I no longer do tax prep—and saw a net 4x increase in income

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Flashback to 2017:

  • We’re the largest CPA firm in town.
  • We are landing hundreds of new clients a year.
  • Our reputation is stellar.
  • I’m making more money than I have ever made before.
  • And I’m miserable.

Know anyone who feels this way in our profession?

In 2017, we were killing it by every metric in the world of tax and accounting. However, when I started the firm in 2006, I did so with the vision of being known for superior client service, proactive advice, a happy and fulfilled team, and not needing to work 80+ hour weeks just to keep from falling behind. We were going to have work-life balance and provide the advice clients beg for from their tax professionals.

Unfortunately, we found ourselves working to the point of exhaustion, only able to share proactive insights when our calendars weren’t dominated by tax deadlines, and completely off mission from the future I imagined for us.

As you know, there are lots of tricks and tips for tax and accounting firms. We tried everything, including hiring too many people, creating departments, raising prices, culling “C” clients, and doing all those things a firm is supposed to do to achieve work-life balance and profitability nirvana.

NONE of it worked.

Yeah, some of it helped, but it didn’t really move the needle. Tax season was just a dragon that couldn’t be slain if we wanted to achieve our goals.

So, I fired the tax preparation clients.

Yes … really. We were a successful CPA firm that just stopped doing tax preparation, and instead, centered on providing advice.

This may have been the single most positively impactful decision I ever made in my career.

How I went about making the decision wasn’t a knee jerk reaction. This lifestyle doesn’t just sneak up on you, and as I mentioned before, I already tried all the other tricks. Instead of going out for more advice on what to do next, I turned back to a process that I use when I make any large decisions—and one I make when I teach my Chief Proactive Advisor Program. While the purpose of this article isn’t to discuss the process itself, I will tell you that once I re-centered on my passions and who I wanted to help, the business plan just started clicking into place.

Immediately, we began developing a series of products and programs that didn’t rely on hourly rates, created more value for our clients, and didn’t require us to work until 1 a.m. because it was April 14. Admittedly, we screwed up a lot along the way with overly customized offerings, inaccurate pricing models, poor hiring, and other obstacles that happen in business. That’s just business and business risk. Our focus on creating something repeatable, scalable, and more profitable that was centered on our strengths and helping the people WE wanted to help, without 80-hour work weeks, was never unclear.

In the end, we built an offering that has us experiencing prospect calls from all around the United States, more growth than we know what to do with, a 4x net income percent increase from 2017 numbers, and leaving the office to see our families on most nights by 5 p.m.—if not earlier.

In fact, because we were getting so good at saving people money on their taxes or improving business profitability, the “what do I do with this extra money?” question started coming up all the time from our clients. To address that, we teamed up with a group of wealth managers and lawyers to now offer tax, law, and wealth management solutions under a single, virtual roof. This only further enhanced the scalability, profitability, and opportunity for us all.

Sure, it’s not all Disney princesses and parades. There are the occasional long hours put in by myself and my team when we need to tackle time sensitive issues, but those are the exception and not the norm. In addition, getting to where we are today did require long hours of thought, analysis, and development. There were even sleepless nights wondering if I had done something insane because the “that’s the way it has always been” gremlins kept creeping into my mind.

However, I was sure that:

  • Clients wanted actual advice during the year (and not after the fact in April).
  • Clients would pay a premium for techniques and insights that built wealth.
  • My team wanted more fulfilling work than just compliance 24/7.
  • There had to be a way for me to take a well-deserved vacation for Spring Break, without creating animosity and guilt.

I was right.

I’m not tearing my shoulder out patting myself on the back. You know this, too. I was just crazy enough to go all in to prove it. You don’t have to be as dramatic as me to make more money, spend more time with your family, and create more value for your clients. Just step back a moment and remember why you entered this profession, what you wanted to accomplish, what you thought your future would be, and start deciding what must change to make that happen.

2 responses to “I no longer do tax prep—and saw a net 4x increase in income”

    • Hi Richard – thanks for your note and question. There isn’t really a short answer to this; the transition literally took me 7 years. However, there are a number of resources, including the ones I offer through my Chief Proactive Advisor Program, various webinars on CPAcademy, and even a session at this year’s QuickBooks Connect. Good luck!