Case Study: Hunter Bailey, CPA

Head down in the comfortable space tax prep compliance busy work and
not identifying the more profitable higher-value opportunities.

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CLICK: Video Transcription

Q: What motivated you to talk to me?

[00:00:00] Trow Trowbridge: What motivated you to talk to me?

[00:00:02] Hunter Bailey: When we first started talking, you pretty much laid out what the main problems that CPA firms ran into. And my curiosity was, you know the problem. Did you know the solution?

Q: What were you doing to address your problems at that time?

[00:00:15] Trow Trowbridge: At that point, what were you doing to address what you thought were your problems?

[00:00:20] Hunter Bailey: Our method at the time was to do more returns faster during busy season. That way we could get our revenue up, get us through the rest of the year, and then have a handful of low level bookkeeping clients to keep some of the tax return preparers busy throughout the rest of the year.

Q: What did you think was the problem?

[00:00:38] Trow Trowbridge: What did you think was the issue or the problem?

[00:00:41] Hunter Bailey: The perceived issue for us was that we had a very small window of time in which we could make the majority of our revenue, and so we made it a big priority to really do a lot more cash [00:01:00] returns during business season.

Q: What was the shift you made once you joined the program?

[00:01:01] Trow Trowbridge: But that is such a classic situation to do it better, faster, cheaper, and make more money doing it. But as I recall that created a classic burnout situation.

[00:01:15] I remember your partner, Dennis, your father saying, We had 105 days, we’re gonna be totally pedal to the metal. And then we find 45 days it took to decompress from that.

[00:01:29] What was the shift you made once you joined the program to start advising clients and not relying so much on the treadmill of 1040s?

[00:01:40] Hunter Bailey: The shift was in how we perceived what we could do for the clients prior to starting to work with you. Our mentality was if the client asked for tax preparation and maybe a little bit of bookkeeping, that’s what we’re gonna do for them. And then the shift came when we realized, no, there’s a lot more that we could do.[00:02:00]

[00:02:00] And if we simply talk to the client, ask them a few questions and got to know them better, we could open up a world of value that we could be providing to them year round. So that’s where the big shift came.

Q: How do you work with clients now?

[00:02:12] Trow Trowbridge: How do you work with clients now versus the tax prep kind of sweat shop treadmill?

[00:02:19] Hunter Bailey: The difference now in how we interact with the clients is it’s a much more proactive relationship. Instead of waiting for them to come to us and say, we need X and we need Y, we’ll reach out to them and say, Hey, can we talk about how things have been going?

[00:02:33] Through working with you, we’ve learned how to ask different questions that will get them to start talking.

[00:02:38] And as they talk, they realize that they have needs and it’s just a natural progression of getting them to talk, getting them to tell us their needs, and then it’s just a natural flow into more things that we can do for them.

Q: Are you discovering that you have to block out distractions to focus more on your success?

[00:02:53] Trow Trowbridge: It’s a transformation, isn’t it, to go from " this is what accountants do" to, "did you know we can [00:03:00] help you with that?"

[00:03:02] As you are making this transformation, are you finding that you have to block out distractions to focus more on your success?

[00:03:11] Hunter Bailey: Yes. That’s an ongoing work in progress, right? You’re never truly able to block out all the distractions.

[00:03:17] We had a partner retire at the beginning of 2022. We were scrambling, picking up all the pieces of the clients that she had 20 years of experience with.

[00:03:29] It was definitely a challenge to realize we’re gonna be pruning a lot of this. Obviously we’re still gonna meet our professional responsibilities, do a good job, but we have to really change our mindset. Put that down, allow that to not be excellent, in sacrifice for the new direction.

Q: What is your advice to CPAs struggling with too much compliance work and not enough money or time?

[00:03:48] Trow Trowbridge: What would you say your number one piece of advice you would give CPAs struggling with too much compliance work and not enough money or time?[00:04:00]

[00:04:00] Hunter Bailey: I think it goes back to your last question about the distractions. I think my advice would be to not be afraid to prune pretty aggressively. We’ve found that what happens is that two things actually happen if you don’t prune enough.

[00:04:18] One, you just don’t have the capacity. But also the compliance work can be very comforting. " I might not get this new advisory to work, but that’s okay because, if push comes to shove, I can always go back to my tax and my bookkeeping." it’s like you’re trying to put more food on your plate, but you can’t finish what you’ve already got on there. Allowing yourself to be hungry for that work.

Q: Prune aggressively and also price aggressively?

[00:04:40] Trow Trowbridge: Prune aggressively and also price aggressively.

[00:04:44] Hunter Bailey: You gotta price appropriately or it doesn’t matter what service you do. If it’s not priced correctly, then it’s not gonna work.

[00:04:50] Trow Trowbridge: Ron Baker say, "hourly billing takes a pencil, value billing takes courage". You guys have definitely seen the light [00:05:00] and made that shift. It’s been exciting to watch. I look forward to more and I hope you do too.

[00:05:05] Hunter Bailey: Appreciate it, Trow. It’s been really transformative working with you, so we greatly appreciate it.

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