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Adding Virtual CFO Services to Your Firm with Katina Peters

Published by Summit Marketing Team on Jul 7, 2023 6:00:00 AM

The Modern CPA Success Show: Episode 93


Katina Peters, managing partner of Peters, Johnson, Staley and Company, joins Tom Wadelton and Adam Hale to discuss making the shift from traditional accounting services to offering more advisory-focused, virtual CFO services. Katina details the challenges and the “learn as you go” method she and her partners experienced during their decision to move up the value chain and provide more advisory services to their clients.




[00:00:18] Tom: Hello and welcome to our modern CPA Success Show episode.

[00:00:22] Today's a topic I think people are gonna really like. We're talking to Katina Peters, who is managing partner of Peters Johnson Staley and Company. Welcome Katina. 

[00:00:32] Katina: Thank you. Yeah, glad to be here.

[00:00:32] The topic that we're going to talk about as your firm has transitioned to really focusing on CFO services, advisory kind of things, I think will be of interest to a lot of people.

[00:00:42] Joining me today is Adam Hale. Adam is a founder of Summit CPA group, now a partner of Anders CPA and advisors. Adam, welcome and glad you're here today. 

[00:00:52] Adam: Hey everybody. 

[00:00:54] Tom: So Katina, do you wanna tell us a little bit, I know you've got a somewhat unique organizational structure in your company, and so maybe give some people idea a little bit about what the firm's about. How you've organized it for some ground setting before we jump in.

[00:01:06] Katina: Sure. Yeah. When we set up the firm we set it up to be a place for people to come and work when they had families and to get out of the usual grind of the CPA world, which is typically a lot of hours and things like that. We set it up to be a very flexible structure so that especially, it tends to be more mothers, everybody's welcome.

[00:01:25] So they have kids they gotta shuffle to school and pick up and, all the responsibilities there, but they didn't wanna necessarily give up their career profession for it. So we operate on a 20 to 30 hour work week and it's set by the individual. So whatever hours are comfortable for their schedule they wanna work, we have a certain guidelines around when the working hours should be.

[00:01:47] Cause we do have some team meetings and some things like that, but they can work at night, they can work on weekends, things like that to fill in the hours that they're looking to work. So we tried to structure it really to capture that part of the profession [00:02:00] that was maybe stepping out of the profession to take care of family, to do other things and try to offer another way for them to work that was a little different and unique. 

[00:02:08] Tom: And that's the majority of the firm would be on that type of flexible, a little bit less than 40 hour schedule? Is that fair?

[00:02:15] Katina: The entire firm, yep. And we're completely virtual. Always have been too. I know you guys shifted to that.

[00:02:20] We started off that way and everything, so yeah. Everyone in the firm is that including all our administrative people, work, part-time it's like that as well. 

[00:02:28] Adam: When when we connected at BCPA, Katina, I think you told me it was only like the second or third time that you had met in person with your partners. So it's pretty cool. And totally different than anything you would've expected 20 years ago. That would just not even been possible. Heck, even 10 years ago, probably. 

[00:02:48] Katina: Yeah. But I think that we went several years at the beginning of the company.

[00:02:50] We all met through another agency called CPA Moms. And we worked for them and worked together and were on their leadership team. And she wanted to sell outer client base that we all joined together and created a form partnership and did that.

[00:03:04] And all of that was done without us ever meeting in person. So it was several of PJS before we actually met in person. So a different experience. A lot of people were like, “really, you haven't met your partners ever? 

[00:03:18] Adam: I was one of those people. I was like, “really?” 

[00:03:19] Katina: Most kinds of things, but yeah, that's different

[00:03:22] Adam: A lifestyle business is just difficult in general. Like it, it's one thing to have two or three people on your team, or even whenever you started, I'm sure it was like the three of you, like you said, you had shared experiences and lifestyles. But as you scale, I think that's, all service-based businesses are difficult whenever you scale 'em. Just leveraging humans in general is difficult. But then doing it at a lifestyle basis and then still being able to serve the client especially in an environment, I think, whenever you think about client advisory services or accounting services, it's a lot more needy than going into the pile, grabbing a stack of tax returns and just knocking it out. So it does [00:04:00] require a lot of handholding of the clients and a lot of just institutional knowledge that kind of goes in with that. So I always, and I know the first couple times we've met, I just kept picking your brain on the structure.

[00:04:10] Okay, so how does that work? Cause I know you're fixed fee just like we are. How are you servicing the clients when you're not maybe there Monday through Friday or you're not to be able to pick up those loose ends. And so not only do I think that you have a and you've been able to build, how many people do you have on the team now?

[00:04:26] Katina: 20 now. 

Adam: A big team. Pretty impressive to be able to build and do that on that many people. But you also have a pretty unique structure in terms of some of the compensation models too, that a lot of people in the space have had difficulties because the shadow side, I think to this type of business is a lot of times whenever you're talking to an audit partner or a tax partner they're like, “it doesn't seem as profitable.”

