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Finding Firm Value May Be a Mindset Shift Away · MaxValue Podcast

• 0:00
  SPEAKER_00: What do they need to shift in their beliefs so that they can adopt the, you know, spend a dollar now to make three dollars a year?
• 0:06
  SPEAKER_04: How do we continue to add value to this asset?
• 0:09
  SPEAKER_04: And that is really a mindset shift away from the short-term gain and more towards long-term strategy, long-term investing.
• 0:19
  SPEAKER_00: You have to make something that somebody wants to buy at the end of the day.
• 0:22
  SPEAKER_00: Nobody wants to buy the misery that sometimes some of our are finding themselves in.
• 0:26
  SPEAKER_00: If you're if you're feeling trapped, nobody wants to buy your trap.
• 0:30
  SPEAKER_00: What are some of the other ways of measuring success or you know, measuring that return on investment that might not be so obvious?
• 0:36
  SPEAKER_04: Do our people have more time when we think about capacity?
• 0:40
  SPEAKER_04: It's not just capacity to take on more work.
• 0:42
  SPEAKER_04: It's actually capacity for everything.
• 0:44
  SPEAKER_04: Do I have more capacity to be at my kids' softball games, be on vacation, to be unplugged while still growing the firm, having the firm meet their It doesn't matter how much time I'm at my desk, it matters how much I'm benefiting from it.
• 1:00
  SPEAKER_00: And that just uncoupling those two things, time and value, is is huge.
• 1:05
  SPEAKER_04: We may have to change some other things too, and then put these programs in place where we're increasing capacity for more free time for your people without sacrificing revenue.
• 1:15
  SPEAKER_00: Change is painful, especially for people like that.
• 1:19
  SPEAKER_04: A firm has to be open to change.
• 1:22
  SPEAKER_04: We can't be super committed to the way we've always done it because so much of this adding value and building capacity requires us to do things differently.
• 1:30
  SPEAKER_04: We can't keep doing it the way we've always done it and expect a different result.
• 1:48
  SPEAKER_00: Welcome to Max Value, the show for business owners and their trusted advisors who are on a mission to maximize their value with business valuation, exit planning strategy, and investing in your company's future.
• 1:59
  SPEAKER_00: I'm your host, Ben Town, and today we are joined by our guest, Aaron Daber, a CPA turn leadership coach and founder of Well Balanced Accountants.
• 2:08
  SPEAKER_00: She helps accounting firms grow firm value through stronger leaders, healthier cultures, and smarter succession.
• 2:14
  SPEAKER_00: Measured with real outcomes.
• 2:17
  SPEAKER_00: Welcome, Aaron.
• 2:18
  SPEAKER_04: Thanks so much for having me, Ben.
• 2:20
  SPEAKER_00: Yeah, very excited to have you here.
• 2:22
  SPEAKER_00: Thank you.
• 2:23
  SPEAKER_00: So you work with a lot of CPA firm owners.
• 2:26
  SPEAKER_00: Uh you've been there, you know, in their in their brains.
• 2:31
  SPEAKER_00: And so you understand the challenges and and the mindset.
• 2:34
  SPEAKER_00: So what what evolved you or how did you evolve from working as a CPA to working as a leadership coach for CPAs?
• 2:42
  SPEAKER_04: Well, I learned pretty on and early on in my career that the numbers side of accounting, the debits and the credits were not what was going to get me out of bed in the morning.
• 2:55
  SPEAKER_04: It's not what was most exciting for me about the role.
• 2:59
  SPEAKER_04: So I only stayed in public accounting for about four years.
• 3:03
  SPEAKER_04: I spent some time then in industry.
• 3:06
  SPEAKER_04: And that's when I began the self-discovery of trying to understand what really I wanted to do and what difference I wanted to be making.
• 3:16
  SPEAKER_04: Um, and through sort of a roundabout path, I ended up in professional services on the other side as a coach, a strategist, working back with my people, the accountants.
• 3:27
  SPEAKER_04: So I'm really excited to um have made that transition.
• 3:32
  SPEAKER_04: It has allowed me to tap into more of that strategic problem solving side and incorporate some creativity, but still be contributing to the profession that means a lot to me and to the people that I really enjoy working with.
• 3:45
  SPEAKER_04: So it's a win-win.
• 3:47
  SPEAKER_00: Oh, that's amazing.
• 3:48
  SPEAKER_00: And that's that's really cool because that's exactly how I feel about it.
• 3:52
  SPEAKER_00: You know, I feel about being being a CPA and yet not doing real CPA work anymore, uh, quote unquote.
• 3:58
  SPEAKER_00: Um, even though, you know, I do professional services with business valuation and exit planning, et cetera.
• 4:03
  SPEAKER_00: But um, no, I I I've heard that uh, you know uh that similar story and kind of feeling that, you know, feel that resonance, right?
• 4:12
  SPEAKER_00: That these are my people.
• 4:14
  SPEAKER_00: And I I I love hearing that um because they can, you know, we can absolutely be uh CPAs, you know, amongst our people and yet not do exactly the same thing that you know the you know some of our other you know uh members of the tribe are doing.
• 4:28
  SPEAKER_00: So that's cool.
• 4:29
  SPEAKER_04: Yeah, and I think of it like they are so passionate about it.
• 4:32
  SPEAKER_04: And as a client, somebody buying these services from a CPA, I want somebody working for me who's passionate about that.
• 4:41
  SPEAKER_04: And so, you know, from from a client service perspective, I'm not the right person to do that, but I'm passionate about helping them grow their business, have the business run really smoothly, actually treat their firm like a business.
• 4:54
  SPEAKER_04: And I mean, I think that's the most important probably.
• 4:57
  SPEAKER_04: But I really I think of my role then is supporting the people who are most passionate about what they do to do what they do best.
• 5:06
  SPEAKER_00: Absolutely.
• 5:07
  SPEAKER_00: So, well, let's talk about your clients, the the other members of our tribe here.
• 5:11
  SPEAKER_00: Yes.
• 5:11
  SPEAKER_00: Uh so CPA firm owners are just like most professional service firm owners, you know.
• 5:18
  SPEAKER_00: It obviously not a stretch to say that we like taking distributions of cash outside out of our business.
