Half a Million in Six Months: How to Transform Firm Value

0:00I'm Brandon Poe and this is the Accountants Flight Plan Podcast where you can enjoy engaging conversations about murders and acquisitions and accounting practice management. Listen in on strategies to build a more fun and valuable accounting firm. Welcome back to the Accountants Flight Plan Podcast. I have the pleasure of introducing you to Bill and Chris Murphy today. They were in our APA program and they did an awesome job with their firm and so I invited them on. Guys, can you guys just introduce yourself to our audience a little bit? Sure. Chris, and this is my husband Bill and we sold our firm through Poe Advisors in 2022. I think that's right. I think the biggest thing that we can say and one of the things that helped us so much is we took the APA Academy. We went through that process and we probably within six months increased the value of our firm by half a million dollars and so when

1:04we finally sold we ended up being able to sell for half a million dollars more than what we had originally listed them from four. So it was really a fantastic deal for us and definitely pay for itself. Thank you, Brian. Yes, to say the least. Love it. I'll tell you what, it's really meaningful and wonderful to hear a kind of like post alumni stories about what they went, what they did in Academy and what it meant for them and so I'm very excited about sharing some of your wins with our audience because you know running a CPA firm can be harder. It can be not so hard and it can be profitable or not so profitable. I've seen such a variety of results from accounting firms and so I think there's a lot of room for improvement for a lot of people so hopefully people walk away with some real valuable insight from you guys. I want to start off first question

2:06what were some of the biggest roadblocks you were feeling not just as you were approaching your exit but while you were in public practice like what were the major pain points that you guys experienced on a regular basis? Mine for me it was I spent way too much time in the weeds and not allowing employees to reach through full potential and to put them in situations where they could gain experience you that would make my life a lot easier years down the road. Just that keep it hey I can get it done faster better if I just keep it myself and then before you know it the firm is just all about you and it's hard to scale. It's actually. Yeah yeah I see that a lot Chris your thoughts? I think the biggest thing that I felt was just finding qualified staffs you know a lot of times you have to go through four or five six people before

3:08you found that right person and it's difficult to do that because yeah obviously those people are talking your clients and you're taking time to train them you know sometimes you can hire somebody and you think they're going to be great and within a week realize they're not don't hang on to them stock cut the bleeding before it really starts get rid of them do something different but I just think that accounting in a whole just not as many people want to get into public accounting anymore and so you know especially towards Vienna it was really challenging to find good people and the only advice I'd give at that point is when you find somebody good keep them whatever takes yeah treat them well keep them well so Bill what was the result of holding on to that work and was it just long hours was it a bucket of issues that you encountered because of I think it affected me mentally spiritually and physically yeah all of the things that you've

4:08mentioned worked in longer hours mentally just being tired spiritually just me me me me me not what's good for the whole yeah yeah is how I'd answer that well I remember when you you know when we first spoke I remember you were pretty tired and you were on the fence if you wanted to try to get the firm sort of where you could live with it a little bit better or if you was time to exit and you were kind of on the fence and then you you decide okay well we'll take Academy and we'll see what we can do to fix the firm and what was interesting about you guys as I felt like you were at that point where something had to change and what my observation was is that because you were at that point you were very motivated to make change in your practice one way or another and so when you got into the workshop when when you caught up the ideas you were implementing and making things happen do you think that is an accurate depiction of your motivation

5:13was just like something had to change almost definitely properly at the end I don't know if I was driving you crazy by going oh I see something through the EPA Academy we need to implement this now I mean like 10 minutes ago we needed to have all staff on board everything so I had to have Chris I think mainly you would build relax we're we're doing what we're supposed to do yeah we're not going to fix that so for nine yeah yeah really the fixes weren't that I know and I don't think that we were so much broken necessarily I think we had a really good firm as it was we just took it to the next level yeah because you guys had a good team at that point you had a pretty good team so so you were able to put these things into practice quickly because

6:15you had a good team I would say absolutely what what were some of the major things you did that really strengthen your firm and helped it position it the way you did well I can say the biggest changes is what I'm getting at that you know yeah absolutely without a doubt we went through and basically got rid of almost all of our individual tax returns so the stainless tax returns the the tax returns that were you know we continue to do the ones that were tied to businesses so you know we had some clients that had however many businesses they had obviously we would do their personal return but anybody that just is just a personal turn nothing else attached to it we said no we're not doing them anymore they were just a loaf even though our fees weren't terrible they were still a loafy they required a lot of attention and it just wasn't if profitable I mean you looked at the numbers and the amount of time you spent on they just weren't profitable yeah so by getting rid of those clients it immediately I think made a huge impact not only