[00:04:49] I get the trade off. It's a little less, maybe. A little less profitable for the trade off for having the annuity. And so I think we'd prefer to have the annuity and lose just a little bit, but the idea is to optimize that and through efficiencies, hopefully be just as profitable or more profitable.

[00:05:06] And I think that you've put together some pretty cool safeguards right away where you're like percentaging out basically the responsibilities and people are getting paid that way, so you don't really have to worry about managing their time, and then people don't feel like they're, especially part-time people.

[00:05:21] The thing that's the struggle is that when they need a little bit more money, maybe they work a little bit more, or whenever they don't, they work a little bit less, that kind of a thing. You don't have to really worry about that because their pay doesn't change and they're actually incentivized to be more efficient and potentially work less. 

[00:05:36] Katina: And that goes back to, when we started off more as bookkeeping tax, a little more traditional, some advisory sprinkled in firm. But we started off just knowing that, we couldn't take on payroll and all those things.

[00:05:47] So what we decided to do was to offer that these people come as contract. And they are able to also have other clients if they want to, aside from us as well. A lot of them don't, but some of them do. [00:06:00] And what we do is we give them 50% of the revenue that they generate in. So they have an allocation of the maintenance.

[00:06:06] As we say, this is your allocation that you're gonna get expected hours. We don't wanna take advantage of people obviously either. And we do monitor that from both sides to making sure that they are being efficient and also making sure that you do sometimes have scopes start to creep, or jobs start to grow as the businesses grow and it gets to be more. So we monitor that pretty well, but it also puts on us on them a little bit too. We ask them, “okay, you need to tell us, hey, this is taking longer, it's getting more complicated,” whatever the case may be, so that we make sure that it's fair, for the client, fair for the people that we work with as well.

[00:06:39] Adam: Sounds like a really good model. Yeah. I think that's even a great transition into what Tom was mentioning early on it was, a lot of, I guess they define it as CAS 1.0 Client Accounting Services. You were doing a lot of, I was talking to a firm the other day about the difference between bookkeeping and accounting.

[00:06:58] And they're just like, “what is the difference?” And I guess it depends on the degree of the person doing it. Paraprofessional professional, we just slide the name and charge more for it. But whenever it comes to accounting and then going into advisory, that's whenever we very first connected because you recognize the need for just moving upstream in the value chain.

[00:07:16] And you really wanted to start focusing on advisory. Can you talk to us a little bit about what kind of led you there and that kind of stuff?

[00:07:23] Katina: For sure. I think it's always been something that we enjoyed, but it was like how to build it in, how to make it a priority.

[00:07:30] And, struggling with your typical, you have lots of tax returns and lots of books and day-to-day stuff you have to get done and don't have as much time for the other side of it. And interestingly enough, I was taking a CPE in December. The rest of my credits in and enlightened business solutions.

[00:07:46] I dunno if you guys are familiar with them, but they he was talking about letting go of that traditional way of doing things and really turning it more into advisory but coaching from like an accounting perspective, so more of an advisory. So it wasn't to[00:08:00] quite the level we're at now with what we learned from you guys, but it was like an introduction into that world.

[00:08:04] And we did some coaching with them and that really helped shift our mindset. Okay, we can move into this, we can do more and charge more. And there is that value there.  So we started shifting away from problem clients pulling the list a little bit, letting go of those kinds of things and opening up space to do more.

[00:08:23] But then it was still undefined. It was, okay, we know we wanna do this more stuff and we wanna really partner and help the business owner grow and go through that process with them and really show them what their financials are seeing and really educate them and really look at industry analysis and do all the things.

[00:08:39] But we didn't really have a structure designed for exactly how to go about doing that. It was a little, or I esoteric somewhat. My partner Jamies Staley tripped across you guys in a cashflow tool seminar, I think is how we found you. And she was like, Hey, we should see what these guys are doing.

[00:08:55] That sounds like what we're trying to do. So then we started listening to your podcast and taking your CPE courses and I did do the playbook course also that you guys put out as well. And this really helped us to find that structure that we were lacking, like trying to understand. Okay, so we really should maybe step in and actually call it the CFO service and the controller service cuz that just gave a more of a defined definition for us and to be able to step into further. So it's been a little bit of a pathway over the last several years for us in transitioning the business over.

Tom: When you talked about, I think you said calling some of the existing clients and things, when you started offering these services, was it mainly to other existing clients and saying, “let's increase what they're doing?” Or were you bringing in more new clients with the advisory type things? 

[00:09:44] Katina: Yeah. It was a little bit of a combination.

