From Technician to Manager to Entrepreneur
Alan Guillaudeu in Denver, CO
Alan Guillaudeu is on his way to becoming an entrepreneur. If you had told him this would be the case 15 years ago, he probably would have laughed at you. That’s because Alan worked by himself for 20 years. In those 20 years he built his practice up to $100,000 a year and he accumulated a lot of experience doing day to day accounting and tax work. In 2005, Alan decided that something needed to change if he was going to make more money and have less stress. That was the year he decided to do an NCI Plan 3 program and transition from a technician to a manager with our help and grow his practice significantly in the process. He signed on for a second Plan 3 program in 2013. His first CSR on that new program didn’t work out, but NCI found him a replacement that is going strong. I’ll let him tell you how he is transitioning once again, this time from a manager to an entrepreneur with a “big, hairy, audacious goal” of building a $3 million dollar a year practice.
Alan came to our interview prepared with some tips for our readers so that’s where we’ll start off before getting down to the more traditional interview questions:
One of the things that is brand new for us is that we’re soliciting CPA firms and bookkeeping firms. There are a lot of CPAs who want to give up their bookkeeping work. We’re finding that it’s an excellent market to go after and it’s something that we had really never thought about previously. I also have several CPAs who have approached me and either want to sell the business to me or one of them looks like he is going to give me his bookkeeping clients. It’s really been fun to see this develop. Another one I’m buying on a percentage of cash receipts and it’s really kind of fun. I hate to pay money down when I’ve got the NCI program already generating growth for me but if I’m just going to pay a percentage of cash receipts or if somebody wants to give me the business for free, then I’m all ears!
I bet, that’s fantastic! What kind of multiple are you paying for those clients?
On the one I mentioned, I’m paying one third of cash receipts over three years.
That’s very interesting.
Actually, this one CPA can’t even get his act together and get a legal agreement done. So I’m just sitting on his money wondering if he’s ever going to come for it. So that is something new and different that I’m excited about.
That’s a good tip.
Another tip for your readers is I use Dave Allen’s time management books a lot. That helps tremendously because I have a pile for the telephone, and pile for the computer to follow up on and also bill boxes. Just by putting everything into its right box it frees up my time enormously and he’s wonderful on time management.
Time management is a crucial skill for a business owner. I should read those books since, like most people, I could use some work in that area.
It’s huge. Just having a set process, I have two hours set aside on Friday mornings to go through all the open notes, open files, open projects and anything that is sitting around in my to-do box. I follow up on it every week so that nothing slips through the cracks. Another tip is the book Lean Accounting by Joe Stenzel, it focuses on how to get work done in one-step processing without errors or the need to rework it and do corrections. It talks about how to make the process faster and more efficient. Things like having a checklist in the beginning so you don’t miss anything the first time through. I’m also looking at some things on how to reward staff for faster processing. It’s been a fun book to read.
We’ll have to add those to the NCI reading list.
Those would be some great tips to pass on. Finally, something in the future that we’ll probably all have to start thinking about is we may be going off the U.S. dollar as the world currency and we may have to start learning about foreign currency translation. That’s something that I think will be raising its head in the next five to ten years. Every other country has had to worry about that but we’ve never had to. Those are just some items I wanted to bring to the interview.
I appreciate that, Alan as I’m sure our readers will also. Now, can you tell me about your business background that lead you into owning your own accounting firm?
I graduated from college with a degree in finance and I went back to take courses in accounting so I could sit for the exam. I originally started with H&R Block and then I moved into small accounting firms. I worked with small firms up to a medium sized firm from ’77 to ’84. In ’84 I started my own business and I did everything myself; payroll, sales tax, income tax, QuickBooks. I did that until 2005 when I decided to make the leap and originally I did the NCI home-study program. Then I decided to take out a mortgage loan and bite the bullet and I upgraded to a Plan 3 program. After that geared up, I went from a one person operation to six people within a month.
That’s incredible, quite the leap.
It was a huge leap. I knew how to do all the work, so that was a plus but to hire everyone and to try and understand the sales side was difficult. I hired two bookkeepers and we had issues where the bookkeepers just couldn’t handle the workload. So after a year and a half we had to stop the sales program. It is overwhelming if you haven’t had experience managing employees. Also, if they are not really good bookkeepers, all of a sudden you have all this work coming in and you can’t get it done.
You do need quality staff to be able to produce that type of volume.
Yes, it makes a huge difference. I had one of the telemarketers come back and do some phone calling for me after I had hired a few other people and then she became a Client Service Rep. for me. She didn’t quite work out so I had to go a different direction. I had a bookkeeper who used to be an insurance salesperson and she wanted to do sales for me which worked and didn’t work. She finally had to stay at home to take care of her husband and her mother. Then Todd Steinberg found some new sales candidates for me. Two of them turned down the position and third one I hired for three months and she only managed three sales in three months. So I let her go in January and I have a new person up and running and he’s signing on about four new clients a month. One of them is a CPA who concentrates on Dental clients and he has 40 clients that he’d like us to do. The guy never returns phone calls so we’ll see what happens but we’re working on the first client to see how it all works out.
