My Firm Planning Playbook

Hello and welcome to the Big 4 Transparency podcast. This week's episode of the pod is going to be a solo episode and is largely based off of some conversations I've been having with folks lately who are interested or have been exploring the idea of starting their own firm. And these conversations have kind of led us through a process of kind of me walking them through how I would ideate starting a new firm on the basis of everything I've learned from the last, you know, 85 plus episodes that I've recorded of the Big 4 Transparency podcast and all these conversations that I've had with firm leaders who've done this exact same thing. So I've broken down the process and I'm going to give you practical examples of if I were to start a firm, what I would actually do. But yeah, we're going to kind of break this down into sort of six parts. So the first one would be a self-assessment for fit of what might be worthwhile pursuing. The next would be bookmarking people, which we're going to talk about next, looking into niches I know and like. Fourth one would be thinking about people that I know in the space, a possible client base to get me started. Next we're going to talk about content and communities. And then the sixth point is the land and expand of like what's next once I get a client through the door. So without further ado, I guess the first point would be the self-assessment. So again, in these conversations I've had with people, their situations have been varied where some might have families, some have obligations, some are used to the lifestyle that they might get where they've been earning $200,000 plus a year as a senior manager or something like that. My own self-assessment is that I would be able to peel things back to a level where I think I could go out on my own and, you know, it'd be okay to have a first year where revenue is maybe not crazy, crazy high. I haven't been at that salary range where I'm making the $200,000 a year. And so I'm not accustomed and spending in line with that lifestyle. And so I could have the time and the luxury of that time to start something from scratch for myself. Now, for some people, that's just not a reality. Even though you might really want to get into entrepreneurship, it just might not be realistic to think that you're going to pull the plug and start something from new. So for those people, what I've recommended is you can actually look into other firms where you may be able to get a little bit of a head start. So a very practical example for this would be someone who is looking to potentially start up a tax practice. Well, if you can't afford to go out on your own, there's a way that you can actually kind of de-risk starting this tax practice. There are lots of very cool business models under Dark Horse that are worth checking out for you. But another opportunity for you might be finding a firm with an established client base, but that is not yet offering tax services. So that way you get to kind of start this practice on second base and yes, it's going to cost you some future upside and some of the ownership of what you're doing is going to go to that firm. But if you can find, let's say, a CAS practice, an established CAS practice, probably has a couple employees already who has a big enough client base, then you might be able to supplement and basically make what you've been making right off the bat, either through salary with them, if that's what they're kind of looking for, and then eventually talk about partnership or as well as just kind of jumping right into kind of equity ownership of the tax division or something of that sort where you're cross selling this new tax offering across the client base. So, you know, I mentioned in this example, a CAS practice that could work as well with, you know, a firm like maybe even like a wealth advisory practice. We've had Evans May advisory on here, where you can really, really start and scale very rapidly when you have that trust, you have that brand name and that existing customer partnership. So for myself, I think if I were starting a firm, I would probably go out completely independently. But that's just kind of based off of my own, you know, my own needs, my own financial situation, my own obligations. But there are other options there where you can actually kind of de-risk that move. The second point here, if I were to start a firm, is I would go through my bookmarked people and that kind of ties in with the self-assessment. So myself, as an entrepreneur, as an accountant, I think that I'm, you know, I'm fairly good and I've gone through the motions with Big Four Transparency as well, generating business leads, generating business intent and doing eminence type work. So doing the things that will help drive the firm business forward. I'm able to do tax work. I would not feel confident in an audit role. And I would feel kind of moderately confident in, you know, kind of doing the book. So doing the kind of CAS type work for a client base. And so I would look for someone who's very complementary to that. I would go through my bookmarked people and see if there's someone who's in a situation And this, you know, again, for me personally, the timing of this firm isn't like a decision I'd have to make now. So I could wait and be opportunistic for those people to be looking for a new opportunity. And this is a practice that I've had kind of throughout, you know, my whole career is that I find people that I think are interesting, that I think I work well with and who have a complementary skill set to me. If I were to go out and start a firm, personally, I don't think I would want to go out on my own. Because I think, you know, there are some areas in operation, organization. And I would also just kind of like find that to be a little bit lonely. And so I have probably