One of the things we do at Jetpack Workflow is to reach out to our clients to see what we can do better. Today’s guest on the Grow Your Firm podcast told us he managed to double his clients and triple his revenues by improving his workflows. Once we heard that, we had to get him on the show to tell our listeners how he did it!

Russ Cowen is the president of Money Smarts Inc., a Nebraska firm that focuses only on small business clients. They do bookkeeping, payroll, taxes, sales tax, and income taxes for their clients. They’ve grown to around 200 clients and around $680,000 a year in revenue. If you want to see how his team did it, listen to the podcast or read our summary below!

Summary

• How Money Smart Inc. was started
• Why the first hire didn’t go so well
• His amazing growth numbers since then
• How Russ uses Jetpack Workflow in his firm
• Why his office manager is awesome
• And more!

Resources:

• The firm’s website: https://www.moneysmartsinc.com
• Russ Cowan’s LinkedIn: https://www.linkedin.com/in/cowanruss
• The firm’s Facebook page: https://www.facebook.com/moneysmartsinc/
• Russ’ email: russ@moneysmartsinc.com
• Interview with Jackie Meyer: https://jetpackworkflow.com/how-to-add-revenue-tax-planning-services/

How It Was Done

Money Smart Inc. was formed in 2007. For the first few years it was a side gig for Russ. He had about 30 monthly clients. Like many new firm owners, much of the day-to-day running of the business was kept in his head.

Eventually, he had to hire another person to keep up. After a couple of years, the firm had grown to 65 clients, but the type of clients the hire was bringing in were not the ones he wanted to serve. He was bringing in large clients, but the clients were too big to handle, needed a full-time accountant, or were lower quality. Some of them wanted 20-30 hours a week of accounting done, which drew away resources from the other clients. It was unsustainable.

Eventually, he had to let his hire go but he didn’t leave him high and dry. He told several of the clients that the person who brought him in was leaving and they could choose to go with him. After the fallout from that was processed, he continued to niche down on the kind of client he wanted to serve. See our interview with Jackie Meyer linked up in the resources section for more about the power of this technique.

By 2014, the firm had a small handful of members, 3-4, and they were billing out $8528 a month. But now, in 2019, he has 18 members and 200 clients. He bills out $36,733/month just for contracted monthly services. That’s not including tax work and one-off tasks. How did he turn things around?

Finding Efficiencies

The key was to get more efficient and to use technology to move information out of Russ’ head and into a place where everyone could be on the same page. At first, he used spreadsheets to help out. It took him about two hours to get a client entered into the system he built. When these got to be too unwieldy as he scaled the firm up, he tried Jetpack Workflow. Once the software was configured, it only took him a half hour to add a new client.

He also leverages the reporting features of Jetpack Workflow. One of the regular reports that he pulls through the software is how much time each client takes per month. If it is taking too long to complete a client’s needs, that’s a sign that something in the workflow needs to be tuned up. This is how they’re able to increase the margin for each client.

According to Russ, 9 times out of 10 a time problem is rooted in a problem with their workflows. For instance, maybe they need to set up a bank download instead of manually entering data. However, this report does sometimes catch a client that needs to be charged more.

To get his team to use the software, he made Jetpack Workflow the one-stop-shop for everything they need to do their piece of the package. Every piece and step has a name attached to it. By using the dashboards, it’s easy to see who is behind and who is not. Furthermore, he runs his time tracking through the program and uses the scheduling features so that his team always knows what to work on next.

Additionally, by tracking time, he can see which team members are spending too much time on admin time. This is something his office manager tracks and brings up in a monthly meeting. The team then brainstorms how to reduce the time for the next month.

Motivation

Another thing this firm does is use simple motivation techniques and incentives to get workers to raise their efficiency. For instance, his office manager came up with a game for the workers. If they get their current queue down to zero at the end of the week, they get a point. If they get rid of ten of their overdue jobs, they get three points. If they got rid of ten jobs from someone else’s queue, they got five points. At the end of the month, the people with the most points receives about $500 in prizes, along with stickers and chocolate.

This game started when the team fell deeply behind after last tax season. They divided up the tasks among all the team members then played the game over the summer using Jetpack Workflow to handle it. All Russ had to do was ask her how they could reduce the number of overdue tasks and she ran with it.

The full story of how he found his awesome office manager can be heard in the interview around the 31 minute mark. You can also hear how he manages to get one new client per week through his referral system. If you like what you’ve read here, listen to the whole podcast and let him know through the email above what you thought of it!

