This episode of BKOT is focused towards answering the buzz about whether your firm and your practice is sustainable for the future. What are the measures that a firm must take and how soon will you be able to achieve it? Additionally, as the contemporary coronavirus situation has almost shut the firm's down and people need to be confined to homes for their safety, how the profession needs to innovate at every turn—to shift away from hindsight and instead become permanently proactive. Watch the video to know more.
Mike: Hello and welcome everyone to today's podcast on how to build a kickass offshore team. Today we are joined with Phil Whitman, Shawn Parikh & David wolfskehl. And we like to get going on this conversation before we do that, like each of you go ahead and do it yourselfer quickly, starting with Phil.
Phil: Wonderful, thank you, I might use it really appreciate it. I'm Phil Whitman, President & CEO of of Whitman Business Advisors, where we're helping make public accounting a better place for the people, and we have helped CPA firms grow, we've got our six pack wasn't strategy and if there's a question you've got if I can answer it, David can or someone we know is there help who can help you, we’ll be glad to do that even.
David: Yes! I'm a senior managing director and one of the things I spend a lot of time on is helping firms figure out if they're sustainable for the future and if not what they need to do to become one. So this is a really exciting topic for me.
Shawn: Hi everyone- this is Shawn Parikh and those who are coming to the broadcast I mean watching the forecast for the first time, well, I am from ‘Entigrity’ offshore staffing and You know talking at this time. You know where we are. You know what it is and then a big pandemic. You can't really talk about any kind of opportunities & you have to empathize with the situation of the people. But you know as the Chinese definition of a ‘crisis’ is that, ‘crisis’ are basically an opportunity like riding dangerous wins, so be just are all here to talk about today. The sustainability part of accounting and as you know how our business, Suddenly it has become so more relevant today. You know with the remote working gaining so much traction, so offshore staffing was conceived differently by many people, Today it's kind of every accounting firm in America, has to look at it, not as an option, but rather something that they have to do if they want to go ahead and kind of expand & survive this new normal. Having said that I'm Shawn Parikh from Entegrity offshore staffing Mike & Thank you for hosting this podcast today.
Mike: Sure, yeah! See, that's what we're talking about, we want to talk about, Is your firm sustainable for the future? and with all the uncertainties and seem to be coming upon us, Anyone is able to see them coming. Things are going to be different and the idea of sustainability for CPA firms is a big question right now. We're talking earlier that some firms with the now social, distancing and work from home are really throwing them into a bit of a confusion. I was talking to a friend of mine recently just yesterday and they're doing OK. They figured it out. So that's going on, you know Phil, what's kind of what do you think about the sustainability topic and how would you. Lead that discussion.
Phil: Sure, I I just like to take fifteen seconds to say you know whoever's on listening to this, whoever your god is, god bless you and your families. You should stay healthy and this coronavirus should pass and as business resumes, in some sort of new normal. So sustainability has been a question: we've been asking about CPA firms and not just in light of the current health crisis. Okay, there were changes coming that we're really impacting the profession like artificial intelligence, block chains & now the world has become a much flatter place and many more competitors coming in. So we would ask firms, you know, are you sustainable into the future? Can you remain viable, I'd like to share a story? We get a call from a ten million dollars, CPA firm, okay and they are at the crossroads. Do we merge up? Or Can we remain independent and sustainable? Can we take our ten million dollar firm and grow it to fifteen, twenty, thirty, forty or Fifty? Or Do we need to Merge-up, so one of the things that we did as a team, at Whitman business advisors; we said we're gonna help you we're going to look at things like your human resources, your I.T.,your bench strength. As your future partners we're gonna look at the business model that you have now and help you decipher, whether or not you can transform it into what people have been calling for years the firm of the ‘future’, so we're gonna talk a little bit about the firm of ‘our future’ and the ‘future is here’: it's not two to three years out, and perhaps this coronavirus you know which is a curse, It's it's global! It's nationwide! It's changing the way & perhaps when all settles and everything is calm, the CPA firms out there I'm gonna, look at the way, they've done things and know that the world is flat and they certainly can do things differently. So one of the things, Go ahead Shawn!
Shawn: Yeah, so first of all! Phil, what you saying completely makes sense, but I would like to highlight one thing. First of all, it’s not a great time for people but bad times and I hope families remain safe, all family members remain safe and or people around you know how this situation passes and, and people come out of it. You know as normal as we can get out of it. Well, I'm sure it will not remain the way it is anymore. A few things I want to highlight here when you were talking about this change all the time, Phil you, me, David, mike & we have done so many videos, we do all this, but you know we also need not accounting firms similar to the forms that you meet in. And you know the older partner said you know I'm in my fifties and he is also in my sixties & you know whatever change is going to happen. It's not going to be back in my life. That mindset is going to change the corona coming in.
