Who's Really the BOSS?

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Rachel Dillon: Welcome to Who's Really the Boss podcast. I'm Rachel Dillon, and along with my husband, Marcus Dillon, we share the joys and challenges of leading a $3 million accounting firm together. From team structure to growth strategies, we share our leadership successes and failures so you can avoid the mistakes we have made and grow a valuable accounting firm.

Rachel Dillon: Welcome back to another episode [00:00:30] of.Who's Really the Boss podcast.

Marcus Dillon: Hey, thanks for having me back.

Rachel Dillon: We have a very special guest with us, Tim Abbott. Tim, thanks for being here. And welcome.

Tim Abbott: Yeah, absolutely. Thanks for having me on.

Marcus Dillon: Awesome. Well, hey, Tim, uh, really appreciate you joining us today. And, uh, I'm going to give a little bit of background. So Tim, Rachel, Tim and I have known each other and been in mastermind groups together for a while now, and, um, he's done some fun stuff in his firm, uh, like we have. He's done [00:01:00] some acquisitions. He's lived through assimilating clients and team members and exiting clients and team members and all that fun stuff. So, Tim, I know that, um, there's going to be a lot to unpack today and even share with where you start and where you're at. But if you want to kind of give us a little brief introduction, including location and all that fun stuff, um, we'd appreciate it.

Tim Abbott: Oh, yeah. Absolutely. Thanks again for having me on. Really appreciate the opportunity. Uh, my name is Tim Abbott. [00:01:30] I'm a CPA in the Chicago suburbs, so we're actually in Oakbrook Terrace, which is about 20 miles straight west of downtown. Uh, we're a firm of 13. We've actually been around since 1970, so I'm. I'm not related to the original family, but I'm essentially the third generation owner of the practice, uh, which I'm sure we'll chat about a little bit more. Um, we do about 2.4 million in annual revenue. The bulk of it is monthly accounting. [00:02:00] We also do live payroll and a lot of tax compliance as well. Um, as far as, uh, industries, we we really like to work with law firms and financial planners. Uh, other service businesses. We actually have a pretty decent medical practice, uh, group of folks as well. So, uh, chiropractors, dentists and a lot of specialists as well. And it's it's funny, I guess, for anybody considering working with law firms, they're, they're both our best [00:02:30] and worst clients.

Marcus Dillon: Yeah.

Tim Abbott: We found that they follow every single thing that we tell them to do, or nothing applies to them. And it's just their world and we're living in it. So do with that, as you may.

Marcus Dillon: Yeah, well, I mean, that's just the life of an attorney, right? I think you summed up the whole profession really well. So, um. Well that's good. Tim, uh, unpack the 13 team members a little bit. Are y'all all in office together or, uh, some remote, some hybrid?

Tim Abbott: Were primarily hybrids. [00:03:00] So we have two full time remote employees. We're actually about to have a hybrid employee transition, uh, to be full time remote in the next couple of weeks. And, uh, everybody else is in the office probably 1 to 4 days a week. We give them a lot of flexibility to to come and go as they please. Uh, we kind of have core hours where you need to be online and available from 9 to 3. You know, folks that start earlier, work later and whatnot. But, um, of the 13, we've got, uh, four CPAs, an [00:03:30] enrolled agent, uh, a couple of administrative folks, and then, uh, folks that do the, the csms. So the monthly bookkeeping, accounting and payroll.

Marcus Dillon: Awesome. And Oakbrook Terrace, West side of Chicago, like just a little bit of perspective. Cubs fan, White Sox fan, bears fan. What's the flavor by marriage?

Tim Abbott: I'm a Cubs fan. Okay, so I'm originally from the East Coast. Uh, and I got engaged and I. I lost the coin toss. So I ended up relocating [00:04:00] to Chicago. So my heart actually lives with the the Boston sports teams. Um, unless they're playing the Cubs and I try and be a good spouse. So Cubs it is.

Marcus Dillon: Cubs it is. Man. That's awesome.

Rachel Dillon: So, Tim, you are married and I think you have a few kids as well. Do you want to tell us a little bit about them?

Tim Abbott: Yeah. Uh, we've got, uh, three wonderful daughters. Uh, you know, despite our best efforts to complicate their lives growing up, they've all done very, very well. So we have one that just graduated from college. [00:04:30] Uh, we have another who's a senior in college, and then our youngest is a junior in high school. And so we've got a finance and marketing major who doesn't appear to be interested in the family business, uh, a nurse, and then I think a teacher. So we'll see how things go.

Marcus Dillon: And your wife, she's a nurse in a high school, correct. Or in a.

Tim Abbott: School? Yeah, she's an elementary school nurse as well. So the first two kids are sort of following in our footsteps. Yeah. And the youngest one, she she just [00:05:00] likes to talk to people. So we think being a teacher is going to be an excellent profession for her.

Marcus Dillon: Yeah.

Rachel Dillon: Well that's awesome. Well, you are clearly outnumbered by the women in your life. And so I'm sure that has given you some wisdom. But you don't have to share wisdom related to living in a house of women. You can also share wisdom about anything. So we ask all of our guests, what's the best piece of advice you've ever received? Um, if you'd like to share that with us.

