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A friend of mine has the enviable goal of quadrupling his practice of 15 people over the next 10 years. He has a plan and uses it as a roadmap to help him get there. It also looks like he’s on target. However, he recently expressed regret that he didn’t have time to learn new skills to add to his practice as he is “bogged down” in running his business. This leads to the question of what role he really wants. He is a sole practitioner and currently has no associate-eligible staff.

I believe running a business is an important role, and for a practice to become a business, it takes someone at the helm to steer that ship. I could make a credible argument that a 10 person company that wants to become a big business should have someone dedicated to running that company, i.e. a managing partner or CEO. However, I strongly believe that a 100 person company should definitely have a dedicated CEO. This therefore leaves a vacuum of businesses of up to 100 people who could find themselves in this situation. Should it start when there are 15 people, or maybe 25, 50, 80 or maybe 99 people? Should it even start for a company of 10 people?

Whenever a decision is made to have a dedicated full-time CEO, it should follow that this person will lead the practice and that the practice will be its only client. It takes an investment, a plan, funding, and an understanding that that person’s billable time will be significantly reduced. And my friend now? He has a small practice that he wants to grow and devotes a lot of time to it, as well as time supervising client work, coaching and training staff, doing taxes and planning client activities, reviewing final deliverables and meet with clients. In the meantime, he does marketing and does whatever needs to be done to grow his business. At the same time, he loses opportunities to add services because he is too busy and refuses innovative work or refers it to others.

It would seem that his time is misdirected in every way. If he wants to put in the time and effort to grow his practice, he has to somehow delegate a lot of his work and make better use of what he has. Bringing in a dedicated person to be the “CEO” doesn’t make sense to him, nor does it make sense to become a full-time CEO. It needs compromise and perhaps a reorganization of its operation. Here are some suggestions:

  1. At this stage, he must maintain contacts and relationships with customers. It shouldn’t be delegated. However, he could ask his staff to be a little more proactive with customers while keeping them informed and referring difficult questions and issues to them. And he could spend more time calling and checking in with customers.
  2. Given the size of his firm, I don’t believe he has enough critical mass of work to hire a specialized tax reviewer or someone who could review the client’s other type of work. Instead, it would need its current staff to perform most of these functions. He can put the deliverables through a pre-review stage before reaching him. The screening could be done by another member of staff, ideally at a higher level, but it can also be done by someone at the same level or slightly lower. It wouldn’t relieve my friend of his opinion, but he would have a better quality product and it should take him less time. He would initially train staff on how he wants the screening to be done. It should also increase the knowledge and improve the quality of those carrying out the pre-examinations. Also, staff members of equal level could pre-review each other’s work. Emphasis must be placed on the quality of the work to be provided to the client, but also to him first.
  3. To cover the extra time these extra steps would take, he would need to hire another staff member, but this could be at an entry level. This person would need training and should ensure that systems are in place for senior level staff to properly, efficiently, effectively and consistently train new staff. I’ve been there and I know this method works as it does with all companies that regularly hire staff outside of school.
  4. If he doesn’t have the right systems in place, then he will have to work on that, and that should be a priority. Without the right systems and most importantly staff training and growth, he could never achieve his growth goal unless he got extremely lucky. I don’t see this as a strategy; it’s a bonus if it happens, but not a strategy.
  5. Along with reconfiguring his accounting staff, he should hire a personal assistant who he could assign work that could be done as efficiently, or nearly as efficiently, as he was. This helper could learn by following him until he understands how he likes things done.
  6. If opportunities arise to carry out an innovative service, he can either delegate it to one of his most experienced collaborators, or learn it himself and carry out the work necessary for this commitment. If he is the “big” businessman he thinks he is, then he would have a new service he could provide to other customers while training a staff member to perform a significant portion of those services.

What I suggested was adding two staff members, spending time ensuring systems are in place, and upgrading current staff to more effective and responsible roles. This will take time and incur additional costs. This will become his investment in his growth plan. I don’t know how long it would take to be fully implemented, but I believe it could be done in six to nine months. If properly organized with dedicated and resolute determination, and cooperative and understanding staff, it could be done. The added costs, along with the six to nine month wait time, might turn out to be the best investment he can make.

The above is more than a suggestion; it’s a model of something I’ve done and successfully accomplished. It was not easy and although I had partners, we each had different responsibilities and we had clear divisions of management and administration functions. While we supported each other, it was up to each of us to implement the changes we wanted, and that became our “role”. So, I did all of the above and I know it works. I believe it can be done by others.

If you want growth, consider what I suggested, or parts of it, and go for it.

Do not hesitate to contact me at [email protected] with your questions about practice management or assignments you may not be able to complete.

Edward Mendlowitz, CPA, is a partner at WithumSmith+Brown, PC, CPAs. He is on Accounting Today’s list of the 100 most influential people. He is the author of 24 books, including “How to Review Tax Returns”, co-authored with Andrew D. Mendlowitz, and “Managing Your Tax Season, Third Edition”. He also writes a blog twice a week dealing with customer issues on as well as the Pay-Less-Tax Man blog for Bottom Line. He is an adjunct professor in Fairleigh Dickinson University’s MBA program and teaches end-user applications of financial statements. Art of Accounting is an ongoing series where he shares autobiographical experiences with advice he hopes his colleagues can adopt. He welcomes practice management questions and can be reached at (732) 743-4582 or [email protected]