• 5:23
  SPEAKER_00: I mean, we can have as much passion as we want, but we also like like to be uh paid for it.
• 5:29
  SPEAKER_00: Um but I I know you you make the argument that uh retaining more of that cash within the business actually eventually leads to bigger firm values.
• 5:39
  SPEAKER_00: It's uh something that I completely agree with and believe as well.
• 5:44
  SPEAKER_00: But that takes a shift in mindset for for firm leaders.
• 5:50
  SPEAKER_00: So what do they need to do?
• 5:52
  SPEAKER_00: What do they need to shift in their beliefs so that they can adopt the, you know, spend a dollar now to make three dollars later and make that feel like an investment and not not not a sacrifice, not a diet.
• 6:03
  SPEAKER_04: Yeah.
• 6:04
  SPEAKER_04: Well, I think of it like the the analogy I often use when I'm talking with firm leaders about succession planning and exit planning is think of it like selling a house.
• 6:15
  SPEAKER_04: So you have an asset.
• 6:16
  SPEAKER_04: You could either be investing in it and keeping it up and doing sort of that maintenance over time to keep it a really valuable asset.
• 6:26
  SPEAKER_04: And likely when you go to sell it, it's going to be worth more.
• 6:28
  SPEAKER_04: You're going to get more out of it.
• 6:30
  SPEAKER_04: Or you could live in that house for 20, 30 years, have tons of deferred maintenance that you've avoided and you've just been, you know, spending on other things.
• 6:39
  SPEAKER_04: And then you're likely to not get as high of a valuation or sale price in that case when you leave.
• 6:47
  SPEAKER_04: And I really think us building a business, building a firm in this case is similar, especially with how fast things are changing in our profession, we really have to be mindful about making those continual reinvestments into modernizing the firm, into developing our people so that the asset continue to continues to build value over time.
• 7:09
  SPEAKER_04: So whether you're looking at having an external sale, somebody coming in and evaluating you and actually putting a value on your practice and saying this is what will pay you for it, they'll be looking at, they'll be looking at those categories and those factors.
• 7:24
  SPEAKER_04: Um, or if you're doing it internally, same thing.
• 7:27
  SPEAKER_04: You want to be transitioning over a valuable asset, that increases the likelihood that your successor is going to be able to pay you over time, that that business is going to continue and thrive and be profitable so they can pay your sales price over the course of 10 or 15 years, however, you structure that deal.
• 7:45
  SPEAKER_04: So, regardless of what the exit strategy is, that's that's the way I think about it is how do we continue to add value to this asset?
• 7:55
  SPEAKER_04: So you asked about a mindset shift, and that is really a mindset shift away from the short-term gain and more towards long-term strategy, long-term investing.
• 8:09
  SPEAKER_04: So the short term is well, I've got a bunch of cash now, let me pay it all out in bonuses without reinvesting back into the firm.
• 8:16
  SPEAKER_04: Long-term might be, yes, we can still give bonuses and be paid really well for what we do and be making these investments.
• 8:25
  SPEAKER_04: And remember that those investments should be generating ROI and actually contributing back to your bottom line.
• 8:32
  SPEAKER_04: So ideally, they're actually increasing the value even more so you can have both.
• 8:39
  SPEAKER_04: You can have the investments and the big bonuses, the big distributions that you want.
• 8:45
  SPEAKER_00: Well, absolutely.
• 8:46
  SPEAKER_00: And you have to make something that somebody wants to buy at the end of the day.
• 8:49
  SPEAKER_00: Uh nobody wants to buy the misery that sometimes some of our people uh are are finding themselves in.
• 8:56
  SPEAKER_00: Um, if you're if you're feeling trapped, nobody wants to buy your trap.
• 9:00
  SPEAKER_00: Um well and another thing.
• 9:02
  SPEAKER_00: Oh, go ahead.
• 9:03
  SPEAKER_04: Uh yeah, I mean that just makes me think about, you know, again, the deferred maintenance.
• 9:07
  SPEAKER_04: So if we just keep going with that analogy of selling a house, I remember I sold a house several years ago, and we did a lot of improvement on it before we sold it.
• 9:18
  SPEAKER_04: And I remember looking around thinking, gosh, this is nicer today than it ever was when I lived in it.
• 9:23
  SPEAKER_04: And now I'm going to give it to someone else.
• 9:26
  SPEAKER_04: So we can think about these reinvestments into the firm like that.
• 9:31
  SPEAKER_04: Also, let's make it nice and get to enjoy it while we're there.
• 9:35
  SPEAKER_04: Let's use these investments to improve our team, improve our efficiency, maybe be able to have more work-life integration, more work-life balance while we're there and maybe reduce our suffering as opposed to investing and then handing it off.
• 9:50
  SPEAKER_04: So it works the same way.
• 9:52
  SPEAKER_00: Absolutely.
• 9:52
  SPEAKER_00: And I and I think it works even more in business.
• 9:56
  SPEAKER_00: I mean, I I love the house analogy because it's completely apt and and directionally makes complete sense.
• 10:02
  SPEAKER_00: But also in in valuing a business, um it's multiplicative.
• 10:09
  SPEAKER_00: And so that's where you get from the you know, invest a dollar and get three later, literally multiplicative.
• 10:15
  SPEAKER_00: So if you are able to uh reinvest, I'm just making up you know numbers here, but you reinvest$100 and you're able to improve your cash flow, you know, down the road because you've increased, you know, your your personnel, your technology stack, etc.
• 10:32
  SPEAKER_00: processes.
• 10:33
  SPEAKER_00: Um you've been able to increase your your cash flow by$20.
• 10:38
  SPEAKER_00: You know, you you get a multiple on that$20 when you finally sell it.
• 10:41
  SPEAKER_00: And of course you get$20 for however many years you know you're you're actually running it.
• 10:44
  SPEAKER_00: So it's it's a uh everything needs to be thought of in in that way.
• 10:50
  SPEAKER_00: And it you know, it doesn't take a lot to really make a make a difference there.
• 10:55
  SPEAKER_03: Absolutely.
• 10:56
  SPEAKER_00: When when you approach a client, you know, so let uh you you kind of take a de-risking approach.
