Jay Steer, CPA has been a student of NCI since he first attended our practice development seminar in 1990. Back then he had just opened his own practice and by his own admission, had no idea how to market and solicit business. So he and his wife attended our seminar and implemented it. Once they had proven to themselves that it worked and became overwhelmed with new clients in the process, they upgraded to our Plan 2 program to bring on some help and really grow the thing, and grow it has. During the ensuing years, Jay worked with the same CSR for 20 of them. He no longer employs that CSR but he has a new one, one that has brought on 95 clients in only the first 10 months of 2016. He has also attended our seminar several additional times, including our Advanced Processing training, and he has grown a million dollar practice using what he has learned from NCI. He also maintains an ongoing business relationship with our founder and CEO, checking in over the years to pick his brain and see what new ideas NCI has developed. We’re always happy to hear from him and of his ongoing success. So Jay knows more than a thing or two about the NCI marketing model and how to implement it successfully and he’s happy to share some of that knowledge with our readers.
Tell me about your accounting background and what lead you to starting your own practice.
I received my CPA in 1989. Before that I worked in industry for seven years in Florida in the financial department. We got bought out and I had a little bit of money so I came up here to Virginia Beach at 38. I told my mother, “Okay, I can retire now!” She said, “No, you can’t, you don’t have enough money.” [Laughs.] So here we are 30 years later and I’m still working. So I passed the CPA exam and I opened my practice in Virginia. I went to the most expensive office building in town and got a very small, shared office and just sat there with no clients. I thought that big companies needed accounting services so I went out and tried to solicit these huge companies. Those kinds of companies already have a strong relationship with their accountant and that was not the right market to target, I was getting nowhere. So I saw the NCI ad in the Journal of Accountancy and I was desperate with zero clients. I had no idea how to get clients, no idea. So my wife and I went down to the NCI’s Plan 1 seminar in New Jersey with my oldest son, who was just two at the time. This was around 1990.
I was my own CSR and my wife and I worked on the marketing for the business together based off what we learned at the seminar. We still have one of the original clients that we picked up that very first month and she is still with us. Within a year or so I upgraded to Plan 2 where NCI helped us hire and train a marketing rep. The first rep. that was hired did not end up working out, but the second CSR we hired was with me for over 20 years. We made a lot of money with him. We did eventually run into an issue with that CSR because the NCI recommended residual for CSRs back when we started was 15% and he eventually got to a point where he was content with what he was making through residuals and his sales slowed down. The residual rate has since been cut down significantly by NCI because of this issue. He also was busy servicing all the clients he had already signed up because he would go out and do QuickBooks consulting with them and clean up their QuickBooks files when needed. This still worked out for everyone involved though because I wanted nothing to do with QuickBooks consulting, it’s an endless pit.
How much growth was your CSR able to bring in?
Including tax work?
In 2011 we were up to $853,000 in gross billings. This year we’re already over $1 million and it’s only November.
Congratulations! That’s incredible, you’re part of the NCI million dollar club now. Going back to your first visit to the seminar, how was that beneficial to you and your wife?
I remember doing the role play session at the seminar. I still remember my first roleplay business, the prospective client as an antiques dealer. I said something stupid like, “oh it’s nice and cool in here, you must have the air conditioner running” or something like that. [Laughs.] The telemarketing system we learned, I picked right up on that. Not many accounting firms were doing that at the time but we did it from the very beginning and we grew fast especially with bringing on new businesses.
What were some of your major concerns before making the decision to attend the seminar initially and then again later when you upgraded to Plan 2?
Your father will tell you that before I attended the seminar I consulted with my attorney about it and he told me not to do it.
I hope you fired that attorney, Jay.
Needless to say, I went ahead and did it anyway. Before we upgraded to Plan 2, I was getting bogged down doing all the bookkeeping myself and doing most of the marketing. I figured we could double our productivity with a CSR out in the field doing the marketing and me in the office processing the work. I was also afraid to ask for higher prices and I thought having a marketing rep. could get me higher fees.
What are some of the challenges you’ve faced in running the program over all these years?
I fully feel that I could lose 50% of my clients at any given time due to some outside factor. For example, the recessions of 2000 and 2008. We got clobbered in those like everyone did. I feel that half of these companies could go out of business in a bad downturn. So we have to have enough of them so that we can survive an event like that. Half of 400 is still 200 but half of 100 is only 50.
So you like to attrition-proof or catastrophe-proof your business, which is very smart forward thinking.
Yes, just like with the stock market. If you are a stock market investor, Warren Buffet says, if you buy my stock you can expect it to go down 50% and it has, twice! I’ve owned it, but that’s business I guess. I don’t want to be a casualty of a recession. The way this practice is set up, you can expand and retract based on the business that is available at a given time.
Getting back to problems, filling the appointment setting position can be tough. Right now we have one person doing it and he’s great. He’s been here about 5 years and he knocks them out. He’s full-time and he’s like a machine generating appointments. He works off the new business listings from Infofree. A lot of the new business listings don’t include a phone number but with Facebook and the internet he can look up most of them.