David: Yes! I think that mindset, especially over the last eighteen months to two years yeah, would certainly be for people in the fifties. I think that mindset is already starting to shift, that people are seeing that business isn't going to be normal and I. Think that was occurring or this crisis yeah again there, certainly you might be in their sixties or trying to just get through the next couple years, but I think that many people's mindset has started to shift, although not necessarily the actions that need to be taken have been started, Sure!
Phil: David you're, absolutely right. You know one of the things might. My big concern that I have is it, if we look back at 2008, and obviously it wasn't a health crisis, but the markets tanked in the markets have changed again and the concern is with people down twenty five and thirty percent and some even more in their portfolios. My concern is we're: gonna have a lot of those people that are saying I'm ready, I need to merge up, I need to start my succession transition, you know, or maybe they have a young person that they were going to transition to. They're now going to say, I need to work a couple more years, because I can't retire. Yeah I mean we don't. We know that that's gonna happen in many cases, which is going to limit the new partner possibilities. So I mean firms that don't have mandatory retirement. You know this is probably further going to cause some of those younger people that we have in our trenches. The pipeline of future partners to question whether or not they're ever going to have a chance to take over they'll, either go out on their own right, but I work with going further and we’re already in one, So I think it's a wonderful thing. Hopefully, firms have your it out how to work virtually. Maybe they do. I need to have forty thousand square feet in Manhattan that I'm paying eighty $8200/square foot. Maybe people can work at home and if they can and they're doing it right. Why not look to an organization like Entegrity to offshore some of this you're going to be your realization is going to be hit, because of what's going on, people are not as productive, okay, you're paying them; okay, people are gonna get paid; and hopefully the production is, is going to continue, but obviously in a very different way and I think we're taking a hit on realization, I. Think, looking at that offshore staffing and at much lower cost. Can help you get back some of that realization that you're losing due to this epidemic or pandemic? David, why don’t you do this, Go ahead shawn!
Shawn: Phil, I have a really different viewpoint on this was the whole point.See first of all we cannot just look at I, mean I, don't look at it from the staffing standpoint on this day, I mean accounting industry as a whole, and you know that we also operate a business or my_CPE, which post online webinars and videos or doing you know taking a CD credits up up, we are talking to many speakers, educators in an accounting industry. Their main source of revenue, let me I mean I, don't need anyone right now. That's all right! The main source of revenue is speaking live. events Is this going to be the same ? & this is a big question. Yeah, I know for the fact that many speakers, educators, don't wanna, look at webinars because they're making wonderful money through live events, they're being paid handsome amounts, and they say that you know when you know they have never looked upon webinars as a business opportunity. I was listening to Joe, one of the great content marketers, and he mentioned to me that his main source of revenue is personal consulting followed by content marketing and speaking at live events. I mean the accounting industry has scored the highest number of accounting conferences because of the CPE requirements. Every state society had about four or five or seven or maybe more conferences, So there's this whole stuff, two hundred fifty three hundred it also maybe five hundred live events happening every week & every year. First, is going to hit the dent on attendance & it was already hitting the attendance. For a reason online companies, like my_CPE, but unfortunately I have to say that, but I will read kind of taking away lot of people away from CPE. and that's where account tanks in the USA got closed, & they have actually closed their operations this year, because last year, like many exhibitors complained and the attendance was very low, & now with this event, I personally feel there are two kinds of business. One, which is on the right side of the segment one which is on the wrong side of the segment. And the one which is on the wrong side of all of this event, will have permanent damage. To what extent? I don't know! But definitely there is going to be a little damage if they don't come on to the right side of the business.
Phil: So Shawn, what you're talking about when we talk about sustainability of CPA firms. I think this current crisis really is going to test the sustainability of many organizations and companies regardless of what they do. But you know one of the things that we did at Whitman Advisors is that we created something that we call sustainability. Study in David. I want to talk about that a little bit and how we survey the staff and parachute in and the steps that we take.