Tim Abbott: Yeah, [00:05:30] absolutely. Uh, the best piece of advice I received, uh, somebody looked at me and basically said, you need to remember that no is a complete sentence. And so it really helped kind of put into perspective, uh, accountants, by our nature, we like to help. We like to solve problems. We like to plan, we like to do all these things. And you just you can't stretch yourself too thin, you know. If it's industries outside of your core, if it's services you're not really proficient [00:06:00] at offering, you're you're so much better off just saying no, because it allows a client to maybe find a better solution and lets you focus on what, what you're really good at, good at. So, uh, yeah. No is a complete sentence would be my my current mantra.

Marcus Dillon: Yeah. No. That's good. How many times do you have to tell yourself that? Every day.

Tim Abbott: You know, it's, uh, the number increases as time goes by, and it also becomes easier because every once in a while, you slip a yes in there, and it's just, [00:06:30] you know, it's it's a reminder of why we don't do that. And so, uh, it becomes easier with time for sure.

Marcus Dillon: Yeah. And hold that near and dear to your heart, especially with three daughters as well. I mean, it applies both at the office and at home, for sure. Yeah.

Tim Abbott: Absolutely.

Marcus Dillon: Awesome, man. Well, uh, let's let's dive in a little bit. And, um, obviously, where you're at today isn't where you started. So, um, kind of start with this journey of of you going out on your [00:07:00] own as, as a business owner and how, you know, you made your way to a multi generational firm that was that was born in the 70s.

Tim Abbott: Yeah. It's uh, it's been a fascinating journey. So I had worked for some firms previously. So big firms and small firms and I really enjoyed the, the I'm going to call it small accounting world small small business accounting world. You know, the, the 500,000 to 10 million in revenue. You get to work with the owners and the decision makers and whatnot. And so I was actually [00:07:30] with a large firm in downtown Chicago and determined I'm not a downtown guy. And so I had started building my own practice. And at the same time, I found an opportunity at MJ Vandenbroucke. So they were looking for a CPA. And so I actually went and interviewed for a job, and I was attracted for a lot of a lot of reasons, um, similar philosophies with the owner at the time. Uh, he didn't really have a succession plan in place. They had really good infrastructure from an operations standpoint. Uh, and [00:08:00] he also had three daughters as well. So there was a lot of advice outside of the accounting realm I could partake in. Yeah. So, uh, kind of stumbled onto that opportunity in 2012. Uh, I merged my small practice in with MJ Vandenbroucke, and we worked towards basically a succession plan or acquisition that came together in 2017.

Tim Abbott: And so it was really an interesting journey because from, from, you know, 1970 to the 1990s, [00:08:30] not a lot of things changed at the firm. Uh, I remember the first tax season, our project management was a clipboard. We had the alphabetical names, and we would check off the returns as they were completed and check them off as they were mailed. Um, so as part of this, uh, acquisition, as we sort of headed into that that plan. Uh, we took a series each year to to try and incrementally improve, uh, just a variety of, [00:09:00] of things at the firm. You know, we instituted electronic, uh, filing for tax returns, uh, file cabinets. So we started saving electronic copies, client portal, direct deposit. So from 2012 to 2017, we were able to to work on a number of bigger project items to really move us to a more modern experience. Yeah. And so that was that was relatively intense. You know, it's a five year span, but uh, um, a little bit [00:09:30] of resistance to change after doing things one way for such a long time.

Marcus Dillon: Yeah. What was the team makeup at that time? Was it still around 13 folks, or was it more or less?

Tim Abbott: Uh, we had about ten at that point in time. Um, there was a second acquisition that came later on where we added some folks, but, uh, ten and it was really interesting because nobody was particularly resistant to change, but there were a lot of long time employees, you know, 20 to 35 years of tenure. And [00:10:00] in fairness to them, when you've been doing things largely the same way for 30 years, it can be challenging to change. So, um, we tried to manage the rate of change, both for the staff and for our clients to find something that was acceptable.

Marcus Dillon: No. That's good. And, you know, we can go ahead and date ourselves 2020, 2012 to 2017. In that era, where are we talking? Uh Thomson Reuters. File cabinet. What? What software? Okay.

Tim Abbott: So, yeah. File [00:10:30] cabinet was the first foray into digital document storage. Yeah. Um, it's it's a long, uninteresting explanation, but at that time, we were doing entity returns and ultra tax and individual returns in sort. And so that wasn't something that I necessarily wanted to continue long term. Yeah. Um, so, uh, we use the, uh, creative solutions and then accounting CS suite on the accounting side as well. So yeah, primarily Thomson Reuters.

Marcus Dillon: I think you made every listener [00:11:00] that knows tax their mind just blew up because you think about like k one imports into the individual, uh, file. And the fact that you were going from ultra tax to lesser and lost that import and it's like, oh man. So yeah, I'm sure there was there was a reason for it. And maybe it was some of those team members that were just used to doing things a certain way. Right?

