Seeking Advice from Those Who Have Started or Acquired a CPA Firm
Hi everyone, I’m a 34-year-old CPA with 12 years of diverse experience, including time at PwC, working with Fortune 50 companies, and smaller private businesses. My expertise mainly lies in Audit, advisory, internal controls, and financial reporting, with about 80% of my focus in the first three areas.
For a long time, I’ve been dreaming of starting my own firm, but I have some reservations. I’ve seen many others with similar backgrounds successfully transition into running their practices, often blending Bookkeeping and tax services. However, I’ve also come across advice suggesting that a strong tax foundation is essential. While I’d prefer not to be labeled as a “1040 shop,” I understand I might have to embrace that if necessary.
I believe I could effectively manage a practice that includes both Bookkeeping and tax work, possibly even a 50:50 split, but I’m uncertain. I’m considering looking into firms that are for sale and exploring options for owner financing with around 25% down. My wife fully supports my ambition because she knows my work ethic, but I also recognize that we tend to overanalyze our capabilities. I need to convince myself that I can succeed before I present this to any potential seller.
Additionally, discussing this with my wife while I’m still uncertain adds another layer of complexity. Has anyone else navigated a similar path? What steps did you take, and what are your insights? I’m licensed in both Illinois and Texas, with plans to set up the practice in Texas if I go forward.
I would greatly appreciate your thoughts and advice!
One response
It sounds like you’re at an exciting yet challenging crossroads in your career! Transitioning from being an employee to business ownership is a significant step, and your extensive experience gives you a solid foundation to build on.
Here are a few thoughts based on your situation:
Self-Assessment: It’s natural to have doubts when considering such a major change. Perhaps take some time to conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) specifically related to your potential firm. This could help clarify your abilities and areas for growth and assist in forming a business plan.
Tax Experience: While your background is strong in Audit and advisory, tax expertise is crucial, especially if you intend to offer tax services. You might consider collaborating with an experienced tax professional or seeking additional training in tax preparation to boost your confidence. This could ease the transition and broaden your service offerings without becoming a full-fledged 1040 shop.
Business Model: Since you’ve mentioned a preference for a mix of Bookkeeping and tax, look for firms that align with that focus. It may also be helpful to identify a niche that leverages your existing experience, such as advisory services for specific industries or sectors.
Selling Your Vision: When discussing this with your wife and potential partners, focusing on your experience and your commitment to hard work could help instill confidence. You know your capabilities, and she understands your work ethic. Clearly communicating your vision, goals, and how you plan to mitigate risks can help both you and her feel more secure in the decision.
Networking & Mentorship: Reach out to other CPA owners or mentors who have taken a similar path. Their insights can be invaluable. Forums, LinkedIn groups, or local CPA societies could be fantastic resources for building connections.
Financial Planning: Make sure to have a solid financial plan in mind, including how to manage cash flow, especially during the startup phase. Investigate owner financing options and what metrics you’ll need to demonstrate to secure those.
Trial Run: If you’re feeling particularly risk-averse, consider starting with a smaller consulting venture or side business first to test the waters. This can provide you with valuable insights and boost your confidence without the full commitment of purchasing a firm right away.
Ultimately, follow your gut, but also ensure you have the support and resources needed to make an informed and strategic decision. Best of luck in your journey!