Chuck Foley, CPA – Scottsdale, AZ
Tired of the Corporate Rat Race? So was Chuck Foley
Who hasn’t at some point daydreamed about leaving their corporate job? Not having to answer to a boss and creating your own destiny (not to mention hours) is too appealing not to dream about. As you will read below in our interview, Chuck Foley, CPA had a high paying corporate job with Prudential insurance for ten years. In 1986 he was earning six figures but like many of the people I speak with on a daily basis, he was unhappy having to answer to someone and work within the confines of a corporate environment. That’s when he saw NCI’s ad and decided to take a leap of faith on what was at that time a new company. This decision would ultimately pay endless dividends and end his corporate slump for good. Since that time Chuck has built not one, but two tax and accounting practices using the NCI Plan 2 program. The first was in New Jersey which he sold (through NCI) for a 1.5 gross multiple, all cash. The second practice he built in Arizona and he just recently sold it for a 1.29 gross multiple, once again all cash. Now he has shifted gears again and is focusing on helping others become entrepreneurs like himself as a franchise consultant.
Chris: Tell me about what you were doing before starting your first accounting practice.
Chuck: It was 1988 I began with you guys, actually I think I signed up the end of ’87. So for ten years before that I was with the Prudential insurance company as the vice president and controller of the real estate department. And I left the corporate office there in ’87 and went with [NCI] to start [my firm.] I hit the big 4-0 that year, so you have to do something when you do that right?
Chris: What prompted the change, aside from the big 4-0?
Chuck: I just got tired, I think I was always basically an entrepreneur and I knew it. I always felt frustration working in a big corporate environment. You have to be a team player and go along with everyone else’s ideas and everything gets pretty much compromised and watered down. Whereas in your own business you still can make mistakes, but you call the shots, you know?
Chris: How much in annual gross billings did you accumulate in that practice?
Chuck: I think we were over $300,000, maybe 310.
Chris: What brought you to NCI in the first place?
Chuck: Believe it or not I was depressed about my job, which was rare for me. It was just through the grace of God or something I picked up a Journal of Accountancy, which I seldom read and I was kind of moping around thinking what was I going to do, and in there was [NCI’s] ad, with the rat climbing up the [ladder.] [Editor’s Note- This was an old ad we used to run, “Tired of the Corporate Rat Race?”] And I said well that’s interesting.
Chris: Why did you sell that first practice?
Chuck: A couple of things, we had really grown [the practice] the four years before that so it was at a pretty good peak. And I wanted to move to Arizona, my parents were out here and my older son was out here.
Chris: What were your major concerns before doing the Plan 2 Client Acquisition Program?
Chuck: My biggest concern was would it work? My wife didn’t work and I had two kids so would it work and where should I do it because I knew I could do it anywhere. I seriously thought about going down to Atlanta because that was a booming area at the time. I didn’t want to move my kids again because I had just moved three years before that from Chicago to New Jersey. What convinced me that it could work was, I realized right within Monmouth County and I’m sure this is true across the country; new businesses were [starting] like 600 a month. I said jeez if I can’t get ten of them, you know if they’re brand new and I’m constantly marketing them, so I figured well the best focus was on the brand new businesses. Once I realized there were that many each month, and I said if I’m doing that 100% of the time, chasing them down, I know I can get 10 a month. And then I had a comfort level at that point that it would work.
Chris: Tell me about getting your second practice started in Arizona.
Chuck: Of course the business climate here is much stronger than in New Jersey. But I did start off slow because I opened right at 9/11. I signed my lease on September 11th. But we started off fairly good for being such a bad time. We started in October 2001 and once we got into January I was busy as hell. And by March I had my first full time accountant. And her concern when she came on board was, well I don’t know if you’re big enough, because she was working for me on weekends because she was with a big firm, Arthur Anderson. So she says I don’t know if you’re big enough and I said believe me this works, I will be big enough. I paid her the same salary that she was making at Arthur Anderson. Within 6 months Arthur Anderson went out of business, so she was glad she came with me.
Chris: How long did it take for you to reach the guaranteed billing amount of $125,000 in 13 months?
Chuck: I think my first year in New Jersey I probably did like $160,000 when did I hit the 125? Like nine months. [With the Arizona practice] it was probably similar, somewhere between six and nine months.
Chris: Tell me about the sale of each practice.
