How Millennial CPAs Are Building Their Own Firmsby
Working a traditional 9-to-5 job has its benefits, but one-third of millennials are finding corporate policies don't meet their needs. To help older accounting professionals bride the generational divide, four CPAs explain why their decided to start their own accounting firms and offer insight into what today's talent is looking for from their employers.
The road to entrepreneurship can be rocky, but research shows that millennials are rising to the challenge at an unprecedented pace. Nearly one in three millennials reported having a small business or a side hustle in 2020, and almost one in five say it’s their main source of income, according to a GoDaddy survey.
This new wave of millennial leaders is fueled by accessible technology, the cultural acceptance of startups and virtual workspaces, and most importantly, the desire for more flexibility and freedom.
“There’s a lot of people who started their businesses during COVID-19 because they saw it as an opportunity to change their careers and reevaluate where they’re going,” says Joshua Lance, CPA, CGMA, managing director of the Lance CPA Group and an Illinois CPA Society board member.
Lance’s observations are spot on. In 2020, startup business activity grew by 24 percent in the United States, according to the Peterson Institute for International Economics. Recent figures released by the U.S. Census Bureau revealed 5.4 million new business applications were filed in 2021, surpassing the record set in 2020 of 4.4 million.
“For a lot of people, the pandemic reset things in terms of what they wanted to do for work and how they wanted their career to look,” Lance notes. “It opened up room for change, and there’s still that room for change. And while it’s hard work building your own practice from the ground up, it’s completely rewarding.”
Achieving Work-Life Balance
Before starting his virtual firm in Chicago, Lance worked 80-plus hours a week as an auditor. In 2015, he decided it was time to begin a new chapter of his life.
“When I first started, it was a little nerve-racking because I was worried this was going to set my career back,” Lance recalls, adding that he questioned if he could even run a firm by himself and if he had the support and the resources to do it. “It’s a bit of a risk to start your own practice, especially if you’re coming to it from scratch and you don’t have a book of business you’re bringing on. I found, through the process of building my firm and taking that risk, that it’s doable.”
Fast-forward to today and Lance is the managing director of Lance CPA Group, a Chicago-based boutique virtual accounting firm that mainly works with craft breweries and digital agencies across the country. He now works 40-hour workweeks on a consistent basis from the comfort of his own home.
“I get to see my family and kids, and I’m not on the road constantly,” Lance says. “I’m able to find that balance of doing what I want and enjoying the work without getting burnt out by 80-hour weeks and traveling all the time like at a big firm.”
Lance encourages other CPAs to take that leap of faith and reinvigorate their careers: “Start something new—especially now. I’ve talked to a lot of accountants who don’t want to take that risk because they have job security. You can do this. It’s not as big of a risk as it may seem.”
Building a Solid Infrastructure
One thing Lance wishes he did from the get-go was being more diligent and organized when it came to the firm’s processes and procedures.
“Early on, a lot of this stuff was in my head, and I was less organized and less detailed,” Lance says.
How did he fix this problem? By documenting everything in Basecamp, such as the scope of services for each client and how he wanted tax returns completed.“Getting all that information out of my head and into a system accessible to me, and now my team, really helped because they were on the same page as I was,” he says. “I didn’t have to explain things over and over again because it was now in a place where they could see it and understand it.”
Like Lance, Andrew Coombs, CPA, CEO and founder of Newark, N.J.-based Coombs CPA and a recipient of the Black CPA Centennial’s 40 Under 40 Black CPA Award, agrees that building a sustainable infrastructure is a key step to ensuring long-term success.
“The issue isn’t clients. The issue is building a strong infrastructure so that you’re able to manage the work and perform, because the better you perform, the more clients you get. Without an infrastructure, you have no business,” explains Coombs, whose four-year-old company specializes in real estate and nonprofit accounting services.
To help his brick-and-mortar accounting firm run at maximum efficiency, Coombs developed a clear set of guidelines and procedures for his staff of five accountants.
“Everybody has a role, and the business is able to function without me having to be there all the time,” he says. “If I’m not there, someone’s picking up the phone, someone’s sending out requests, and someone’s preparing the bookkeeping or tax returns.”