about 15 people that I would say I kind of keep tabs on where they're at. And I do know personally of some people in my network who are highly qualified individuals, might be a little bit better at some of the in-depth tax research and like figuring out those kind of stickier problems than I am, that I would feel really confident in working with. And that's a practice that if you don't have that already, I would highly recommend starting to do that regardless of your entrepreneurial, you know, aspirations. It is a super valuable thing to do to keep this Rolodex of people. And oftentimes these are people that you've worked with. And let's say if you leave the employer that you're at, just make sure you stay in touch with these people, right? It's something I personally tend to do naturally. Again, I'm currently a solopreneur. I'm working on my own. For the sake of my own sanity, I do have to go for, you know, lunches, dinners, beers and stuff like that with former colleagues. But it's also a really good way to stay on top of, you know, what are their thoughts on going out and trying something new? What are they looking for out of their career? Are they at a place where they're all in or are they actually someone that like might genuinely consider leaving, right? And again, you should always just do this socially either way. I think having a Rolodex of people can really kind of start you ahead of time and you should be investing in these people. You should be helping them along their journeys and exposing them to some of the content that you're exposed to. That way you guys have kind of, you know, the same level of inspiration around what you might want to start together one day. Next I would kind of look into the niches that I know and I like. I think, again, if you're starting an accounting practice and you are working with people that you dread all day or an industry that you're just maybe morally opposed to or just not aligned with, I think that that's going to make everything way more difficult and clients can see through this in a heartbeat. So a couple of years back, I had a small book of business in the crypto tax space when I was personally really involved in that. And people really responded very highly to that. You know, little things such as I'm talking to them on Discord, which is the native platform a lot of those people are on, made a huge difference and distinguished me versus the old, you know, what they would consider the old kind of boomer accountant approach where they were unwilling to meet these people where they were at. So just by you actually being ingrained in that world, I think would make a huge difference. So for me, if I were going to look at that, I would say there might be two avenues that would be of interest. The first one is through secondhand connections. So my sister's a doctor and I know of a lot of the things that keep her up at night when it comes to the finances or when it comes to the kind of accounting work. I've dealt a lot with like medical professionals in the past when I was working at a big four firm. And when I'm looking at that niche and I'm evaluating it, what I can tell you is these are people who are making very good money. They can afford to pay for support. And these are also people who are super busy for the most part. A lot of doctors are working a whole lot of hours. And so these are people who are very, very busy and who would then value you supporting them through this, them not having to deal with this whole headache of maybe tax support. Maybe it's the bookkeeping for if they have kind of a professional corporation or anything like that. And that makes that like a very interesting niche to pursue. Another one that I would have some credibility in, I think, would be in people who own rental properties or Airbnbs or things like that. So quite a few years back, I bought a condo when I've since kind of bought a house with my wife and I kept that condo. And so I operate a rental property and I understand some of the pain points that relate to that. And I also know, again, if you have investment properties, then you are very likely a person of a certain level of means, particularly for people who have many investment properties. And so, again, this is a client base that I understand, I am a part of, and I know that they have the disposable income for the most part to be able to hire a professional to support them. They're also people who are kind of working in a world where the margins aren't like excessively large. And so some level of financial optimization might actually make a huge difference in someone's real estate portfolio. And so that's something that I think is very interesting as well. There's also people of all walks of life doing, you know, the kind of real estate type of thing on the side, which I think is really interesting because, again, these might oftentimes not be people who have the financial know-how, you know, the accounting tax expertise to do everything themselves. And so I think that that would be a very interesting niche as well. So for me personally, if I were to pursue one, I think it would be the rentals. I think the medical community might be really interesting as well. And for you, it might be different things, you know, maybe you have a friend who's an influencer and you can make it in that world through some of their connections or, you know, the list goes on and on and on. Maybe you've worked a bunch of sales jobs in the past and you could become a specialist for people who are earning commission based pay. There's all of these kind of areas where you can kind of stand out. And the reason for choosing a niche rather than going broad right off the offset is that you can then become such a specialist in that, that you can actually compete with the level of offering that some of the more kind of established