[00:09:48] We do have clients that we were working with that we started to talk more in depth with and to slowly work with them more on the advisory side and everything. And then we also just had a different [00:10:00] mindset when we were bringing in new clients, even though we hadn't yet defined all the things that we learned later and that we're working through still now. But we were able to just come at it with a different perspective and mindset, different charge structure in place. Things like that. So it definitely upscaled what we were, who we were talking to, and what we were talking about at that point.

[00:10:21] Are you interested in offering virtual CFO services at your firm or scaling your existing service offerings? The virtual CFO playbook. How to land $60,000 a year clients and provide a killer client experience is an online series of modules that will equip you with essential tools for creating and delivering scalable VCFO services.

[00:10:41] These approaches have helped Summit CPA grow from $500,000 to upwards of $5 million in revenue over the past decade. If you are ready to grow your firm, visit summit cpa.net/vcfoplaybook to enroll now. 

[00:10:58] Tom: I would guess our listeners are probably really interested in how do I look at my existing book and try to increase that.

[00:11:03] So I'd love to spend a little bit of time there. Can you talk a little bit about maybe how the pricing changed for maybe a typical client? What they were getting before, and then also how you approach them in saying, “here's what we can do more, but it's gonna cost X amount more.” I have a feeling that's the word a lot of people are looking and and thinking about if they advance that. 

[00:11:21] Katina: Sure. I wish I had a really straight line to give you. Sure. it was very it morphed as we went, I think, and each situation was a little bit different. We, I think it, it was more about, and though we do maintenance pricing, we did also do a mix of hourly pricing, so a lot of that we started with we're just gonna add on hourly and then we leveled the maintenance charge once we leveled out what we wanted. So I think cutting back on the clients that, as they say, they bring a little bit of money and a lot of time and annoyance and stress a lot of times. Not all of 'em, but, it was like cutting some of that out opened up [00:12:00] more brain space. I would say, for us to talk more with the good clients that we did have and start to recognize more needs. And start to offer, “hey, we can help you with that.” So it wasn't a well defined and executed plan at the time. It was each of us going little baby steps cuz we didn't really have that vision in mind. Like we do now after going through the playbook and seeing how you guys structured stuff and getting our own ideas a little more in line.

[00:12:25] But it's interesting how when you open up that space. It can be a little scary, right? You're cutting some revenue streams and that's scary. But it is amazing how much space it opens up for you to find the need, and once you start aligning with the client at that level, they start to really see the value.

[00:12:42] We went from years ago having our largest client at $2,500 a month to now we have $20,000 a month clients, several of them. And then we have some in between too. You can definitely level off at different places and we don't anticipate always having, $20,000 month clients and all of them being that and neither are they.

[00:13:00] We have smaller ones as well. But that's just the possibility that can happen when you're bringing that value and you're really aligning with the business owner on what they need and helping them. Execute those things. So we were able to do that over time.

[00:13:15] Adam: That's great. I think that's a great experience there because I do, Tom, I hear what you're saying. A lot of times people are like, okay, I have this existing client base, or maybe I'm a tax firm. How do I convert all these people? I know I'm having these conversations and it really does come down to just situational awareness.

[00:13:30] I don't think that, in my past it was always like financial advisors that would beat on the CPA firm store. And they'd wanna just scrub your tax list. And they'd come in with this organizational tool, okay, which clients have this much money? Which ones have this? And then here's the letter that you hit 'em up with and they'd have this whole marketing spiel to get financial dollars moved out of your tax base.

[00:13:53] Not a good approach. I think it's about just being, “no, do not do that.” I think that [00:14:00] and correct me if I'm wrong, Katina, but it really starts understanding what you can deliver and what that looks like first. Gaining a clear picture. And then I think that once you start talking to those clients, that's whenever you're like, “oh yeah, actually I do this, and this is how I would solve that problem.”

[00:14:16] Before it was always just like anecdotal. It’s just, “oh, I'll do this, I'll do that.” But now it's no, I actually have a process for that that could fit there and we can start doing things on 'em. Did you find that to be the case? Like making sure that you had that foundation of what you were doing first?

[00:14:31] Katina: Yeah. I mean I think it did. Like I said, it changed a little bit over time. I think one of the big things that, I know you guys have talked about the imposter syndrome, have driven things like that. So I think one of the big shifts was a mindset shift first because then that really helped us recognize and align better and recognize our own value and put ourselves out there for that.

[00:14:49] It definitely helps to continue to define and structure more because then now we're at the place where we have a definition and a structure and ability to talk to that and to really well define what it is that we're offering to potential clients coming in the door because before we had to baby step into it, even with the newer ones, cuz it wasn't, “oh, here's what you're getting for this.” It was, “oh, let's start off here and then we do this,” and we kept growing it from there. Typically, I think, obviously you have to have great core values.

[00:15:21] You have to have great systems, processes. You have to have the ability to build that trust with the client and to align and expand those services to become that. But now we're flipping. a little bit of that script now that we have the better structure set out, “okay, this is what our service is.”

