This month’s success interview is with Robert Azar, EA. Robert and Bruce Clark, NCI’s CEO, have a long and storied history together. Robert was originally hired by Bruce way back in 1987 as the CSR for an accounting firm in Shamburg, Illinois, a suburb of Chicago, under our Plan 2 marketing program. In six months Robert brought on 106 new monthly clients and essentially sold himself out of his job. Robert then contacted Bruce saying how much he loved the NCI system and wanted to come to NJ and work for the firm, which was promptly arranged. For several years Robert acted in a sales and seminar instructor capacity, eventually leaving to start and build his own firm using the NCI marketing system. 25 years later he returned to NCI where we pick up with him in this interview.
Please tell me about your background in accounting and what lead you to working in America’s Choice?
My accounting background started quite a while back, I was intrigued with accounting when I was younger because I worked in my family's business. I worked on the financial side of that business and I saw there was so much more to learn in the areas of finance, accounting, recording and bookkeeping and just overall measuring the performance of a business. That created my interest. I ultimately went on to get a bachelor’s degree in accounting and a master’s degree in accounting. I then passed the Enrolled Agent’s exam. I worked for various CPA firms in the Chicago area over the years to gain experience but I wanted to start my own business so I did. I opened a bookkeeping and tax practice and worked on expanding it. This was in late 70s to early 80s and back then there was no marketing if you were an accountant. I built my practice over a five to six year period in the Western suburbs of Chicago. It was a very conservative atmosphere and you didn’t market. You just wined and dined potential clients and it was all about who you knew. The growth potential of an accounting firm at that time seemed limited to me because of this. That started to bother me and I wanted to pursue other avenues, so I sold my practice.
A few years later I met your father [NCI CEO and founder, Bruce Clark.] Bruce was in the Chicagoland area working on hiring a salesperson for a local CPA firm. I saw the ad they ran in the Chicago Tribune. Seeing that ad, which tied together marketing with a CPA firm, really drew my attention. It really addressed my frustration with the industry at that time. So I jumped at the chance and went in for an interview, even though the ad said they were looking for someone with sales experience and that accounting experience was not necessary and even discouraged. So I interviewed for the CSR position with Bruce Clark and he hired me. He was reluctant because of my accounting background but he was willing to give it a try while closely monitoring my progress and I went on to be successful in the position.
I came to Atlantic City for training at the NCI seminar, went back to Chicago and successfully signed 106 clients in six months. The approach was really groundbreaking and prospective clients couldn’t believe I was going to their location to explain the service to them. With my understanding of the accounting and tax requirements of a business, I was able to excite people about our service. I ended up selling myself out of that job. Most accountants are very aware of being overworked and having too much business volume and not being able to handle it. That was the case with the CPA I was working for in Chicago. He couldn’t keep up with the work I was bringing in, so he had to shut down the marketing to get caught up on the work. He did eventually continue his marketing efforts later on. Once he let me go, I contacted Bruce about coming to New Jersey to work in his company. Since I had no obligations in Illinois, I relocated to New Jersey because I was so intrigued by this business concept. I was there up through 1997 I think and for several years I taught the NCI training seminar.
Quite the history you have with NCI and the marketing program! So then you worked for NCI, selling the marketing program to other accounting firms and teaching it to them at the Plan 1 seminar for several years and eventually left and went on to do some other things and after about 25 years you came back into the fold at NCI.
Bruce and I always stayed in touch. After I left NCI I wanted to start another practice, so I did! I started my second practice in Berlin, New Jersey. I built that using the NCI marketing concepts over about four to five years. A CPA approached me about wanting to buy my practice and I sold it to him. At that time I had five people working for me and the practice was billing about $200,000. We did a lot of write up and tax work but no complicated work like audits or reviews or anything like that. So he bought it and I worked for him as a CSR to guarantee his billing during the transition period, any client he lost, I replaced them and then some!
So you have really seen the marketing program from every angle, you’ve been a CSR twice, you’ve run a business and grown it with the program, you sold the program to other accountants and you have taught the program to accountants through the seminar. Moving on to America’s Choice, the accounting firm started by Bruce Clark overseen by you, how long has the business been under way and what is the current size of the business?
Bruce contacted me and said he wanted to start a practice and he had several reasons for this. The first was the training ground concept, using the practice as a test bed for the NCI marketing program to see what is working, what isn’t and what may need to be updated. Also, the technology side of the accounting business has changed a lot since the last time Bruce did this, so there would be things to learn there as well. We got started in the first week of November, 2014. So 2015 was our first full year and we’re on calendar year basis. We did really well, we hired and trained CSRs and picked up clients very quickly. In the first year we brought on over 100 clients, 103 to be exact and we have had a high rate of client retention as well.
We also developed the firm in areas that were new to me like working with GKM for outsourced processing. Also working with ADP to provide payroll service to our clients and incorporating that and their various services. Now we’re on to our second full year in 2016. With all of the tools and technology available to us, we’ve started securing clients not just locally but nationally. This isn’t necessarily possible for each and every firm but it is very doable. We’ve had the good fortune of Bruce’s connections to partner up with a national firm that incorporates businesses. They chose America’s Choice as their go-to firm for their clients who have tax questions and they started offering our service to their clients. We did that for about six months and then they came to us with the idea to sell the accounting service to their clients who need it or express interest in it. So they started referring business to us in that light and those clients were all over the country, so that helped us really expand our borders and has been very lucrative for us.
What about projecting out for year two?
We are projecting close to $400,000 for year two.
What has been your biggest challenge in running this practice?
