Podcast

Summary

In this episode of Growing Your Firm, host David Cristello welcomes Jeremy Wells, EA and CPA, owner of JWellsCFO and Chief Operating Officer Steadfast Bookkeeping

Jeremy specializes in tax planning and business strategy for small businesses and has been active in the field since 2018. 

Before his accounting career, he spent a decade as a college instructor. The conversation delves into Jeremy’s unique approach to business, which emphasizes a subscription-based model rather than traditional billing methods, making his services accessible to small businesses and individuals starting their entrepreneurial journeys. 

Listeners can expect insights into navigating the challenges of running a business during the COVID-19 pandemic, along with Jeremy’s expertise shared through his substack, J. Wells Tax, and his roles in various professional organizations. Tune in for valuable advice on tax strategy and business planning tailored for small businesses.

Biography of Jeremy Wells

Jeremy Wells is a distinguished entrepreneur and financial expert, recognized for his innovative approach to accounting and business strategy. He has dedicated his career to empowering small businesses and solopreneurs through comprehensive tax planning and strategic business advisory services. 

Before venturing into the world of accounting, Jeremy spent a decade in academia, where he served as a college instructor. His passion for education and mentorship was evident as he engaged deeply with students, guiding them through their academic journeys and helping them connect their studies to their broader career aspirations. 

This experience laid the foundation for his current philosophy: that effective financial guidance is not just about numbers, but about understanding the individual goals and challenges of each client.

Jeremy’s transition from academia to accounting was driven by a desire for greater control over his professional life and a commitment to making a tangible impact on the lives of small business owners. 

He recognized that many of his clients were freelancers and solopreneurs—individuals who, despite their entrepreneurial spirit, often felt overwhelmed by the intricacies of tax obligations and business strategy. 

This insight led him to develop a business model that prioritizes accessibility and simplicity, offering a subscription-based service that eliminates the traditional billable hours approach. By doing so, Jeremy has made it easier for his clients to receive the support they need without the anxiety of unpredictable costs.

His expertise extends beyond mere tax preparation; Jeremy is a thought leader in the field of tax planning and business strategy. He shares his knowledge through his Substack publication, J. Wells Tax, where he provides valuable insights and advice to a growing audience. 

Additionally, he serves on the editorial board of the EA Journal and is an active member of the Florida Chapter of the National Association of Tax Professionals, further solidifying his commitment to the profession and his dedication to continuous learning.

Jeremy’s approach to pricing reflects his deep understanding of his clients’ realities. He believes in a value-based pricing model that aligns his fees with the revenue of his clients, ensuring that his services remain affordable while still providing the necessary support for their growth. This philosophy not only fosters trust but also encourages a collaborative relationship where both parties are invested in the success of the business.

Throughout the tumultuous period of the COVID-19 pandemic, Jeremy’s firm experienced significant growth, doubling its revenue and client base. This surge was not merely a result of increased demand; it was a testament to his ability to adapt and respond to the evolving needs of his clients. 

He embraced the challenges of rapid expansion, hiring additional staff and refining his processes to maintain the high level of service that his clients had come to expect. However, as he navigated this growth, Jeremy remained true to his core values, ultimately deciding to scale back and focus on a more personalized approach to client relationships.

Jeremy Wells embodies the ethos of a modern accountant—one who is not only a numbers expert but also a trusted advisor and mentor. His journey from academia to entrepreneurship is marked by a commitment to education, a passion for helping others, and a belief that financial success is achievable for everyone, regardless of their background. 

Through his work at J. Wells CFO, Jeremy continues to inspire and empower the next generation of entrepreneurs, helping them to realize their dreams and navigate the complexities of the business world with confidence.

Detailed Synopsis

Jeremy Wells highlights the significance of a subscription-based pricing model for his accounting firm, J. Wells CFO, as it offers several key advantages that cater to the needs of small businesses and solopreneurs.

Predictable Revenue

One of the primary benefits of a subscription model is the predictability it provides in terms of revenue. Unlike traditional billing methods that depend on hourly rates or project-based fees, a subscription model enables Jeremy to establish a consistent income stream.

This predictability not only aids in financial planning for his firm but also offers peace of mind for his clients, allowing them to budget for their accounting services without the worry of unexpected costs.

Alignment with Client Needs

Jeremy’s target clientele primarily consists of freelancers, solopreneurs, and small business owners who often lack experience in managing their finances. Many of these individuals are transitioning from being employees to entrepreneurs and may not fully grasp the complexities of tax planning and business strategy. 

By offering a subscription service, Jeremy can provide ongoing support and guidance, ensuring that his clients receive the assistance they need throughout the year, rather than just during tax season.

Simplified Service Delivery

The subscription model simplifies the service delivery process. Jeremy notes that he has never tracked time or billed for individual projects, allowing him to focus on delivering value rather than getting bogged down in administrative tasks. This approach not only enhances efficiency but also fosters stronger relationships with clients, as they receive regular communication and support rather than sporadic interactions.

Tailored Pricing

Jeremy’s pricing strategy reflects the financial realities of his clients. He bases his fees on a percentage of the client’s revenue, typically ranging from 2% to 5%. 

This method ensures that his services remain accessible to small businesses while allowing for scalability as the client’s business grows. By aligning his pricing with the client’s revenue, Jeremy can cater to their specific needs and provide a service that feels fair and justified.

Client Retention and Engagement

With a subscription model, clients are more likely to remain engaged with Jeremy’s services. He observes that if clients do not hear from him regularly, they may question the value of the service and consider discontinuing it. 