Where did you find this guy? Can we clone him? Do you have any tips for hiring appointment setters?
I don’t recall how he got started with us. I say just go through them until you find the right one and it can take a few. I don’t know what the employment laws are for people reading this in various places, but we can have someone on the payroll for 30 days without having to pay unemployment but if they are not producing, you have to let them go. You can’t just let them linger. If they try to start telling you how to change the system, you have to get rid of them.
Those are excellent points. We’ve had programs do that too often, probably because they don’t want to go through the hassle of hiring again but what is the bigger hassle, hiring another appointment setter or having one on the payroll too long who can’t set enough appointments? Also, if they think they have a better way than the NCI system, it won’t be better. Do you have any other tips for running an NCI program or on processing?
For processing, our bookkeepers can handle about 50-60 accounts each. I think NCI used to advocate capping it around 40 accounts but ours are doing more than that. Bank downloads are also very helpful, where we go into the client’s bank account and download it into our QuickBooks and it saves us time especially on entering those debit transactions from the bank statements. Another thing we do is have a payroll specialist. I want each bookkeeper to do five or six payrolls but I have one lady who does payroll exclusively. She’s really good at it and that has worked out really well because of the person we have in that role. We have seven bookkeepers on staff right now plus the payroll specialist. In addition to those, I have two admin assistants and the marketing team of one CSR and one appointment setter. I don’t know how this huge practice developed. My CSR is either going to keep signing up new business or we’ll lose him, so he gets after it.
Let’s just say the NCI program had a little something to do with it!
[Laughs] I’d say so!
What advice do you have for accountants considering one of NCI’s marketing programs?
My advice would be to do the program and don’t think you know better. When I started in the program, I said I’m going to do this and what NCI tells me, I’m going to do it. I didn’t say, well I might do this and I might do that. No, I’m going to go implement it 100% because I don’t know better and it worked. I remember a guy on the radio saying that the secret to success is to work hard and advertise. So you have to work hard too. Also know how far you want to take the marketing but you need Plan 2 to really get up to a significant size.
You have a new CSR now, correct? Was he trained by NCI?
He was not trained by NCI but he was trained by me and I was trained by NCI and we are following the program very closely. I have changed the CSR compensation plan though. My CSR gets a salary, a car allowance and each quarter and a $3,000 bonus if he meets his sales goal in that quarter. The goal is 25 new clients. There is no per client commission and he seems to be fine with that. He’s a go getter and he doesn’t need that extra incentive on each client. I’m happy to pay him a lot of money to generate this kind of growth.
My father said he’s brought on something like 85 new clients since January?
Let’s see what he’s up to now. Hany is his name, Hany Faheem, he’s half Egyptian. Everyone loves him but his issue is that he needs to turn the client over to a bookkeeper as soon as possible. He’s very good at signing up new clients but he’s not as good with keeping up with clients and handling the little details. He is still always available to answer their questions and provide support though. We’re working on improving that process. He doesn’t do monthly pickups either, we have someone else do that. We have about 300 monthly clients right now and about a third send their work to us electronically or by mail and the other two thirds we pick it up for them. We have a woman that does the pickups two weeks out of the month and the other two weeks she helps with collections. We’re still getting some of that organized because we’ve had terrific growth, Hany has brought on 95 new clients so far this year as of today, November 3rd.
That’s an impressive number. Where did you find Hany?
Hany started out working for another bookkeeping firm in the area. They let him go and he wanted to come work for me and he started out as a bookkeeper for me. He did okay with the processing. He had no sales background but everyone that meets him likes him. He just started signing clients for us without any formal training.
What are some of the larger monthly clients you have secured through the marketing program?
Our largest monthly client right now pays us $1,300 per month. They work in healthcare and are doing really well.
So that one client is generating $15,600 per year in bookkeeping fees alone, very nice. What are some of the larger back work amounts you have brought in so far?
Last year we did one for $4,500. He was a small client who had five years of back work. That doesn’t include the cost of doing his back taxes either. He’s going to owe a ton of money to the I.R.S. That’s why he didn’t file probably.
Can you summarize your feelings on NCI, our CEO Bruce Clark and our marketing programs?
My experience with NCI has been very positive. The system is excellent and everything has been as promised. I always look into any new ideas Bruce has because a lot of it makes good sense and he’s worth listening to no matter what he says. I’m very happy with NCI.
Where do you go from here Jay? What’s next?
My son Justin is taking the CPA exam in the spring and he wants to come on as a partner. So I’m going to train him and see what happens. He’s in grad school now and working through his 150 hours. My growth goal was always 400 clients and we’re there.
Well good luck to Justin on the CPA exam. Thank you Jay for taking time out of your busy schedule to talk to me. We appreciate your kind words and great insight into your success with the NCI marketing program. Best of luck in the future to you, your son and the rest of your staff.