[00:15:40] This is how it's going to work, this is how we onboard. So that we can do that more on the front end now when we're talking to people and we're going through that performance. And it also allows for just all the things to come together. You can market better, right?

[00:15:56] Because you know what you're saying a little more clearly of that clear [00:16:00] definition of things. You perform the service better cuz you have a clear outline of what it is you're trying to accomplish. And I know you guys have talked about having a framework and obviously as a CFO it's a very customizable situation.

[00:16:12] So that’s same approach we have, here's our framework. We want accountability. We want certain level of this is what we do, but obviously it's very customizable to the business and what they need and how we work with them. But it also allows people coming in the door, As CFOs, as accountants, whatever level you're at, to understand what it is and to be trained on how to do your part in that too.

[00:16:35] So it really comes full scale once you lay out that structure. That's kinda the process where we're at. We're in that part of, we have the structure we're building still some of the operations and things behind it, and working on training people in it, things like that.

[00:16:49] But it definitely just interplays a lot and comes full circle when you have all that to find. 

[00:16:54] Tom: I love that you, so I really wanna emphasize one thing that going in and trying it early on, and I noticed that when you and I worked together some, when we were in the fireside chats that we had, the Tuesday weekly calls. Many of the people coming in, my impression is as accountants were very structured and diligent kind of our thinking, but it's analyze before they actually want to do anything.

[00:17:13] And it did feel like you were saying we're getting out there and doing it. And you mentioned it was scary, which I totally get, but the number of times I've said to someone, “just try it.” Try using a pricing tool with a client like on the phone or try this. You're gonna learn so much more than spending hours and hours with me asking what I had done.

[00:17:28] And I'm just curious if you think that was your impression and would you, having now developed the process, do you think it was the right approach to say, “I'm just gonna try it?” Or do you wish you would've said, let's develop a lot of processes before stepping in to do this? 

[00:17:42] Katina: No, I think I think definitely and I couldn't because of the journey we're on, I guess we weren't faced with having the structure before we tried it cuz we didn't know what the structure should look like.

[00:17:51] Sure. So we just said we're gonna try something. So that helped a little bit. But even in having the structure and the things it really is, you [00:18:00] have to jump in and do it because even though we've built the structure and we're utilizing it, we're still tweaking it. You don't know until you're in it exactly what it's gonna look like and exactly what it needs.

[00:18:10] And obviously every client situation is specific to them anyway, but you can do some forethought and you can plan things, but it's always gonna not be exactly what you forethought it to be anyway. So at some point you just have to just jump in and do the work and do your best and learn, and those kinds of things.

[00:18:29] Adam: It's okay to suck, is what you're saying. Yeah. It's okay to suck the first couple times. Let's be real. Sometimes you get off a call and you're just like, “wow, I could not have scripted that any better. I was amazing. I can't believe they don't go with our service.” And other times, even if you've done it a hundred times, you get off the call and go, “oh my, I couldn't put two words together on that call. What the hell?” So you just have to, but I think that, earlier in the conversation you were talking about imposter syndrome, and we do talk about that a lot. We talk about it with our CFOs. The stuff that we talk about day to day just seems so “duh.” That you're just like, “of course.” But to the client, that's real information. Sometimes whenever I see people in our profession like posting tips and tricks and stuff like that on LinkedIn and other stuff, I'm like, “that is so like accounting 1 0 1,” like that's not even super insightful to me. But to the masses that they just sent it out to, they're like, “yeah, this person knows what they're talking about.”

[00:19:22] So it's like you just have to remember that they're, and I think that's also intimidating cuz they're experts at their business. So here we are coming in trying to, “hey, you should probably think about.” And you can't go toe to toe with them with what they sell and their institutional knowledge that they have on their product and all that kind of stuff.

[00:19:38] But whenever you come in and you just look at it and stay in your financial corner, then it's really easy to be able to just snap the bracelet every once in a while. Remember you're the finance person and just lean into it a little bit. 

[00:19:51] Tom: Yeah, and I think recognizing, cuz Adam, you and I had this conversation when I started five years ago.

[00:19:54] I definitely had that imposter syndrome and it's helpful to know that yes, you do have expertise here and [00:20:00] that's a somewhat natural feeling that you're just gonna have to get over and naming it. Definitely helped me in doing that. Have your clients, so you went through a journey with clients just like we have where processes have changed, right?

[00:20:10] You did it one way and then as you developed, you started changing. Any learnings about how to take a client through that part, or did you find that they were pretty good about, “okay, it’s a new way of doing it and we're just transitioning to something.”

[00:20:23] Katina: Yeah, I think that especially the ones that we were transitioning, we do have that really close relationship and trust with, each of the people that are involved.