firms might be giving them. Right. So it's impossible for me to go and compete with even a regional firm on services across the board because I would be spread way too thin in terms of tax research across all these different sectors, across all of these different areas to be able to provide the highest quality of service. But if I choose just one area that becomes my expertise and I become actually able to compete and provide the same level of service, hopefully a little bit more tailored and hopefully a little bit more white glove. Also, when you're pursuing everything all at once, it becomes really hard to kind of follow up and go into more specialized advisory services or complementary services to what you're doing to these folks because, again, you're spread so thin. And so you might hit a wall a lot earlier than you might if you were to pursue a niche very specifically. So those are kind of the first three of six areas. Next, I would look into people I know who could be my early client base, as well as sort of maybe even test subjects. Right. If you are somewhere and you've got some spare time and you want to start this firm on the side of your desk and operate that kind of evenings and weekends for your first three or four clients just to test the waters, see if you like it, even maybe set yourself up a little bit of a financial cushion before pulling the plug on what you're doing. I think that's not a bad idea. Although, obviously, if you are in professional services, you have to be respectful of the limitations of what you're allowed to do within the firm that you're working at. But in terms of people I know personally, I know probably seven or eight people who have fairly large rental portfolios. And then the next thing is people who are tangential to that that I can speak with. Right. So I actually have a great relationship with the mortgage brokers I've worked with in the past. I might see if they have relationships with the CPA that they're referring work to currently. If they're not, that might be a great opportunity. Offer them either maybe a profit share if I'm trying to keep things lean early on and not have to pay. Or maybe if they have a newsletter that they send out to their client base, offer up a sponsorship for an ad slot in there or something like that as well. That might be interesting. Same thing with real estate agents. I know a couple of people in that space that I would speak with. People that can kind of help generate leads as well as be my early client base. And if I'm struggling to get people on board, what you can do is you can, without giving away value, you can offer a discount in return for some other value that they might be able to provide you that's not just paying a higher billable rate or a higher fee. Right. So things like being in agreement to share a testimonial with you, with their experience with you, if they're kind of like an established business or brand or a well-known figure in the space, maybe even being able to use their name, image or anything like that up on your website to help create credibility. I think those are all fantastic beginnings to kind of set up that early lead generation, set up that kind of referral engine where if you can really make your early customers super happy, they might be generating a lot of leads for you down the line. And so that's kind of how I would start setting up my customer base. Next, content and communities. So in all of these conversations with people, what I would be doing is asking them, where are they meeting other people like them? So not every real estate investor or not every doctor or whoever that person of interest to you might be is actually going to be very plugged into the community. And so you have to ask a lot of people. You can't just ask a few and then say, well, I guess those communities don't exist yet. You can go and you can talk to those people. And once you find a community, again, bring some value to that community before necessarily making the ask for them to become clients. Right. So if they have a meetup, if they have a newsletter, anything like that, you can start plugging in some content, some some free things that you can do to provide value. Did you know that this new section in the new tax bill or something like that impacts your business? Here's how it works. And you can explain it for them as well. Don't be too afraid of giving away value. And I think that that might actually be a really good way to kind of show that you have expertise. We've covered this with guests in the past, too. You know, we had Mark Gallegos come on and talk about how he does his eminence work and how he actually does give away a lot of value for free. The reality is people often just don't feel comfortable enacting tax planning themselves. And so even if you kind of give them the step by step, they'll still probably be more comfortable working with you to enact those tax plans and go from there. And then finally, the last step would be figuring out how to land and expand. So my personal wedge would be in the tax work, which is great. However, for a lot of these individuals, you can only charge so much for a tax return. So a lot of research should be done on that front to make sure that you're not underpricing yourself early on because then you're going to be very resource constrained, both in terms of time and money that you can reinvest back into this business and growing it beyond a certain scale. And so beyond just doing the tax work, I think I would do a lot of work in terms of understanding where I might be able to provide more value and more advisory services. So in the example of rental properties, you know, one of the big things for people who own multiple rental properties that is a daunting task for an individual who's not a CPA or someone in the financial realm might be debt