3 Ways to Raise the Bar for Your Business
Stop allowing your business bar to maintain the status quo–or worse, lower.
By Seth Fineberg
At Large
Stop allowing your business bar to maintain the status quo–or worse, lower.
By Seth Fineberg
At Large
Don’t have a skill? Hire someone who does.
By Sandi Leyva
The Complete Guide to Marketing for Tax & Accounting Firms
If you’re a sole practitioner or small-firm operator, you’re probably very good at what you do – or you wouldn’t be in business today. But when it comes to marketing and selling yourself, well, many of us didn’t voluntarily sign up for that part.
As a matter of fact, some of us are resisting – kicking and screaming – marketing ourselves. So no wonder, for some of us, business is slow or not growing at the rate we’d like.
READ MORE →
By Martin Bissett
How big should the buyout be?
By Marc Rosenberg
The Rosenberg Practice Management Library
Question from a reader: We didn’t contemplate an owner leaving before normal retirement age unless it was because of death or disability or we had to fire them. However, as we were discussing hypotheticals at a recent partner meeting, we came to the uncomfortable conclusion that, currently, there’s nothing to stop owners from accumulating large buyout balances and just walking in one day and offering up their resignation pursuant to our partner agreement, thus entitling them to receive substantial buyouts as long as they give us a one-year notice. Our vesting provision has a very limited penalty for early retirement: the buyout is reduced by 2 percent a year for every year before 60 they leave.
No matter what, we need to modify our agreement so that if someone wants to leave early, they can do so, but they must know there will be a stiff penalty. We don’t want our partners to see their vested buyouts as large savings accounts that can be withdrawn at any time. Instead, we want them to see our buyout as a true retirement plan, one that is redeemed close to or at a normal retirement age. My current thinking is that we restrict it in a similar way to an employer-funded retirement plan. The first day you can withdraw is the day you reach 55½, subject to vesting provisions and stiff penalties for early withdrawal. We think there should be a minimum number of years as a partner in order to receive any buyout.
READ MORE →
Taking steps “little and often” works, but you have to get started.
By Martin Bissett
Passport to Partnership
A big concern in recent years has been how the incoming partners will purchase equity or fund the capital account and exit of a retiring partner.
Much has been written that examines the mathematical complexities of this topic but the bottom line is simple. Would-be partners in the age demographic of 28-42 are part of a generation who are already heavily borrowed in the form of credit card debt, mortgage debt and other forms of personal loans.
Their capacity to borrow in the current economy is extremely limited and it would appear that this will be the environment for the foreseeable future. In turn, banks’ willingness to lend has also been largely withdrawn in recent years.
This has produced a cash impasse that has forced partners to consider gifting equity, especially on the basis of time served in the firm. There is not scope within this piece to give full examination of best practice within this area except to highlight that 72 percent of partners surveyed highlighted that a senior manager’s ability to “buy in” to the firm and assume responsibility for funding the retirement plans of exiting partners was among their top three concerns about passing their practice on to existing employees.
READ MORE →
Are your skills up to snuff?
By Rick Richardson
Technology This Week
According to a January 2024 Deloitte study of 100 business executives, nearly half, or 45 percent, of high-level executives indicate they are aggressively upskilling and training their work force in artificial intelligence. Approximately the same percentage, 44 percent, state they are hiring for it.
Therefore, it should not be shocking that generative AI ranks first among the highest-paid IT skills. This is supported by a recent study from the job search firm Indeed, which determined that computer abilities have the largest impact on pay. According to Indeed, a job’s salary was 47 percent higher when generative AI was listed as a required talent.
READ MORE →
Twelve things to do before you get busy again.
By Ed Mendlowitz
202 Questions and Answers: Managing an Accounting Practice
Question: Do you have any suggestions for the New Year?
Answer: Checklist of things to do in the New Year:
BONUS: An illustration using two firms, one oriented to both production and marketing.
By August J. Aquila
Price It Right: How to Value Accounting Services
An emphasis on production (billable hours) can have negative consequences for an accounting firm. An emphasis on billable hours causes professionals to focus on internal measurements, i.e., the number of hours charged to a client, and not external measurements such as client satisfaction.
It also emphasizes the technical aspect of accounting work and keeps professionals from developing a marketing mindset. Let’s look at the four negative consequences of a production orientation.
READ MORE →