• 11:03
  SPEAKER_00: Uh you have a a way of allowing somebody to take small bets.
• 11:10
  SPEAKER_00: So walk walk me through you know how you approach, you know, the c maybe that first 90 days or your your initial playbook, you know, to set up the you know, pilot or you know, uh whatever program that you do and and to make just to make sure that somebody can try something.
• 11:26
  SPEAKER_00: And you know, if it doesn't work the first time, you know, it's not catastrophic.
• 11:30
  SPEAKER_00: But if it you know, if it does work, then you know it's the low-hanging fruit that you can just really get a lot of good benefit out of.
• 11:36
  SPEAKER_04: Well, maybe it makes sense to take a step back and talk about what we're selling, um, just to give some context because it is something that I find is a little bit challenging to buy and that some firms have experienced had maybe negative experiences with.
• 11:51
  SPEAKER_04: So we're helping firms increase their value, their revenue, um, and ultimately doing that through helping them build capacity in a number of different areas.
• 12:02
  SPEAKER_04: So when we think about building capacity in a firm, you can level up your people because then they're naturally going to be able to get more done, pass more down to the next level down.
• 12:14
  SPEAKER_04: Um, they'll just be more effective and more productive.
• 12:19
  SPEAKER_04: You can get your processes and your firm modernized, whether that's technology or we're just being more efficient in how we design our processes to deliver client service.
• 12:30
  SPEAKER_04: And then maybe the most part is leadership effectiveness.
• 12:33
  SPEAKER_04: And a lot of times, and I'm specifically talking about the partner group, that key group in charge.
• 12:38
  SPEAKER_04: And if we were talking about a business that's not a partnership, it's still that C-suite group, making sure they're able to work effectively together to drive decisions, drive change, um, ultimately manage the business.
• 12:52
  SPEAKER_04: So those are the types of services that we're selling a lot of times.
• 12:57
  SPEAKER_04: It's coaching, custom programs, maybe um offsites for partner groups.
• 13:04
  SPEAKER_04: Not something that many firms are used to buying.
• 13:07
  SPEAKER_04: Firms are used to buying technology or you know, paper and you know, different things like that.
• 13:13
  SPEAKER_04: That's not it's not as easy of a purchase.
• 13:15
  SPEAKER_04: And it's typically a higher investment item, you know, maybe right there alongside the technology.
• 13:21
  SPEAKER_04: So something that we do a little bit differently because I recognize that there's some risk being taken that we're going to invest in a program like this, and we're not guaranteed to get results.
• 13:37
  SPEAKER_04: So that in itself, for a group of people who tend to be a little more risk-averse and uh cautious about spending, especially on something that's unproven, not a sure thing, that's that's a challenge.
• 13:50
  SPEAKER_04: So I take a slightly different approach in how I sell those programs because it's not only to meet my buyers, my clients where they're at, but also because I really care about my clients getting ROI.
• 14:06
  SPEAKER_04: I always try to pay for myself in the service that we offer within the same year as much as possible.
• 14:13
  SPEAKER_04: So, how we do that is really through in-depth conversations up front about what problem are we solving with this.
• 14:23
  SPEAKER_04: So, if you're an accounting firm and you approach me about we want to do a manager training program, that sounds great, but I'm going to still ask you a lot of questions about what's the problem that we're solving, making sure that we're putting the right solution in place that will get you the ROI.
• 14:40
  SPEAKER_04: We talk in detail about how you're going to measure your return or effect success, right?
• 14:48
  SPEAKER_04: Let's call it success.
• 14:49
  SPEAKER_04: How are we going to measure whether this program, this investment, was a success or not?
• 14:54
  SPEAKER_04: And a lot of times we skip over that step just to get the immediate gratification of great, I put this program in place.
• 15:02
  SPEAKER_04: So now I should have better managers, or I've ticked the box, I've provided CPE, but we haven't taken those intentional steps up front to really define the problem, make sure the solution is the right one, and then identify how we're going to measure that success.
• 15:21
  SPEAKER_04: So I think that's something that's a little bit different about how we do it to mitigate that risk.
• 15:28
  SPEAKER_00: That makes a lot of sense.
• 15:29
  SPEAKER_00: And of course, you know, you you anticipated where my my mind goes as as an analyst.
• 15:35
  SPEAKER_00: Well, if we're investing a certain amount, yes, if it you know falls to the PL, it's maybe something we can measure fairly easily.
• 15:44
  SPEAKER_00: But if not, what you know, what what are some of the other ways of measuring success or you know, measuring that return on investment that might not be so obvious?
• 15:55
  SPEAKER_04: Yeah, and sometimes it will follow the PL, but not in a way that you think.
• 15:59
  SPEAKER_04: So a lot of times uh one of the first places we go in accounting in particular is will this save me hours?
• 16:07
  SPEAKER_04: Will will this make my team more efficient?
• 16:09
  SPEAKER_04: Which in many cases, for instance, making them a better leader or making them more of a strategic thinker could improve their efficiency.
• 16:19
  SPEAKER_04: But their time's just going to be spent somewhere else.
• 16:22
  SPEAKER_04: So overall, the number of hours is not likely to change.
• 16:25
  SPEAKER_04: And in some cases, for firms that are billing by the hour, we actually don't want the hours to go down too much.
• 16:30
  SPEAKER_04: That negatively affects our top line.
• 16:34
  SPEAKER_04: So we have to again think about that more strategically and really dig into what are the ways that we will measure outcomes?
• 16:44
  SPEAKER_04: So is it um quality of the output, right?
• 16:47
  SPEAKER_04: Is their quality of their work product improving, even though the hours may not have changed?
• 16:55
  SPEAKER_04: Are they getting to some of those other projects that otherwise fall to the wayside and don't ever be get addressed because we're busy just dealing with the fires?
• 17:06
  SPEAKER_04: Is our you know, are we also looking at some other things you could measure is client satisfaction?
• 17:12
  SPEAKER_04: A lot of firms don't do client satisfaction surveys because they're afraid of what they might hear.
• 17:16
  SPEAKER_04: But if we're being really intentional about improving our client service and doing that through any of these services we've talked about, that might be something we want to measure.
• 17:28
  SPEAKER_04: And it's another possible measure of ROI.
