Firm First Steps with Graham McGuire

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Hello, and welcome to the Big 4 Transparency podcast. I'm joined today by Graham McGuire, the very, very recent founder of Kingswood Accounting. Welcome to the pod, Graham. So we chatted a little bit prior to this, but I guess for the audience to give some context, where are we at with Kingswood Accounting? What kind of stage in the process are we talking with you here? So I just started it basically at the end of 2024. So we're sort of like six weeks in to business. Nice. And you are leaving kind of like a CFO position at, you know, what seems like a pretty cool startup overall. And so what was it that you were kind of like seeking in making that jump into your own accounting business? Well, I guess the first thing to say is like, I'm going to be able to keep them as a client, I guess. So I'm like retaining some involvement there, which is great. I guess I just was looking for a little bit more variety and just the opportunity to run my own business and scale it and be a little bit of a master of my own destiny. Yeah. Nice. And with retaining them as a client, was that a conversation of kind of like keeping some of your key duties? Like, is that going to be like accounting work or like virtual CFO work or what's that going to look like? I think probably the title is going to be something like executive advisor or whatever. Yeah. So it was just a it was just a conversation with like the leadership team about sticking around to support, I guess, initially the transition and then kind of helping continue to grow the business going forward. That's always cool. Like I like talking to people about like what it is that they kind of made the jump with, because there's often kind of like a little bit of a story there where it's not necessarily just like, you know, jumping out with no parachute. It's either, yeah, they can retain their former employer as a client, or some people basically like have already built up, you know, a $40,000 book of business on the side and they're like, all right, this is like, you know, going to pay some of my bills at the very least and keep me, you know, eating ramen noodles and in a worst case scenario, but okay, so you're able to like retain them as a client going forward. And then when you sort of like decided to make the jump, did you have like another existing client base? Or it was really kind of like just based off of them? No, it's yeah, so I don't have, I didn't have an existing client base. I did some sort of preliminary market research, if you want to call that and some networking. So I put some feelers out to see what was what the market, like the local market looked like, and kind of talked to people in my network. So I have, I guess, a small handful of clients now, like five ish as a result of that sort of laying that grant work. And yeah, I'm hoping to basically be able to grow back to like replacing my income within 12 months or whatever, so nice. And I don't think you've really like announced fully that you were doing this either, right? I feel like once you kind of go public and all that, that helps as well to kind of draw some people in. That's right. Yeah. Like I'm going to update my LinkedIn and make an announcement here in the next little while. That's exciting. I love talking to people. This is the announcement, John. There we go. You got the exclusive interview. I'll maybe have to like publish this like extra early just to make sure we're ahead of the curve on that. There you go. No, but I find, I find talking to people who are kind of at this stage so interesting and it's probably one of the more valuable things for the audience too, where I think a lot of people listening are sort of people working at, you know, the big firms who are maybe wondering like what else is out there and they're, they're curious, right? They're not ready to make the jump. And like for me getting into entrepreneurship, like indie hackers, my first million and stuff like that was huge because it sort of normalized the idea of like, yeah, you can just go out and do things. And like, there's like a pretty good chance that, you know, eventually you'll find something that works out. And then from there, like, you know, there's sort of a bit of a playbook to like how you can kind of scale that and all that. And it just normalizes the idea of it and it makes it a little bit less crazy. And like for me specifically, like no entrepreneurs in my family really. And so you kind of need access to those people and, you know, hopefully for some people, maybe that'll be you where they're kind of like listening and they're like, oh, cool. Like Graham made the jump. Maybe that's not so crazy. Right? Yeah. I mean, that was my experience too growing up. Like my parents, my dad had a union job, my mom had a union job with the government and there's nobody in my family, like going back probably generations who are entrepreneurs. And I guess maybe working like in the startup ecosystem exposed me to that. And being on the leadership team at Taka 2 kind of gave me a bit of a look under the hood of like what it's like to run a business, which was kind of, yeah, a very valuable experience. And then, yeah, it's an exciting opportunity. Yeah. And I mean, I can't remember what the other thing I was going to say, yeah, sorry. That's all good. We can circle back if you think of it. Yeah. So if we rewind a little bit to like before this as well, you were actually, you did your education to become a high school teacher, right? Right. Yeah. I went to, I have a math and physics undergrad and then I did my bachelor of education. Right on. And so like what, I guess, what attracted you to like accounting specifically away from teaching and then like what were the steps like to have to bridge that? So after I got married in 2012, we moved out to Nova Scotia from Ottawa and I was sort of like an underemployed teacher out here doing substitute teaching work. And it's a long story, but I basically ended up applying for a job at a hedge fund admin