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From Zero To $1.5 Million In Three Years
Posted 11:00 am by Jetpack Workflow & filed under Accountant, Growing Your Firm Podcast, Growth, Workflow Excellence.
Today's guest came to us in an unusual way. He reached out to us with an interesting story. Brandon Hall owns a virtual CPA firm that started in 2016. In three years, he's scaled to over $1.5 million dollars in revenue and has 12 employees, all of whom work remotely. He's been named as one of CPA Practice Advisor's 40 under 40 list.
How did he do it? That's what we're going to talk about today on this week's Grow Your Firm podcast.
Why Brandon started the firm
His huge growth numbers
How interacting with the community brought in the leads
The problems he faced while growing
How he sets up his team
How content marketing helped his firm boom
The Real Estate CPA
Brandon's LinkedIn
Orin Wilson interview
The Story Of The Real Estate CPA
Brandon started his accounting career working at one of the Big Four accounting companies, but he was not happy with his job. He investigated renting real estate on a site called biggerpockets.com that teaches people how to do real estate.
Through browsing the forums, he learned that there were a lot of tax questions in this niche. As he started to answer questions, people started asking him if he was taking on tax clients. In mid-2015, when he was only 24, he passed his CPA exam and started taking them on.
At first, he was scared he was niching too far, but at the time this was just a side job so he felt comfortable taking the risk. In 2016, he surpassed his day-job income and went full-time as a CPA firm focused on real-estate clients.
He made $120,000 in 2016 and made his first hire, a salesperson. In 2017, he made $680,000 and had eight people on the team. 2018 bumped up the revenue to $1.2 million with 10 workers, and this year he estimates to make $1.5-1.6 million with a team of 12.
That's a crazy amount of growth! How did he bring in so many clients?
Brandon's main marketing tactic early on was answering tax questions on the betterpockets.com forum. He left posts that delivered high-value content of interest to the readership. By the time he quit his job, he was receiving 2-5 leads per week through the forum.
Then betterpockets asked him to be a podcast guest and he started receiving 30 leads per week. That level of leads allowed him to springboard his own content marketing platform and continue his growth to his current rate of around 50 new leads a week. Of these, 20% of them turn into clients over a 3-6 month period.
Service Problems
Like many new CPA firms, Brandon had to figure out what kind of clients he wanted to serve. That first year where he made $120K he had around 100 clients, which is a clear sign of undercharging. Part of the problem was that he was trying to push a yearly package of services where people could pay monthly, but his clients thought it was a subscription service. Around 60% of them did not understand the product.
After figuring this out, they cut the subscription program and raised his prices to about $2800/month on average to reduce the number of bad clients to a manageable level. It still took about a year to get rid of the bad clients. He has since continued to raise his prices to attract real estate funds, which are his current ideal clients.
Brandon offered advisory services right from the start along with tax returns. In the beginning, it was tax returns along with 2-4 phone calls depending on the package the client bought. Now he offers tax advisory, tax preparation, and accounting services, with each generating a roughly equal share of the revenue.
Hiring Well Took Time
Most business owners discover a learning curve when they make their first hires, and Brandon is no exception. His first salesperson was skilled, but he admits he didn't know how to manage or compensate a salesperson. The salesperson also didn't know how to set expectations for new clients. This was one of the reasons the subscription model didn't work.
These days, he handles all the sales himself and lets the rest of his team handle the day-to-day work, but he had to go through two salespersons first before he decided to take over that piece of the business. According to Brandon, it's only this year that he's been able to find an organization method that works well for the firm where the most capable people are in the right positions and are given the authority to execute those positions.
Instead of a standard org chart, he uses an accountability chart that shows who clearly handles which position. Brandon handles the CEO, finance manager, sales manager, and client service manager positions. Under the client service manager position, he has a personal team. Then there is a separate technical team with two advisory managers and a tax manager, each with their own associates.
Here's an example he gave of putting people in the right positions. He hired a bookkeeper in 2017 that developed apps for fun on the side. In early 2019, after significant growth, they worked out a way to make him into a full-time software developer to handle application integrations and building custom software for the company.
He also assigns each member KPIs so he can track their performance, mostly gross revenue and revenue per FTE. There are also customer experience KPIs like timely delivery. One of the lessons he had to learn was to not measure too many KPIs. Many of the ones he looked at early on didn't directly impact revenue.
There's a lot more that Brandon and David talk about in the podcast, so be sure to listen to the full story to learn things like what his target revenue per FTE percentage is, how he leveraged content marketing after his big success with the betterpockets podcast, and what his preferred style is when creating new content pieces for his audience. Thanks for reaching out to us and sharing your story, Brandon!
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