Top Five: Secrets of a CPA Start-Up

In the suburbs of Washington, D.C., an ex-Army intelligence specialist is breaking the mold for accounting firms and inventing new ways of doing business.

by Rick Telberg

Maybe it’s the four years he spent in Army intelligence at the Pentagon. Maybe it’s the influence of a CPA uncle in San Diego. Maybe it’s the entrepreneurial father who, as a part-time magician, established a Guinness World Record for fire-eating.

Brian Wendroff

But 30-year-old CPA Brian Wendroff wants to break the mold for accounting firms.

In his version of a CPA firm, the four-year-old Wendroff & Associates in Arlington, Va., is modeled more on the strengths of a technology company than a traditional professional services firm.  In his firm, he’s working on the kind of new product development, speed to market and customer feedback loops employed by the best software developers. In his mind, he’d rather be less like a KPMG and more like a Microsoft.

“Like a software company,” he says, “we’ve got to come out with upgrades every year, new versions with features that the customer tells us they want to see.”

So far, Wendroff & Associates LLC of Arlington, Va., may only be on version 1.1. But for a young firm, that’s not bad. From a book of business starting with ads on Craigslist and energetic networking through BNI, Brian Wendroff now counts seven accountants and two interns in his firm, plus his brother Darren, who manages marketing and communications. The firm is doubling in size every year. “The Web is our number two source of leads,” says Darren, “right behind client referrals.”

Together, Brian and Darren Wendroff are working to innovate every aspect of how an accounting firm works. Take just five examples of their leading edge strategies:

  1. Adopting flexible and supportive human resources policies — The firm’s tele-work policy was put in place to support a healthy work-life balance and to attract and retain the best talent for the money. But it also came in handy during the “snowpocalypse” that hit Washington in February, which otherwise might have ground their tax season to a halt.
  2. Pursuing Web- and cloud-based business solutions — The firm is a pioneer in QuickBooks Online and sits on an Intuit advisory board. Their CRM system, Highrise, is all SaaS. And they manage many firm processes through Google Docs.
  3. Aggressive experimentation with social media marketing — Twitter has yielded five new clients in the last year, billing about $14,000 annually. And the firm picked up two more in January. The last time I checked @wendroffcpa, they had over 13,000 followers. By comparison, @PwC_LLP, representing the largest accounting firm on the planet, had about 3,700.
  4. Ruthless dedication to changing with client criticism — The firm sends out a client satisfaction survey twice a year, which is unusual enough. But they use the super-simple Net Promoter Score developed in part by Bain & Co. And they follow up with a memo to their client base baring the results and sharing their plans to improve.
  5. Practicing the “sow-before-you-reap” verse is the new age marketing Bible — The firm offers free “Ask-a-CPA” Webinars on basic accounting or tax tips for clients and non-clients alike.  For business owners with at least $2 million in annual turnover, Wendroff & Associates organizes CEO peer-to-peer groups. “It’s a group where C-Level executives or business owners can talk frankly about issues affecting their organizations,” Darren says. “We wanted to join a group like this, and couldn’t find one, so we created ours.” The meetings are invitation-only, highly structured, single-topic and followed by a memo to all, which actually reads more like a Harvard Business School case study than minutes from a meeting.

It wasn’t always this way. When Brian first started the firm, he admits his fees were set too low and he was attracting the wrong clients. Today, fees are set to cover overhead and salaries, plus enough to plow back into the business. And the firm is now getting the right kind of clients — the kinds who want more than just bookkeeping or tax prep, but want and need strategic services.

The proof? Wendroff says, “Nearly every company we worked with last year grew through the recession.”

Copyright 2010 AICPA.

8 Responses to “Top Five: Secrets of a CPA Start-Up”

  1. Lisa Branley

    Great article. Valuable tips.

  2. Maria Smith Johnson

    I truly appreciate this article.Much thanks again.

  3. Chris Hooper

    Great article, glad to hear we’re ticking the right boxes so far as what our startup firm is doing.

  4. Azran Financial APC

    We are entering a new age of CPA firms. Those with the vision are utilizing the next generation of technology and providing the next generation of service. The commodity CPA services are giving way to the question, “How can I add value to my client.” This is a wonderful change in the industry, and our firm looks forward to being a part of this paradigm shift.

  5. Mathew Heggem

    This is both wonderful advice and inspiring – to see that innovation pays off. This is the type of CPA Firm that will create change throughout the industry.

  6. Steven Sessions

    Remember probably the most valuable thing, but the most difficult to do, when starting a new practice is clearly differentiate from existing established practices because even with the best product, a company can experience lost sales>> and Credit Suisse documented how companies outperform the real marketplace>>

  7. Dennis Howlett

    Stunning story Rick. I riffed over at IT Counts. Hopefully people in the UK will draw inspiration:

  8. John R. Ezell, CPA

    Great post. I enjoyed this since I started my first practice in Arlington 18 years ago. Brian’s firm sounds like it is off to a great start.

    I like his use of technology and the flexible staff. By investing in his staff, he can develop his team into future business developers that will more than pay for themselves with new business and they may spend a long part of the career with his firm because its a good place to work.


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