[00:20:31] So I think, having that and saying, okay, we're shifting into that, and it's been a little over time so it wasn't like, bam, we're changing it right there, that kinda thing. So it was slow and steady and in a comfortable way, but I think they just had that kind of innate trust and they see also the outcomes and the values that the structure brings and the, like I said, the accountability the outcome of the growth that they're seeing, things like that.

[00:20:53] They have to see that obviously or what's the point in doing it? That's our goal in doing it. That's what they want to do and get that value out of it. So yeah, they've not had a hard time moving in that direction with us because of those longer relationships and like I said, it just was built up over a little bit of time.

[00:21:11] Tom: Yeah. And Adam, I'm curious of your perspective on that cuz what I would say is we change things constantly. What's your feeling for how our clients react when we're switching tools, switching processes, switching approaches.

[00:21:24] Adam: Yeah. I think one, I think they appreciate that cuz you don't want to stay stagnant. I think that's the reason why people move a lot of times. It's like, “eh, I've learned everything that I could from Katina. Now it's time to move on.” So it's good to keep things fresh.

[00:21:36] Obviously you don't want to be chaotic and you have to also remember that a lot of those tools are for our benefit, not for theirs. And so while we wanna show off all our little cool spreadsheets and reports and bounce from one thing to another cuz we put 'em together and we're super proud of 'em.

[00:21:51] You have to internalize that pride and just, your job is chief storyteller, so you use all those cool things and you can speak into 'em, but don't don't make the client [00:22:00] dizzy. So I think, but it's also good, like I said, educate them that you are up on the latest stuff. That you are changing things, but the client shouldn't feel the impact of those changes. 

[00:22:07] They should just see the results of hopefully those upgrades and evolutions in your service and your tools.

[00:22:15] Tom: So Katina, when you talked about structure, any advice for people? If you look back at like, how would, what are some of the examples that you might prioritize and say, these are some of the things I'd probably focus on first, or either wish you had, or maybe the early successes, which you got it right. What someone who's taken that step, what would they focus on?

[00:22:35] Katina: Yeah, I think I would, what I stepped back and did when we first saw that there was a structure and it was like, “oh, this is what we wanna do.” Like basically similar to what you guys were doing. We just couldn't figure out exactly how to define it and how to go about it. So once we had that, we basically went through and decided, “okay, what levels of service do we wanna offer and how are ge gonna be defined?”

[00:22:57] Okay, we're gonna be VCFOs. What does that mean? What is our definition of that? What things are we gonna do with things or aren't we gonna do? And, being an accountant,I did a spreadsheet.

[00:23:09] So spreadsheet to lay out the thoughts and what does the deliverables look like?

[00:23:17] And et cetera, et cetera. So that was like the first step was just that high level “what is it we're trying to do and how would we go about it?” Et cetera, so that we could build process then around that, we could build marketing around that. We could build training around that.

[00:23:32] And it's again, it's that, try something a little bit cuz you know it's morphing right. As we go through a little bit. It's “oh, didn't think about that,” or “we will change this a little bit.” Things like that. So it's still an ever-changing process and you can build processes out with as much forethought as you can, but until you're in the process, it's just gonna change. 

[00:23:51] I know we went through a big software conversion last year for our internal processes and it comes with these templates for each type of [00:24:00] job and which is nice. As we went and learned more about how we actually were functioning with the software, we tweaked those templates and we changed things and okay, this isn't working like we thought we're gonna do it that way.

[00:24:10] I think it's always gonna be that ever-changing thing and I do agree with that and I know when we work with companies that we work with, we like to see them always improving and not stagnating and that was one of the major reasons we made a big software supply change, to be honest. So I think that is important too, like you said, in a service-based situation that your Not getting stagnated in what you do.

[00:24:29] You have to stay up on somewhat on the technology. As the advisor to the client, we need to know what's available out there too. So we want our clients to continue to grow and not stagnate, not fall behind in what they're using for systems and not that we're gonna know all their systems, that they're using from their end of their service line. But what are good accounting systems? What are some good communication tools? Those kinds of things so that we can help them to consider things. 

[00:24:57] Adam: Yeah, I agree.

[00:24:59] And that's what we talk about in the course too. There's definitely a framework to it, and no matter what we say or how you say that you've done it, Katina, it's all about just being innovative and customizing it to way you do, but it's being able to see what that basic framework looks like.

[00:25:12] , and I do think you, you pan out a little bit with the service packages first of all, who do you wanna serve? How do you define CFO? Like you said, that's very important. What's gonna be your brand promise? And then you have to move from there to service, the actual scope of services that you're gonna provide and then engine once and everything else just starts to funnel together from there. Cuz then you get the pricing down, you get the pitch down, all those kind of things, all the processes you can fill out. And like you said, it's always gonna morph.

[00:25:37] It's always gonna change. You're always gonna find some things lagging there, but it's good to just start down that direction. . But I know one other thing. I know we were talking the other day cuz speaking again, not to like totally come back to imposter syndrome, but I know that we were But it's real again.