Tim Abbott: Yeah. I mean, it literally had been going on for a couple of decades, and people kind of looked around and just shrugged. Well, the data's there, so. [00:11:30]

Marcus Dillon: Yeah. Love it.

Tim Abbott: Yeah.

Rachel Dillon: Well, let's talk let's talk a little bit about, um, that transition. So you mentioned an acquisition that changed the makeup of the firm just a little bit. Let's talk through, um, kind of that experience. And you can start wherever you want to start from.

Tim Abbott: Oh for sure. Uh, so, uh, quiet. Mj Vandenbroucke. In 2017, you know, throughout that time, uh, was involved in a lot more on the firm management side as far as development, [00:12:00] you know, tax CPE technical training, that's fairly easy to come by. And so I had started looking for more of the operational management type training. Uh, and it's funny, I wound up at a conference, uh, one one fall and I sat down at breakfast and sat next to a CPA, introduced myself. And, you know, lo and behold, it's a CPA from new Jersey. I'm in Chicago. We start chatting and he says, oh, you're you're in Oakbrook Terrace. You must know. So and so who's about two miles down the road from you? And so I [00:12:30] never had an opportunity to meet uh, so came back from the conference, just sent a friendly email. Hey, I'd love to get together and, you know, have some coffee. I met so and so at this conference. He had great things to say. Thought, thought it would be worth meeting. And so, you know, the email led to a cup of coffee and then, you know, sort of touching base every few months. And, you know, from probably 2018 to end of 2020, we were able to come up with a framework where, uh, the acquisition made sense. So, um, just [00:13:00] to step back briefly that the the CPA was in his mid 70s and there wasn't really a plan in place. Yeah. And so the, the timing, uh, was appropriate for both of us.

Marcus Dillon: Yeah. It's it's amazing. Whenever your succession plans just call you out of the blue or email you out of the blue, right. So I'm sure for him, it was his lucky day, uh, that somebody younger than him was interested in potentially buying his firm and ultimately led to that in 2020 during, you know, a pandemic of all [00:13:30] things. So how did that go with acquiring a business during that time of life?

Tim Abbott: Yeah, that was an adventure. So we actually we acquired it and we moved our location as well. Okay. So um, 2020, you know, beyond all the societal reasons, 2020 was a challenging year business wise as well. So it's, uh, it's something that we had discussed off and on, uh, periodically and things just kind of fell into place mid 2020 and said, if this is something we're going to [00:14:00] do, this is really a good opportunity to do it. Uh, and just the way it worked out, their office had a significant amount of space. So I actually relocated my practice to that second practice that I acquired, which was 2 or 3 miles away. So, yeah, hammering out the details, emails, zoom calls, all that fun stuff. Uh, in 2020 was a bit of an adventure. Oh, and then we had to move the office in November. So. Yeah.

Marcus Dillon: And Illinois and Chicago were definitely, you know, full on, [00:14:30] you know, protection, you know, for Covid and all the fun stuff that happened during that time. So I can only imagine the conversations that were had. And so with with both MJ Vandenbroucke and the 2020 acquisition, what was what was it like with the the shareholders, the former shareholders and their role. After you acquired both practices, did they stay on for a while or did they kind of naturally fade away immediately retire?

Tim Abbott: Uh, it was interesting. They were both similar. [00:15:00] Um, the transition ended up being a little bit different. So in the first instance, the CPA I acquired MJ Vandenbroucke from, he stayed on and the plan was to work for a few more years. He wasn't quite ready to retire, and so his plan was to retire after tax season in 2020, which, as everybody knows, drug and drug and drug. So we kind of sat down in March and he he basically said, if we don't just rip the Band-Aid off, I'm going to be here forever. And so he opted to pick June 30th of 2020. [00:15:30] So he, you know, finished what he could and said so long to the clients. And he was just ready to transition at that point. So um, it was wonderful to have him around. He was a very big help. He was welcome to stay as long as he wanted to, but that was just kind of what worked for him, naturally. The second acquisition was somewhat similar, so obviously it's a larger entity, and so we need more folks to service the clients. And so he essentially retained his role of reviewing tax [00:16:00] returns and meeting with clients, conducting the CFO meetings, all of those things for the first year. And so I would sit in on those meetings, but I wasn't doing much direct work with them. So he he basically maintained the same role the first year. The second year we started to transition. And then the third year I hired a CPA to replace him.

Marcus Dillon: Okay. So and he was able to fully retire in that third year?

Tim Abbott: Uh, yeah. Yeah. Essentially, he also has some other business interests, but fully [00:16:30] retired from the tax and accounting part of it.

Marcus Dillon: Okay. Awesome. Yeah. Is there. So it sounds like both situations, they stayed on for about three years and kind of ended on their own terms and were able to serve clients and all that fun stuff leading up to the point of walking out one day.

Tim Abbott: Yeah, it doesn't always work out that way, but by and large, everybody that's retired both, you know, previous owners and staff have been able to retire on their own terms, which is wonderful to see. You know, we we know it doesn't always work out that way. You know, in [00:17:00] both cases I think it helped quite a bit, uh, to have the previous owner around the first year. Another piece of advice that I received that ended up being quite useful is that that first year after the transition, unless something is functioning horribly, don't change anything. You don't have to. Yeah. Um, you know, there's other things that can arise as far as kicking the can down the road, but just giving giving clients, uh, a sense of comfort and stability paid a lot of dividends in both cases.