Chuck: I was very satisfied; they were both 100% cash. And my one in New Jersey was 1.5 gross sales and here was 1.29 I think. One thing I did in the [Arizona] sale, that really worked well was that instead of putting up 15% reserve or whatever that is, I offered not to put that up but I gave them all of my receivables at that time. It was so much smarter to do that because then your not fighting for this is mine, this is yours. Then I got all my cash up front and getting your cash that way is all capital gains whereas if I get the receivables that’s ordinary income. So the difference in the tax rates is pretty significant too. It’s just so it’s smoother, so this guy that bought [my practice], he now is ready to buy my office building. So even though he’s not that busy generating enough revenue now, I gave him 60,000 in receivables and within the first six weeks he’s collecting 45,000. And that looks good when he goes back to the bank and he just bought a new business and he collected 45,000 in new revenue. That’s helping him buy this business. So it worked from many aspects.
Chris: Why did you want to sell the Arizona Practice?
Chuck: The growth was so phenomenal out here; I mean it was just growing and growing. And it was getting more difficult finding accountants and I just said do I want another tax season? And I thought about it a year ago and we came real close like one day away, when I went through you guys, the [buyer] was coming in the next day with the offer. And my wife chickened out, “oh I’m not ready to retire” because we both really enjoyed the business. But I hit the big 6-0 this time. Last time was the big 4-0 so I hit the big 6-0 this year. So I’m thinking do I want to be working like this all the time? And I’m living in a place with such nice weather and I never golf in the good weather, and we were just growing so fast.
Chris: What are you doing now?
Chuck: I’m still going through the transition with the guy who bought my business here. I gave him 45 days free and my wife did too. So we’re still working with him. Now I’m going to be a franchise consultant. Say you’re interested in a franchise, and you answer something on a webpage or whatever and my company gets it and they funnel it out to me. Plus people I know and existing clients interested in a franchise, they come to me and I’ll do a search for them. The company I work for, we represent like 300 franchises. There [are] a lot of really good smaller ones, less known, that need the franchise consultants but we’re very selective about the ones we take. You might want to put this in there too, get me some referrals (laughs) if anyone wants to sell their business and get out of [accounting] is that 90% of franchises make it the first 10 years. And that’s a fact. I feel very comfortable dealing with the franchises and I don’t really sell them, all I do is match people up and they don’t pay me anything. If somebody wants to use me as a franchise consultant they get my services free. I’m independent, so I look at franchises and say these two or three make the most sense for you and we talk about it. And then if they go with the franchise, then the franchisor pays me. They get all my services; I do all the legwork for them. The other interesting thing we do, we do business opportunities too, which is a one time fee type company. So you might pay $175,000 and there’s no franchise fee and no royalty, and you put down 10% and we’ll finance the rest of it for you and within a year or two you can be making a couple hundred thousand a year, for a one time fee.
Chris: How has your quality of life changed since undertaking the program?
Chuck: It’s been a huge part of my life, I mean 20 years, and I’ve done very, very well. [I’m] living very well out here in Arizona and it’s all the result of having gone and gotten into this. I tell my wife this all the time, thank God I ran into [NCI founder and CEO] Bruce Clark. I feel very indebted to him and the program. I’ll tell you one funny story and I told him this, when I first met him, he had just started out. I was probably like his third client I think and it was 1987. I went to the seminar in Atlantic City, and he was with Joe Pastella. It was in the winter and the two of them had their big heavy winter coats on, so we sat and had lunch and at that point Bruce wanted me to give him a down payment. He wanted like $12,000. So I’m looking at these two and they’re wearing sunglasses and we’re in New Jersey and they looked like the Blues Brothers. Here I am sitting in a restaurant going to give these guys I just met, about an hour ago, $12,000 to start my business. And I’m picturing my wife, I can see this 3 months down the road, her saying, you idiot, what did you do, who are these people? I told Bruce later I was a nervous wreck giving him that check. Because I didn’t know them, I didn’t know anyone that was with them. I guess intuitively I thought well it makes sense and I was comfortable with it, but it was something I normally would never do. I’ve had a lot of fun with this business and I’ve learned a lot and it’s been very enjoyable.
Chris: Can you just sum up your feelings towards NCI, our program, and our founder Bruce Clark?
Chuck: I don’t know if words can express how thankful I feel, for changing my life and teaching me how to become an entrepreneur.
Chris: As you can see, Chuck has his doubts and with good reason. When he did this program it was practically brand new and an unknown. Now we have over 20 years experience and many stories just like Chuck’s. Obviously he is glad he took that leap of faith all those years ago. Now you have the benefit of knowing this works and has for over two decades, Chuck didn’t have that luxury but he went forward anyway and has built and sold two very successful businesses as a result. So what is holding you back from doing what Chuck did? If you would like to learn more about our various programs or to speak with Chuck Foley about his success, give us a call at 1-800-338-0778.
Thank you for taking the time to speak with me Chuck and best of luck in your new endeavor.
You can contact Chuck Foley at (480) 998-4100
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.