David: Right, we are a business advisors team of a team of 14 of our consultants, many of whom have been long term industry insiders. We have a warmer HR partner from a top 10 firm added and a marketing person from a significant firm as well, and so we bring multiple people with multiple depth of expertise to over give value to what we get. We often get qquestions like, Do they have a batch right? Are they using I. T. properly, you know, or they have, that mindset of the 21st century, the world's black, and it's not just about my local community. Do they have a business development plan or is the one founder who might be looking to retire? Is he the person who's brought in all the business and we go in there and we walk it often? What's really funny? Do we don't really tell anybody any leadership? Anything that they don't know. Right but it's easy to kind of push shop and say: yeah. We don't have a great bank. Where we don't have a great process, but when we deliver this record as one package. It really drives leaderships, should not be able to hide anymore, not be able to look at each thing individually and justify it, because, when you're looking at that entire package, yeah what's much more difficult. So we believe that firms that are going to be sustainable in the future are gonna have to be flexible and I. Think that you know shawn you were talking about mind set. So flexible, as far as what do what's your business model and are we a CPA firm that provides accounting or are we a small business firm added by that helps our clients to be successful right? You know from a staffing point of view we put an ad in the local paper which may not exist anymore. What do we look at a world wide solution for staff? And so we really believe that starts with the business model. It starts with the mind set to allow these firms to remain independent, John.
Phil: Yes, so before Shawn jumps in, so imagine this you're the managing partner of the firm & you’re at the top. Okay, there's something called the iceberg of ignorance. So if you think about the Titanic there was this little thing above the water, but it wasn't that it collided with that killed it. You know I made it sink. It was everything that was below the, and there are things as managing partners or partners on an executive committee that use thanks. You know that you create story, you create the ending, so one of the things we did with one firm well, we always do it, but with this firm we deploy a employee survey because we don't want to just talk to the partners about the sustainability we want to get in with the people that are, you know that bigger part of the iceberg, because if you really want to know what's going on in organization, it's not talking over the top. It's talking to the people in the trenches, they know where you are. They know when you're golfing, when your doctor's appointment. So one of the staff- and we asked for comments yet we have a very important question. Would you recommend a friend to work at your firm?, and that is a very telling question one of the responses? What's? Why would I have a friend working here when partners are running around like chickens without heads bringing in new business and the expectation of our staff, which is already overwhelmed to bang down additional work that we just don't have the capacity for? So when we sat down and we met with the partners- and we told them about this comment, the initial thing we heard from the managing partner was: who is that guy I want to fire him? And you know what David said: what did you say? David.
David: I said, here's a person who cares right and makes this comment is a much less important comment than the action that you're taking, but in so many firms people don't care right. That was a comment up. I care, that's why I want to make things better. Sure- and we know the people vote with their feet and every day when they wake up in the morning, they decide am I going to do it or am I not going to do it. In today's environment, it's not like I'm gonna, decide to commute to work and get an elevator and get off and do what I do today. They are waking up, You're walking to their home office and you better believe it every recruiting firm out there right now. feels that they have an opportunity to connect with your people? Okay, because they're at home, they don't need to close the door they're, not sitting in a cubicle. They don't have someone next to them. I think that our profession is in for hysteria in recruiting and retaining people & I think you know. Yeah I will share this, My son works for a very large CPA firm and these firms- you know a body works at another firm and they're sharing the emails that are coming out from the management of the firms, and you know one firm is saying Hey you know during this coronavirus. You know we're gonna, give everyone an extra sixty dollars a week of expense money, so you could buy extra food into it. Yet, as a matter of fact, we have team members in the Philippines. We sent them extra money so that they can stock up because they are more cautious than we are here so the question that I throw out to you is because you stay in the belly, it's all about the people. Yes, it's about your clients and you will lose clients, because businesses will close that happy employees, happy clients make sure you're taking care of them, Shawn it looks like you had a comment.
Shawn: Well, no I I would like to hear from Mike Mike what he had to say.
Mike: Well today i am the host & i am listening, I'm I'm, engaging with you guys here,
Shawn: We would like to know more that you spend so many years & you’ve watched it from inside & outside,I'm sure you might have some use for it. Maybe not as aggressive as me and Phil have, but maybe some other probably.
Mike: Well, one thing that Phil said is very true in what I have experience in both in the industry and in private business is forgetting who really is necessary for your business to succeed, and that is the people. The people first come into the direction & How do I take care of my Staff, my employees in a way that will create the longevity to become a refer to as a employer of choice and make him so that our people don't leave us for the first five percent raise opportunity or they don't jump out because they they feel not appreciated as much as they could elsewhere, because the grass is always greener, and so when we, when people are in times like this, it's very important stay connected to your team. Stay connected to your staff so that once we get over this hump to get things back to us little bit more normal you're right Phil, people check in there & they're gonna be distracted towards some other opportunities, possibly in with a tight staff, labor market, we have in the CPA firm in the industry right now. It's important I'm, so those who might be listening to us make sure they're paying close attention not only to their own family but to their business. And make sure that they're going to still be there when things settle down, otherwise, you might be really in trouble for some stuff kind of hit on me, as I was listening as you make it a real good point.