• 17:33
  SPEAKER_00: Well, I certainly know that in in my small uh small firm, I measure my own ROI um based on some of the uh programs we do internally to make ourselves better.
• 17:46
  SPEAKER_00: My metric is how many vacation days have I taken in that particular quarter or year?
• 17:50
  SPEAKER_02: Yeah.
• 17:51
  SPEAKER_04: Fortunately, that's gone up, uh, which is big that could be so uh, and I'm actually a big advocate of that.
• 17:58
  SPEAKER_04: I like the movement of firms away from this idea that everybody has to be working 55, 60, 65 hours a week.
• 18:08
  SPEAKER_04: And I like a measure of do our people have more time?
• 18:12
  SPEAKER_04: You know, and when we think about capacity, it's not just capacity to take on more work, it's actually capacity for everything.
• 18:18
  SPEAKER_04: Do I have more capacity to be at my kids' softball games, to be on vacation, to be unplugged while still growing the firm, having the firm meet their revenue goals, their client service objectives, those sorts of things.
• 18:35
  SPEAKER_04: So uh, but what that often will uncover in these early conversations with clients is we may have to change some other things too.
• 18:44
  SPEAKER_04: For instance, maybe we need to move towards more of a value-based billing model versus hourly, and then put these programs in place where we're increasing capacity for more free time for your people without sacrificing revenue.
• 18:57
  SPEAKER_04: So sometimes it is, and again, that's why we have to have these deeper conversations up front, is to really understand what's important, what are we measuring, and what are we not only what we say we're measuring, but what are we actually measuring.
• 19:12
  SPEAKER_01: Right.
• 19:12
  SPEAKER_04: Um, because I'll put this other little underscore in here, and I see this a lot, is we may say we value and are measuring sort of productivity or output versus ours, but there's still this underlying conversation in the firm that if I'm not at my desk later than the partner, that I'm now not pulling my weight, I'm not that invested, you know, fill in the blank.
• 19:38
  SPEAKER_04: There's probably a lot more um less nice ways that people describe that.
• 19:43
  SPEAKER_04: But that's the underlying culture.
• 19:45
  SPEAKER_04: So we need to be mindful of that too.
• 19:47
  SPEAKER_04: And again, I try to understand what the environment is that we're putting programs into to make sure everyone is set up for success from the beginning.
• 19:57
  SPEAKER_00: Uh gosh, absolutely.
• 19:58
  SPEAKER_00: And you know, at the same time as, for example, my my personal freedom, which is how I measure success, my personal freedom is has increased.
• 20:07
  SPEAKER_00: Um, you know, getting out to all those hockey games and you going to uh uh going on vacation, etc.
• 20:13
  SPEAKER_00: Um, we actually had the biggest year we've ever had uh last year.
• 20:18
  SPEAKER_00: So I I actually think that you know building that uh resilient capacity is absolutely something that's correlated with being able to then you know take take some time away.
• 20:29
  SPEAKER_00: And man, I I hate this concept that, oh yeah, well, we're gonna be business owners, so we're gonna leverage every leverage everything and you know, kind of this, well, I'm a lazy accountant type thing, because first off, accountants are some of the hardest working people out there.
• 20:43
  SPEAKER_00: And I think the um the there's so much of our our personal worth sometimes that can be that we can feel is tied up with how much we're working.
• 20:58
  SPEAKER_00: And I think really we need to be shifting that to how much value are we providing to our clients as professional service people.
• 21:09
  SPEAKER_00: And I know I know you do that for for your CPA clients, and of course we do that for our business owner clients as well.
• 21:16
  SPEAKER_00: It doesn't matter how much time I'm at my desk, it matters how much I'm benefiting my client.
• 21:22
  SPEAKER_00: And that just uncoupling those two things, time and value, is is huge.
• 21:29
  SPEAKER_04: Talk about a mindset shift.
• 21:31
  SPEAKER_04: That's a big one for especially for people that have been in this profession for a long time and who kind of grew up under that mindset of minimum hours and sort of this burnout cycle that is very common in this profession, unfortunately.
• 21:47
  SPEAKER_04: But couldn't agree with you more.
• 21:49
  SPEAKER_04: I think there comes a point where you just can't squeeze anything else out of you know, of that orange.
• 21:55
  SPEAKER_04: You've you've gotten everything you can and you could try to squeeze harder, but nothing else is you.
• 22:00
  SPEAKER_04: not going to get anything else.
• 22:01
  SPEAKER_04: And so really balancing and and reinventing our relationship to recovery, like rest and recovery alongside hard work and seeing that those two work well together and striking the right balance increases your your revenue likely.
• 22:20
  SPEAKER_04: Uh absolutely increases your capacity to think strategically, which is often what's missing.
• 22:26
  SPEAKER_04: You know, if firm leaders could just take a step back and say, how could we work smarter, not harder here?
• 22:33
  SPEAKER_04: That would make a huge difference for many of them.
• 22:37
  SPEAKER_00: But they're not.
• 22:39
  SPEAKER_00: Absolutely.
• 22:40
  SPEAKER_00: Well it and you know we can think of ourselves like professional athletes.
• 22:44
  SPEAKER_00: I know that's a little egotistical sounding potentially and I know that's not kind of how our tribe likes to view ourselves sometimes as you know kind of the the the a special person.
• 22:53
  SPEAKER_00: But at the same time you know they train all the time.
• 22:57
  SPEAKER_00: They work all the time.
• 22:58
  SPEAKER_02: Yeah.
• 22:58
  SPEAKER_00: And they take their days off.
• 23:00
  SPEAKER_00: They because they have to they have to uh that that's the only way to have uh the ability to perform at peak when they need to perform at their peak.
• 23:11
  SPEAKER_03: Absolutely good a good analogy.
• 23:14
  SPEAKER_00: I I I've left kind of to the to the very end um you know one of the one of the elephants you know one of the elephants in the room the you know firm leaders are are busy.
• 23:25
  SPEAKER_00: I mean whether whether or not they've you know cracked the capacity code or they've um or they're just still stuck in it every day you know how do you how do you capture their attention long enough to you know get them to listen to you and of course eventually you know hopefully engage with you and and improve their their situation it's a great question and something that continues sometimes to uh I think that just shows up for a lot of people who are trying to sell into the accounting space is how do we because there's so much noise and they're you know they're right targets for a number of different things right whether it's tech sales or AI or anything else.