This model encourages ongoing communication and proactive engagement, which is crucial for building long-term relationships and ensuring client satisfaction.

The Impact of COVID-19 on Small Business Accounting Firms

The COVID-19 pandemic brought about significant changes in the landscape of small business accounting, as discussed by Jeremy Wells, founder of J. Wells CFO, in a recent podcast episode. Here are some key insights into how the pandemic affected his firm and the broader implications for the accounting industry.

Surge in Demand for Accounting Services

During the pandemic, particularly from mid-2020 to early 2021, Jeremy experienced a remarkable increase in business. His revenue more than doubled, and he saw a substantial influx of new clients. 

This surge was largely driven by the rise of online businesses, as many individuals turned to entrepreneurship during lockdowns. The pandemic created a unique environment where people sought to establish new ventures, often in the gig economy, leading to a higher demand for accounting services.

Characteristics of New Clients

The new clients that Jeremy attracted were primarily freelancers and solopreneurs, many of whom had little to no prior experience in managing a business. 

They were often transitioning from traditional employment to self-employment, which meant they required guidance on various aspects of business management, including tax planning and compliance. 

Jeremy noted that these clients often lacked knowledge about essential topics such as estimated tax payments, self-employment tax, and S-corporations, making his advisory services crucial.

Business Model Adaptation

To accommodate the growing demand, Jeremy adapted his business model to focus on a subscription-based service rather than traditional hourly billing. 

This model allowed him to provide a comprehensive package of services for a fixed monthly fee, which was particularly appealing to his target demographic of small business owners. 

By eliminating the need to track time or bill for individual projects, he could streamline his operations and focus on delivering value to his clients.

Challenges of Rapid Growth

While the increase in clients was beneficial, it also presented challenges. Jeremy found himself overwhelmed with the volume of work and the need to manage a growing team. 

He hired two full-time bookkeepers and a virtual assistant to help manage the workload. However, he soon realized that this rapid scaling was taking him away from the core aspect of his business—client interaction and advisory services.

Reevaluation and Scaling Back

After a period of reflection, Jeremy decided to scale back his operations. He recognized that his passion lay in providing personalized service and building relationships with clients, rather than managing a large team. 

As a result, he let go of some clients and staff, ultimately returning to a more manageable size that allowed him to focus on the quality of service he provided.

Lessons Learned

  1. Client Commitment : Jeremy emphasized the importance of vetting clients to ensure they are committed to entrepreneurship. This commitment is crucial for a successful working relationship, as it aligns expectations and fosters a collaborative environment.
  2. Value of Fixed Pricing : By adopting a subscription model, Jeremy was able to provide consistent value to his clients while simplifying his billing process. This approach also helped clients feel more secure in their financial planning.
  3. Importance of Personal Interaction : The pandemic highlighted the need for personal interaction in accounting services. Jeremy’s desire to maintain close relationships with clients drove his decision to scale back and focus on a smaller, more dedicated client base.
  4. Adaptability : The ability to adapt to changing circumstances is vital for any business. Jeremy’s experience during the pandemic illustrates the importance of being flexible and responsive to market demands.

Importance of the Discovery Process

Identifying Commitment to Entrepreneurship:

  1. During the discovery process, Jeremy emphasizes the need to assess whether potential clients are truly committed to the idea of being self-employed. He notes that many individuals may start a business while still considering themselves employees, often filling out job applications for W-2 jobs. This mindset can hinder their growth and the effectiveness of the services provided.
  2. By asking probing questions and engaging in deeper discussions about their business goals and aspirations, Jeremy can determine if the client is ready to embrace the entrepreneurial journey. This commitment is crucial because it influences how they will utilize his services and their willingness to invest in their business.

Setting Appropriate Pricing:

  1. Once a client demonstrates commitment, Jeremy can better estimate their potential revenue. He has developed a pricing model that typically ranges from 2% to 5% of the client’s revenue. This model allows him to align his fees with the client’s financial situation, ensuring that the pricing is both fair and sustainable for both parties.
  2. The pricing structure is designed to be flexible; as clients grow and their revenue increases, the percentage may decrease, reflecting their evolving needs and the additional services they might require. This approach not only makes his services accessible to solopreneurs and freelancers but also ensures that he is compensated fairly for the value he provides.

Building Long-Term Relationships:

  1. The discovery process also helps establish a foundation for a long-term relationship. By understanding the client’s business model and their commitment level, Jeremy can provide tailored advice and support that aligns with their growth trajectory. This ongoing relationship is essential for both the client’s success and the sustainability of his business model.
  2. Clients who are serious about their entrepreneurial journey are more likely to engage with the services provided, leading to better outcomes and higher satisfaction. This, in turn, fosters referrals and organic growth for Jeremy’s firm.

Conclusion

The discovery process is not just a preliminary step; it is a vital component of Jeremy Wells’ business strategy.

By vetting clients for their commitment to entrepreneurship, he can set appropriate pricing based on their revenue, ensuring that both he and his clients benefit from a mutually rewarding relationship.

This thoughtful approach allows him to focus on clients who are ready to invest in their business, ultimately leading to better service delivery and client satisfaction.

Timestamps

[00:01:58] Transitioning from academia to accounting.

[00:04:06] Tax planning for solopreneurs.

[00:08:05] Customer willingness to pay.

[00:10:41] Pricing strategies for accounting services.

[00:14:40] COVID business growth experience.

[00:17:36] Scaling back in business.

[00:21:35] Employee hiring challenges.

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