in Halifax because that's a sort of a small, like niche industry locally here after the, or maybe just right leading up to the financial crisis, there had been like a bunch of government tax incentives to bring hedge fund admins here from offshore. So there's Halifax, it's like a little mini hedge fund admin enclave. So I got a job there and it was like at the, at the interview, they mentioned that they sponsored people to go through the CPA program. This was right around the time of the merger. So there had been a lot of like CMAs working there who had got into accounting through either like economics or finance or other degrees like that. So because I had a math undergrad, I didn't have any of the business courses. Like I had never, I had never even looked at a debit or credit before walking in the front door there. So I ended up having to take a bunch of prerequisite courses through CPA. At the time, I think the first course I did still had CMA branding on it. It was that early in the process. So I banged out those courses over the course of about a year. And then just as I was starting the CPA program, one of my colleagues from the hedge fund admin sort of hooked me up with somebody in his network at a small local firm. So then I ended up working, I ended up working at a small public firm for a number of years after that. So, and that's where I finished my CPA. Okay, right on. And then from that small firm experience, like, I mean, first of all, I think going to a small firm is a great background to like starting your own firm, because I think there's a lot more of, you know, exposure to like the actual behind the scenes chaos. It's not just like all prepared for you like it is kind of at a lot of the bigger firms. Are there any like key learnings that you're taking from that experience that you know, things that you are adamantly going to do differently or things that you think that they did really well that you want to make sure that you kind of continue to foster in your firm? Yeah, that's a great question. I mean, I like the atmosphere of working with a variety of clients, kind of knowing people personally. So, you know, when you would work on their file, you would do corporate file and family trust and personal like owner manager tax plan, and then their personal taxes and stuff for their kids. You know, and often there were like, sort of groups of companies, you know, entrepreneurship kind of runs in families, it seems. So I like that a lot. And I guess it was a while ago, actually, that I worked in public accounting, I've been in industry for a while. So I feel like there's been a lot of changes, like, in terms of like the tech stack, the availability of like practice management software and stuff. So I like I am going to steer clear of some of the big, like the PMs that are offered by tax prep software and stuff like I'm planning on using some of the sort of startup cloud based tech stack solutions at my firm. And I really want to like focus on being remote or digital first, I really am not super interested in like big stacks of paperwork coming in the door. So I mean, those are some of the things I guess that I appreciate and maybe some of the things I'm going to try to change in my practice. Nice. And and so in picking that tech stack, like, where did you go? Like, where where are people kind of making those decisions? Now? Was it just a bunch of independent research? Did you kind of like, check out everything Jason stats is making or like, what, like, where do you kind of look to? I so like, I made a few connections through my local network, and I talked to a number of people, it seems it seems like even like, especially maybe among solos, as opposed to small firms, that people aren't using PMs. Like I don't even know if they're aware that they exist. So that that decision, I kind of binged Jason's dad stuff and looked through his big PDF comparison guide and then tried out a couple of them. So I ended up settling on financial sense for now. It seems to do what I needed to do for now just to keep things organized and monitor deadlines and what have you. So yeah, some of the other decisions were just based on either like personal experience, or talking to people. There's like a there's a Facebook community of like Canadian tax preparers. And so those are mostly like solos or, or small practices, like a lot of non designated people on there, too. And there's a lot of discussions there around some of the different tax preparation solutions. So I ended up settling on tax cycle. That was partly through that research, and then also just talking to a couple people locally. Yeah, it seems like a fairly well priced and like a like a reasonable solution for what I need. So and that's what that's sort of a zero product, which I sort of like their ecosystem a little bit more. So yeah, yeah, we've definitely had some kind of zero super fans on the pod before. So yeah, I think, you know, all of those have kind of their their own benefits. I've definitely talked to a lot of people who kind of early on use financial sense, as well. There's somewhere like, I'm not, I'm not super acquainted with them. But I'm gonna have to kind of go dig a little bit deeper and get into that ecosystem a little bit more. For trial. Yeah, I'm out of the game, though, for right now, anyways, it could be my future, but I'm a little bit out of the actually doing the accounting game. And so okay, so we've got your tech stack figured out here. And then in terms of kind of early leads in like business development, like, what do your first kind of five steps look like for that? Like, where are the leads that you're developing so far kind of coming from? Yeah, so some of it was just talking to people in my network and putting it out there that I'm planning on starting a firm. And I was actually surprised, like, though, I already got to two clients from just conversations with sort of random people that I called up and talked to, and whether it was something that they weren't interested in, one was something that was sort of outside their wheelhouse. And