• 24:09
  SPEAKER_04: So I think there's a few things that are really important.
• 24:13
  SPEAKER_04: One being I've become more and more clear about who my ideal client is who I can partner best with and who I can provide the best value for.
• 24:27
  SPEAKER_04: And this is something that I preach in a way to my clients about them selecting clients is being very clear about who do we want to work with, who can we do our best work with that's really important.
• 24:40
  SPEAKER_04: So for me I'm it's a certain persona if you will of person and I've come to realize that that's not everyone who's open to making the kinds of changes and adjustments in their firm that we are looking to help them make.
• 24:56
  SPEAKER_04: So for example a firm has to be open to change we can't be super committed to the way we've always done it because so much of this adding value and building capacity requires us to do things differently.
• 25:11
  SPEAKER_04: We can't keep doing it the way we've always done it and expect a different result.
• 25:15
  SPEAKER_04: So if you're committed to that I I really have made a conscious effort to we call it preaching to the unconverted.
• 25:25
  SPEAKER_04: I'm not going to chase you around and try to convince you that you have a capacity problem or that you have a you know dwindling value in your business or that you have a ton more value you could be tapping into but aren't um in some ways by me being a little bit more specific about who I'm working with that allows them to self-select and find me which is great or to resonate with what I talk about if you were to meet me at a conference or see me at a state society or something.
• 25:54
  SPEAKER_04: So in terms of just to kind of broaden that scope I think that's why it's so important to to niche and be specific because that applies to firms also they could be doing that with their clients that makes a lot of sense.
• 26:08
  SPEAKER_04: Yeah and so that's part of it right they've already in many cases at least had this inkling of we we have a problem here right we're already maxed out we've we're turning away business or our team is maxed and isn't taking the amount of vacation and downtime that we would like to or we aren't as the owners right and maybe they're having that conversation of I started this business for more freedom and look at me now not having the freedom that I wanted this isn't what I signed up for.
• 26:38
  SPEAKER_04: So that again just kind of highlights all right here's somebody who's ready to make a change that makes it a lot easier to speak it to them when I can come to them and say I can solve this challenge this thing that keeps you up at night or the thing that is bothering you the most about the current state of your practice, your business.
• 27:02
  SPEAKER_04: So that helps and I'm not going to chase somebody around who's not in that place.
• 27:06
  SPEAKER_04: That's not a good use of my time or theirs and that's okay that you know maybe there's somebody else out there for them.
• 27:14
  SPEAKER_04: So that's one is solving a big challenge.
• 27:17
  SPEAKER_04: And then I also think that it's I've never been a salesy type person.
• 27:23
  SPEAKER_04: So I like to simply understand what the business challenges are, what are those ways that I can support them and if we have solutions and I think our approach is different enough that it sometimes catches firm leaders off guard like wow this isn't what I was expecting or this isn't how this conversation's gone with other strategists or consultants.
• 27:46
  SPEAKER_04: But that really comes from my commitment to make sure that I'm doing right by those clients.
• 27:54
  SPEAKER_04: And I think that's because I I was in in a seat in a firm so I wouldn't have wanted that to happen.
• 28:00
  SPEAKER_04: You know I wouldn't have wanted my firm to get taken advantage of in any way or something like that.
• 28:05
  SPEAKER_04: So um that's really I think the extent of chasing them around right and and I think it's important to note that when we're so busy being busy it does pull our attention away from making some of the changes and sort of working smarter not harder so if we stay on this hamster wheel of just trying to crank out the next tax return or the next task on your to-do list we do miss some of those opportunities to slow down and say how what change could I make that could potentially alter the course or alter my reality going forward I don't have to just accept this as it is what it is.
• 28:52
  SPEAKER_04: So I think that's important too sometimes I I really try to be that intentional pause in their day like hey take it take an hour take 20 minutes let's talk about this and see if there is a strategic opportunity that you could take advantage of here.
• 29:09
  SPEAKER_00: Everybody I want to take a second here to share something about who we are and why we make this show.
• 29:13
  SPEAKER_00: You're probably here because either you or a client of yours is thinking about buying or selling a business bringing in investment or planning an eventual exit.
• 29:22
  SPEAKER_00: And that is why we call this show Max Value.
• 29:25
  SPEAKER_00: We provide you with information and insights about how to maximize the value of your business.
• 29:30
  SPEAKER_00: Our team at Town Advisory guides business owners through the crucial often once in a lifetime opportunity to exit their business.
• 29:37
  SPEAKER_00: We use our trademark exit builder program to help business owners prepare early protect the value they've built and obtain maximum value through an exit and the secret is our clients define what value means to them.
• 29:49
  SPEAKER_00: Taking the right steps now can make all the difference in creating a successful outcome for yourself your family and your work team if you think you're ready for the next step in understanding and increasing the value of your business make a comment send me a message on LinkedIn or send me an email all those links are in the show notes.
• 30:06
  SPEAKER_00: Yeah it it is definitely hard to make somebody want to talk about taking kind of a a a short term loss if you will because people are equating their hours to dollars you know I could be billing x X amount of dollars for this this time you know making that that loss opportunity cost and say you know and trying to think okay well that's going to then you know lead to something better in the future and I sometimes think about it you know kind of the opposite way where it's the the the pain threshold you know because change is painful especially for bad people like us.
• 30:44
  SPEAKER_00: Yeah and you know it has to be somebody has to you know be feeling and recognizing a pain point acutely enough where they say okay well changing this as painful as that will be is going to be much less painful and you know over beneficial over the long term than you know having to you know that then than experiencing what I experience every busy season for the rest of my life.
• 31:09
  SPEAKER_00: Right.
• 31:10
  SPEAKER_00: And set that way then suddenly people are you know can be if it's in their minds can be uh incentivized to move.
• 31:18
  SPEAKER_04: You know there's another mindset shift that you just made me think about when you said that and that is there there's something that business owners do and accounting firm leaders are sort of guilty of this also which is if it's just my time it's not costing me anything.
