What They Don't Teach Accountants
These days, the cost of securing an accounting degree is rather exorbitant. Well over $100,000 at most private colleges. And lots of hard work to boot.
After that brilliant education and hard work, how well prepared are you to start your own practice? After spending $100,000, shouldn't you know how to hang out your own shingle as a bona fide accountant? For a professional that is bottom line focused, where is the ROI on this investment?
If you want to be a beautician and attend a trade school, don't they teach you how to start your own business for a lot less? If you want to open a McDonald's franchise and attend their Hamburger U, they teach you everything from A to Z on running a store. For Accountants U, WHERE is the BEEF?
If someone spends over $100,000 to become an accounting major in college, shouldn't they know the following basic questions about entering this profession?
- How to start up a new accounting practice from scratch?
- The various entry strategies for starting an accounting practice?
- The various business models for running an accounting practice?
- How to price and justify the value of accounting services?
- Who is your target audience for a new accounting firm?
- The problems with selling accounting services?
- How to differentiate your accounting practice from every other firm in town?
- How to hire accountants and what to pay them?
- How to market your new practice?
- What services to offer and which to avoid?
Oh I see, there is too much to learn in accounting between managerial accounting, cost accounting, federal taxation, professional auditing, generally accepted accounting principles (GAAP), and this new Sarbanes-Oxley stuff to answer these basic questions. So is this taught by one of the Big Four firms? No. How about when I go back and drop another boatload on securing a Master's degree? No. What if I work for a Big Four firm and then drop down to a prominent regional firm? No again...
You're kidding me. You mean to tell me that I could spend over $100,000 on an undergraduate degree in accounting, another $40,000 for a master's degree and spend another five years in public accounting and not know the answers to these basic questions? Ouch...
To illustrate my point, I got a call from a client of ours in Dallas. He's a CPA developing a new practice and we manage the marketing for his practice. He called in laughing from his cell phone to tell me that he just picked two CPA's as a new client. As it turned out, the appointment that we set for him was with two CPA's, a husband and wife team that just acquired a new business. Well, it turns out that both the husband and wife worked for over fifteen years each at a Big Four firm in Dallas (30 years of combined accounting experience) but spent their entire careers in auditing, which meant they knew very little about taxation. They decided to buy a Bed and Breakfast and needed to hire a CPA to do their tax work because they knew virtually nothing about tax.
Don't feel bad. I have an undergraduate degree in business, master's degree in marketing and then worked for fourteen years in marketing and didn't know the fundamentals about starting a small business. While I had taken a class on entrepreneurship in business school and had written more business plans than I care to count, that doesn't mean I can successfully start a business from scratch on a shoestring budget. That's right, I spent nearly twenty years between my education and working in industry before learning these fundamental questions.
To acquire these real-world skills of developing a local accounting practice (and answer the ten questions above), most accountants will move from a larger accounting practice down to a local firm to learn the basics on a grass roots level, find a mentor that has made this transition successfully, and shorten the learning curve by attending a practice development program for accountants. Ideally, the practice development program is instructed by a CPA that has walked a couple miles in this path already and had success developing a practice.
In terms of ROI, a practice development program is cheap compared to the cost of college. And, it pays back after you acquire just one new client. So if you are looking to start a new practice or take your current practice to the next level, consider taking a marketing and practice development program that is instructed by a practicing accountant. It will shorten your learning curve and help you ramp up your practice much quicker.
Practice Management Program: Generate higher profit margins and learn how to have a business that you want to run, not a business that is running you.
Accounting Marketing Program: A complete system to grow your practice focusing on reliable lead generation using inbound marketing, pricing, and selling.
By Hugh Duffy
Hugh Duffy is the Chief Marketing Officer and Co-Founder of Build Your Firm, a practice development and marketing provider for accounting firms. They work with small and medium-sized accounting firms and offer a free email newsletter. Visit www.buildyourfirm.com or call 888-999-9800.