optimization. So if someone has a whole bunch of mortgages, there's often terms within those mortgages. I'm in Canada, so our mortgages are a little bit different typically than in the U.S., but there might be a lot that can be done in terms of optimizing the debt load where when they get a new mortgage or a new property, if they have a more favorable interest rate, it might be better for them to borrow more money on that property and, you know, pay down some other mortgages that are a higher rate to a certain degree, you know, below the limit where there might be fees or early repayment penalties or anything like that. There's a lot of financial optimization that can be done within the debt load in Canada as well. For example, interest on your mortgage on your personal property is not tax deductible, whereas if this is for an income generating property, that would be tax deductible. So that's another very low hanging fruit area where you can kind of ask them about all the properties that they own, what all the equity is in each of these properties. And very early on into your offering with them, just say, hey, you know, I've done the math on this. We can save you $6,000 a year between actual savings on interest payments and then the tax benefits of actually having tax deductible interest payments instead of having more equity in your personal home or sorry, less equity in your personal home just by optimizing your debt. Right. And that becomes an opportunity for me to do very, very high value advisory work. So that might take me half a day to figure out for a client and might be something that could save depending on the size of the real estate portfolio, anywhere from five to who knows, right. Twenty five, thirty thousand dollars and it's not a ton of work. And so that's something that I find really attractive. And the other example of doctors, there might be opportunities to do their medical billing for them, right. Developing some level of expertise in that and then expanding the client base through that. And so these are kind of things that you should be thinking about in your practice where you might be able to go further. And again, that's something that we've covered at length as well in the wealth advisory space with Rory Henry or Owen and Steven from Evans May, where, you know, you can do the tax work, you can do the accounting work, but there are much higher margin activities that you might be able to offer these people. Another one in the real estate space and I'm you know, you would have to look into the regulations around this, but you know, maybe you can become a mortgage broker for these people or maybe you can partner with a mortgage brokerage where you share leads or possibly you become a referral source to them and you can then kind of get a percentage. Same thing with real estate agents. You might be able to set up a mutual referral program or maybe you can get kickbacks from them for referring your client base to these real estate agents. So whatever niche you're in, you want to really think about what the really high margin activities are that you might be able to lean into to generate significantly more revenue in terms of a value billing model and obviously generate way more savings for that client base. Right. And so, yeah, that's kind of, you know, the conversation that I've had with a lot of folks recently who are looking into starting their own firm or who are maybe running a firm and trying to kind of figure out how to get out of the slog or they're stuck between the 150 to 250 revenue range and don't have the capacity to just take on more clients and just feel stuck there. That's, you know, from from all the conversation that I've had with firm leaders, that would be my approach to doing this. And then also beyond kind of just like getting involved in the communities of these people, once you have that level of comfort and you have a client base you've been working with for a little bit and you can understand what their level of sophistication is, what they're actually interested in. Look for the reactions of people when you share something. If something always kind of clicks for people, that might be something you should be generating content around to start creating those inbound leads. Right. And you could start creating that on LinkedIn. You can set up a podcast, which has been really valuable for me to do with Big Four Transparency, for example. You can start a newsletter. There's all these kind of content plays that you can do, which will then kind of get the inbound motion going for you as well. So people discover you organically. And then when you create that content, you want to make sure that you share that as broadly as possible. So, for example, the newsletter that we have, Big Four Transparency, was kind of stagnating for a little while. And then I noticed LinkedIn had launched newsletters and I launched it on there. And our overall newsletter following grew by about 30 percent in a very short period of time, just by kind of launching across a new platform where people maybe are more likely to discover you natively using that platform, as well as the way these platforms work is usually when they're kind of launching a new offering, they'll push that a little bit further in the algorithm. And so jumping on those opportunities for distribution of your content to that audience. So I hope this is informative for people. This is a little bit of a different format than we've typically done. If you like this, I would love to hear from you. I'm going to include my email in the podcast show notes. And yeah, I hope that this kind of thought process can help get the wheels turning for people who are looking to explore the opportunity, whether or not they would like to start a new practice, what that might look like. And as always, thank you so much for tuning in.