Running a Solo Accounting Firm that Prints Money in 2025!

You want to talk about cool one-person businesses, man? It is pretty hard to beat a single-person accounting firm. We've talked to folks that run a super chill shop, like literally halftime, make several hundred grand a year. But you definitely don't start there, and like, that's not the reality for most people. So, how do you get there? What are the steps you take to make sure you can build a solo firm that aligns with, I don't know, your lifestyle, like your goals, what you want it to be?

After all, the greatest thing that your own firm offers is agency. It's the ability to make it whatever you want it to be. You only want to work on Mondays and Fridays? Great. Only want to work with race car drivers? Cool. Or if this is just a step to like building the next Big Four firm, well, then that's going to look a little different, right? So, how do you craft a one-person business around what you want it to be? What sounds fun right now, without becoming the victim of that agency? You can't point at your boss anymore and blame it on them. You're the boss. And that struggle, like that is the hardest part of running a firm. So, we're going to get super tactical today, but also talk about the personal blockers that come with this and how to run more calm, more profitable one-person accounting firms. Come on in, let's do [Music].

Welcome to the Jason on Firms podcast. If this is your first time joining us, uh, take a moment. Look to your left, look to your right. Find someone you don't know, introduce yourself. We talk about running small firms because, honestly, it's not a bad gig. And of all the, like, domains that are threatened by AI right now, uh, accounting is actually, believe it or not, less exposed than a lot of other things. You combine that with the fact that we have people leaving the profession, like retiring out of the profession in droves, man. If you're coming out of a big firm, if you're just a career switcher, not a bad gig, run an accounting firm.

I don't want to make light of it, but increasingly, we've got folks that are like, "I just want to do my own thing. I don't have to manage anybody. I want to run a one-person business." That sounds nice. Nobody to answer to, nobody to keep busy, like, team members. It's just me. And so that's what we're talking about today. And while my background was not in itty-bitty firms, I last had a team of about 40 when I sold that firm and came to create content. I became a single-person business, and we've hired some people from there, but I'm, I'm very familiar with the trappings, setting boundaries for yourself, and not getting sucked into, "Well, I actually just accidentally ruined the, like, what was special about this and the flexibility I thought I'd have with a one-person business." Because you absolutely can make a super profitable thing if set up right. Like, it kind of feels like it prints money if you're overseeing things like properly, attracting clients that will pay you really well, that sort of thing.

So, we talked about side hustles here. We're talking about the folks who have gone all in. Like, this is their thing. It is a one-person firm. They might want to grow from here, they might want to stay the same. But my model for, uh, kind of how you approach building a small firm is: you have a machine. The firm is the machine, and its job is, when it gets client work in, to do that client work. Client work goes out, you get paid for it. But outside of that machine is a whole bunch of other stuff. You think when you're getting into running an accounting firm, you're just going to work the machine. "I'm going to make the pies." When what it takes to actually move a firm forward is the more meta stuff happening outside of that machine.

So, I frame that as three things. I frame that as systems, tools, and offers. Systems are how you make the things that you do repeatable. Systems are the pipes in the machine. Tools are just the tech we use to get that stuff done as efficiently as possible. And three, offers. Offers are the things that we put out into the world that make an entrepreneur stop and say, "Yes, I shall have you do this work for me in exchange for my money." Note that's framed as offers, not as services. The trap is selling bookkeeping. And as soon as you start selling bookkeeping, then the customers go, "I can get bookkeeping over here for $2 an hour." And, oh, oh, into it actually just started doing bookkeeping. Why am I paying you? We don't want to sell services, we want to sell solutions. You're going to make an offer to an entrepreneur who is stuck at a certain point in their business. And what you do, even though that might be bookkeeping, gets them over the hump. It enables the profitability of their business. It's a solution specific to them. So that when they look at you, they don't think, "I'm pretty sure my mom could do the same thing." No, they think, "Oh, sweet. I got Tina working for me. Tina is the very best person for beekeepers. I'm so lucky to have her." And they are good for you, Tina.

So, at any given stage of firm running and solo firms, uh, most of these are going to fall between, uh, 0 to $300, $100K a year in revenue. At that size of firm, you're going to have firms who like, just got here and are very junior and figuring it out. You're also going to have, like, solo firm runners who've been doing this for 50 years. So, you can absolutely stay here. So, you're, you're going to have, like, a very big swath of different types of people who are solo firm runners. But we're going to dig into, kind of, what the areas of focus need to be and the common traps for solo firm owners. And for solo firm owners, your systems, your tools, like, they become more important, more important than when you were side hustling. Because, uh, the next new client that fits nicely into a process you've already built, like, you could probably do four of those clients in the time it takes you to do one client that's something totally different. So, systems are starting to matter more here. Not near as much as when you have other people doing the work. Um, systems in many ways are a prerequisite to bringing more people onto your team. Uh, and if you have team members, if you've been down this path before, the common mistake you make there is, like, "I'm going to hire somebody and they're going to make my life easier." And then you hire them, and you're like, "Well, oh gosh, I got to now, I got to babysit this person all day long and find them stuff to do." And why, why didn't they give me the work back? Is it not what I expected? It's a lack of systems. So, you need some systems as a solo operator, but it's not as big a deal as it is in, like, subsequent firm sizes if you end up going that route, or if you're already running a team.