then another was something that they weren't, they didn't have the software to deal with. So yeah, I have two clients just from network. And then I have a couple of clients through my wife's professional network. So those were those were the ones from my wife's professional network. I kind of had those lined up like worn leads before I decided to make the jump. So yeah, I got a few I had a few I had put some feelers out before I decided to make the lead. Okay. Yeah. And I think that makes sense, right? Just making sure you have like some minimum level of interest and income. I think that's like a good step to take rather than just sort of blindly making the jump and then being surprised at the outcome. So yeah, and I think another thing was like, I had a very kind of like motivating conversation with another local CPA who had started a bookkeeping practice about a year ago, and it's gone really, really well for her. And she started with, you know, three or four clients and has grown her business like phenomenally well over 12 months. So that was also like a little bit of like a market research, you know, just like knowing that the work is out there. She's turning down work already. So after 12 months. Yeah, that's what's like, like having those people in your network and like having exposure to those people. Like if they're not through your network, either maybe like one of the accounting communities or just like going to conferences and seeing these people like, I think that's so important where like, oh, like, that's just like a, just like a regular woman, that's just like a regular guy. And they are killing it. And you know, they're, they're being rewarded, rightfully so for taking a chance. But like, other than that, like, this isn't necessarily like the riskiest business venture to get into either, like, there's a very, very high probability of like, you know, some floor of success of like, that probably looks like, you know, low six figure income, which is kind of like, sort of the floor of success that you're likely going to hit, right? So yeah, I think there's like a lot of demand out there. There's a lot of like baby boomers retiring. You talk to people, a lot of people are like annoyed with their accountants because they can't get ahold of them. So that obviously tells you that either prices are too low or demand is too high or whatever. What were your kind of early cues in terms of establishing pricing? I mean, that's still something I'm working on. I've kind of, I've gone down the whole, like, what's his name, Ron Baker, the value pricing. And I've listened to like Ryan Lozanis a bit about that. I mean, I'm trying to avoid pricing things hourly. Yeah, the first couple of like contracts, I think if I had priced them hourly, like I probably would have done myself a disservice, you know? So it's kind of interesting because a lot of it is about like finding that match between, you know, what the customer is willing and able to pay and what your services are worth based on, you know, deadlines and the level of service you can provide. So yeah, it's still like, it's a work in progress. I'm sure at some point that'll come back to bite me that like, I'll, I'll, I'll fix, fix fee something and it'll blow up in my face or whatever. I mean, it may. Yeah. And that's, you know, that's obviously going to be a learning process and that's fine. It's cool to hear though, that you have like the good influences and like, there's lots of really good pricing folks and like, you know, Logan Graff is great, Jody Paydar is awesome. But like, it's also important, I would say for you being Canadian, that you have some Canadian influences because it is easy to get wrapped up into like some of what's going on in the States. And you know, some of that can be applicable here, but like sometimes you, you can get a little bit of head ahead of your skis if you're like, oh, cool. Like a corporate return should be X, Y, and Z, but it's like our business ecosystem. Yeah. And it's like, our business ecosystem is a little bit different. Like our price sensitivity is a little bit different. So Ryan Lozanis for that is amazing. I had him on the pod. He's like, I mean, he's like kind of like an OG of like, he was doing a lot of the things right before. That was commonly known that that was kind of the right way to run a practice. So yeah. So were you always kind of plugged into this like, you know, accounting community? Like it does seem like you have a lot of like the really good influences or was that only since you kind of decided that you were maybe. Yeah. That's just been over like the last few months. I just have kind of really gone down the rabbit hole. So I mean, I was kind of very heads down, head down just doing the kind of startup thing. So this is like getting back into public accounting is going to be a bit of a learning curve, right? Even going through the process of setting up the firm, like, you know, having to pick up the appropriate PD and whatnot to get registered. Yeah. Yeah. Yeah. Yeah. There's a lot to it for sure. Okay. So yeah, it seems like you got a lot of like pricing kind of figured out a lot of tech stack figured out. Are you actively pursuing any kind of a niche? I know you mentioned some people kind of from your spouse's network and you mentioned kind of offline that she was in the medical profession. So that could be like an interesting niche, but early on, like, are you, are you going in specialized? Or are you going to kind of figure that out as you go? Yeah, I think that's going to be come later. I'm not going in, like with a specific niche in mind, although I have some ideas. Yeah, I'm just picking up what work I can get. Okay. And then hopefully grow the business, you know, mostly through referrals. And at some point in the future, it's looking like one line of business is particularly attractive, probably just doubling down in that area. Okay. And then, and what's like the scope of your offering, at least like starting out right now? So I, I'm actually kind of debating this right now. So these first of