Marcus Dillon: Yeah. The the phrase [00:17:30] don't break what you bought. Uh, yeah. You know, I think that's, that's one that a lot of people talk about and, uh, makes a lot of sense most of the time.

Tim Abbott: Yeah. And I was very pleasantly surprised in the second acquisition as well. Uh, you know, the clients do generally how old he was. And so there was actually a pretty big sense of relief that there was a continuity plan in place and not just, you know, one day so and so is going to retire or there'll be a health issue or what? So, um, I was very pleasantly surprised by that.

Marcus Dillon: Yeah, it was very similar to whenever [00:18:00] we bought, you know, a retiring CPA in 2011. I can't remember how old Bob was at that time. 60s or 70s had a health scare and clients were, you know, probably thinking the same thing. And then they see a younger person walk in the door and then they're like, oh, great, you're the you're the answer. I'm going to put you in my will to be the person who manages everything, because you're gonna be here longer than I am, too, right? Uh, we got a lot of those questions, which, uh, if you've ever been named trustee, uh, would highly recommend that you don't [00:18:30] accept that, you know, and, uh, leave that for some other person, an attorney or a beneficiary. Um, you kind of learn from things as you go. So.

Tim Abbott: Yeah, uh, we've generally been able to avoid that, but, uh, still get roped in with some family members. You're you're the family expert after all.

Marcus Dillon: Yep, yep.

Rachel Dillon: Tim, can I ask you, um, practically. What did that hand off look like? I know a lot of times the shareholders or owners, they hold a lot of the very valuable relationships, the ones [00:19:00] they have a lot of trust with clients. So as that transition was happening practically, what did that look like? Did you join in to meetings with him? Um, how were those introductions made and kind of the baton passed to where there was a sense of comfort and trust from the clients?

Tim Abbott: Oh, yeah. For sure. Uh, so the first one, to be honest, was fairly easy. I had been there for five years, and so the previous owner would, of course, go on vacation. And so at some point in [00:19:30] time, I had met and talked with all of those clients over the years. So even though I maybe wasn't the primary person, uh, there was a lot of comfort that transferred pretty quickly. Um, a handful of annual relationships, uh, exited when the previous CPA wasn't around to prepare the return, but it was a very, very small percentage. So, uh, the first transition was pretty easy from a client standpoint. The second one, uh, also went pretty well. Uh, we had to be a little bit more careful about how we managed and [00:20:00] communicated with clients. So we presented it basically as a merger, which, you know, we felt was fairly accurate because the entire staff was intact. Uh, that first year, we essentially ran sort of two internal processes. We had our processes and then we had the processes of sensory accounting, the firm we acquired. So a little bit of friction internally, nothing horrible. But uh, because nothing really was changing visibly for clients. We presented it as a merger, which gave me an opportunity to [00:20:30] either go meet, sit in, uh, visit with, with, you know, clients sort of just starting at the top, working our way down. Um, so because of the longer transition time, it made it a little bit easier to cement those connections.

Marcus Dillon: Yeah.

Tim Abbott: So.

Rachel Dillon: And that's I think one thing that we have learned and Marcus, you can share more about this, but with two of our acquisitions at least, um, the [00:21:00] owners really didn't stay around. Not for, for very long at all. Like, they're always there if something comes up and they're needed. But as far as working, like Monday through Friday or Monday through Thursday, not necessarily. And so trying to meet those clients faster. Right. Like trying to get in front of those clients. And so I know one approach that we have taken is to, um, kind of start with not that [00:21:30] any person is more valuable than the next, but from a revenue standpoint, that highest value client. Right. The the people who are spending the most money, probably the most time with the firm, and kind of go down the list that way. So if that if that plan is accelerated, if someone is doing an acquisition and there's not a lot of runway to kind of share the ownership and the leadership, uh, that is one thing. I think that we found that we could kind of get that list under control [00:22:00] sooner rather than later, and make sure that we start developing those relationships pretty quickly in.

Tim Abbott: Yeah, yeah, I would wholeheartedly agree. We had very high retention in both cases, and it was a direct result of having those folks readily accessible for a couple of years.

Marcus Dillon: Yeah. I think two things that we've learned and would love for you to to weigh in on Tim, and maybe you've had the same experience, maybe you've had different, um, the clients are a little bit easier to retain than the referral sources. So the referral sources [00:22:30] that we're referring into, the firm while it was owned by another, um, CPA, what we what we see is some of those loyalties, uh, go away, uh, if you will, at the new ownership level. We've tried our best, uh, you know, kind of connect and do that. But I know for, uh, a lot of the referral sources that, like, I personally have, uh, outside of any acquisition, those are people you kind of grew up with in business. And so you have an external relationship [00:23:00] with. And now I understand why. Um, but that was that was one thing that was a little bit harder to transition where some of those referral sources.