40 new clients in one shot would be quite a boon!
Yeah, the bookkeeping is probably pretty well caught up and I’d have to hire one or two extra people.
How long were you in practice before you undertook the NCI program?
About 20 years doing it on my own.
What was the overall size of your business when you started the NCI marketing program?
I was doing about $100,000 a year at that point.
What were some of your deciding factors in doing the NCI marketing program?
I just didn’t see myself getting ahead. I would always be constantly behind. I would rob Peter to pay Paul, it was always either feast or famine. There was only so much I could handle on my own. One person can handle $100,000 to $150,000 and there are a lot of CPAs who work 12 hours a day, seven days a week during tax season. As a CPA, if you’re doing a lot of the basic bookkeeping, that’s really work that should be handled by a bookkeeper.
Exactly, if you want to grow beyond that point you need to leverage yourself out through other people like bookkeepers and marketers. That low level work is frankly, below a CPA.
That’s exactly correct and I have people who really enjoy it and really have fun doing it and do a better job than I do. It frees me up because we have a lot of clients wanting to sell their company. They need tax planning or cash flow planning. I’m helping a client right now to sell his company. It’s a lot more fun and I can delegate and streamline the work and it makes a huge difference.
I like that you keep using the word “fun.” It’s important for you and your employees to enjoy the work you do and people should have fun running their business.
They should, and it gives you more “sane” hours. With the CSR and bookkeepers, the client has 3-4 people they can call and that makes a huge difference. If there is an issue they can’t resolve, then I get involved.
Approximately how much growth have you added to the initial $100,000 since implanting the NCI program?
I’m up to $400,000.
What was the timeframe for adding that extra $300,000 in business?
The first time I did it with salespeople on and off and wasn’t full bore. Between buying companies and our salesman now, we’re looking at getting to a million dollars in two years, assuming everything continues to work out. I’m having fun because my wife doesn’t want me to come home and retire so if I can have everybody else do the work, I’ll be fine.
You can focus on the bigger picture and let your staff handle the day to day.
That’s what I’m looking at. I can probably hire five bookkeepers and one or two extra tax preparers and another receptionist and I think we can handle the million dollars. I’m actually already trying to figure out if we can make it to 3 million in billings. That’s where the book on lean accounting comes in because if you can have teams managing all the work then you don’t have to be involved in all the day to day work.
After the program you implemented in 2005, you did the program again more recently, correct?
Yes, the 2005 program lasted about a year and a half. We had to shut it down because the work got to be too much.
Right and the second time you implemented the program, where were you in terms of billings at that point?
I was doing probably $350,000.
So you’ve added about $50,000 in new business since the start of the second program.
Approximately. My new CSR came in in January and he’s been adding $1,000 a month in new billings.
What was your biggest concern before you signed up for the marketing program the first time around?
I think the biggest thing is the time management and the employee management. I didn’t have any experience with that at all. It was all very new to me. I was already accustomed to do the work as a technician and that’s critical but having never managed people and never really worked with a salesperson, it was something I was concerned about. Sales is a totally different ballgame. When you get clients one at a time it’s more like friends and family referrals, it’s totally different from a proactive sales approach. The biggest thing was working with all the different personalities each day.
I’m curious, now that you do have that experience under your belt, how do you feel about managing people at your firm?
I have such good people and I’m such a good boss [laughs] I view my employees as my number one asset. I listen to them and talk to them and we work things out and figure things out every day. The fact that I listen to them is crucial for them.
I have no doubt that that attitude has contributed greatly to your success.
It makes a huge difference because everyone is smiling every day and they’re just very knowledgeable people.
That does make all the difference. Can you tell me a bit about how you were feeling and how you persevered through a couple false starts when NCI was helping you hire and train a CSR in 2005?
I’ve heard it said that with bookkeepers, you’ll go through 2-3 before you get the one you need. I applied that same attitude to salespeople. It’s just part of the territory, you don’t know how a salesperson will work out until they get in the field. To me it’s just all part of the process, you just keep on plugging. You need to give them enough time to see if they can prove themselves and whether they have the right attitude and whether they’ll be able to get along with an accountant. Accountants and salespeople are totally different animals. My CSR didn’t realize at first that some people will put you off for months and then all of a sudden they turn up and want you to work for them right away.
I try to be open and have a routine approach. I meet with my bookkeepers, appointment setters and CSR every Monday afternoon to go through sales and backlog so we know exactly where we stand with client back work and we know what the appointment setters and the salesperson have accomplished the past week.
You sound very organized and involved with your approach to the program which goes a very long way.