What I really want to start with is offers. So, we get a bit into systems and tools, but we're really going to talk about offers. How you begin refining the client list. Because now you've got enough clients on the list for this to be your main gig. But first, let me kick down a few doors because these are just repeat questions I get a ton from folks super early in their journey. Maybe you're just starting out, just beginning your solo firm. There are these blockers that are just like the playing house of running a business. If you've maybe never run a business before: Should I get insurance? Yes, get insurance. There's all sorts of insurance providers for accounting firms. Get something to cover your honey in case you make a mistake. Uh, should I set up an entity for this? Like, probably for the same rationale that most business owners will do. I need to go get credentials for this? No, almost certainly not, unless you're going to go out and do audit work, which is a little unusual for small firms. Yes, you got to have a CPA. In some cases, if you're doing tax work, yes, you got to go out and get a credential. Look at the rules in your state. Like, Oregon has a really nice sort of linear progression that's a very direct path to the certification you need to doing tax returns in Oregon. You go out and get an EA and become an enrolled agent. A much, much more efficient path than getting a CPA. A CPA is like, it's obviously got the education requirements, but it's way more than just tax or bookkeeping or anything else. So, that's generally an inefficient way to get there. I got my CPA, I think it was valuable. But if you are like, "I'm the only one working in this business," don't fool yourself into thinking a credential will make that a more profitable business. You don't want clients coming to you and buying because of your credential. If that's the case, you've already lost the battle. You want them coming and buying from you because they perceive you as the expert, as the one person who can solve their problems. You go out and get a CPA, you go out and get a some other credential, congrats. You're now up against tens of thousands of other people with that credential. It's a step forward. But, you know, the CPAs and the folks with those other credentials, you know, the ones who are crushing it, they're the ones who are solving unique problems. And you can still do that without a credential. So, don't get too hung up on that. Definitely don't plan on sinking like two years into this journey of going and doing this thing that is just procrastination. Because often times, you think when you finish that, like, "Oh yeah, I'm going to feel so capable and ready to then go run my own firm." When running your firm is like getting yourself out of bed every morning, doing hard the hard things, like firing clients. All of these things that have nothing to do with the technical. So, don't get blocked on that stuff. Just get it done. There is no perfect version of a decision. There, but I see those simple things like hold people up for years. Just get started.

Okay, let's dig into offers first. We'll talk offers, and then systems, and then tools. The big thing with solo firms when it comes to the offers, the things that you hold out to the public to say, "These are what I will do for you." With a solo firm, you have to be so, so careful about the work that you take in because you, you're signing yourself up personally to the commitment of doing that work. And in many ways, solo firms are like more pure than bigger firms. Because big firms, their solution for overcommit or something like that, they're like, "We'll just hire more people." And that enforced selectivity of being a solo firm, it's almost this like more pure, more refined version of running an accounting firm. Whereas bigger firms are like, "How do we get as much realization as possible out of every member of our team?" You're like, "I'm one person. There's 24 hours in a day. What can I get done without losing my mind?" And so you have to think, especially if you want to stay at one person, just you, you have to think really hard about who the right client is. The goal here isn't always more clients. The goal, whether you're a baby firm, whether you're Big Four, the goal is better clients.

Big mistake firms make: they stop taking in new clients. Maybe you got to do that to like get you through a season, but as soon as you stop taking better clients, the firm stagnates. That doesn't, don't work as people in your team develop and they want new high responsibilities, stuff like that. We need to always be investing a degree of our effort in finding better clients because it's literally the most important driver of profitability, of flexibility in an accounting firm. Think of it like a, a basketball team. Uh, you got five people on the court, and you've got a whole, like, internal staff on the team of trainers and all these people that will help those five people get better. But who's got the most important job there? I would say the person that goes out and finds those five people that are going to be on the floor. If I got a bunch of stinkers and they're no good at basketball, no amount of internal team members and, "Oh, we're going to fix them next year. I'm sure they'll be better." Like, no amount of that's going to take me to a championship. And we can get so fixated on the doing of the work, operating the machine, pushing the buttons, getting the work done, that we never zoom out to be like, "Is there actually somebody better than Steve that I could be serving? Who would appreciate me more because I'm solving more painful problems? Who will pay me more to do the same work because those pains are more painful for them than this other person?" Running a successful accounting firm, it comes down to the client roster. I mean, it's a hundred different things, but arguably the most important one is, who is that client roster? And how much do they value you? And so, if we are afraid to let clients go, if we're afraid to invest a little bit of time in marketing, gross, I'm an accountant, then we're never going to find that better client.

So, in my firm, this was maybe four or five years ago. So, we had collected like a whole ton of clients that had been with the firm. It was an 80-year-old firm, and I think we had like 1600 clients. And we just had too much going on during busy season. It was a tax and accounting firm, but our, our biggest bottleneck was tax season. And it was these tax returns where we couldn't justify doing tax planning for them because they were so simple. So, they, they really like had to be filed during the first three, four months of the year. And I pulled a client list and pulled, like, you know, prior year revenue. And we had maybe, it was 1800, something like 1600, 1800 clients. And we had so many low-ticket clients that had been just been rolled up, rolled forward forever because nobody had the stones to like cut them loose. And because they got a great deal, so they referred their friend. And then we felt the need to give their friend the same good deal. The, the niche that you don't want that is. And I did the math on a big old spreadsheet and I found that by client head count, 70% of our clients accounted for less than 10% of the revenue. And probably even less than 10% in profit because those itty-bitty projects are hard to make money on. And this was the product of like, decades of just adding and not removing. We come into this thinking like, "Oh, this client, no, they're going to be with us forever." And so we always have to be great for them. When the reality is, most firms are evolving such that they're getting into more valuable work. The nature of how you deliver services changes. So, those very first clients, like, I understand the attachment where you're like, "I don't want to get too big for my britches. I still want to help them. I may like them." But if your firm is no longer a great fit for them, like, you're also doing them a disservice. And in my case, in our firm, like, we ended up having to cut a whole ton of those clients. And I did it because nobody before me had had the guts to do it. We were not serving those people well, doing like $2 to $400 tax returns when our bread and butter was like $2,000 a month engagements that were like way more hands-on. We didn't care, like, those clients were not a big deal to us, but they were still on the list. And I think, uh, this trap of hanging on to these things. I worked with someone who used the analogy, "Why would you not take that on? Or why would you not keep that?" It's like walking by a $100 bill on the sidewalk. And they're right, right? Like, you, yeah, no, we could make money on that. But you can see what a trap that is, right? If I stop at every single $100 bill on the sidewalk, that starts to get a little distracting. You got a whole pile of $100 bills, but what bigger opportunities have you missed out on?