[00:25:51] But it's real again. And if it's not then you're probably a narcissist and if you're a narcissist, you don't believe what I just called you anyway, so it doesn't really [00:26:00] matter. We all feel that way. So I know you whenever we were talking, you've done a really good job with all those things that you talked about.

[00:26:07] You've built out the brand promise, you've got the sales pitch down. I know that I kinda listened to one of those and we kinda went back and forth and I think you've really got down what you do and how you do it in a way that you can convey that to a client easily. But talk to me, talk to everybody about the first couple you did, you weren't really getting feedback right away, so you were starting to get a little nervous.

[00:26:30] And then just the other day you landed what I would consider for us a whale of a client, doing the exact pitch and everything that you leaned into. So talk to us about how that kind of experience has evolved and confidence there.

[00:26:45] Katina: Yep, no problem. Yeah again, I'll be a little more somewhat typical CPA, right? Not a salesperson by nature. So it's definitely a muscle you gotta grow into. Some of us take it up faster than others. They think for sure. And selling this level services, it's a different sell. I sold taxes, I sold bookkeeping.

[00:27:01] Those kinds of things. It's a different level. It's a different lift. Because you're, again, we're flipping the script around and having to build that trust for them to come in at those maintenance higher level of trust right away instead of building it over time. Which is how we came more into it as we grew.

[00:27:17] So it's again, looking at the things that they're asking about, looking at how are we conveying the value to them, and that takes some practice and takes some just getting used to how to say it succinctly. We're meeting with them for an hour and you're trying to build this trust for them to pay you. Over that hour to sign on for relatively large sums of money, especially what a lot of them are used to paying for their CPA or tax.

[00:27:44] Cuz they don't have the same level. So you're trying to convey that value to them and how you can really work with them to get their business and their goals and those kinds of things. It definitely takes some practice and it takes thinking through, trying to answer some of the questions that they [00:28:00] likely have.

[00:28:00] That sometimes they say and sometimes they don't. So working through that. It's all about obviously asking good questions to them as well. Both at the beginning of the call we were just trying to find out about them and understand them and picking out those pain points that they might have.

[00:28:15] But then also the harder part for me is at the end of the call when we've gone through what the services are and what the pricing is, asking them, how they feel about it, and talking to them about their potential concerns. Again, it's that uncomfortable thing, for me anyways, I don't know if.

[00:28:33] So I just gave you all this information and I said all these things, aren't they great? And now I have to ask you, “what do you think?” For this amount of money, right? And asking some point of questions like, “do you feel like this is the type of service that you're looking for?” at the close of that call and see what they have to say and see how they're feeling about it.

[00:28:53] Because a lot of times, if you don't ask they don't say. And then if you do ask, a lot of times they will say, “sounds okay, or I have some concerns about this or that.” And you can talk to them about that. And asking them also specifically about the price point too, like how are they feeling about that?

[00:29:06] Can also be an important question too for them because then you can really see where they stand on it and where their concerns lie. 

Tom: One area we haven't talked about yet, you guys have really focused on marketing to at least one specific niche. Can you talk a little bit about which ones you play in?

[00:29:21] Maybe a little bit about how you came to that decision and I'd love to explore a little bit more about the folks on niche, cuz it's one of the areas that we talk a lot about that's important. 

[00:29:32] Katina: Yeah, definitely. Again, as we came into some of this, and even before finding you guys we said, okay we're only gonna do service based business, first of all.

[00:29:41] No, manufacturing, no, retail, no inventory, no restaurants, things like that. We wanted to be in a service based industry because that's where most of our background and experience was and strengths were, et cetera. And then we said, “okay, we didn't pick one. We were a little more conservative as accountants and we didn’t want one niche. 

[00:29:59] We [00:30:00] didn't quite settle on one. So we settled on a few. So we have construction, we had a dentist background with one of our partners primarily, but we've been working with them for a while so we expanded that knowledge. IT. So we have a few that we specifically are marketing to.

[00:30:16] Oh, attorneys missed that one as well so there's certain service lines that we are specifically marketing to. We have landing pages specifically for them that talks to them about their specific industry. And we just felt like it really offers us the ability to build out good processes for that specific industry, right?

[00:30:32] So that when you know, we're not trying to cover every industry that possibly could come out and service based businesses are all fairly similar in how you go about the accounting and the processes and things like that. And then each one has little nuances.

[00:30:50] Construction that has its own nuances and attorneys have their own nuances. But we wanted to try to just focus in a few certain areas so that we weren't spreading ourselves too thin. And again, with training, it helps you with the processes. It helps you with the marketing to have all those in alignment so that you're just getting really good at servicing those industries and really understanding those industries.

[00:31:14] And one of the things that we really want to do is to have that integrity and to really serve at that level. That's what makes us happy. That's what makes us feel fulfilled: that we wanna help our clients and make sure that we're aligning in that way

[00:31:26] Adam: Yeah, I think we've talked about niches a lot and as Tom you mentioned, you're right, it's super important to us.