• 31:34
  unknown: Oh my God.
• 31:34
  SPEAKER_04: So we're not we're not being honest with ourselves about what some of these um what some of the status quo or what we're currently doing is actually costing us.
• 31:44
  SPEAKER_04: I'll give you a good example because you were talking about you know my hourly billing rate and so I was working with this organization that wanted to put in um they wanted to modernize their performance evaluation process for their team which would solve a lot of things it would it would definitely speed up people's progression makes it a little bit more user friendly keeps those goals and development objectives front of mind easier to to see and monitor and track as opposed to doing it on a Word document right where we set goals once a year and then they live on a shelf somewhere.
• 32:19
  SPEAKER_04: So all had good intentions.
• 32:22
  SPEAKER_04: So then they started to look at the investment in some of these softwares which some can be fairly expensive others not as much but it was going to be somewhat significant.
• 32:32
  SPEAKER_04: Let's for argument's sake call it$20,000 or something like that.
• 32:38
  SPEAKER_04: And they said oh gosh we can't we're not it's not that big of a problem.
• 32:42
  SPEAKER_04: We're just going to keep doing what we're doing.
• 32:45
  SPEAKER_04: It's the the short term thinking right and then I asked how are you doing this right now?
• 32:50
  SPEAKER_04: How are you monitoring and evaluating performance now well we have everyone fill out this self-evaluation form on a Word document.
• 32:58
  SPEAKER_04: Our admin collates it puts it all in one document so there's time and hours that we're paying for then we get all of our partners 10 of them in a room let's just for fun call it$500 an hour but you know it's more than that, right?
• 33:14
  SPEAKER_04: For a day and a half.
• 33:16
  SPEAKER_04: Oof run that number it gets that number becomes very large very quickly and we talk about each individual person's performance and we argue back and forth about you know are they a top performer middle where where do they fall?
• 33:31
  SPEAKER_04: So easily every year they're spending not in cash but they're you know foregoing its opportunity cost$50 or$60,000 in personnel time possible billable time that we're using on this process.
• 33:47
  SPEAKER_04: So you probably can't cut it all back to zero but could we make it could we cut it in half and so we're saving 30 but we're spending 20 absolutely so we have to just start being really honest about what is that opportunity cost.
• 34:03
  SPEAKER_04: In other words what's not getting done because we're spending time doing it this way absolutely and and be clear about some of those current processes so uh I think I think if firms looked at that it would be a much easier decision to make to say this is something that we need to invest in because it's actually going to save us money not in five years from now but pretty much immediately absolutely absolutely measure the right things I I'm gonna throw something at you here.
• 34:41
  SPEAKER_00: The you know you touched on um you know use of AI and obviously that's a that's a huge you know topic these days but in in relation to CPA firms you know there's there's a there's a number of ways to leverage right there's personnel leverage there's technological leverage um you know looking at both you know outsourcing and offshoring something I'm a huge proponent of and also you know technological leverage you know use of AI and systems etc you know what what are some of the things that you're seeing just as trends in the in the industry so I've definitely seen more firms and smaller firms curious about or taking on offshoring resources which is great um they I think they're finding that it's also not a magic you know silver bullet or anything like that that they have to actually train people they have to have um there's actually an interesting correlation between the two but from a you know hiring offshore talent we still have to have clear processes in place clear expectations and procedures needs to be well documented and we ultimately need to lead provide feedback hold people accountable just the same as if they're in your own office or working remotely for your firm in some other state um but I think it's a great option and it has absolutely helped build capacity especially when you know for firms in areas that they don't have huge pools of students to pick from more rural or remote areas smaller towns towns that don't have a huge sort of pull of people like to go live there and I I guess ironically or related with AI firms are finding the same thing to really get ROI and significant capacity boost with AI, they're finding that they have to have clear procedures clear processes well documented and it has to be consistent.
• 36:57
  SPEAKER_04: So we have to hold people accountable to using the systems and using the processes in the way they were designed.
• 37:05
  SPEAKER_04: So there often is a little bit of trial and error so I'm seeing that especially when a firm is looking at putting AI into a significant process like trying to automate the full 1040 preparation process from start to finish that requires really clear systems and processes for AI to be able to function there.
• 37:31
  SPEAKER_04: What I'm seeing more commonly is uh I guess what I would consider like a niche or a very targeted solution.
• 37:38
  SPEAKER_04: So using things like text research or document organization tools that are AI driven, using some of the AI functionality already built into your CRM or your um your project management system that's I think a place where you can get some pretty quick ROI from those AI tools.
• 38:03
  SPEAKER_00: Yeah and I like how you kind of ended that with you don't you don't necessarily have to take you know the the big swing right off the bat.
• 38:15
  SPEAKER_00: And there's a lot of places where people can use offshore out of state uh staff or you know uh technology in some way to to really smooth out you know some uh capacity issues uh but in small bytes you know not not necessarily you know not necessarily doing it you know full 1040 tax preparation which may or may not be that feasible especially for smaller firms uh but you know if you can get a 20% solution well guess what that's that's still a fifth of the work that's getting done in a in a way that you now don't have to you know time so I I think a lot of times people think of these solutions as an all or nothing.
• 39:00
  SPEAKER_00: Well I'm gonna fire all my staff and get them you know uh call up the Philippines or India or whatever right um no no these these are all AI and outsourcing really are about or offshoring are really all all about augmenting and making your your people you know superhuman uh in a sense so we just have you know it's interesting you we're we're we're talking about you know this whole uh this whole conversation we're talking about mental shifts um more than really anything else and and that wasn't that wasn't what I expected out of the conversation but I love it well it's it is important and I think you know a lot of this is uh that is a mindset shift and you had asked me earlier about um you know how do we basically take small wins versus getting overwhelmed by the gravity of oh my gosh we could we could spend or invest millions or billions of dollars into modern modernizing the firm or firm improvement.
• 40:05
  SPEAKER_04: Likewise you know when firms haven't put development programs in place or have never sort of done the personal development at the management group level at the C-suite level you know they're gosh what are you going to ask me to do and that in itself can be a little bit overwhelming.
• 40:21
  SPEAKER_04: I think any of this can be done in bite sizes and I actually recommend that because it you can put something in place also from a change management perspective also.