And so, the lesson here for me was, like, for the first time in our firm, being willing to walk past that $100 bill, even if we have capacity to spare, to reserve it for something that's better. And to accept that my job as, like, I was out of the client work, I didn't do any client work in the firm. My job working on the positioning of the firm and talent acquisition and how we find clients and all that. My job was to continually reinvent the firm, one client at a time. But that only works if you're willing to then cut the legacy projects. And I say cut, we want to do this in as tactful of a way as possible. The best thing to do here is have a referral network so that you have someone else for whom that's an awesome client and an opportunity for them, and they'll take great care of that client. Don't fool yourself into thinking that you are the very best thing for every single person on your client list, 'cause you're just not. Especially not the clients that are no longer great fits for you. So, we would go out and reinvent the firm, like that next client at a time. But then we also had to cut, like, a couple legacy projects as well. And in the process of doing, like, this spreadsheet exercise where I realized, man, we have all these legacy clients that just aren't a fit for us anymore. And this is like inherently just where you end up if you're a solo firm and you kind of scrapped to get there, where you're like, "Man, I'll take on any type of work that I can." But then because you're literally limited to yourself and your time, you have to be even more selective than a bigger firm, maybe, because you can't flex that work across more people or hire another person. Anyways, I realized going through this spreadsheet exercise, convincing myself it would be okay to let those clients go. The simple arithmetic of how ultimately, like, price trumps everything. And if you look at your client list right now, most accounting firms, easily your most premium clients are paying two to three X for the same work. What your least premium clients are the folks who don't value you. And the folks who complain about their bill. And an unwillingness to cut those clients is stopping you from finding more great clients.

You know the old adage, "Double your prices and go home at lunch" or "go home midday." It's actually even sweeter than that because if you have any costs that are associated with delivering that work, you also drop the costs associated with that work. And so, if I can do monthly bookkeeping for one client for $100 a month and another client for $200 a month, when I add that new client, I can at least drop two of the old clients, sometimes more if I have like fixed costs in those projects. As a solo firm, you're not going to have a ton of fixed costs tied up in there, but you get what I mean. Like, going home at noon is the worst-case scenario. And it's what makes that constant reinvention of the firm like so essential. Like, how you keep growing, but not like revenue growing, like growing in terms of finding people who value you more.

This episode is sponsored in part by LiveFlow. Hey, cool new thing. LiveFlow just shipped in their platform dashboards. So, LiveFlow, if you remember, awesome way to connect your QuickBooks and your Zero ledgers with Excel or Google Sheets. You now have just a button in your Google Sheets or Excel that can connect you to like any accounting ledger you have access to. But they're building on that to now offer dashboards where, via the same ledger connections, you can now pull like widgets into a dashboard for your client. Because it's LiveFlow, they've templatized a whole bunch of it. So you can swipe KPIs, build out this super nice visual for your client. And all you got to do to share it with them, just copy a little link, send it to them. Bada bing, bada boom, cool dashboard, bro. As I told you recently, LiveFlow just raised a big old Series A, so they're putting all sorts of cool new investment into the product. We're checking out the link down in the show notes, bud.

Okay, this episode is sponsored in part by Ignition. Come, come, come, come, come. Here's the thing, here's the thing about client billing. You can't bill for the time you spend billing. You can't. You can't. It is pure waste. And we're bad at billing because it's, it's icky. You let things slide, you don't get paid, you waste time, waste time chasing people for money. That's not what I did. I would just, I didn't want to waste time chasing them, and so I would just, I just eat it. Don't do that. This is where Ignition comes in, the leading revenue generation platform for accountants and professional services. When I was running my firm, Ignition wiped out our AR. It's true. And significantly reduced the time spent billing clients, saving our partners over a thousand hours in the first year 'cause he didn't have to build all that stuff manually, man. With Ignition, we won more business with impressive online proposals. No more hustle and hustle PDFs and Word docs. We automatically pulled payment up front or at the end of a job when it was done. No more dialing for dollars. We transitioned our firm to more recurring revenue and better managed scope creep. No more leaving money on the table. Ignition is making thousands of firms more money and genuinely made us more profitable. Check out why over 7,000 of the smartest businesses run on Ignition at ignitionapp.com. I put a link in the show notes.