7:24on profitability because you're thinking oh gosh you know I'm getting rid of 50 thousand dollars in revenue oh my gosh what is that going to do but we were just able to take the time that we had spent all those clients turned it into spending more time with the corporate clients with a no time I mean it was definitely worth it it was definitely worth it the revenue just came back in other fashion like that I mean it was Brandon the first lesson the big picture lesson that you had us to pay for the class for us because we immediately made changes I mean just looking at time dollar and you know taking that taking enough time to look at that by client yeah was the best exercise that I personally did what they did it's it's none of its really rocket science right it's just taking the time in the place in the structure to like okay we're gonna do this we're

8:29gonna step back and look at it of course you had your cohort to talk to but still people don't always act on that information it still takes a leap of faith and I guess what were some of the things like like before you terminated clients what is there a lot of struggle with the team over that decision was there struggle with you with that decision like or was it just like hey let's go what was what was that like if you recall wait the biggest struggles with us getting past us getting past oh we're gonna let that client go well they've been with us for so long or oh they're eighty something years old or I mean we could come up with oh their husband just died I mean any excuse in the book that we had just uh should we hang on to them I think the big the biggest obstacle yep and then I think the way that we got through it was us talking about it and saying hey

9:29are we gonna trust the process because that's what it is it's a process that builds upon itself and once you've made one hard decision the next one seemed to be a little easier to make didn't take quite as much time and drama hmm does that you're kind of committed it's like you're you had to demonstrate the commitment to yourself and get that feedback loop like oh this works and then you can keep going is that act like yeah and it will say it was really helpful for us to both be involved in both you know the fact that there was two of us helped because we are on the bounce things off each other we were able to you know debate forward you know lack of a better word changes that we made if you are a single like if we were individual or single practitioner I think it would have been a lot harder because you don't have somebody to bounce those ideas off of you know have somebody to play doubles advocate or play the other side of the argument and so I can see

10:32how it'd be much more difficult to make that decision hmm we were fortunate that we had each other to talk you know to talk the whole process and I think we rely on the crew yes a lot yeah that we were transparent yeah this is what we're doing yeah we're gonna try this we don't we don't necessarily know what's gonna happen and someone in the group would throw something out so I would say working with our peers that necessarily weren't in the same market that we were in was a tremendous plots that having people that had years of experience behind and they were having some of the same issues or either had had those issues and have resolved up we were able to let them help us through it save us time I think and I gave you the confidence and the courage to

11:34take the lead it's actually yeah yeah well so so that was one major thing that kind of gave you capacity right because then you then you realize not only do you have more capacity your team has more capacity and then that gives you the space to focus on some of the other changes you want to make which I know you guys did quite a bit of an overhaul with your pricing model yeah tell us a little bit about that that was some of the fees more than doubles didn't they if I remember for equity yeah and we were like I don't know we're gonna be able to do this and I can't remember one client in particular that I met with and he was so taken aback by that I had to explain to him look I apologize for under-charging I like that here's the value here's what you're paying for this is what you're going to get you already know

12:39what you're getting at a reduced fee and I actually did business with the client and I told I said you know I do business with you because of the value that I get you're not the cheapest guy on the fly but I know that I can trust your service I know you're gonna stand behind it and you've been in business for over 30 something years you're not going any and that shut that door and his very happy pay this bill well I like the way you positioned it I'm sorry for under-charging you before yeah yeah because they kind of know they're being under-charged yeah do they step up and say hey I think you need to double your fee I don't think so well most of the people that I talk to have ever done a price increase are always pleasantly surprised by how few clients they lose and and sometimes people go well I thought I would lose more wanting to lose more with the price and

13:46they don't lose clients with the price and then they're still over committed you know so was that your experience to you you were kind of thought we were you would lose more than you did yeah we did yeah and they stuck around it you'd be really amazed if you've never done it before how much more money you can make without doing any more work really is what it comes down to but what we did is the revenue we lost with firing individual clients we more than made up with the price increase yeah we had more time to breathe and more money too yeah awesome just such a simple strategy but it works right but you got to put the time in let me just say that that you know AP Academy is not you just show up in your meetings and it's all you do you've got to put the work in and you've got to put the time in there are people in our group who didn't and they didn't get anything out of it and that's not that's not your fault that's their fault we I will say that