Tim Abbott: Yeah, it's uh, that was a little bit of a tricky one to manage. Um, one thing I think that helped a bit is, again, we're a small firm, but having been in business since 1970, I wouldn't say that by any means. We're an institution, but we have some longevity. And so some of that goodwill and some of those referrals, I think, uh, stayed with [00:23:30] the firm especially too, because we've had a lot of long time key employees. So we may have had an owner leave. But if the bookkeeper, who's been working with a client for 22 years is still here, there's a lot of comfort there in passing that along. So there definitely was some change. But I think because of us, a couple of different factors, it was it was a higher percentage of retention than truthfully I would have expected. Um, we get a lot of referrals from existing clients as well, which, uh, again, there wasn't too much of a drop [00:24:00] off from that. Um, but yeah, the owner's friend, people that grew up with high school buddies, fraternity friends, uh, some of those don't transfer very well, no matter how hard you try.

Marcus Dillon: Yeah. So so that was something. If you've never been through an acquisition, it sounds like that. That's not always necessarily a guarantee. So you definitely have to turn on some BD or marketing or advertising whatever that's going to, you know, because you're just not going to retain those same incoming leads more than likely. [00:24:30] Uh, the other thing that was surprising, uh, in multiple acquisitions that we've done and are getting on the other side, and then all of a sudden the opinion of what a good client is or is not after you've bought the firm. Um, that changes in that seller. And so I've had conversations with, with the seller after the deal was done and he was like, oh no, they're awful to work with. Like we would never do. We would never do this service for that client. And I'm like, why are they [00:25:00] still here? Why did I pay money for them if you think that they weren't a great client. So, um, those are the surprise conversations on the other side of acquisition that you usually, um, you can't have prior to because, you know, prior to the, the closing. Everybody's a great client. It's full of A-plus roster clients. But after the fact, yeah, there's some people that need extra grace, if you know what I mean.

Tim Abbott: Yeah. Um, absolutely. The. I dodged [00:25:30] a lot of bullets the first time simply because of how long I had been there. So, you know, if you can't find the skeletons in the closet after five years, I guess you deserve what you get. So, you know, a couple of situations we addressed in that case. In the second case, there were a few more instances of things that popped up. Um, nothing that was, uh, I would say directly hidden at all or misrepresented. But as you start to dig into some things and find out, well, you know, we're in September, why are we working on May financials? [00:26:00] Well, they're always late and we have to call three times. And so there are some things that you uncover. Um, and then you get to make the fun decision. What what are we going to do with that. Do we continue on or do we just go ahead and make that change now?

Marcus Dillon: Yeah, that's something that we're actually, you know, the acquisition that we did earlier this year, we're still working through. It's um, you know, it was just conveyed, well, these clients don't expect financials. You know, it's one of those where it's like they're months or quarters after the fact, and we're doing our best to get those out and [00:26:30] timely and in the client's hands. But there's a reason they don't answer questions or they don't value that coming across, because they may have been, you know, upsold on a service level that they really didn't need or didn't want at some time. And yeah, it's just it's one of those where even that's frustrating for a couple of team members right now who are trying to do their best, get AMAs answered and get financials out. And the clients just yeah, I'll talk to you next year type thing. You know, it's it's one of [00:27:00] those conversations.

Tim Abbott: Uh, yeah. There were a couple of things we definitely had to realign in the second merger, but, uh, it wasn't it wasn't anything major from my standpoint. So.

Marcus Dillon: Yeah.

Rachel Dillon: From the firm as a whole or from the mergers and acquisitions. Is there anything that you would do differently today or in the next one, um, that you didn't do previously?

Tim Abbott: Um, if [00:27:30] I were so I guess probably maybe two answers to that. So if I were starting from scratch and looking at this, you know, for a first acquisition, I would probably do a much more in depth buy versus build analysis. Um, you know, when I was going through this process in 2010, 11 and 12, uh, some of the resources we have today, software vendors, technology that's available that just didn't exist 12 or 15 years ago. So, uh, in some ways, I think it's much easier to launch a [00:28:00] practice and build and ramp it up quickly and successfully today than it would have been 15 years ago. So if I were doing it all over again today, I would spend a lot more time trying to evaluate, uh, what I thought would would be the best option for, you know, my family, for myself at the time, looking at the buy versus build option, uh, my wife and I thought that buying this practice and then acquiring the second practice, it would give us the greatest certainty to just get where we wanted it to be from a lifestyle standpoint, from an economic [00:28:30] standpoint, you know, building is great. There's nothing wrong with it at all.

Tim Abbott: But at some point you run into various ceilings, you know, with with headcount and hiring and revenue thresholds, and you have to have the energy to continue to fight through that and the effort versus if you're stepping into something that's a little bit more known, uh, it's your job just to continue steering the ship and making incremental improvements and honestly trying to not mess it up. So at the time, buying made a lot more sense for [00:29:00] us. Um, if I were to look at another acquisition, uh, again, going forward, it would have to be a really, really good fit. Uh, similar client profile, um, similar software, uh, stack. It would have to be an owner situation that that made sense. Um, you know, somebody that wants to sell and say goodbye and 60 or 90 days. The retention is going to be quite a bit lower versus somebody who may be willing to make an 18 to 36 month commitment. Probably worth worth more [00:29:30] to both of us in that scenario. So it would have to be just the perfect set of circumstances, I think, uh, for another acquisition at this point in time.