Accounting covers a huge array of services, not all of which your firm may provide. When you have a client that asks you for something that’s outside of your scope, how do you handle it? One way is to set up partnerships with other firms to handle that part of your client’s needs.

In this week’s Grow Your Firm podcast, we’re speaking with Sylvia Dion of PrietoDion Consulting Partners LLC. Her firm’s specialty is state & local tax compliance, an area that has become particularly tricky since the Wayfair decision changed how state and local tax presence is regulated. She partners with other firms who need assistance with this complex area of tax compliance and talked with us about how her firm handles these partnerships.

Summary:

• Sylvia’s history in accounting
• Why you might consider partnering with a firm
• How Sylvia’s firm handles payments, updates, and client interactions
• Why building a referral network of other firms can help you grow your business

Resources:

• PrietoDion Consulting Partners LLC: http://www.sylviadioncpa.com/
• Sylvia’s LinkedIn: https://www.linkedin.com/in/sylviadioncpa
• Sylvia’s Email: sylviadion@prietodiontax.com
• Sylvia’s Twitter handle: @SylviaDionCPA 

Calling Another Firm For Assistance

Let’s say you do federal tax compliance. One of your current clients comes in and says that they’ve started selling online and have questions about state and local taxes. How do you do that in a way that delivers a great client experience and without losing your client to a larger firm?

While you could hire someone to handle it, another way is to partner with a firm that specializes in a particular tax area. That’s how PrietoDion Consulting Partners grew their firm. They specialize in SALT compliance and offer their services to businesses, including other firms, who need help with this complex area.

Their business has been growing a lot since the Wayfair decision, which in essence removed the requirement of having a physical presence in a state in order to be liable for doing business in that state. A major part of their business lately has been creating voluntary disclosures so businesses can avoid liability thanks to the changes caused by this ruling.

Many of the firms they work with have clients with multistate contacts and they don’t know the tax implications. When you have to deal with the rules for all 50 states, it gets complicated quickly. Firms can find themselves in over their heads if they don’t have the in-house expertise necessary, so they reach out to Sylvia’s company.

A partnership like this can be a great boost to your business. It lets you expand your services and helps keep your clients happy. Let’s look at how PrietoDion handles its partnerships with firms.

The Initial Contact

When working with a firm, they make the introduction to Sylvia and explain the situation. Depending on the needs of the firm and the client, Sylvia will either partner with the company to handle the problem or she will work independently with the client on SALT issues and keep the firm in the loop as needed.

The key thing to ask is what can you offer to the table so that both the client and the partnering firm get what they need. If you can work in a collaborative way that makes everyone happy, the chances of future referrals will go up and you’ll get a good reputation for helping out with particular issues.

As part of this, she also gives free one-hour consultations with firms and clients so that she can understand the scope of their needs prior to making a bid. Given the complexity of this area of tax law, this makes perfect sense.

How Is Pay Decided?

If Sylvia’s firm is partnering with another firm, she depends on the referring firm to charge enough to pay her rates. She does not charge the client directly in this case.

However, if she does contract directly with the client then she gives a 10% discount on her rates for the referral. This makes it easier for the client to pay and it’s a nice gesture to the referring firm to thank them for the referral.

Her firm does not do percentage cuts of her revenue to the referring firm, e.g. 20% of her fee goes to the referring firm if they send her a client. This lets her keep her revenue strong for her specialized services and doesn’t undercut their value.

Communication Styles

Sylvia keeps her firm flexible. She is the main point of contact, but she works out with each client and firm on communication styles. Some firms want a single person to do all the communication with the firm. A larger firm may allow anyone to reach out to Sylvia. Part of her advisory services package is to teach others about SALT issues, so having an open communication style helps her do that part of her role, along with her blog and column writing.

Updating The Firm

In addition to talking with the client, the partnership firm also needs regular communication based on their needs. She prefers to use email for this. She will CC her CPA contact whenever she sends the client finished work. Along with that, she takes the time to explain her analysis and how they can use it to do what they do better, whether it’s for monthly compliance, reconciliation, or whatever the original firm does for their clients.

Clients will have different needs as they grow and your firm may not be able to handle all of those needs. By making partnerships with firms that handle areas of accounting that you don’t handle, you can prevent these clients from jumping to a larger firm and start forging relationships that can help you diversify your services.

Even if you don’t make a formal partnership, having a CPA you can reach out to for particular issues can be really beneficial. They can serve as a mentor or advisor to help you learn enough of what you need to know what to do for a particular client. Sylvia Dion has kindly offered her email address for any of our listeners and readers to talk about SALT issues or partnering with firms. You can find it in the resources section at the top of the page.