14:49it's you got to be prepared to do what is asked and what you know the whatever the critical module is that we work on do it go through the exercise because it's going to pay off yeah yeah and one of the things that um we want to talk about delegation a little bit because you did have a good team which definitely helps you implement this these ideas quickly but one of the things that you guys discovered when you were doing your client analysis was we were you didn't have always the optimal staffing assignments with the right clients I'll tell us more about that because I feel like that was a fairly big aha for you guys Chris I'm gonna let her handle this because she pretty much handled the delegation yeah I remember the morning we had a meeting and we would go through and find out who was working on what whether you were at you know you know as most people know sometimes through no fault of your own

15:53you fall behind clients don't send the you the information that you need and then we would redelicate or reallocate you know when person was really bogged down the other person nothing to do we wouldn't move the work over and so I really think that we work I don't know that we probably necessarily had the wrong people with the wrong or the wrong staff with wrong clients I just think that paying attention to your staff's workload and reallocating weekly I mean that's how we did it literally was weekly reallocating as necessary so that one person isn't working a bunch over time and somebody else send their twittering to thumbs yeah and the one thing I'd like to add here is when I hear the word meeting we have a Monday morning meeting I cranche because of time you're already filled under the pressure of time the one thing I think that that crested very well with the Monday morning meetings as we had an agenda we had a time limit

16:59and we went through that and if we were over time limit meeting started and then we would get what that staff member because it was evidently they were having more issues with the client than what needed to be taken care of and a firm wife maybe Monday morning meetings were good for us needed that structure and that meeting cadence yeah to the point that I used it in my current you know my current business too I mean everyone in the morning we have a meeting till everybody knows what's going on and it doesn't have to be a long meeting sometimes we're in their half hour sometimes it's less sometimes it's a little more but it's important I think to have everybody included it's important to have an agenda and to make sure that the work is allocated appropriately because that really provides a lot of good morale in the firm if somebody's overloaded to say hey you know we're gonna help you and sometimes Bill and I stepped in and said hey get that to us we'll

18:00take care of it not that we wanted to do the work itself but sometimes us what it had to be done that way it just really was uh it was definitely a good thing the one thing I'll say is that you've got as as owners of a firm we used to say this lot you need to be driving the bus you can't just be riding along in back seat you know you're the ones that are driving that bus you need to drive it you need to be in charge you need to dictate when people get on and off whatever you need to be 100% into it and and making sure that things are running appropriately because if you're not they're gonna run themselves but you're not gonna like how they do it you can definitely be very inefficient if you're not driving that bus yeah yeah I feel like the meeting cadence and having the agenda and starting on time and stopping on time it's such a you know we do that too we have a Monday morning meeting every Monday and not only does it just it just helps kind of bring people in on

19:01what's going on in the firm what's happening that might you know affect them if it's a new hire or if it's a new big client or whatever it is it's they they understand what's going on and it keeps everyone cohesive that's uh so um lastly I always like to get a book recommendation what's a good suggestion for our audience on a book to read I personally like a book called walk away wealthy I've not heard of that one before it's by Mark Tepper CFP yes yeah there it is walk away wealthy okay I picked this I was waiting for an airplane and needed something to do so this book just and be uh out front and I picked it up and read a couple of pages I said okay this will entertain me for a little bit so I got it and read straight through the book it was a I liked it so much I

20:05bought a case upon and when I would pick up a new client I would give them the book wow wow okay walk away wealthy yes it is surprising it is the entrepreneurs exit planning playbook how do you get out of this success that you created and let me just say he made me read it to like about a year ago he made me read it again because you're starting a new business yes all right now I'm gonna have to read that book it sounds like an interesting one so well Bill and Chris thanks so much for coming on to our podcast today and I think you've given people a lot to consider and and you sharing your experience we really appreciate it thank you so much well thanks for asking us on we had a good time yes thank you thanks for listening to the countenance flight plan podcast you can keep the momentum going by subscribing and sharing your thoughts with us visit our website at pogroupdivisers.com for more resources and tune in next time for

21:09more exciting conversations like this one this podcast was produced and edited by lethal apps of pogroup advisors thanks for listening