• 40:33
  SPEAKER_04: Put something in place have people experiment with it we're we're doing our part to manage the change and communicate and get people on board and aligned with it.
• 40:43
  SPEAKER_04: But then we start to see benefit that's going to have people that much more bought in to phase two whatever that phase two is if we're thinking about AI or if we're going to expand our offshoring or you know in the cases of putting development programs and accountability in place like much of what we do with firms it's it's a great practice to start small, have people see the benefit and then they can it's more palatable I guess to say all right well now we can make a bigger investment in the next phase because we're more comfortable with the fact that we're going to see returns on that.
• 41:22
  SPEAKER_04: So I always think that saying yes to something is better than saying no to all of it.
• 41:30
  SPEAKER_04: You know, maybe you're not going full fledged, you know, we're automating everything and I wouldn't recommend that because most firms a lot firms and and actually organizations there was a I believe it was in the MIT study recently about AI was saying that most pilot programs with AI fail or fail to produce the intended outcomes.
• 41:51
  SPEAKER_04: And I would argue that you could find similar data about most change management initiatives because we are biting off more than we can chew and we're not actively managing the process or we haven't done that front end work that we talked about.
• 42:07
  SPEAKER_04: So it's all linked together.
• 42:09
  SPEAKER_00: It's sort of the same process and same mindset required yeah yeah absolutely and the way I tend to think about it is what is it that you're leveraging so all these things are leveraging or changing something as you said but what is it that we're starting with so if you're trying to increase your technological leverage with AI well do you have a solid process that works now effectively before trying to amp that up and multiply it out you know many times and and I I find this is actually the the biggest problem with you know offshore staffing as well how how are you working with your staff now is it that is it effective now do you are the processes clear yada yada yada where making it making that staff farther away and just throwing more bodies at it is actually going to make the process well it's not gonna change the process and might make the the outcome even worse than it is now by you know not not doing it in a in a well considered manner.
• 43:21
  SPEAKER_04: So I just saw this recently so um it's it's amazing to me these things are kind of clicking together as we're talking like how similar those two things are so whether you're thinking about automation as your solution to capacity or offshoring or maybe a combination of the two you're absolutely right if it's you know I always talk about AI you could layer AI onto a really inefficient process that's just going to make your AI very inefficient.
• 43:49
  SPEAKER_04: And I ran into that when I started to put it in place in my business to you know it helps me I use it right now to take client calls and turn it into statements of work.
• 44:01
  SPEAKER_04: It saves me a lot of time.
• 44:02
  SPEAKER_04: It's not perfect, but it's a great starting point.
• 44:05
  SPEAKER_04: And it's better than me doing it all myself or doing it from memory.
• 44:09
  SPEAKER_04: But in that process, I realized that I used to have like six or seven different formats of statements of work that I would send.
• 44:18
  SPEAKER_04: And it was confused.
• 44:20
  SPEAKER_04: It's like, which how do I know which one, which format you want?
• 44:23
  SPEAKER_04: And so similarly, I see it a lot with tax prep processes where we've trained our in-house humans to say, here's the process, except when you're working with this partner, except when with this client, we do it a different way.
• 44:39
  SPEAKER_04: And except for this batch of clients, we do, you know, all these alternative processes, which arguably is very hard for your team, your in-house team, to kind of like grasp and embody and have, you know, have that become second nature.
• 44:57
  SPEAKER_04: It's going to take a long time, a lot longer than if it were one process.
• 45:01
  SPEAKER_04: And same if you're going to layer AI onto that or if you're going to train somebody offshore.
• 45:06
  SPEAKER_04: Much easier to do if you have one process, maybe two, right?
• 45:12
  SPEAKER_04: Maybe it's two, depending on like different types of clients, different outputs.
• 45:17
  SPEAKER_04: I can understand it not all fitting into one, but we gotta eliminate some of those exceptions to the rule, which are arguably slowing you down today, right?
• 45:26
  SPEAKER_04: We're or we could fix that now just by fixing the process, and you'd already gain some efficiency or capacity.
• 45:34
  SPEAKER_00: Ooh, and it I think every time one of us brings up a point, you know, there's a there's something that springs into mind uh for the other person, uh, which is which is great.
• 45:42
  SPEAKER_00: Uh the you know, when you have those exceptions, because they happen, I mean, every every individual case is gonna have uh its own little you know fun fact.
• 45:54
  SPEAKER_00: But trying to figure out where you truly, truly have an exception versus being able to fit something kind of in the box um that that's normalized and and you know, something you can templatize perhaps uh is is a hard part of what we do, but it is something that we needed to get uh get efficient at and effective at.
• 46:17
  SPEAKER_00: Um also okay, so now we can put 80% of a particular case in a box or 90% of a particular case in a box, where you know, AI, lower level staff, whatever, some kind of leverage can help you move the ball forward, you know, all that way, and then you know, maybe the person who has that, you know, that level of judgment, etc.
• 46:38
  SPEAKER_00: at the higher level can then say, okay, that all that said, and taking into account you know a couple of exceptions, now what do we do?
• 46:48
  SPEAKER_00: That's so much easier to get it to that level and reduce the the decision fatigue on that higher level of person, um, that it's oh gosh, it's so so much more worthwhile.
• 47:01
  SPEAKER_00: It it makes uh makes for a better life for the professional.
• 47:05
  SPEAKER_04: Yeah.
• 47:05
  SPEAKER_04: I also think sometimes we're putting a lot of pressure on I don't want to say the wrong people, but maybe I'll say the people that get thrust into that room to make the decision about the process, aren't that's not always their skill set.
• 47:23
  SPEAKER_04: I mean, we're talking about detail-oriented, uh, what I would call a fact finder, right?
• 47:31
  SPEAKER_04: We're looking at these detail-oriented people who the value that they bring to their clients is to dig into the weeds, dig into the details.
• 47:39
  SPEAKER_04: And now we're asking them to come out from this level up to the 40,000-foot level and have a more strategic conversation and not only have the conversation, but generate it themselves, come up with the idea, come up with the system.
• 47:55
  SPEAKER_04: And I don't know that we give enough credit for the fact that coming up with those systems and processes is a skill set, and it's not one that comes naturally to everybody.