Phil: My point there is, you know, for you: managing partners are people that are like responsible. You know obviously having your people put in their time so that you could send out. Invoices are critical, but you know when you want someone to put in their time. You know, make sure you say, hey! i hope all is well in your health and your family just want to remind you that the deadline is, Friday at 5 PM or Monday morning at 10 AM just say: Hey make sure you get your timing. I mean these are very sensitive emotional times so that people know that you care. You know you know HR, You know this is only one piece of sustainability but I think it's a big one. You know David why don’t you talk about the evolving business model that we believe is necessary for a CPA firm to really be sustainable. You know, even in the event that this coronavirus pandemic didn't occur changes that need to be made.
David: Right! So I think you know that today's issues might accelerate, yes, but I don't think they've certainly created them or will really change the correct trajectory that we're on. So we really believe that CPA's have tremendous competitive advantages against many other service providers, and that is that they're called the most trusted adviser right and that many of their clients would rather buy water stains from the most trusted adviser banned from some strange So we believe that you know CPA firms have to move into advisory kind of business three type of model we're not talking to you about yesterday, we're helping you create the future that you want. So we believe it starts with what you do and what your company is and we believe companies that are stuck in that tradition. This is how we've done it for the last thirty years, and this is how we're going to do it tomorrow or at tremendous risk , because we believe that the firms that try to survive that happens to be destroyed. So we think that it needs to be more advisory services. It needs to be more referral partners where you can find the best in your community and start working on bringing business fast in your communities. We also think from a staffing perspective that again it's not your local market, it is the world, and so there could be things like integrity for your day to day and giving you additional support. But it's also about finding the expertise, even at the highest level, not necessarily sitting next to part or even part of your firm. But in today's world you can find the best and work with them on a need basis. So we believe that many of these forms can be sustainable, as Shawn talked about earlier changing that mindset and we believe it's also changing that business model is that true key component that will allow some of the firms that thrive in the future instead of just survive into the future.
Phil: David, you know, everybody said advisory services & advisory services, and I believe some firms believe that they also or already doing advisory services, because Hey I'm consulting with my client, give our listeners an idea when you're talking about if ice resurfaces, what are some of the relationships of business advisory services if they can provide to their client base.
Mike: The day before, I get that call more graphic, I'll wrap up a range of end of our time here, German. So, let's make these final comments and then we will have to call it a day right!
David: So I think that three services can be everything from introducing offshore staffing to your clients could be an advisory service. It could be traditional CPA services, RD tax credit costs that it could be helping your clients sell their business relationships with investment bankers or business brokers. It could be helping your clients secure their future by offering wealth management. You know so I think that the list of potential opportunities in advisory services is almost unlimited, Shawn?
Shawn: Before we end, just a couple of things in the last one minute: I know you were talking about advisory services, adding services is the solution that we have been talking about and client accounting services coupled with offshore staffing. I mean when you talk about advisory services. Well, You’ll need that recurring revenue and client accounting services gives you that we got recurring revenue and it is not just a day to day bookkeeping. Why do I push CAS (Client Accounting services) the reason is recurring revenue & you get access to all of all of the numbers. So they are dependent on you for all kinds of advice. You want whether it's financial planning, tax planning, business strategic planning, so it opens up all new doors of advisory or business consulting that you want.
Phil: And it's around you every month, at Work, No peaks and valleys and I know one thing for sure: we have an affiliated company. It does fractional CFO services and we've had conversations with Entigrity about hoping to build a team, an offshore team. It's going to be able to provide analysis so that companies that are hurting due to this coronavirus have the ability to take a look at their fixed costs and cash flow, and you know that's not CFO work, okay, so building that offshore team to help you with critical mission, critical services in this time of crisis. It's a tremendous business advisory. Unity also.
David: You might want to take us out of here.
Mike: Well, guys I think we had a great conversation about the sustainability of the firm, & a lot of different topics came up, which is very interesting and very helpful. Appreciate your time for coming with us and join us today, and that will be our. Time to kind of wrap up our session here and hope you all have a great week & stay safe!, stay healthy! & we'll see you next time.