Floundering Firm Turned Around

By December 4, 2019 March 18th, 2020 No Comments

After working at a national accounting firm without the recognition or advancement opportunities I’d earned, I opted to buy a practice of my own. Since my wife was at home with the children, ours was a single-income family—that meant I’d have to make enough money to maintain our lifestyle at the very least. But I felt I’d have a better chance of being paid my actual worth and recognized for my contributions if I stepped out of my comfort zone and pursued being an employer versus being an employee. Although I knew that wouldn’t happen overnight, I was willing to take the risk.

Going from an employee with limited responsibilities to a practice owner involved much more than accounting. I knew it was going to be difficult and it was. My biggest challenge was dealing with employees. I had the idea I should be a “good boss” and everyone’s friend. When I first arrived, I discovered the bookkeepers had no bookkeeping background. They weren’t pulling their weight and I had to spend a lot of time that I couldn’t bill, cleaning up their work. One bookkeeper had family issues that she brought to the office; she treated everything as if it were the end of the world. I felt for her, but at the end of the day, I had to think of my family, and it wasn’t too long before I let both bookkeepers go.

The practice hadn’t raised its prices in 10 to 15 years prior to my acquisition. When I took over in 2012, I raised rates slightly but was very timid about doing so. We were providing significantly discounted services relative to our level of performance. Although I was working 3,100 hours a year at the time, I wasn’t making any more money than I had at my prior job. Cash flow was always tight, and at times I went without a paycheck to make sure everyone else got theirs.

The long hours put pressure on my home life. My wife and I had two young children and I wasn’t home to help or watch them grow. My own parents hadn’t been around when I was growing up and I’d committed to doing better for my kids, but I wasn’t living up to that standard.

Stressed out and depressed, I didn’t know what I was doing that wasn’t allowing me to realize the success that I sought. That was when I received a mailer from Sterling which promised to help me restore balance to my life and to do so in a way that was profitable. That caught my attention. After speaking with a Sterling consultant, I became a client because I knew that with the right guidance I could make it work.

Sterling helped me realize I had to remove the emotion from employee interaction and that I had to focus on empirical metrics to help me do this. They helped me understand the different personality types in our office and how to distinguish performers from warm bodies. Using their hiring techniques and personnel testing, I was able to find and keep quality staff that others (including me) wanted to work with. For instance, I hired an accountant who was working on his CPA exam. He is a rock star who earned his CPA designation and is still with me years later. I also took on another aspiring CPA who is still with me, and I helped a 30-year tax preparation veteran seek and earn her Enrolled Agent certification to take her career to another level (and she too is still with me).

I hadn’t been doing a good job of communicating with both clients and staff prior to Sterling. On the Sterling program, I studied the fundamentals of communication, and once I learned how to clearly communicate a message so it’d be received as intended, I realized I could accomplish amazing things. For instance, I was able to help the staff I worked with understand their roles in the firm and take ownership of them. I realized how much more valuable I was by helping them become more productive, rather than doing all the work myself. I became a better delegator which, in its own right, brought much balance to my professional life.

Sterling also helped me identify quality clients and how to communicate the value of our services to them. I learned how to explain complex topics to non-experts in a way they could understand. On the other hand, I’d never been a believer in “the customer is always right.” I strove to do the work I enjoyed, but working with difficult clients was not enjoyable, and I realized that I didn’t have to do that to be successful. Sterling gave me the spine to say, “I don’t like the way you treat me and my people. I’m not doing business with you.” And in some instances, that helped my clients realize the length to which I was willing to go to serve them, and they decided to change the way they approached me and my staff.

In December 2013, a prominent local firm approached me about merging our two practices. At the time, I had just signed on with Sterling and wanted to be a success before taking the business in a different direction. I told the firm I wasn’t interested and to check back after tax season.

As it turned out, we had a stellar tax season. I had brought my staff out to Sterling to do their program and while there, fired an employee who’d been sapping the energy out of the office. It took a little time, but Sterling helped me have faith in the value of our services. We raised prices and saw our realization jump. By tax season’s end, I’d turned the practice around 180 degrees. Like any business person, I knew I needed viable cash flow no matter what venture I might be in. The difference with Sterling was they taught me how to make that a reality.

The prominent CPA firm contacted me again about merging our businesses. By then, thanks to Sterling, I’d achieved the kind of success I was looking for and agreed to the merger as part of my growth strategy.

Were it not for the Sterling program, I’d still be working long hours for little money with no home life. Instead, I turned around a floundering firm, became a success and have achieved a better-than-ever balance between work and my personal life. That has a lot to do with the focus Sterling helped bring to my career and profession.

I’m thankful for the value Sterling helped bring to my efforts. I’m thankful that I decided to pursue their guidance. It was money well spent. And I still use the lessons learned, and will continue to do so for years to come.

Jared Matts, CPA