie is to help businesses convert into S-corporations. After that, they upsell into tax planning, then bookkeeping and so forth.

For more details on how Louie interviews a new client or how he uses Jetpack Workflow as part of his services, check out the full podcast.