Marcus Dillon: Yeah. No, it's one of those where there's definitely ROI in buying and you can scale a little bit faster and get team in place and kind of have a base of operations that you can work with a little bit easier. Um. It's interesting. Uh, I've had more than [00:30:00] two calls with financial advisors in the last 30 days that are just looking for CPAs to do individual clients of, of their firm, and they will pay market rates for the CPA firm to essentially be their back office preparer. And, you know, those are great situations. If you were kind of starting out and wanting that type of work to kind of keep you busy, and I had to have very hard conversations with both of those [00:30:30] financial advisors to say why most CPAs don't want that type of work any longer, and the options that actually they have, which they could buy a CPA firm, they could go build a tax team, they could go, you know, have a relationship with an offshore team that could do all of those things. But I think they were kind of left in those conversations in, you know, why wouldn't the CPA want to work directly with us, not want to work with the client and just get paid 600 $1,200 a [00:31:00] pop for these tax returns? That seems like good money to the financial advisor who probably, you know, they're making 1% on assets under management, maybe not working that hard. Um, but, you know, I think that's where there's a disconnect between, uh, some of those referral sources and maybe, maybe that's why those referral sources don't refer to us any longer. Um, but, you know, it's it's, uh, it's interesting the options that people have as they get started.

Tim Abbott: Yeah. And that's [00:31:30] a really good comment. So we did have to do a bit of education with some referral sources after the acquisitions, as far as what was a good fit and what was not a great fit. Again, you're around for for such a long period of time. There's a lot of attorneys in the area and you know, the the small one off estate or, you know, first and final trust return. It just they weren't great fits for us. So eventually the message was was received but had to had to retrain some of those folks.

Marcus Dillon: Yeah. And those attorneys, those financial advisors [00:32:00] are just dumbfounded. Why you wouldn't want to do a first and final estate tax return and, and do all the heavy lifting, take all the risk and liability deal with beneficiaries for one year engagement. Um, you know, it's just they they don't know they don't realize, uh, some of the changes that we have to live through and the opportunities that we have.

Tim Abbott: Yeah. For sure.

Rachel Dillon: Yeah.

Rachel Dillon: Um, Tim, I want to hear some of the goals and initiatives and things [00:32:30] that your firm is currently working on. So you guys have made it to the other side of mergers and acquisitions, made it through the other side of 2020. Um, seemed to be doing very well at 2.4 million with 13 team members. Um, that's pretty incredible on its own. So what are, um, some things that you guys are working on currently?

Tim Abbott: Uh, well, it's interesting, almost all of our goals have been internal and process related, as opposed to revenue or, or client growth. [00:33:00] It's believe it or not, it's been a multi year journey to sort of bring together the collective processes between, uh, the two firms. Uh, again, and I don't think I mentioned this, the second acquisition I made, that firm had been around for almost 40 years. So you've got 50 years of history here, you've got 40 years of history. And so it just it takes a little bit of time to align, uh, the client service levels, what we're doing for clients, how we're delivering those services. And so we've finally gotten to a really nice spot where, uh, things [00:33:30] are pretty uniform across the board. And so to your question, one of the things that we just actually rolled out last week is we redid our website. And as part of that, we've got much better clarity on our, uh, monthly accounting process and then our tax process as well. What what the service levels are and what clients can expect to receive on those various levels. And, uh, went ahead and posted pricing.

Tim Abbott: You know, we're not out here to compete with anybody on price, but you have no reason to really hide it. And so it's given us, uh, I think just [00:34:00] a much better, uh, option to showcase what we can provide to some of these clients. Uh, so we're very, very happy with the website. It's actually, uh, we've had a couple of clients where we've been able to upsell as a result of having these, uh, laid out there for them. So that's that's been great. We haven't quite paid for the website yet, but we're on our way. Um, so the website was a really big initiative. Um, we're also we have a new practice management system we implemented last fall, and we're looking [00:34:30] at a number of ways we can really utilize that more fully for this coming tax season, uh, both internally and for client communication purposes. Um, and outside of that, it's just it's a number of minor evolutionary steps, uh, throughout all of the various areas. But those those are two of the bigger things that we've been working on. We've been excited about.

Marcus Dillon: What about, uh, team members, uh, looking to add teams, what you got and just take care of who you got?

Tim Abbott: Yeah. [00:35:00] We're not really looking to add any headcount at this point in time. We're probably. So we went through a stretch from 2020 to 2023, where I think we had five people basically retire in four years. So a lot, a lot of long time employees. And so there's a lot of interviewing, a lot of hiring. And so that's that's stabilized, uh, which has been great. So we don't expect to have any retirements for a couple of years. So not not planning any any headcount increases or decreases with a lot of the changes [00:35:30] we've made, I think we've freed up some capacity. So with the existing folks we have, I think we've got, uh, you know, a fair amount of headroom to to add 10 or 15% without really stressing or straining anybody. So that I think is going to work out really well, uh, in that regard. So no, no major headcount changes planned at this point in time.