This episode is sponsored in part by Team Up, who helps you find talented accountants in the Philippines. Conversation online. Uh, I actually realize a lot of folks when they think about offshoring, what they're actually thinking about is delegating work to a group that then does the work and gives you the work back. Because most of the offshoring failures I've heard, they said, "You know, the work quality wasn't good enough," or something like that. And that is why the only way I ever touched offshoring was just hiring my own people, just like I do onshore. I honestly don't want to chuck my work into a black box and just like hope that the quality comes back how I want it to. I just want to develop people, and I want them to work with me. That's what Team Up helps you do. They got recruiters on the ground in the Philippines that will find you really talented people, and you develop them just like anybody else that do in your team. And I think that's actually a big misnomer with how you offshore these days. And it's probably because a lot of the cold outreach, even though it's coming from people saying, "I will do your bookkeeping," these are personas that offshoring groups use to pull more work into that offshoring service. And you go down that path, you get into the sales process, and you get like their very best person who will dazzle you, and you're like, "Oh, this is great." And then you send them 10 times as many projects, and it goes to the back of the office, and you're like, "This sucks. What have I done?" The solution: just hire people. People. Test them before you hire them. Train them. It's not any different than hiring people onshore. Is what I did. You want to get started? Talk with the folks at Team Up. Link down in the show notes.

Now, a good, uh, North Star for how do I, uh, double down on those people who value me more, or how to even find them, or understand why they value you, is think about your client list right now. You're going to have A clients up at the top, like, are paying you top dollar and absolutely thrilled to do so. They will never complain about a bill. Frankly, they'd probably happily pay you more. But for whatever reason, like, they think you are the bees knees. And often times, you don't understand why until you dig into that a little further. But on the other end of the spectrum, your C and D clients, you've also got those clients where every time you have to invoice them, you're like, "Gosh, I'm never going to get all this." And so you mark it down, or you give them some sort of, you gave them some sort of sweetheart deal in the came in that you now regret. Maybe when you do that renewal every year, you're like, "I can't increase it because they'll just say no." Those clients, most of the time, they're not bad people. You're just not solving very painful problems for them. Those people used to just like tick me off. "Why can't you be more like Jim, who happily pays my bill?" It's because the problems you're solving for them are not as painful. So, go back to those A clients and get an understanding of, like, what exactly makes me so valuable to them. An example I commonly give: we're doing a lot of work with dental clinics, and we had this lady that just absolutely loved us. Like, she sent us every gift basket imaginable, every holiday. And the reason was, was she had spent the last two decades trying to get her office managers in her dental clinic to do the bookkeeping, and the bill pay, and the payroll, and make the retirement contributions. And that went exactly as well as you would think it would. She also worked with a couple of other bookkeepers that were just crappy bookkeepers. And so she didn't feel like that was the solution until she came to us. We did all that back office stuff, we did her tax work for the business, like, for her personal. And she was like, "Oh my gosh, you would have saved me so much headache if I had had you for the last two decades." And so, what does that tell us? Like, okay, this is a scenario that's probably pretty common among dentists. Where if they have that context, that background, when they come in, they're going to value what we do in a super premium way. So, how do we go find more of them? We're probably having conversations out there like, "You know, you frustrated with your office manager trying to do this, that, or the other thing?" You can even put marketing out that is directed to the office manager who has been tasked with this stuff and may be feeling inadequate or overwhelmed. "I can't do this stuff well." But I've got that A client that absolutely loves me. And if you're looking for a North Star for where to invest, finding more people like that person, that really acutely feels the pains you solve for, that's a great place to start. Because your life, you might be thinking of who that client is for you right now, or a couple clients. Your life, like, and it's maybe even worth doing the numbers for this. You throw on a spreadsheet the amount of work that goes into all those projects relative to the money that they give you, and like the profitability of those clients. If your entire client list was those A clients, your life would be so much better in every way. You would have time back, you'd be making more money, you would enjoy what you do more because they value you. It's not like a begrudging relationship where they're like, "I don't want to pay you this much." They're like, "Man, thank you so much. They're so appreciative for everything."

But what stops us from taking the time, or even having the space or the time to go after that next A client, is the A-nesters, is the C's and the D's. And because we're not willing to get rid of those C's and D's and free up excess capacity, you mean, "I might not have anything to do." Spoiler alert: you will probably never have that problem. You may think you're going to have extra time, but you probably won't. But because we won't cut those old projects, we don't have space for the new ones, or we don't have space to market to the new ones, or to ask that A client like, "Hey, we're going to take on like two or three clients like you before the end of the year. Do you have any friends that come to mind because we, we frankly love working with you and would love to find a few more firms or whatever the business is, just like you." Now, you're never going to send that email if you're swamped, if like you are behind on all the work. And often times, that volume of work, especially the C and D clients where they don't value you, they can tie you up so much that you don't deliver the level of service that you need to to the A clients, and you jeopardize like what is an even better direction for your firm to go in the first place.

So, we're going to talk about some other stuff here, but the really big problem I see with running a solo practice, what makes it extremely challenging, is the fact that it all falls on you. You're the only one that can get the work done. So, you, more than any other type of firm, have to be so selective about who you're willing to serve. And much faster and making decisions about who you can no longer serve. When you're a side hustler, you're like, "Just give it to me. I need the money. Thanks. I'm really sick of this job and I'll, I'll do just about anything." When you're a bigger firm and when you're growth-minded, you're like, "Ah, just, just hire somebody," or, "Uh, just flex this work across a couple people." When it's just you, there's no hiding from that, right? So, you, more than any other firm type, have to be super, super selective.

