Why We Might Not Be the Best CPA Firm For You


This post is in: Blog, Business
No Comments

Over the past week, I’ve had a lot of consultations with prospective clients. In some cases, there was an immediate “click” and they became clients. Since we have a limited number of spots open, that opportunity will be gone soon. So if you’re reading this a month or two after the publish date, please talk to Richard (888-591-4769) before you assume that we still have capacity.

I don’t want to turn this into a blog about why you should hire us. In fact, I want to tell you why you should NOT hire us. In a minute I’ll tell you about a case where I was definitely not the right strategist. First, though, let me tell you just a little bit about our process.

When you call Richard or drop him an email, he’ll set up a time to talk a little bit about what you are looking for and then about what we do. Right off the bat, there are some people that we aren’t the best fit for. If you don’t have a business (or plan to start one) or invest, primarily in real estate, (or plan to start), we’re not the right fit. We may have a referral for you or perhaps not.

If you aren’t willing to change anything that you are currently doing, but want different results. We can’t help you.

If price is your main concern, we’re not the right firm for you. We want you to have more money in your pocket after you pay both us and your taxes . We can’t guarantee the result but we are pretty good at projecting it.

But what if you have a business and are willing to make changes, plus you understand that hiring the right CPA firm is an investment, not an expense, are we the best fit? Maybe not.

Here’s what happened this last month.

A new prospective client came to me. The husband (let’s call him Matt) was a 1/3 partner in a new venture. It was primarily a service business and Matt worked in it. They had a lot of plans to grow, maybe expand internationally, maybe sell it.

Meanwhile, in the first year, Matt made about $20K as his share of the business’s profits. Not a great return for his time, but in the first years of the business ANY profit is a sign that you may be on to something.

Most businesses take at least 3 years to get profitable. And then it takes 10 years, on average, for a business to truly show they have proof of concept and execution. That’s the average boom/bust cycle for the economy. Some businesses do great in bust economies. Some businesses do great in boom economies. But it’s a rare business that does great in both. If you recognize what you have, it’s not necessarily a bad model. You just need to be completely honest with yourself and everyone around you that you’ll make money for a certain period of time and then it will be time to dramatically roll back or change the business. Maybe it’s time to just shut it down until the next time the economic gods are in your favor.

The question Matt had was whether he was in the right business structure. I had questions for him first.

How much money will the company make this year?

Answer: I don’t know. It’ll be more.

Do you and your partners want to have a pension plan or provide medical insurance?

Answer: I don’t know. Maybe. Does that matter?

What is your plan for the business?

Answer: If it gets more profitable, we’ll either keep it as it is, expand it or sell it. If it doesn’t get more profitable, we’ll close it down.

With that, I laid out the possible scenarios. If A happened, this would be the best answer. If B happened, another plan would be the best answer. If C happened…. Well, you get the drift.

Matt wanted one definitive answer that would be the best in all cases. Ah! I thought, FLEXIBILITY! That was the answer.

I talked about the most flexible plan. Since he had partners that would mean he needed flexibility both due to the uncertain prospects for the business plus the varying needs and wants of the other partners. They should keep the existing LLC structure and then he would hold his interest in an S Corporation. He can then get his own deductible benefit plans that he wants for him and his family. He could employ his kids in the S Corp, take the deduction for his home office rent, get a company car, etc. And as long as it has a business purpose, it’s all deductible.

In the end, he wasn’t happy with that recommendation. He didn’t want to spend the money to put another entity in place. It would mean a cost to set up, an annual state fee, another tax return, another set of books and that all meant time and money. Normally, I’d come up with the initial cost estimate to put that in place and the annual cost to maintain, then compare it to the tax savings. That’s how the ROI (return on investment) would be calculated. That’s why I say hiring us is an investment, not a cost. If there’s not a return on the money, we don’t have a fit or we’re not doing our jobs.

In this case, I couldn’t quantify the return on the investment for that. That’s because I didn’t have a solid plan and goal. Without a goal, all you can do is guess.

If someone tells you that you MUST have such and such type of entity and it fits all possible scenarios, they are just trying to sell you something. They aren’t a strategist. They have just have one tool in their tool box and that’s what they’re going to use.

If that’s what you’re looking for, we’re not the best choice for you either.

After all that, if you’re really interested in hiring us, there are a number of things you can do:

You can join the twice monthly coaching program. The programs have two live sessions and provide two Home Study Courses a month. You can ask questions during the sessions, or before if you can’t make it. The sessions are recorded so you can listen when your schedule permits if you miss one. Here is the link – https://www.ustaxaid.com/coaching-program/

You could have a private consultation directly with me. Here’s how to sign up for that. https://www.ustaxaid.com/consultation/

You could become a client (provided there is room for additional clients at the time you apply). Call Richard at 888-592-4769 for that.



Leave a Comment