And while Coombs might not always be physically present in the office, Coombs says he’s always “on”—whether that means FaceTiming clients, answering emails after hours, or connecting with his team on Google Hangouts.
“Being an entrepreneur isn’t freedom, it’s autonomy,” Coombs says. “You’re able to do what you want when you want. But remember: If you don’t work, you don’t eat. If you’re going to become an entrepreneur, you’re going to have to work harder than you did in corporate America.”
Enjoying the Process
Fellow CPA and 40 Under 40 Black CPA Award winner, Baseemah “Bee” Nance, knows a thing or two about working hard. She’s currently teaching accounting at San Jacinto College in Houston, serving as the chief operating officer for a nonprofit called Generation Teach, publishing a children’s book called “Sunny Gets Money!” and running her own online financial consultancy, Professor Nance’s Accounting Academy, which provides financial training as well as accounting and consulting services. She created the online platform in 2006, and mainly works with nonprofits, startups, and women- and minority-owned businesses.
“My goal is to eventually run the academy full time,” Nance says. “I have a lot of one-off clients, which is great, but it’s not something that’s predictable from an income standpoint. It’s a delicate balance because taking on more clients means that I’m going to be busier.”
Professor Nance’s Accounting Academy started as a face-to-face tutoring business and has transformed into a one-stop online educational consulting firm. To keep up with it, Nance puts in 20 hours of work each week, meeting virtually with clients, shooting her educational YouTube videos, and private tutoring.
“Teaching financial things to people who don’t normally have a knack for financials and managing their finances is a beautiful thing,” Nance says. “It’s one of the reasons I fell in love with teaching. Experiencing the ‘aha’ moments and feeling the pride when someone learns and appreciates being able to maintain their own finances is what I’m most proud of.”
For those looking to branch off and become their own bosses, Nance offers some advice: “Different things will come at you as you’re trying to build your business, but if you keep pushing, then eventually you’ll get to the other side of those obstacles. Then there are new obstacles, and you keep pushing. It’s a process. You never fully arrive at the destination, but that’s not the goal. The goal is to continuously be on this journey of building a business and learning, growing and absorbing as much as you can during that process.”
Finding a Niche
Before Kenneth Mason Jr., CPA, left his job as a senior audit associate in 2018, he started looking at what was happening in the accounting world. He was providing tax services to local businesses on the weekends but quickly realized that wasn’t all he wanted to do.
“I knew that in order to help businesses, it would take more than looking to see what happened at the end of the year,” Mason says. “That wasn’t enough to actually help businesses grow and keep the doors open.”
Seeing a need, Mason, a member of the Illinois CPA Society and winner of its Young Professional Leadership Award, rebranded his Chicago-based virtual business, changed its name to Equibis, and shifted the focus to accounting for the cannabis industry specifically. He’s never looked back since.
“Before I decided to enter a niche market, it was challenging to understand businesses from different industries. If you only have a small team, it’s hard to develop expertise in all these different areas, so you’re limited in the knowledge and resources you can provide to your clients,” Mason explains.
When asked how he gained specialized knowledge needed to serve the cannabis niche, Mason explains that he built a network of other accountants, lawyers and enrolled agent tax professionals who were also working in the cannabis space. “It was one of the most critical pieces, if not the most critical piece, for understanding and navigating the industry,” he says, stressing that this network’s deep value comes from learning from other people’s successes and failures.
“If someone tells me, ‘I went wrong because X, Y, Z,’ I can avoid that same mistake by learning from their firsthand experience,” he says.
Mason’s closing piece of advice for future entrepreneurs is to dream big: “Research—dig, dig, dig. Map out a vision. That’s what allowed me to build a firm that gives me the flexibility that I want in my life.”
This article originally appeared in the ICPAS Insight Magazine.
Kasia White is a dedicated journalist with five-plus years of B2B magazine publishing experience. Her work has taken her around the country, from reporting on the world's largest music trade show to sitting down with executives from globally renowned companies.
From 2016-2019, Kasia served as the editor of Music Inc. magazine, North...