From the May 2013 issue.
I’ve been immersed in our profession every since I was a kid. I practically grew up in my father’s public accounting firm in Bloomington, Indiana. On Saturday mornings, I would drive with Dad to his office. Being the 1960s, business was done much differently than it is today. Core ‘workflow’ tools consisted of pencils, paper, desk calculators, and an IBM Selectric typewriter.
A standard workday was 4 am to 7 pm. There was no such thing as a ‘virtual’ meeting. My dad met his clients in person—on their turf. In fact, I recall walking around the town square, making onsite visits. I would help him by labeling journal posting headings while he met with the client. The highlight of my day was visiting his pizza parlor client—I don’t remember talking accounting, but it was the best pizza ever!
These experiences shaped my perspective and perception of the small accounting firm: five or fewer employees, local clients, and long hours. And this perspective didn’t change over the next several years. My dad continued to do business the same way—using tools no more sophisticated than the typewriter and copy machine.
At 18, I enrolled at Indiana University. I was drawn to its business school, which is one of the highest-ranked in the country. Within my first semester, I found myself drawn to accounting, and the curriculum gave me new view of the accounting profession. My experiences in Dad’s firm led me to view the profession as ‘mom and pop,’ where all clients were local and their needs didn’t reach beyond payroll, monthly financial statements, and tax returns.
Now, I found myself introduced to a much broader perspective that included an alphabet soup of concepts I had never heard of before—EBITDA, EPS, GAAP, and others. I had a tough time reconciling what I was learning in school with what, at the time, I knew to be the real world of accounting.
After graduating college I took a job with Deloitte Haskins and Sells (one of the ‘Big 8’ back then). I specifically chose to work in the Indianapolis office, because it was small enough that I could perform both audit and tax work. Working for a bigger firm, I served clients that didn’t reside on the town square.
I worked with General Motors, large banks, and high-income taxpayers. While the work environments of my dad’s firm and Deloitte were very different, they shared a common denominator—long hours. Different firm, same unhealthy work-life balance.
Being a small cog in a big wheel at Deloitte didn’t feel good to me. I couldn’t envision making a lifelong career of it, so I made the decision to return to my dad’s firm. I found it virtually the same as it looked years before, from the drab carpet and furniture to the old-school hardware.
I approached business at this point by doing what I intuitively thought were the best things to achieve growth. We moved our offices to a new, more appealing location, and I started building relationships with bankers, attorneys, and other business leaders in town to generating new business leads.
And we did indeed grow. Within the first five years, we took annual gross annual revenue from $120K to $800K and had increased our staff to more than 20.
By this time, the late 1980s, the technology revolution was starting to fundamentally change the profession. This, along with our rapid growth, began to underscore the polar extremes of how Dad and I practiced accounting. We decided that it would be best for him to be able to continue in his practice while I started my own firm.
I launched Root & Associates CPAs, with an intense focus on growth. With each new client, I reinvested in the firm, acquiring new software, an email server, mobile phones, and other technologies that boosted our ability to handle more work. But there was an underlying problem—the more the firm grew, the more life began to pass me by. I had simply recreated the same basic work environment that I experienced in my dad’s firm and Deloitte—LONG HOURS.
One weekend, tired and discouraged, I picked up Michael Gerber’s book, The E-Myth, a study of the lifecycles of small businesses and how entrepreneurs need to grow and change along with their enterprises. Gerber told the story of a bakery owner who started the business based on her passion for baking. The business became successful and soon the owner was overwhelmed with managing a growing business while trying to continue being the baker. Instead of being liberating, her dream of being her own boss became enslaving. She was merely a technician within her business—working in the bakery, while at the same time trying to lead it.
This story immediately struck a chord with me. It was my story. I was a good technician and good at cultivating growth, but now I was about to choke on the very success that I worked so hard to achieve.
The big lesson was this: I could no longer do it all myself. My firm had to be able to function with or without me present. To accomplish this, I needed to build a system for staff to work within effectively and efficiently. This was the real turning point for my business, and it was liberating, both personally and professionally.
It took a period of several years to make the change. I had to rethink virtually every aspect of how my firm operated and earned revenue, from technologies and workflow management to staffing and new business development. Slowly and steadily, I felt myself reclaiming my personal life and controlling my business, rather than the business controlling me. I found myself no longer overwhelmed by being a technician—I was able to work ‘on’ my business, rather than ‘in’ my business. I was earning more, working a reasonable, healthy number of hours and enjoying it all more than ever before.
It was a long journey with a lot of pain points along the way, but it was worth every effort. It changed my outlook dramatically, and it made me realize that if this approach can transform my practice, it can change the entire profession. When I recalled the long hours my father worked, and considered nearly 140,000 small firms that are facing similar struggles today, I realized just how important it is to share my experience with others.
In 2006, I assembled a small team to create RootWorks LLC. Together, we worked to compile and articulate the concepts, methods, and models that transformed my firm and extend them to the community of small accounting firms across America. We move firms along the same path that I carved out for my own practice, helping them to avoid the pitfalls and giving them an accelerated start with all of the essentials.
Reaching leaders of small firms through RootWorks and in my role as Executive Editor of CPA Practice Advisor has become a way to realize what has become my greatest passion—working to change our profession from the inside out and create a better quality of life for us all in the process.
I never imagined I’d get a second wind like this more than halfway through my career. But I’m motivated by what our profession has to offer. In a world where quality career opportunities appear to be increasingly scarce, our industry offers incredible promise for this and future generations of practitioners. I’m proud to be part of this profession, and I’m energized to make it something greater than ever before. I hope you are, too.
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Tags: Accounting, Auditing, Firm Management, Technology