Rachel Dillon: I think that just speaks volumes to to leadership within your firm and then also to why those processes and why having the right [00:36:00] technology and utilizing it to its full capabilities. Because then you don't necessarily just have to add team members to continue to move forward. And so just thinking about you, Tim, have done an excellent job carrying forward to legacies, right? Two legacy firms and then creating your own. If you had to kind of boil it down to what makes that possible with your team and with your firm to continue being [00:36:30] as successful as you are. Is there something that you guys do better than others? Is there something that the clients appreciate from you guys or your referral sources cite back to you?

Tim Abbott: Um, so I think probably two things. So I've always hiring is a process and there's a lot of skills and traits you look for. Uh, and I don't know exactly how you quantify this, but I've always tried to hire just good people, people that are generally pleasant and upbeat. You know, we're accountants. Personally, I can be [00:37:00] a glass half empty kind of guy, so having folks to balance out on the other side has been really helpful. So I think it's, uh, really contributed to just an overall positive environment from a client standpoint. One of the things I think we do really, really well is I think we do a great job of communicating and explaining complex subjects to clients without being patronizing or anything like that. Um, you know, clients will ask a seemingly simple question, [00:37:30] and the answer nine times out of ten is it depends, which isn't satisfactory. So we have to strip out the extraneous stuff and try and distill it down to just the key parts. Um, and we've received a lot of compliments and comments from clients, you know? Hey, thank you for not making me feel like I'm an idiot. Um, we've actually we've received several referrals from prospects who have literally called and said, you know, so and so told me to call you, I need help. And they said, you wouldn't make me feel dumb. [00:38:00] And so it sounds silly to say, but I feel like we've done our job, you know, really taken care of. And just meeting them where they're at, you know, most laypeople don't understand our terminology and, you know, effective tax rates and marginal tax rates and things like that. So I think we do a really good job communicating those concepts to clients.

Marcus Dillon: And knowing you, Tim, for as long as we have. I think the other thing that we can say to answer Rachel's question is just your demeanor. Who you are individually, I think, has added [00:38:30] to, you know, the success of the firms and what you've built. Um, you know, I think you're easygoing, fun to be around, always have kind of a, a dry sense of humor comment waiting uh, in, uh, to to be spoken at just the right amount of time to get a chuckle or two. So I think that also goes a long way. So not surprised at all, um, that you, you know, meet people where they're at, care for them really well and, and made them make them feel heard, [00:39:00] uh, without, you know, being lectured to or using crazy accounting acronyms that we love so much.

Tim Abbott: Yeah. No, I really appreciate the kind words. And it's, uh, again, having three daughters, you have a lot of time to sit and listen and think. And so some of that listening, I think can translate well in the client side of things.

Marcus Dillon: So well. And having having three daughters, um, you can take a punch really well as, as, you know, as a dad to, uh, you just kind of have to take the licks and keep [00:39:30] on going and love people where they're at. So when a client sends an angry email, you can redirect it because you probably had to do that in another aspect of life.

Tim Abbott: Uh, just every day's an adventure. We look forward to it.

Rachel Dillon: I think Tim, that you mentioned it there with kind of what sets your firm apart is that you guys just really take care of people and genuinely have good people within the team and want to take care of people however you can. But I think that also comes from your relationships [00:40:00] as well. And so earlier you mentioned that you had met, you know, a potential, uh, firm owner to be acquired from being in a group of people in a group, a room of peers, and just making, like a happenstance connection and then reaching out to someone locally nearby and making that connection as well. So we talk a little bit more about what those like peer relationships have meant for you in the firm.

Tim Abbott: Oh, yeah. No, [00:40:30] absolutely. I mean, it was COVID was brutal for everybody. And I don't know that I would still be here running a firm without just some of those relationships that kind of got you through the tough times. You know, it's been both online communities. Um, I've been involved in a mastermind group for a number of years, continue to be involved with collective. And so having having the resources of other firm owners that have, you know, literally walked, you know, in your shoes and face the same challenges, uh, and everything else. So getting their perspective, getting their [00:41:00] wisdom, getting their advice, uh, has always been hugely beneficial to me. And really, I don't think we would be as far as we are today without a lot of those resources. I'm I'm not sure that I would still be in this industry, you know, getting through that 2020 to 2022 time frame. So, um, yeah, I'll cherish those relationships forever.

Marcus Dillon: Yeah. No. It's good. And while while y'all were sharing that, it made me remember that Denise, who's also in our mastermind group, was the one who said, hey, have you talked to Greg [00:41:30] Cole lately? And that led to an acquisition, uh, for DBA. So I would say that's a word of caution. Whenever you go to, uh, conferences and get togethers with with friends as well, because, uh, there's always something brewing in the background, it seems.

Tim Abbott: Yeah. It's, uh, face to face events I think are hugely important, even more so in this day and age. I think originally we may have met, uh, via zoom in the middle of the pandemic, because that was our really [00:42:00] only option to meet people there for about six months or so. Um, so it's a really useful tool, but nothing beats, I think, getting out to in-person events, you know, whether it's a vendor conference, uh, you know, a community conference, uh, association conference, uh, I. It's been hugely beneficial to me.