Now, let's talk a bit about your firm's systems. Here, we're just talking about the offers of your firm, like how you present yourself externally, how you position your firm, how you decide who you're willing to work with. Now, let's talk about systems, and we'll wrap with tools. I think it's really important to think of the machine in your firm that does the fulfillment. And these more like meta-level considerations, offers, systems, tools, they happen outside of that machine, but they influence the machine. Your machine is like, it's like a generator. It's got like the pull string, you pull it, gas goes in, exhaust comes out. That's a pretty bad analogy. Client information goes in, like work product goes out. Your clients give you money. When you're a solo firm, you're also the only person in the machine pushing the buttons and making the cars and whatever that is. And, and often times, the trap here is, "Well, nobody else is going to get the work done, so I can't spend time on the meta stuff. I just have to do the work." The only way your firm moves forward is by spending time on the meta stuff. If all you do is do the work, and the only work you take in is like referrals, here's actually a really big trap. If we go back to that A client to D client spectrum, on a whole, the referrals that you're going to get are going to trend towards, I would argue, those C and D clients because there's more of them. And because not all of them are unhappy, many of them have a great deal that they won't get anywhere else. And so they'll tell their friends about it. The A clients, there's not as many of those. So, in general, in my experience, if you're not selective about the referrals that you'll take, those referrals can actually pull you downward a bit. And so the solution here is like to more proactively ask your best clients for referrals. But absent any other change, if all you ever do is rely on referrals, then at best, your firm is just getting bigger with more of the same. It is like a lateral move. It's not making your firm better. At worst, it's actually pulling it downward because getting more C and D clients. And so word of mouth can be a trap here. It can also be great if you can selectively like get those A clients in. But this is why, like, you have to be able to spend some time outside of that machine, investing in how you attract people, developing a more compelling offer, that thing that says, "Yeah, dentist, this one problem that you encounter managing the back office that's been driving you nuts, here's a killer solution for it. We're going to do that for you." Where they see that and they're like, "Oh my gosh, where has this been for the last decade? Yes, please." Investing in finding that really painful problem for whoever you're trying to serve, that's not going to happen if all you're doing is working the machine, right?

So, with that in mind, and building systems for the machine, because your systems are ultimately how do things go through that machine in a standardized way. Very important when you're building a team. Still important, but less so when it's just you because you can just kind of remember the stuff that you've done. It's worth thinking about what investments are worth making in you yourself and what you know versus what investments are worth making in the machine. And part of this is going to depend on: Do you ultimately plan to hire more people or not? If you do, that is an opportunity for you to be ignorant of certain things, certain types of expertise that you can hire for. A big trap on small firm, small firms is, and all small businesses have this issue, is the notion that the owner has to be the be-all and end-all expert on everything that happens in the business. And so the business, its limitations are ultimately a reflection of the limitations of the business owner themselves. They can't get out of the way. Those who are able to grow beyond that, they hire talented people that they can trust to produce work that's correct and that sort of thing. I mean, we have a bunch of non-accountants that are coming in now and buying accounting firms and operating them. Some are doing that well, some are not doing that well. But the next step can't be for you to develop every type of expertise imaginable. So, it's going to depend on whether you ultimately plan to hire people or not, whether you're going to hire for that type of expertise or whether you're going to do it yourself. But take care not to try to like learn anything and everything because there's no amount of time or investment that will get you there.

This is also an argument for serving a more specific type of client. And I think ultimately attracting somebody who feels a very specific pain and being perceived as like, "Oh, you're the one solution provider that can offer this to me," and that's why I'm going to pay you a bunch of money to do it, rather than hiring somebody in Pakistan for, you know, $4 an hour to come and do it for me. Serving that specific customer, it makes the notion of building specific expertise much easier because there's going to be expertise that's relevant to them and expertise that isn't. And the counter-argument, the notion that you need to build this general expertise and understand how to do a bunch more things. The trap there is you lose depth. The people that go general, like, they don't have that same connection with a specific space. And that, that is a real thing. You will often hear people say, "Well, it's all the same. Like, specialization is just marketing." It's both. It's both marketing, and it's the fact that like, yeah, when you go deeper, there's more there. And the tax return might actually be identical, like, to what you prepare versus what a general firm would prepare. But the way that you go about it, the way that you deliver it, the way that you have conversations with the client, you're a fundamentally better advisor because you have a greater understanding of the specific problems that they have. And that's what people will pay for. So, if you're struggling right now with having to learn a whole bunch of things, think about the fact that that might be because you're just serving too broadly still. So, is there a way to get more specific that will put less requirements on you and what you need to know to help people right away? And there, like, there's a million, like, self-sort of limitations, like blockers we put on ourselves here to think that like, "Well, I'm not as smart as that other person I know that can do this thing or that thing." No, that, like, like there's people who are not this way who are maniacs that can just like do a bunch of stuff irresponsibly. But just know that most of us will be biased to be too slow here. When the way that you build that expertise is, is to do it. Is to work with more people. Are you going to get some stuff wrong along the way? There's nobody like watching this right now who has not. So, I'd love if there was a way to where you like would never make a mistake along the way. The reality is, you got to learn. Now, there's good ways and bad ways to do this. Um, something I, I love that I'm seeing more of with one-person firms is they'll partner with another person, like, one-person firm to review their work, that sort of thing. So, like, let's be clear, it's a big spectrum of how aggressive should I be here versus how responsible should I be here. We do need to make sure that the work is correct and not get like too far out over our ski tips on that. But know that human nature, your nature, it, like, it is perpetually lagging behind what you are actually capable of. A framing of this that I heard is, your external reality, like what other people will tell you that you're capable of, is perpetually lagging, like, two years behind your internal identity, what you tell yourself you're able to do. And that's human nature. Like, our ability to change and adapt and accept, like, "Oh yeah, I can do this and I can be helpful to this person," it is almost always lagging behind it. And an example of this in action is when somebody comes and they pay you or they accept a proposal that you put, like, a really big number on, and you're like, "Whoa, yikes. Like, somebody's actually willing to pay that." Evidently, nice work. Like, and then, like, your internal identity kind of has to catch up to that, right?

