New Firm #0: My Why
Why am I building a new firm?
Over the next six months, I’m sharing the story of building a completely new business advisory and tax strategy firm.
I already own and operate a relatively successful accounting firm. So why would I do this? For three reasons:
🧪 To start a new experiment
As I tell almost anyone within earshot, running a business is an experiment. Each customer, employee, software application, process, in fact every decision is a modification of the conditions of that experiment.
Over the past five years, I’ve had the pleasure of working with lots of different business owners, firm owners, and service providers. In that time, I’ve cobbled together what seems to be a good patchwork of customers, processes, and software applications.
But I still have so many things I want to try. But if you mix the wrong amounts of the wrong volatile chemicals, you might blow up the laboratory! Customers can handle only so much experimentation with niching, pricing, processes, and all the other little things we modify and test in our businesses.
Now I want to reset all the conditions. I want to start a new experiment from scratch.
💪🏻 To set a new challenge
But I’m not exactly starting from scratch. In my first and current firm, I had the immense benefit of a generous mentor who had already developed his preferred kind of firm. And he helped me build mine just like his.
And over the next few years, I tweaked, modified, added, and dropped things that I thought would improve my firm. Some of this was based on what felt right at the time, some was driven by reactions to the needs of new customers or complaints from ex-customers. And some was based on things I heard or read about and wanted to try.
But the core of the firm has always been the initial model I started with. And that model continues to be, I think, a great model for a tax return-first firm.
But I want to flip that model. Instead, I want to build a strategy- and advisory-first firm. I’m still working on exactly what that looks like in practice, which is part of why I’m giving myself six months to build this new firm. But I have some models, such as David C. Baker’s consultancy, to work from.
♻️ To get a refresh
But you cannot easily switch a firm from deliverable-based to consultancy-based. In fact, both my own experience and lots of conversations with other professionals has shown that customers generally reject offers of paid advice from implementation-first professionals. Put another way:
It’s virtually impossible for an implementation-first firm to shift to being a strategy-first firm.
A customer that hired you as a $30/hour bookkeeper isn’t easily upsold a year later to a $2,500/month vCFO or business coaching package. But that doesn’t mean the customer isn’t amenable to hiring a $2,500/month business coach. It just probably won’t ever be you.
But I’m betting that a strategy-first firm can more easily sell the $2,500/month advisory plan that includes tax return preparation (a service a vCFO or business coach can’t readily offer).
In other words, I believe the best way to build a service business is to start with strategy first, then services.
So that’s why I’m starting a new firm. I still have a lot to figure out. And I’ll be sharing thoughts, goals, ambitions, and steps taken over the next six months. Thanks for joining me on this ride!