• 48:05
  SPEAKER_04: So if that's a struggle in your organization, I think that's it's one of my favorite things to do.
• 48:11
  SPEAKER_04: I think, uh, and again, there are people out there, in addition to myself, that love to do that and that's their specialty.
• 48:20
  SPEAKER_04: Uh, but that's hard to expect that of somebody if that's not your skill set.
• 48:26
  SPEAKER_04: Just like for me, it was very hard to get me to care about and be passionate about tracking down those little exceptions when I was auditing.
• 48:35
  SPEAKER_04: It was just sort of, you know, that that was it took a lot of energy for me.
• 48:39
  SPEAKER_04: And so likewise, I think we need to recognize that that's the value of sometimes having outside support is they can help us think through, then we just have to make the decision about what works best for us.
• 48:52
  SPEAKER_04: And even that can be a real time savings in the long run, instead of you having to go back and retool or rework this process over and over again, you know, when it doesn't work.
• 49:05
  SPEAKER_00: Awesome.
• 49:06
  SPEAKER_00: That that's that's a good button to put put on the top of that.
• 49:09
  SPEAKER_00: Um so I have a couple of questions, just just for you, just to get to know you a little bit.
• 49:15
  SPEAKER_00: Can you can you, Aaron, tell me something that's not on your LinkedIn or on your website profile?
• 49:23
  SPEAKER_04: Um, I am uh an avid golfer, and I'm also a wine enthusiast.
• 49:31
  SPEAKER_04: So I uh played college golf for a little while, now mostly play for fun, um, and love a scramble or a charity outing.
• 49:40
  SPEAKER_04: That is like my idea of a great time and great way to spend a day.
• 49:44
  SPEAKER_04: And then I also went and I believe it was right before the pandemic, got my level one Somalier certification.
• 49:52
  SPEAKER_04: So all that has done for me recently is put the burden of choosing the wine on me at every dinner I'm at with friends.
• 49:59
  SPEAKER_04: So um it's really fun, really fun, great.
• 50:04
  SPEAKER_04: I mean, I I really like it and enjoy.
• 50:06
  SPEAKER_04: I just think the science of making wine is so interesting and how it can change from one year to the next just as a result of the weather.
• 50:15
  SPEAKER_04: Uh, that that kind of fascinates me.
• 50:18
  SPEAKER_00: Yeah, so much depends on the weather.
• 50:20
  SPEAKER_00: Yeah.
• 50:20
  SPEAKER_00: Okay.
• 50:20
  SPEAKER_00: So what are you reading these days?
• 50:23
  SPEAKER_04: I am in scaling mode for myself and for my clients.
• 50:29
  SPEAKER_04: So I just read a book called The Science of Scaling.
• 50:34
  SPEAKER_04: And I'm now in the process of reading, I believe it's called 10X, the 10X Code, something like that.
• 50:42
  SPEAKER_04: I believe it's oh gosh, don't misquote me, the Grant Cardone, maybe.
• 50:47
  SPEAKER_04: Uh yes, the 10X role, Grant Cardone.
• 50:50
  SPEAKER_04: I just cheated and looked at it over here on my desk.
• 50:52
  SPEAKER_04: Um, so those are kind of along the same lines and same theme, but that's that's what I'm reading.
• 51:00
  SPEAKER_00: Gotcha.
• 51:00
  SPEAKER_00: Cool.
• 51:01
  SPEAKER_00: I'll have to check those out.
• 51:02
  SPEAKER_00: I that's uh that's that's kind of my my secret, is I always mine everybody for you know the the good uh good recommendations on on what to read.
• 51:12
  SPEAKER_00: So do you have any offers or giveaways that you you want to provide to the uh audience here?
• 51:20
  SPEAKER_04: Well, a couple things.
• 51:21
  SPEAKER_04: I would encourage them to go to my website for the latest dates and information.
• 51:29
  SPEAKER_04: But one thing we offer that I would encourage everyone to take advantage of are executive forums.
• 51:34
  SPEAKER_04: These are small group conversations.
• 51:36
  SPEAKER_04: We bring partners and managing partners together from firms all across the country, and we pick a topic.
• 51:44
  SPEAKER_04: These are happening just about monthly, depending on the time of year.
• 51:49
  SPEAKER_04: So that's why I said check the website for the next date that's upcoming.
• 51:52
  SPEAKER_04: But we pick a hot topic, we share best practices, what we're seeing out in the market, and allow for some really safe and friendly discussion among peers.
• 52:04
  SPEAKER_04: And so those are really popular, they're completely complementary.
• 52:07
  SPEAKER_04: We do that just to contribute back to the profession.
• 52:10
  SPEAKER_04: So would definitely invite anyone to join us there.
• 52:15
  SPEAKER_04: Um, and if something that we talked about today resonates, if you're looking to build capacity in your firm and want to kind of understand where you would even start in that process, we have some assessments that are available on our website and also always open to having a conversation with you.
• 52:34
  SPEAKER_00: That's awesome.
• 52:35
  SPEAKER_00: And is the best place to get you uh on your website or uh another way to contact you?
• 52:42
  SPEAKER_04: Website, or they can certainly find me on LinkedIn uh under Aaron Daber, but both um, and then the website is well balanced accountants.com.
• 52:51
  SPEAKER_00: All right.
• 52:52
  SPEAKER_00: Well, Aaron, gosh, this has actually been a very, very cool uh conversation and it went in a couple different directions that I didn't expect.
• 53:02
  SPEAKER_00: And I think it's so much the better for it.
• 53:03
  SPEAKER_00: So I'd love to have you on and would love to have you on again.
• 53:07
  SPEAKER_04: I would it would be my pleasure.
• 53:08
  SPEAKER_04: Would love to come back.
• 53:09
  SPEAKER_04: Thanks so much.
• 53:11
  SPEAKER_00: Thank you.
• 53:12
  SPEAKER_00: That's a wrap.
• 53:13
  SPEAKER_00: You've been listening to Max Value Podcast, and if this episode provided any interesting information, hit that subscribe button, smash like, and drop a comment below.
• 53:22
  SPEAKER_00: I'm Ben Town with Town Advisory, and I'll catch you next time.