This episode is sponsored in part by Financial Sense, 'cause WorkflowCon is back, baby, with the theme "Freedom to Scale." Unlock your firm's potential for operational freedom and profitable growth. It's happening October 22nd and 23rd, virtual conference, totally free, not just for Financial Sense users this year. They're helping firm owners remove themselves from the day-to-day routine so they can stop being the bottleneck in their firm. Systematize so it can run without you, giving you the freedom to focus on scaling. Standardize your processes to empower your employees and improve client satisfaction. Scale your firm, whatever that means for you: hiring new staff, getting acquired by PE, H, get that out of my ad, re-breath, work 10 hours a week, can travel, or hit a million in revenue. Bunch of smart people are going to be there speaking: Don Broland, Sabrina Parisi, Kelly RoR, Nancy McLellan, Erica Good, Chadwick Davis, Blake Olives, Brandon Hall, Kea Hill, Trewick, Kelly Parker, a lot of people we've had on this pod, Logan McGrath, Ryan Lazanis, and others. Fun virtual conference, really. I'll put a link to register down in the show notes. Check that one out.

This episode is sponsored in part by Finn Daily, actually an app that I founded a few years ago and then sold. Finn Daily, in short, it's almost like an email marketing platform, but for all of your financial data. So, you build these email templates, and then you plug in, like, banking balances, QuickBooks or Zero data, like outstanding bills, outstanding invoices. You connect this email template to all these different variables, and then you set that email to go out to your client on a recurring basis, on a schedule. And then right before it sends, makes an API call to all those sources, pulls the most updated information into the email, and sends it out. Now, I was doing a cash reporting process for my clients. They were paying top dollar for it, but it was a pain in the neck to go out and like wrangle all the stuff I needed for those emails. So, I actually founded this to automate that process. How's that sound? A fully automated cash reporting service that your clients will pay top dollar for. You, it's a thing, I can tell you 'cause I've done it. Pretty nice. Finn Daily will even let you connect with like multiple accounting files, so you could push out a single email digest pulling from like multiple sources. Bang, accounts, credit cards, pretty cool stuff. Okay, check out the link down in the show notes to learn more.

This episode is sponsored in part by SafeSend One, who helps you automate the entire tax workflow from taking information, actually, before that, from engaging the client, do an intake, clear through delivery, engagement letters, file transfers, organizers, e-file tax return assembly and delivery. Now with a new and innovative AI-driven gather capability. We actually did a demo video on this that's coming out soon. It is really good. SafeSend supports CCH Access Pro System, F, UltraTax, GoSystem Tax, Alert. Don't take my word for it. How's this sound? The average user takes him 3 to 4 minutes to deliver a return, and 94% of e-signatures and file forms come back within 15 days. You know, you know those 8879s sitting in the file cabinet? You know those Tinkers? SafeSend can make that a whole lot easier for you. Explore how SafeSend's AI-powered tools can make your whole firm more productive. Check out the link down in the show notes to learn more.

On the subject of systems, a tricky trade-off here. We have like a growing number of practice management systems that will, and we'll talk about specific systems in the in the last tool bit, but there's a growing number of systems that will actually run like a really turnkey client engagement from end to end, if the client is willing to pay ball. And that means like submitting their docs via the portals and messaging you specific ways and being willing to follow the workflow that you dictate. Now, the sort of conundrum here is, there's a growing number of productized services that do the same thing, that will run clients through a very homogenized, turnkey workflow. And we are like trying to stay upmarket of those solutions as they get more mature and frankly get better. Like your TurboTax Live, your QuickBooks Live Bookkeeping, those productized solutions will continue to come upmarket. So, we never want to deliver a service that ultimately is going to feel like the same thing. Like, that's a losing battle. We won't do it as well as those like hyperscale companies will. But when you're a solo operator, you don't have a ton of choice unless there's a much lower volume version of this where clients will pay way more for you to do a more white-glove version. It makes it tricky to like do much unique stuff if you are a solo firm runner. Now, the solution still isn't like crank on mega volume. I think that just becomes like a hamster wheel that's no fun. But it is a uniquely hard trade-off to make for solo firm runners where you don't want to get lumped in with, like, you've got enough imposter syndrome and like you struggle enough with like, "I'm just a little baby firm." You got enough of that going on to where the last thing you need is for clients to think that you're just the same as some productized solution because the only thing they ever see is email notifications from your software saying, "Give me this now, give me that now," and they never actually see you or have a conversation with you. So, that's admittedly a really hard thing to balance here. Don't be the same as a productized solution. Put yourself first. Like, build systems so that the touch points with the client can be human and can be as valuable as possible. I'm a big advocate of using machines to do the requesting and the document gathering so that the humans can do the other stuff. If you are emailing them for for documents and sending

them reminders and all of that. It often times comes at the expense of the more meaningful conversations that will be helpful to them, especially if you're solving a specific type of customer that has pains that you understand.

Last thing I was going to say on systems. You may identify as a solo firm runner, but I would encourage you, it doesn't mean you couldn't hire a VA, an admin, something like that. There's a certain element of like, uh, taking out the financial garbage. Like there's just like this off-gassing that comes with running a business of all these administrative things that you didn't sign up to do and you probably don't enjoy. There's probably somebody that could help with those things.