My biggest challenge has been managing various client personalities. We have a lot of clients at this point, 300+ clients who we are servicing. All of them have different personalities and different needs, wants, desires, demands and problems. There is a lot of phone time addressing those things. That, to me, is the primary challenge. At the same time, it allows me to give them more care and let them know exactly what we need from them to do the best job possible.
What advice do you have for the accountant’s reading this article?
I’ve done this for many years and I’ve seen accountants do the NCI program over the years. I knew your grandfather really well and he was the originator of this type of marketing, direct contact marketing for accounting services. The one thing I’ve seen over the years that accountants need is patience. Patience with themselves and with the marketing effort. Marketing, as much as it is common knowledge, people and accountants are aware of it and the need for it but when accountants do it, it’s generally new to them. Any time you learn something new, the first thing you need to demonstrate with it is patience. The patience to understand how it works and how it yields you a profit. Until that time, you have to have the patience to stick with it and incorporate it into your practice and you will see the kind of return it can generate. In the years I’ve been involved with this, I’ve seen accountants get overwhelmed with all the new clients this program can generate and that requires patience as well, patience to handle that kind of sudden increase in workload.
NCI recently made changes to the client service agreement form (engagement letter) that we provide to our clients based on what was happening at America’s Choice, what are some of those changes?
The one change that stands out the most to me concerns state organizations, state governments. Most states are having a fiscal problem and need money and so they are leaning, as usual, on small business people. They are getting more aggressive in demanding file requirements and they’re creating more forms to file. Under new LLC laws there is a slew of new forms to file from that law alone. Plus if I go from a sole proprietor to an LLC you have another form filing in most states. So we stopped including these filings under the service agreement. Years ago, you did a federal return and state return and that was pretty much it, there wasn’t a whole lot of extra filing like we are seeing now.
Some of the accountants who consider the NCI marketing program worry that you only get very small clients from it, to help offset that misconception, what is the largest client secured through the program for America’s Choice thus far?
They always say “the bigger, the better,” right? A bigger client is exciting to an accountant because they are earning more money from that client. There’s also more challenges and demands with a larger client though, more hours of labor required. A lot of traditional firms bill based on time and material. NCI focuses on value billing, a certain dollar amount versus the value of the service you are selling. “I’ll sell you a package of services and here is what it will cost you each month,” that’s value billing. The reason this has become popular is that with accountants doing a lot more marketing, they find that value billing is much more appealing to prospective clients. Time and material billing is okay for a very large client but with smaller clients, value billing is a much better fit and more appealing. Time and material billing, also known as hourly billing, is an unknown to the client, so it’s fine for a larger client with more cash flow but not with the smaller business client. In the NCI marketing program value billing is a must because you are often signing a client up for the service within an hour or two of meeting them and they need to be comfortable in knowing what service they will be receiving and exactly what they will be paying for that service. It gives the client peace of mind.
Getting back to the original question, our largest client so far pays us $650 per month. We also have several in the $300-$400 per month range.
What about back work fees?
We’ve gone as high as $4,000 for back work.
Let’s talk about GKM. You’ve touched on processing and how that is a real challenge for any accounting firm, especially for one that is growing very rapidly with an effective marketing program. What has your experience been like working with them and outsourcing client work to them?
When I started out with America’s Choice, I was as new to GKM and outsourcing as anyone. I had no experience with it. Since I’ve been working with them for two years now, I think they’re fabulous. From a client’s source documents they reconcile all bank accounts and all business credit card statements. We supply the necessary information sequence to them, they generate cash receipts journals, disbursement journals, general ledgers and financial statements. They’re amazing. GKM’s processing facility is located in India and it took some time to work out how to get the most out of this type of resource. One way I did that was with patience, I never lost my cool with them when there was a disagreement and when something was not being done correctly they picked up on it right away. If there is an issue that becomes a sticking point, I’ll approach their management and they will resolve it quickly. Quite frankly, there were some issues in the beginning that were on me because it was all so new to me.
Now that I get it, we barely need to communicate with them anymore because we understand what they need to do the work and they understand what we need. We do a thorough review of their work when it comes in and it’s fantastic. They are very reliable. We now get the work back from them within one to two days. With the time difference, they’re working while we’re sleeping so it allows a lot more work to be processed in a shorter time frame. Everyone in public accounting knows that you can hire someone to do your write-up/bookkeeping work, and eventually they are great at doing it. Then they leave you and you have to start all over again. You don’t have that hassle with GKM. I’ve worked in multiple practices and you don’t have a life when things get going. That’s why frustrations can build up in accounting, the work consumes you. Timeliness is so important, you can’t get outdated work to a client! We need to be on time and meet all kinds of deadlines and using GKM has been the best way to do that. This allows me to have a life after accounting and still deliver the quality of work our clients expect and deserve. It also allows the practice to grow more quickly.
We also do still employ some in-house accountants to help run the business. Since we are working with GKM and using all the electronic tools available to us, I have decided to steer our hiring towards senior and graduating accounting students for labor. They are either in their final year of college or have recently graduated. The young people have a very good grasp of the electronic tools and software we are using. That reduces the training time required. On the accounting side, they have recently taken accounting courses or are actively taking them, and I’m showing them how to apply their knowledge in real world businesses and how to communicate with our clients and their various personalities.
Another benefit of having GKM make the write-up side of the business less demanding is that I have more time to offer special services to our clients. For example, the IRS form 2290. We have signed a lot of trucker clients all over the country. The 2290 is required for them as an annual filing because it is the road use tax. I’m trying to develop that as another profit center. That’s just one example.
Thank you for taking the time to do this interview with me Robert, especially considering you have the October filing deadline looming! I appreciate all your insight and experience and I’m sure our readers will as well.