the first five clients, only one of them is sort of like ongoing monthly bookkeeping client accounting services. The other ones are sort of like either they'll either be like one off or annual tax work. So I'm kind of debating that because I guess I'm a little bit reluctant to get bogged down with a lot of like ongoing deadlines, versus just having a big lump of work, you know, on an annual basis. So that's a little bit TBD, or maybe, maybe the right answer is a mix of both, you know, like ongoing cash flow at a certain level, and then it's your time. So you're talking about being maybe more interested in kind of like the more seasonal type business though, like you don't want to be bogged down by recurring? Yeah, that I mean, that sounds maybe a little bit crazy, but I don't, there's part of me that would almost rather like put in 1200 hours in the first six months of the year and then work, you know, 10 hours a week the rest of the year or something. Yeah. Yeah. I mean, so long as you make it worth your while kind of later down the line, that's fine. Right. Um, you know, some people talk about doing exactly that. I think Yuri, Yuri Keplovich, I think, I don't know what the exact numbers look like, but I think he's like doing yeah, 45, 50, and then like, 25 or whatever, right, the rest of the year. Um, and I think that that's like a perfectly good model for for solo. But I think if you do then try to scale, that can maybe become a little bit tricky. Is that something that's sort of in your ambitions of like, you would like to kind of grow this into like more of a, you know, practice with employees, or are you kind of really pursuing the solopreneur type route? Yeah, I think for now, it's solo for the foreseeable future. I think that'll be open to reassessment, maybe like 12 months down the line. Yeah. Yeah, I agree with you. I mean, the the people I know have been successful with that model have basically been solos because it's very hard to find like seasonal staff, right, bring in for three or six months or whatever the number is, and then not have them working the rest of the year or trying to be busy the rest of the year. Yeah. And then for someone at your stage, like in the journey, is it is it like motivational at all, to see kind of the increase in like exits and exit liquidity for kind of firm owners? Or is that like not in your head at all? It's that's, that's not really what I'm, that's not what I'm thinking. I'm actually more I'm thinking about this more as like a legacy, like if anything, I'm more interested in building a business that I can pass on to kids, you know, so I'm not really I'm not interested in in hitting the exit button. If I if I am successful in building up something like that, I'd rather like have it as a sort of a generational family business as opposed to selling it out. Okay, that's cool. Because I like to I like to kind of look at where people's heads are at on this private equity thing, because I wouldn't be surprised if some people were making the move to buy firms today, or to sorry, to start firms today, with being like, oh, cool, this is like has now become something I can possibly exit one day, right. And so I like kind of getting a feel of that. And like, to me, like, if I was building a firm, to possibly exit, like there's some tech stack that you can establish that, like might help that a little bit more where it's like, okay, well, carbon, for example, has like this marketplace, right? So it's like, okay, you can list and sell to other carbon firms really easily and things like that, of that nature. But I think like, if you are, I think I think it's great to be like, a little bit more clear about your intention early on, right of like, okay, I'm building this with the intent of X, Y, and Z. And so, okay, so you're, you're kind of looking for like a long term type of thing to just kind of keep, keep building out. Yeah, I think so. I mean, I kind of I kind of wonder about the like, the long term implications of that sort of attitude, not just in the accounting industry, but like, in society at large to, you know, like, exit to PE, you know, and then, and then what are the incentives involved there? You know, for everybody, it just seems like, like, it's maybe not the best, the best outcomes. Yeah, then for the founder. And then also, like, in the way that you're operating, right, where it's like, yeah, you might be like, obsessed with keeping your margins, like, too clean, where then you end up like, yeah, you're not treating employees properly. You're not doing the things that make you happy to be running a firm, right? Like, we're just growing the top, just growing the top line, you got to grow the top line, right? Yeah, doing that, like unprofitably. Right. Yeah, yeah, no, I think I think that is true there, there is a little bit of room there to kind of, like, steer the ship the wrong way, if you're just kind of heads down pursuing that kind of exit liquidity as well. Yeah. Okay, well, I think that, like, I think that that's kind of all I had in terms of questions for you. I would love to touch base with you again, maybe in, you know, six or 12 months or something like that and, and see where things are at and see what has kind of changed and all that. I really do appreciate you coming on the pod kind of at this stage, I'm sure you're you've got a lot of things that you're kind of very eager to get to for your firm. So thank you for taking the time. And yeah, and I absolutely wish you luck. If any other people are kind of on this journey where you're sort of like early days, or maybe you have like a firm on the side, and you're like debating making this jump, I would like highly encourage you to get in touch with Graham, I think like, having some people who are doing the same things kind of at the same time as you can be really, really helpful. It feels like, you know, you have this cohort of people who are kind of like working together. And so yeah, I would highly like encourage you to connect. But yeah, I wish you tons of luck with your firm, Graham. Thanks so much, Tom.