Case Study: How Frustration Grew a New Practice
After working for a previous company, Ingrid Edstrom finally got fed up with not being recognized for fixing problems and learning the bookkeeper was making more than twice her pay. She decided to leave the company and started her own bookkeeping company, Polymath LLC.
This is Edstrom’s story of how she created and grew her practice into a firm of the future amid the worst recession the country had seen in decades.
While working for a previous employer in Oregon several years ago, Ingrid Edstrom found herself in an unsettling position. The wholesale and manufacturing firm’s bookkeeper delegated tasks to Edstrom because the bookkeeper was unsure of what she was doing.
“She knew how to enter invoices, but when it came to reconciling accounts and entering other background bookkeeping functions into the system, it was a total mess,” Edstrom recalls. Edstrom had figured out the company’s accounting system even though she was hired as a data entry technician.
Despite not having a formal accounting degree, Edstrom made the shift from employee to entrepreneur by becoming a certified QuickBooks ProAdvisor. She used skills gained from working with MYOB software at her previous employer to learn QuickBooks. “I found that I had a knack for it,” Edstrom says.
Polymath primarily uses QuickBooks Online as its accounting platform. Edstrom says getting the certifications were vital because they showed her firm’s knowledge and earned instant credibility with clients.
Edstrom started Polymath during the market collapse in 2008 and officially launched it in early 2009.
Reasons for Starting
Edstrom felt the timing of starting Polymath was good, as many small businesses had accounting problems and feared that they might have to close if they did not turn them around due to the financial crisis. The situation created a niche for Polymath as Edstrom recalls potential clients hungry for a host of services, including system and software setup, account reconciliation, and advisory services.
“I started doing things that I enjoy for the companies that actually appreciate it,” she says.
Edstrom is president and CEO of the Ashland, Oregon-based firm. She, along with partners Vanessa Barrett and Maretta Stiles, work as full-time bookkeepers and profit advisors. Catering to small business only, Polymath provides bookkeeping, payroll, and profit advisory services to clients in a wide variety of industries.
The Building Process
Edstrom started by building relationships with other local bookkeepers, taking CPAs out to lunch, talking to them about the industry and their needs. Another key step was getting really good advice from experienced accountants. She also joined Business Networking International (BNI), which generated 50 percent of her clients the first year in business.
“I knew plenty about bookkeeping, but I didn't know anything about being a self-employed professional", she says. “I learned all of that from BNI.”
Edstrom claims her firm’s ongoing challenge is to overcome limiting themselves and being prepared to facilitate the firm’s growth. “Our biggest roadblock is always us, standing in our own way,” Edstrom says. “We need to be open to learning, growing, and changing in order to experience success.”
Edstrom believes that bookkeepers and accountants starting up should stay on top of industry changes and trends, and foster professional growth through continuing education. She and her partners do that by attending professional conferences, online webinars, and reading trade publications.
The Firm Today
Polymath has made many strategic moves to grow and enhance productivity. Last year it became a member of Profit First Professionals (PFP), offering profit coaching to clients as a service. The group includes bookkeepers, coaches, and accountants who help businesses boost profitability.
“Rather than having an entrepreneur live off the leftovers, PFP makes sure that business owners get paid first and that their business is surviving on a budget that actually makes sense,” Edstrom says.
The firm also switched to value pricing instead of hourly billing, a move that erased a revenue growth cap last year. Another crucial move came in January 2016 when Polymath became an employee-owned company, allowing Barrett and Stiles to join Edstrom as owners. The trio now get pre-tax reimbursement for health insurance coverage, something unavailable to the rest of the team when Edstrom was sole owner.
She is confident that the employee-owned business model will help with customer retention due to more satisfying relationships. It also provides Polymath a continuation plan, meaning that the firm will keep operating even when one of the partners decides to retire or if someone dies.
But perhaps the main perk is nonmonetary. “The biggest benefit is that our team is invested on a personal level into something we are building together,” Edstrom says.
The actions are working. Edstrom says revenue rose 30 percent in 2015 from 2014 and gross revenues in the first quarter of 2016 increased 82.6 percent from the same time last year.
As an added bonus, in 2015 the firm was also named as a top three Firm of the Future in Intuit Inc.’s nationwide search for accounting firms that use “forward-thinking practicies and technologies” to ensure their long-term success.
Other tools that have helped Polymath grow is offering classes, seminars, and online educational content. The firm has a channel on YouTube called “Ask a Bookkeeper,” where it offers free bookkeeping and business education videos using puppets.
While future plans may include adding employees, Edstrom says the firm’s main priority now is to more deeply define its niche instead of taking on new initiatives or clients. Polymath is still switching clients to value pricing, as well as introducing that platform to existing clients.
“We've got more clients calling us on a weekly basis wanting to get us to get into their books than we can take on,” Edstrom says.
The firm’s educational tools help small businesses grow and gain a better understanding of how to achieve and maintain business success. Polymath plans to launch within the next year a virtual Accountant Bootcamp, where other professionals can learn to experience similar success.