But also, you would actually be amazed at how much a good admin can do for you if you never had an assistant or like a super high-level admin. If you've got your systems and you've got some repeatable processes, there's actually a huge delta in firms I see right now, like a huge spectrum in how much two very similar firms will leverage admin staff. There's some firms who are like, "You're going to sit here at a desk and answer the phone when it rings," traditional in-office firms. You got other firms who are like, "Our admins actually do all of the info gathering and that stuff. Only touches our professional staff when we have all of the stuff in and all the questions have been asked." And so they're protecting the heck out of their professional team's time, and the admins are doing a ton of the heavy lifting. And if you're a solo firm runner with like one super admin, you can run a business that is like 2x the size and with the same effort.

Now, ultimately, like you got to tie that back to why did I start a firm? Like what are what are the goals in terms of of lifestyle and what are the things I want to avoid? Is that ultimately tying back to something I need? Often times you'll find the answer is no, and you have to kind of question like, "Why am I why am I trying to grow?" Because if you remember when you first started this thing, you're like, "Imagine if I could replace my salary," and you're like, "There's no way that that there's no way that's going to happen, right? Surely I couldn't do that." And then you do it and you're like, "Wow, we're here. Okay. It turns out I still have to pay a lot of tax, and so I'm not actually making as much." Let's make a little more. And then you're making one and a half x what you're making before, and you're like, "Well, this is kind of cool. I can buy this thing now, but I'm but I'm not really going to splurge yet because I'm pretty sure it's all going to go away as soon as I'm found out."

And then you make a two, three, 4x what you were making before, and you're like, "Well, well, this is nice." And then you hit your limit and you're like, "Oh, I just became like a victim of my own success, and now I'm working just as much as I did before, if not more, because I feel personally responsible to my clients in a different way." And before you know it, you've kind of like become a slave to the monster that you created, rather than working for another monster. So if you're thinking about growing, or if you're like, "Yeah, no, I need an admin," like make sure that you can tie that back to a specific goal, like a specific need. Because if it's just to do more, or another big trap, if it's to prove something to someone else, be honest with yourself. When I say that, who comes to mind? Is it somebody you used to work with? Is it, is it, is it Dad? Is it, is it some other person you want to talk? Big-time traps. Don't make decisions to try to impress somebody that that doesn't give a hoot about you. Let you out a secret. They don't care. They didn't care before, and they they certainly don't care now. Do what's best for you.

Okay, enough, enough in the field. Let's talk tools. I'll touch on tax firm stuff briefly. If you're a solo firm, my recommendations either Drake Tax or Into It ProConnect. Nice thing about Into It ProConnect is totally SAS, cloud-based. Bad thing about ProConnect, it's Into It, and they're like basically are competing against tax pros and bookkeeping pros now, so it feels a little wrong to give them money. Drake, super cost-effective. It's going to be more work for more complex stuff, so it may not be the right answer for you forever. For small firms with more complex needs, my recommendation is Tax. The exception here is if you're coming to running a firm with existing experience in a platform. So if you're coming from a bigger firm and you're running CCH Access, by all means, if you want to pony up for it, keep running Access because that muscle memory is really valuable.

Also look out for tax workflow tech around that tax software. That's a growing ecosystem. There's some really cool AI-enabled products there now that help with like automated intake of client information and delivery and stuff like that. If you're an accounting firm, at this point, you've you've probably got a platform that you really like. Be thinking about adjacent tools that will make you even more effective in that platform. Uh, one that's a no-brainer, it's called WR Tool. It's a Chrome extension. If you use QuickBooks, it just it improves on upon QuickBooks in every way. Uh, it was developed by Hector Garcia, the the YouTuber who also runs a firm. There's a free version, like at the very least, grab the free version and it'll make you more efficient in QuickBooks.

Uh, look at month-end close management tools like Keeper. Keeper basically pulls all of the data, all the ledger data from your clients into its platform, and you can manage all of your month-end closes in one place rather than having to hop around to all the different accounting files. And it does a bunch of like automated quality assurance, recurring tasks. Like it's like a task manager had a baby with a ledger. Makes it much more efficient to do a large volume of month-end closes. And then like document management stuff like Dex. If you're managing receipts, invoices, stuff like that, be thinking about how can I more effectively manage all the stuff that happens around the ledger. Now that you're doing kind of a larger volume of it. At this is especially important if you're looking at pulling people into the prep process. If you're going to start making some hires, then you probably have to think a little bit more about your tech stack.

After those core tools, you got to look at practice management system. This is like air traffic control for all of the things going through your firm. Uh, if you're a solo operator and you're running a tax practice, like tax only, my top recommendation is generally TaxDome. If you do tax and bookkeeping, or just bookkeeping, it gets a little muddier. Look at stuff like Firm 360, Financial Sense, Keeper, Client Hub, Canopy. I've got some other tools for like getting a specific to you PM recommendation.

But before we wrap here, a few like sort of mental blockers because so much of entrepreneurship is just the things in your head that are blocking you that if you're more aware of them, it gets easier to get out of your own way. Problem with being a one-person firm, oftentimes I hear folks talk about their firm in a way that's like, it is, it is really small and like unassuming and not very impressive relative to to other bigger firms. Here's the thing, you don't need to look any different to other bigger firms. So like, don't go out of your way to to push that to people, at least not in a way that isn't framed as an advantage, because big firms have a lot of their own issues. Big problem with big firms and product solutions, you get passed around all these different people, you don't know who they are, or a partner brings them in the door, and then they immediately get delegated to a junior. With your firm, they're just going to work with you, and there's a lot of folks that will really appreciate that. So frame that like, one, one-person firm thing as an advantage. It makes, um, being perceived as a guru even more important because you can't serve as many people.