[00:31:32] But I don't know, there's this difference between, don't get me wrong, there's some firms out there that are like a hundred percent all I do is dental practices and I think that they can really leverage their database and I think that's an excellent way to go. But I think whenever we think about nicheing and of course you can go geographic versus industry. Those kind of things.

[00:31:51] I know Katina, we've had these conversations before but whenever we think about nicheing it's exactly what you just said. It's more of [00:32:00] it's not that I won't work with other service-based businesses, cuz you can't market to every single type of service-based business there is, but we're okay with working within them because we know it fits within the mold. I would say, so for our main focus that we're in, we probably only have about 50% of our clients now that are in that niche. That just happens to be the one that we actively market towards, so we put all of our content efforts and all those kind of things. We have two or three others that we're going down that road right now with.

[00:32:31] And again, it's more about focusing marketing. It's not necessarily turning away people that aren't dentists, in that example, that kind of a thing. Like we're okay with taking on other industries. Sounds like you're taking the same approach then just it's more, the niche is more about focusing your efforts.

[00:32:47] What percentage of those two or three niches that you called out, like what percentage of your clients are in those lanes? 

[00:32:56] Katina: Yeah, I think it's probably similar, 50, 60%. I haven't sat down and really tried to sort out. It depends on if you look at it from a number count or volume of revenue, which way you look at it. But yeah, and I think like you said, it, we just took a hard line on anything outside of service-based, and we refer that out because we feel like that's just so different. Manufacturing's just so different.

[00:33:17] Retail's so different. And there's a lot of processes and things that you have to build around that that are going in a very different direction. So we do, but otherwise, if they're not in the niche service lines that we offer, but they're still a service-based business, we're still okay with taking that.

[00:33:33] It fits, like you said, it fits the mold. It fits the patterns of the processes that we're setting up, things like that. We don't have to build 50 different processes for different types of businesses. We tweak it a little to fit that, but there's just so much more and you can't be in an expert at everything.

[00:33:50] So we wanna be really good at the things that we do so that we can make that impact. 

[00:33:57] Adam: be experts at everything. Don't tell Tom that. 

[00:34:00] He is just about good at everything that he does. 

[00:34:02] Tom: Adam, how long have we focused on digital agencies as out niche? What'd you think? 

[00:34:05] Adam: Since about 2000, that's probably over 10 years isn't an interesting for that 

[00:34:11] Tom:

[00:34:11] I know We've really emphasized that it's still about half. I have a feeling that when I talk to people about niches, I think that their reaction often is, “I don't wanna limit my opportunities.” When I say I'm going after this kind of client, I've just shut off all these others. And so I just love saying we have really focused hard on a particular niche for 10 full years and it's still about half of our clients.

[00:34:30] So we continue, as I've done discovery, I've done lots of discovery calls outside of our niche, and we do try to work. We don't turn people away. Although there are times where we'll say, “oh, you're really heavy into this kind of thing. We don't have a lot of experience. Here's what we can do. No, I think you get the benefits of focusing.

[00:34:45] Yeah, I think, and I don't think you're really cutting off and eliminating. 

[00:34:50] Adam: Yeah you're limiting your marketing effort. Is what you're limiting. You're trying to be very strategic with your marketing time and dollars I think is the big thing. And then, to your point, like turning people away we do turn people away.

[00:35:02] Katina: I would even add to that. Again with the process side and the training and those kinds of things too, I think it, putting your dollars in that way too, you're not spread so thin. So yes, definitely in marketing for sure. But I think also in other ways it just helps streamline processes and training and things like that too.

[00:35:22] If you are focusing on certain niche areas that people in your team can really get good at. 

[00:35:28] Tom: In your niches, over what time period do you think you developed what the niches were. From, “we need to pick some.” I'm just curious. I assume this wasn't a one time sit down and strategy session and you're done.

[00:35:40] Katina: Oh, it was pretty close. I think maybe a couple times we sat down through. I think we previously did a lot of real estate rehab side of things, which is also very unique, but also extremely volatile. It was one of those things that, in it, had a lot of the challenges accounting wise, things like that. 

[00:35:55] So it was like something we could do, but we we don't [00:36:00] really wanna focus in that area, for example. So again, even before we found you guys, that was one of the things that the prior company was, they were like, you should niche.

[00:36:09] You should have these things. So we sat down and we said we don't wanna be. And we were very like narrow minded about it too, Tom. Like when it was like niche, like I can't pick one and only work in one. Are you crazy ? That was like, where am I? Let's pick one.

[00:36:26] Let's pick one. Service line or service business, but then also like we're gonna pick four or five that we feel really we know a lot about and we can do well in. And that we also don't feel like we have all our eggs in one basket industry. Especially dealing with the real estate rehab market.