Organization is very important, you have to know exactly what’s expected and what needs to be done.
What additional advice would you give to someone who is considering the NCI program?
I would say that the NCI program is a long term investment and I’m looking at it like I’m investing $50,000 to make $100,000 a year, and that’s net income.
Do you have any additional advice to offer to someone who’s currently running an NCI program like you are?
My CSR are really happy with NCI representatives Todd [Steinberg] and Joe [Trujillo] for answering our calls and our questions or letting us bounce ideas off of them. If I run across something I haven’t been through before I can ask and sometimes you just need a pat on the back or a little encouragement.
I’ll be sure to pass along those thanks. Let’s talk some numbers now. What is the largest client you’ve been able to sign so far in terms of the client’s annual revenue?
The largest client we have is doing around $2 million annually.
What about the largest client in terms of monthly fees?
We have a client paying us $500 a month, that’s the highest right now. Our minimum monthly fee has settled at $200-$225. You have to also keep in mind that a lot of these clients end up being 2-3 hours of work per month so that comes out to around $70-$80 an hour so you want to factor that in when determining the monthly minimum fee. We’re trying to move away from quarterly clients for that reason and I would recommend others do the same. Another tip along those lines is that by doing monthly accounting work for a client, we can do tax planning in July, we just double the January-June statements and compare them to the prior year. We also do tax planning in November and December because at that point your three quarters of the way through the year which is nice because it gives everyone a head’s up before tax season gets under way. The tax planning also helps get the client going on estimated payments so they don’t end up having to pay two years of payments in one year.
Those are great tips. We encourage our clients to avoid quarterlies whenever possible, the exceptions are usually only if they are a really small business or are just getting started and not growing rapidly. Plus it just makes more sense from a business standpoint to have a monthly review because they need to know what’s happening financially in their business on a month to month basis. What about back work, what is the largest amount of back work your CSR has secured so far?
Our largest back work amounts have been $3,000 and $2,000. We’ve had four or five clients in that range so far.
Very nice. Any tips for approaching, pricing and handling the back work?
We usually spread the payments out over the first three months and we let them know ahead of time what it will cost. Sometimes we’ll give a discount just because we’re not doing financial statements but we always try to get a payment for the first month before we start the work.
Are you surprised by the growth you’ve been able to achieve with the program so far?
I went to a business coach for a year. He told me to have a big, hairy, audacious goal and that goal for me is to build a million dollar firm. To sit here and think that I can achieve that now and it’s only because of the NCI program is just amazing for me. For me to even think now about going to 3 million is just mind-boggling to me. I had no idea that I would be anywhere near that or even think about it but I can see it now over maybe a ten year period with the program in place.
How has your quality of life changed since the practice starting growing this way?
The stress level has gone way down. The reason is because when you’re by yourself, you struggle. When you’re trying to do all the work on your own it tends to be feast or famine. Then when you hire employees and a sales team you lose money for a year while everything gets up and running. Once everything is set and you get into a routine, I haven’t done payroll or sales tax in years now. That’s just huge for me because now I’m into a higher level of tax work, tax planning and business management. Once your cash flow is going well, that takes a lot of stress off your back. You know exactly what your cash is going to do and where it’s going to be. The second part is building your processes to get the work done. If you’ve got the processes set up you’re not worried about every individual detail.
It sounds to me like your now working on your business as opposed to in your business, which is one of the major ideas behind the program.
Yes. It really frees you up and you start having a lot more fun.
That’s great to hear! Plus you had done the technician work on your own for 20 years, I bet you were ready for a break from it.
I sure was and I knew I had to make a change in order to make more money. I know a lot of one-man CPAs with maybe a receptionist and they’re working 12 hours a day, seven days a week for 10-11 weeks during tax season. They just kiss their wives goodbye, if they have one, and they see them after April. I’ve heard of several people like that trying to sell their business and the buyer sees that aspect and says, “Why the hell would I want that?” Why would you want to buy a business like that?
Can you sum up your overall feelings about NCI, our marketing program and the staff members you’ve worked with?
Everyone has been very professional and very supportive. You have to realize that this is a long term investment that will take a lot of time, effort and thinking and it will take some time to pay off. When it does start to pay off, it pays off really well. You also have to understand that you will be shifting gears from a technician to a manager. If you take that further, you eventually shift from a manager to an entrepreneur.
I want to thank you, Alan for taking the time to speak with me and on behalf of our readers, thank you for your story and all the excellent tips you have provided. Good luck on your way to $3 million, as you already know, we’ll be with you every step of the way!
Chris Clark is the oldest son of New Clients Inc. founder and CEO Bruce Clark. He has worked as a Senior Account Executive at NCI for the past four years. During that time he has presented at the Practice Development Seminar on Internet and E-mail marketing and he also plays the prospective client during the seminar role play sessions. Chris also edits and contributes to the NCI newsletter, New Client News.