Marcus Dillon: Yeah. And what what we've loved to provide here the last few events that even collective has hosted is just, just a room. Because whenever so many friends get together, [00:42:30] they just want to talk and hash through things. They don't need a PowerPoint deck or a, you know, any type of talking points. They just want to, you know, sit around a round table and start talking and see where those conversations lead. And, uh, you know, the fact that we've been able to build that into here are some of the most recent events has been been really fulfilling, because whenever you walk into a loud room, uh, because people are engaged and talking, I mean, that's, that's the best thing that could ever, you know, be [00:43:00] be at an event is just engagement and conversation and, you know, trying to quiet people down to move along. That's not always the best, uh, the best next step because you want to keep that conversation going for sure.

Tim Abbott: Yeah. It's always amusing when the formal session becomes, you know, an obstacle or it's in the way of the lunchtime discussion that you're in the middle of. Um, so obviously both have have a lot of value, but yeah, uh, those in between times are really, really important and really beneficial. [00:43:30]

Rachel Dillon: Yeah. Well, I think Marcus alluded to it, but I know that pretty much collective by DBA can guarantee and really probably any peer networking group within the accounting industry, that growth is going to happen when we come together. It may be growth of our leadership or it may be actual growth where we're merging and acquiring or getting referrals, you know, for new clients. So I think that's something that is really awesome. And as [00:44:00] much as we probably want to be introverts and hibernate and stay out of, you know, big crowds, it's always so beneficial to get together, um, with friends and make new friends that, you know, those relationships just become something way more than a peer connection.

Tim Abbott: Yeah. No, absolutely. You can't really replicate it, uh, anywhere else other than that face to face time.

Marcus Dillon: Awesome, man. Well, um, as we wrap up. [00:44:30] What what? I mean, you've kind of talked through some of the operational goals and things like that that you've been able to achieve one year from now. What does that look like for MJ? Mj Vandenbroucke and, you know, Tim Abbott individually.

Tim Abbott: Um, you know, I think it's a continual path on improvements. Um, you know, there's the old saying you could be on the right track, but as soon as you stop, you're going to get run over. So that continuous improvement just it never really stops. So I think it's [00:45:00] a continued evolution of that. And I think also with having our services better aligned firm wide, both for monthly and tax clients, um, I think it's it's going to be a process that as we talk to prospects, we identify what's a good fit for them. We're bringing those folks in, uh, at an appropriate point. You know, both both price service, uh, all of those things. And as we have maybe some legacy clients that start to retire or, you know, potentially may need, uh, an introduction [00:45:30] to another firm that can better suit them. You know, somebody who's in the office 9 to 5, five days a week because they want to drop off and pick up. It's probably just a continued, uh, evolution of our client base. Um, so I've never really set a lot of revenue, uh, growth percentage figures, dollar figures, things like that. Because when, when when you take the right steps, generally the results follow. Uh, it's been my experience. So maybe that's an easy way out of not not committing [00:46:00] to a goal, but yeah.

Marcus Dillon: Hey, whatever. Whatever floats your boat, man. Whatever keeps you going and keeps you from getting run over. Uh, like you said, I think that's the main goal. And, um, it'll be interesting because the evolution with all the technology advances we've seen in the past year, in the past five years, um, I think we're all going to have to do our best not to get run over. Uh, as as the different technology trains continue to speed by.

Tim Abbott: Um, [00:46:30] yeah, it's it's enough to make your head spin if you take your eye off of it for two weeks even. Yeah. Um, yeah.

Marcus Dillon: Yeah.

Rachel Dillon: Well, Tim, you mentioned your website, so I'm sure that there are people who are curious to know what your new website looks like. Will you share, um, your website address so people who are listening can go take a look.

Tim Abbott: Oh, yeah. Absolutely. We we we didn't ever want folks to have to try and spell Vandenbroucke. So it's mjv. Com. [00:47:00]

Rachel Dillon: Nice. That's awesome. People can find you easily. Yeah. And if any anyone listening now wants to put a face with voices that they're listening to, we are on YouTube, so you can watch this episode on YouTube at collective by DBA. Well, Tim, thank you so much for taking the time to talk with us. Thank you for openly sharing your experiences with mergers and acquisitions and just kind of the growth of your firm. We appreciate your time and you being here. [00:47:30]

Tim Abbott: Yeah, absolutely. I appreciate the opportunity. I'm always happy to share what I can if it helps somebody in their journey down the road. So, um, more than happy to, to take the time. So thank you.

Marcus Dillon: Appreciate that Tim. All right. Well thanks Rachel for leading it. And we'll see you on the next.

Rachel Dillon: Thanks for listening to this episode. If you enjoyed the conversation and want to learn more, be sure to visit collective. You can schedule a meeting directly with me, Rachel, by clicking on the Contact [00:48:00] Us page. Be sure to subscribe, like, and share so you don't miss any future episodes. We look forward to connecting with you soon!