And, uh, there was another firm in town when I was running mine that was like super, super niche. We were doing some dental stuff, and all they did was dental, and they only served, I think it was like 100 clients. They're like, "We will only ever have 100 clients on our list." And there were people in my firm that were like, "That's just nuts. Like, why would you do that? There's so much more work out there and so many more people that you could help." But this firm, man, they were like skimming off the top of the market. So like a pricing concept. Price skimming. Companies will do this when you got a big spectrum of prices that people are willing to pay for something. Like luxury brands will do this. Luxury car makers, they won't try to produce enough of that thing to serve everyone. They will produce enough to like skim the top, say 20% of the people who will pay the most, and then that's it. That's all they do. Is they only make enough for that top 20% to buy, and then it's crazy profitable. That's what this accounting firm was doing by saying, "We will only work with 100 people." You're skimming the top of the market of all the people who could work with you. And if you're a solo operator, this is really like the most profitable way to think about your practice. Not, "I'm capacity limited." Instead, you think, "I have a finite number of slots," and you can, you're like, you can share that with people. Like that scarcity is valuable. You have a finite number of slots and people that you can help. Instead of that being a limiting factor for you, or you just, or you stop taking in clients and you just have whatever set of clients like got you there. Instead of that framing, think of this as like a roster that you are going to refine to be the best, like most enjoyable, most profitable, you know, 40 clients, 400 clients, however many it is. Like that scarcity is arguably your greatest advantage. So don't be afraid to lean into it.

Um, take care not to look at other bigger firms and be like, "I wish I could have that." Because you can't have the perks and the benefits of being a small firm without the drawbacks of being a solo firm. So like, there is inherent limitations there. Unless you're planning to grow, don't compare yourself to those other firms because it's very different. And there's so much thought leadership out there for accounting firms that lacks context where you're like, "I guess that makes sense, but could I actually do that?" So be careful like with what you consume and who you compare yourself to because you're different.

And last, man, like I cannot stress enough, um, the value of not going this thing alone. Um, the biggest, honestly, the the hardest thing for me going away from a 40-person firm to working for myself and and now working with a small team is like, it's just you. Like, and you are inside your head all day, and you don't have that sounding board. Like I used to have a physical office with people in it. We had both in-person and remote team members, and I would, I talked with them all day about all sorts of stuff. We'd have meetings, and just in the course of doing business, you would be bumping against them. And when you're all by yourself, uh, you inevitably miss a degree of that. And and before you're by yourself, you're probably like, "Boy, what I would do to just not be bothered." It'll, it'll like, it'll swing back the other way.

There's so much value in having a sounding board, especially if you can find a group of people who run a firm like yours. Maybe they are early stage and they're like, "Man, I want to keep growing. Um, I enjoy running a firm, but I want to build a team because like this, this seems like a better lifestyle for me if I can just get a little more help." Or maybe you're like, "I just want to keep things simple and it just be me, and I'm I'm going to do this until the end of my days." Wouldn't it be nice to like make some friends who are doing the same thing? Man, the internet enables that now in a super amazing way on social media and online communities. Find these people who are doing things similar to you, and it is so, so energizing. Don't be afraid to like ask somebody to mentor you if they're ahead of you on that journey. Make sure like contextually it makes sense. Like don't go ask somebody in a giant firm to mentor you. Ask somebody who's been running a solo firm for a while and seems like they've got things figured out. Ask if they'll meet with you once a month and you could just kind of pick their brain. But super energizing thing here, finding people who are doing the same thing that you are and being able to share that journey with them. It will cut years of learning off for all of you. Like it is such, it is the ultimate hack in building an accounting firm. It really is.

Because running a solo firm, like there are challenges with this, and I'm not like, I'll be totally transparent, I haven't run a solo accounting firm. I've chatted with a bunch of people who have, but like, it is a really, really unique challenge because you have to inherently be so selective about who you work with, right? Like there's so many band-aids at big firms for capacity planning issues and all these different things that you cannot run and hide from in a solo firm because it is just you, and there's no other people to blame. Like you can't like say, "Well, it's because that person left now we're running behind." You can't delegate that task to somebody else when you get behind. It's just you. And so having a network of other folks that do what you do, there's like some real business collaboration opportunities there for like referrals and cross-reviewing work and stuff like that. But even if it's just for you and maintaining your sanity, like that is gold and totally worth doing.

Like I said at the top, best and worst thing about running a solo firm is you got nobody to blame but yourself. But I can tell you for me, uh, I wouldn't have it any other way. Like that level of agency, like that is, that's the ultimate gift. The very coolest thing about it is that it's completely up to you to craft it into whatever you want it to be. Don't get tricked into thinking that you are going to be subject to whatever work comes your way. Like that's the wrong way to approach running your firm. You are in complete control of who you work with, of who you don't work with, and of how you find that next client. Like you are not subject to whatever the universe is sending your way. It's up to you. And just having a like a greater feeling of of agency of that, "Yeah, no, I actually do have control over this." It is so valuable to ensure that you end up going in a direction that you'll enjoy and be fulfilled by, rather than just being along for the ride. You got this. You can do it. Thanks for coming and hanging. Break a leg.

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