Today’s guest came to us in an unusual way. He reached out to us with an interesting story. Brandon Hall owns a virtual CPA firm that started in 2016. In three years, he’s scaled to over $1.5 million dollars in revenue and has 12 employees, all of whom work remotely. He’s been named as one of CPA Practice Advisor’s 40 under 40 list.
How did he do it? That’s what we’re going to talk about today on this week’s Grow Your Firm podcast.

Summary:

• Why Brandon started the firm
• His huge growth numbers
• How interacting with the community brought in the leads
• The problems he faced while growing
• How he sets up his team
• How content marketing helped his firm boom

Resources:

• The Real Estate CPA
• Brandon’s LinkedIn
• Orin Wilson interview

The Story Of The Real Estate CPA

Brandon started his accounting career working at one of the Big Four accounting companies, but he was not happy with his job. He investigated renting real estate on a site called biggerpockets.com that teaches people how to do real estate.

Through browsing the forums, he learned that there were a lot of tax questions in this niche. As he started to answer questions, people started asking him if he was taking on tax clients. In mid-2015, when he was only 24, he passed his CPA exam and started taking them on.

At first, he was scared he was niching too far, but at the time this was just a side job so he felt comfortable taking the risk. In 2016, he surpassed his day-job income and went full-time as a CPA firm focused on real-estate clients.

He made $120,000 in 2016 and made his first hire, a salesperson. In 2017, he made $680,000 and had eight people on the team. 2018 bumped up the revenue to $1.2 million with 10 workers, and this year he estimates to make $1.5-1.6 million with a team of 12.

That’s a crazy amount of growth! How did he bring in so many clients?

Marketing Efforts

Brandon’s main marketing tactic early on was answering tax questions on the betterpockets.com forum. He left posts that delivered high-value content of interest to the readership. By the time he quit his job, he was receiving 2-5 leads per week through the forum.

Then betterpockets asked him to be a podcast guest and he started receiving 30 leads per week. That level of leads allowed him to springboard his own content marketing platform and continue his growth to his current rate of around 50 new leads a week. Of these, 20% of them turn into clients over a 3-6 month period.

Service Problems

Like many new CPA firms, Brandon had to figure out what kind of clients he wanted to serve. That first year where he made $120K he had around 100 clients, which is a clear sign of undercharging. Part of the problem was that he was trying to push a yearly package of services where people could pay monthly, but his clients thought it was a subscription service. Around 60% of them did not understand the product.

After figuring this out, they cut the subscription program and raised his prices to about $2800/month on average to reduce the number of bad clients to a manageable level. It still took about a year to get rid of the bad clients. He has since continued to raise his prices to attract real estate funds, which are his current ideal clients.

Brandon offered advisory services right from the start along with tax returns. In the beginning, it was tax returns along with 2-4 phone calls depending on the package the client bought. Now he offers tax advisory, tax preparation, and accounting services, with each generating a roughly equal share of the revenue.

Hiring Well Took Time

Most business owners discover a learning curve when they make their first hires, and Brandon is no exception. His first salesperson was skilled, but he admits he didn’t know how to manage or compensate a salesperson. The salesperson also didn’t know how to set expectations for new clients. This was one of the reasons the subscription model didn’t work.

These days, he handles all the sales himself and lets the rest of his team handle the day-to-day work, but he had to go through two salespersons first before he decided to take over that piece of the business. According to Brandon, it’s only this year that he’s been able to find an organization method that works well for the firm where the most capable people are in the right positions and are given the authority to execute those positions.

Instead of a standard org chart, he uses an accountability chart that shows who clearly handles which position. Brandon handles the CEO, finance manager, sales manager, and client service manager positions. Under the client service manager position, he has a personal team. Then there is a separate technical team with two advisory managers and a tax manager, each with their own associates.

Here’s an example he gave of putting people in the right positions. He hired a bookkeeper in 2017 that developed apps for fun on the side. In early 2019, after significant growth, they worked out a way to make him into a full-time software developer to handle application integrations and building custom software for the company.

He also assigns each member KPIs so he can track their performance, mostly gross revenue and revenue per FTE. There are also customer experience KPIs like timely delivery. One of the lessons he had to learn was to not measure too many KPIs. Many of the ones he looked at early on didn’t directly impact revenue.

There’s a lot more that Brandon and David talk about in the podcast, so be sure to listen to the full story to learn things like what his target revenue per FTE percentage is, how he leveraged content marketing after his big success with the betterpockets podcast, and what his preferred style is when creating new content pieces for his audience. Thanks for reaching out to us and sharing your story, Brandon!