In a wide-ranging interview, Glenn Hetzel, Managing Partner of Glenn B. Hetzel & Associates, CPAs spoke frankly and clearly on the many challenges and opportunities related to growing an accounting business. Here are excerpts.
Some Background on Glenn
After graduating from the University of Miami, Glenn joined a large regional accounting firm and then their largest client – an international conglomerate in the containerized cargo business based in Florida. This involved extensive travel and a decision to move to California in 1982. After his employer was sold, Glenn joined a national company in the health club industry as Controller, but when they wanted to shift the office to Chicago, Glenn started with a NASDAQ-listed firm in the turn-key computer industry serving medical and dental practices as VP, CFO. After a couple of years at that public company, he was offered a position with a defense contractor in the aerospace industry. In 1992, Glenn preferred the stability of his own business and established Glenn B. Hetzel & Associates, CPAs.
Today he employs 7 people and is experiencing 30-40% year on year growth (even in a COVID19-influenced world).
Hoping to attract business clients, Glenn tried direct marketing and advertising, but quickly learned to leverage his experience working in a range of industries. He offered a contract CFO service ‘to advise leadership on what sits behind the numbers’. Noting that ‘few people can read financial statements’, Glenn focused on highlighting ‘productivity indicators to tell the story of the business and identify trends to influence decision-making and achieve goals’.
With exposure to international tax and accounting, Glenn attracted foreign capitalized companies investing in the USA, some with global revenues in excess of $100 million.
Glenn acknowledges that each client is different but focuses initially on how the business is set-up. ‘There may be immediate opportunities by converting the business structure’. Then he looks at the accounting system because ‘improved processing of transactions can also unlock opportunities, for example by using cloud-based applications’. Trying to find missed opportunities on the revenue side is always welcomed by clients who can develop ‘tunnel vision’ in their businesses.
Glenn points out, ‘We don’t try to sell to prospects. Instead, find out about their pain or challenges. We may even send them back to their current advisors. We want the client to arrive at the conclusion that we understand their challenges and can help them’.
Glenn tries to attract clients interested in growth with a minimum of $1 million in revenue ($5 million is a sweet spot). ‘They may have outgrown their current accountant, be thinking about a business exit or are looking to raise capital. We also like clients who own a lot of rental properties’. Glenn continues, ‘We are very diligent and selective when bringing on new clients and try to understand their profiles and how they’ll fit with us. The whole team is equipped for this and we send away those who are not ideal’.
The Sales Team
Glenn employs a manager to focus on business development, usually for 3 or 4 hours per day, and spends slightly less of his own time on new business development. They make sure this time is etched into their calendars because, ‘if you don’t plan it and work on it, you won’t achieve anything’.
Are business development skills natural? Glenn acknowledges there are some innate skills but says, ‘It’s like fishing. What bait you use and where you cast is important. More important than sales technique is asking questions and showing a good understanding of a business’.
Having well-defined products – a product menu – also helps. You can give clients a choice and ‘they often choose something higher than what you thought’. This involves clearly understanding the expertise in your firm and how it can be applied to certain industries.
Describing What You Do
‘We describe ourselves as “Trusted advisors dedicated to building better businesses through proactive solutions that result in a path to success and peace of mind”. The idea is to distinguish yourself from accountants. You are a problem solver. Don’t try to push a solution’.
Where are the leads coming from to drive the current growth rate? Glenn cites his networking activities as critically important especially what he calls ‘power partners’. Trust attorneys, business attorneys and financial advisors have been a great source of leads (sometimes up to 10 referrals per week) and the relationship is reciprocal. This works well if you ‘know who your target client is and tell your partners what you are looking for’. Pushing out high-quality content is also important as ‘this builds the brand and trust in the business while making people aware of what you do’.
Acting methodically when leads arise is important and Glenn uses Panalitix’s SalesPipeline. Leads are screened, entered and progress is tracked. ‘This helps to keep people accountable and stay on top of all opportunities’.
To close deals, Glenn emphasizes persistence. ‘Sometimes deals are closed in one or two meetings but with sales calls increasingly done over video, things can take longer, perhaps 1 or 2 months to close’.
Prices for tax preparation work start at $700 for individuals ($1,500 for business clients) and will vary based on the package. A ‘Basic’ package contains only preparation of the tax return while a ‘Standard’ package includes a meeting to provide advice and other support through the year. The ‘Premium’ package includes reminders, correspondence with tax authorities and additional support at prices 3 or 4 times the basic.
Clients are encouraged to pay upfront (to receive a 10% reduction) or in two installments (to receive a 5% reduction).
Working with Panalitix
According to Glenn, his firm was ‘becoming an administrative burden and we were experiencing employee churn. We put in practice development software but I was too busy to learn it properly! At a convention put on by the practice development software firm, I learned about Panalitix and went along to a seminar. I resolved to grow the business based on the Panalitix model’.
First Projects with Panalitix
‘One of the first things we did was define our mission statement. Then we tackled workflow, where we were always falling behind. We also needed to focus on the team because I encountered resistance as we made changes. In the end, I completely rebuilt the team’.
This can be quite challenging. ‘Things improved when I hired a business manager to do HR in addition to managing some client projects and improving our workflow. Bringing on a Client Services Coordinator was also a critical step’.
Glenn goes on to say that maintaining balance is a priority. ‘There are always many spinning plates: scheduling, marketing, business development, client projects, and so on. It took us a year to get a trained team in place to achieve this balance’.
Glenn is always networking and looking for people, whether retiring partners or people starting their careers. And the mindset he seeks out is ‘embracing change’.
‘Leadership should always identify things they can delegate, then hire people to take on those tasks’. Glenn focuses his time on the top clients and some business development in addition to managing the firm.
Managing in a COVID-19 environment
‘Like other accountants, we dealt with an extended tax season and scaled back overtime work. We also got involved with PPP loans and other government program support. Increasingly, we advised clients on the viability of their businesses as they tried to stay afloat. We are supporting them through the transformations they need to make’. Example: One of Glenn’s clients modified their manufacturing capabilities to produce free-standing hand sanitizer stations!
A Balanced Lifestyle
This remains crucially important! Glenn tries to take 1 month away from the business each year. Over time, he learned to ‘take the business with him’, first on trips to Florida and then to New Zealand, Australia, Dubai, Rwanda and elsewhere. Choosing the right time to work remotely can be tricky but, ‘I continue to work with my top 5 clients and always return with a fresh attitude!’
Glenn is optimistic about the many opportunities for accountants arising from technology disruption. ‘Clients need to put systems in place to work remotely and automate their processes. Millennials want to run their businesses from their tablet or phone. This creates new work for our firms and helps us attract new clients’.
Our thanks to Glenn for finding the time to speak with us!