[00:36:41] When we had a lot of clients in that. It's like all of a sudden the real estate market falls and everybody's like going crazy and you're losing clients and there's that volatility in those different industries. So I do like the ability to diversify, obviously, into other industries.

[00:36:55] So if something major happens, even if nobody first saw the pandemic happening, all our dental practices had to shut down for, whatever it was, six months or what have you. And it was like we had to scale back for them because they weren't bringing any money in.

[00:37:09] And it was good that that wasn't a hundred percent of what we were doing cuz we had other industries that were just fine, weren't affected or did better because of the pandemic. So I still like that approach, but I definitely still want to make sure that we're always giving that really high level value.

[00:37:24] And we're working on our strengths. So we are staying within that framework as well. 

[00:37:30] Tom: As you worked toward wrapping up, I'm curious if you were someone saying, “okay, what should I be thinking, kind of the first couple things if I'm thinking of, I do some back office, I do tax work, some of that, but I really want to move toward advisory.”

[00:37:42] I guess I'll ask you and I'll ask Adam the same thing, one or two tips that you're like, okay, here's what you really have to do at the beginning to get this started. 

[00:37:51] Katina: Sure. I think the mindset thing was a big shift for us. To be honest, I think we had to do that first, I think [00:38:00] to really recognize that we do have the knowledge and the value.

[00:38:03] I've seen this meme passed around with the guy who's fixing this gigantic ship and the engine won't work and he comes in and he spends 10 minutes and he knocks in a certain spot and the engine starts and he charges $12,000 for that. And they're like, “you're here for 20 minutes.”

[00:38:17] He's yeah, but I spent 20 years to know where to tap and how to tap. So it's a great analogy. A lot of us at this phase, we have so much knowledge, we know where to look for the problems. We know what kinds of things to do. Even if it doesn't take us long to do it, we need to recognize that there's a lot of value in that.

[00:38:37] So I think the mindset shift would probably be the first thing that I would recommend going through and I think looking at what you want your life to be about. I guess it's kinda “what's your vision?” I still, you talk about vision all the time, it's okay, “what do you really wanna be doing?”

[00:38:52] Do you really wanna be spending 50 hours doing 200 tax returns? Or 50 hours a week doing 200 tax returns. If you do, right? There's some people like that. But if you don't, you need to envision, “okay, this is what I really would like to be doing and this is how I wanna partner with my clients.”

[00:39:05] And that really, I think, just helps you refocus your mind towards that and your efforts towards that, and standing back and taking a minute to really think about, “do I wanna be doing this next year?” Like especially as we're in tax season at this time of year, right? “Is this what I wanna be doing or do I wanna be doing something different?”

[00:39:23] So I would start there. Then I think it would be good or maybe a little more of a direct line to start looking at, okay, what services do you wanna be doing and how maybe would that be structured in doing that and spending some time doing that? And I know when we first started doing this and it was such an interest to me that I would take an hour in the morning even though I was busy and just look at the stuff like, okay, how do we transition?

[00:39:48] How do we get the right mindset? What do we want this to look like? What do we, those kinds of things. Or at least most days, maybe it was more like three or four days a week, but you just have to spend the time thinking through it. And if you're [00:40:00] overloaded with clients, as many CPAs are, you have to look at that client list and you need to make space and it's scary.

[00:40:08] But, one of the things that the prior company we worked with is there's so many people out there that need help. So much opportunity that you need to let go of that fear, cut it out, and be able to recognize that it's gonna get filled in with better things. So there's so much abundance of opportunity

[00:40:24] Tom: Really good advice. Adam, anything to add for kind of those first few steps? 

Adam: Yeah, thanks for letting me follow that. No, mic drop. You nailed it. I think that's exactly everything. The only other advice that I can just offer up is if you're confused about where to start with any of that other stuff in terms of the services.

[00:40:42] Just look within your what your current, the people that you're working with now, whether it's their personality characteristics, their industry, and what do you enjoy about your interactions and working with them. I think that'll give you some foundation to start doing all those things that she had talked about in terms of the services and the packages and stuff like that.

[00:41:03] Just lean into that a little bit, and I think it'll work itself. 

[00:41:07] Tom: This is really helpful. I'm really hoping that people who are listening, who are thinking this have seen a path of someone who's done it and done it successfully. And created the kind of firm that you want to, cuz you also did it by making a firm that's different than how many other firms are out there from a lifestyle perspective and made it work.

[00:41:22] So that's great. Congratulations with that. Thank you very much for joining us today. Okay. Hope you guys have a great day. 

[00:41:27] Adam: Yeah, thanks Katina. 

[00:41:29] Katina: Thanks for having me.


Adding Virtual CFO Services to Your Firm with Katina Peters


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Episode 93 - Adding Virtual CFO Services to Your Firm with Katina Peters



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