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#21
cp_acwt  
Posts:
98
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22-May-2014 1:59pm
Location:
MichigaN
Give everything careful consideration. If you do make the leap and decide you don't like it, it is not very likely that you will be able to re-create what you currently have.
 

#22
j3cpa  
Posts:
38
Joined:
9-Aug-2018 5:58am
Location:
MA
Hi,

thank you so much for the responses. After much consideration, I decided to leave my current job and will try a solo practice to see how I do.

My unique situation is that I'm extremely versed in 990/990T/990-PF realm and is really weak in the income tax side. Most of my career is really in the exempt organization / employment tax / IRS representation for these matters.

Do you think it's possible I can start a firm and grow with these type of clients only? Or should I bang out 1120(S) / 1065 CPEs and catch up on the income tax side? I'm a CPA. I know accounting. But I don't know a thing about these income tax returns. Just wondering what your thoughts are in regard to my unique situation.

Also, do you know any seminars/resources that you can recommend for firm building? I was browsing taxalmanac earlier today and most of them recommend Frank Salman's course. I googled his name and found out that his website overs DVD and looks really outdated. Is this guy still good?
 

#23
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2611
Joined:
24-Jan-2019 2:16pm
Location:
North Shore, Oahu
Hmmm, I wonder if you would have received the same advice if that was made more clear.

Cons:

Not sure about 990 volume. I'm very visible online in an area with a population of 1 million, but I only have perhaps 5 non profit tax return clients, and perhaps 80 1120s/1065 clients.

Pros:

You know accounting... Hiring a data entry person and offering simple bookkeeping/payroll services has been very profitable and leverage-able, in my experience.

Perhaps you can learn to do the tax returns of your future accounting clients.
 

#24
swgordon  
I think it is going to be much much more difficult for you if your focus is nonprofit. To really grow quickly I think you need to do a lot of individual as that is what is out there in abundance and easy to get. You can then scale back the individual as you grow your more preferred clientele.

That being said, there are a lot of nonprofits out there that desperately need help. I am sure you can pick up bookkeeping work with them. If I were you, I would start calling other CPA firms. Many of them do not mess with nonprofits and you could develop those relationships to have good referral sources. I personally have some nonprofit experience but I do not like preparing 990. I always refer that business out to others when it comes in.
 

#25
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2887
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21-May-2018 7:50am
Location:
Northern MI and Coastal SC
Nonprofits are tricky, which is a good thing in that you are well versed in them. I have made a lot of money with nonprofits because I am one of the more experienced CPAs in my area for 990 entities. That said, they are difficult and time consuming clients. They typically struggle to stay in compliance and operations. Many do not actually stay in compliance, and lie as if they do. I am at a point of not accepting any new non-profits. As of next year, I will be down to one and I am not the least bit upset over it.

I do not think it is a stretch to say you can expand into 1040 and then 1120/1120S/1065 work. But, it is a different ballgame with both taxes and accounting, and will take time. Take all the CPE you can on the subject. Surpass your CPE requirements, buy PPC Deskbooks on those forms, and read them. They are invaluable resources and will help you jump start your knowledge of such services and associated regs.
 

#26
j3cpa  
Posts:
38
Joined:
9-Aug-2018 5:58am
Location:
MA
swgordon: than you for your suggestion. I do plan on contacting other CPA offices once things start rolling. Other than a referral $, I don't really think I can provide any real benefit to them. I would be leeching clients while having no clients to refer back. What do you think?

ItDepends: exempt organizations are all over the place. Most CPA knows very little about non profit because they have very little volume compare to 1120s or 1040s. But there is very good money here, basic returns could go from $850 to $5000 where I'm from (MA). If anyone reading this in the area and feel like my estimate is off, please chime in.
 

#27
Posts:
2887
Joined:
21-May-2018 7:50am
Location:
Northern MI and Coastal SC
j3cpa wrote:swgordon: than you for your suggestion. I do plan on contacting other CPA offices once things start rolling. Other than a referral $, I don't really think I can provide any real benefit to them. I would be leeching clients while having no clients to refer back. What do you think?

ItDepends: exempt organizations are all over the place. Most CPA knows very little about non profit because they have very little volume compare to 1120s or 1040s. But there is very good money here, basic returns could go from $850 to $5000 where I'm from (MA). If anyone reading this in the area and feel like my estimate is off, please chime in.


While I agree there can be A LOT of money made in non-profits, I would be very hesitant to build a practice on them. Non-profits are still heavily based on very volatile economic factors, where at least you can somewhat diversify among other clients.

Do not think you have nothing to offer other CPA firms in exchange for nonprofits or anything up your ally as far as competence and experience are concerned. There is always something to give and take. That is why I do not view other CPAs as competition; we need each other, and we can feed off each other. Hell, I have things to offer other CPAs that have 20-30+ years more experience than I do, and yet we still work accordingly.
 

#28
swgordon  
The benefit that you are providing to them is that they have a good referral source to send clients too. That is enough. When I refer out, I never expect referrals back or $$. I just want to have someone good I can send prospects to that I can not support. Just that makes me look good in the prospects eyes and could lead to referrals from them later.

Also, many of the CPAs firms that prepare 990 do not offer accounting services for those clients. So that is another opportunity. If you are willing to do just the bookkeeping I think you could pick up clients from other nonprofit CPA firms. They would be thrilled that a competent CPA who understands the 990 is taking care of the books as it makes their job so much easier when it is time to prepare the 990.
 

#29
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1174
Joined:
21-Apr-2014 7:09pm
Location:
NC
j3cpa wrote:I have a 100K job. Work from home whenever I want. Great benefit. No stress whatsoever. Basically can take leave whenever I want.

For non competing and conflict of interest reason, I can’t moonlight on the side for extra income. It’s been hard deciding if I should leave this gig to start something of my own.

How long did it take you to get 100K NI?


So using simple math if you only worked 1,000 hours at $200 an hour you would easily get there. My 1st year , in 1997, I did $100K gross, 2nd year $200K gross and from there got selective. I have a different skill set and got lucky in that I hit Charlotte NC in 1997 at it's infancy of growth BUT.... CPA's are hard to find right now and I see no CPA's around here doing less than $200K gross and most are over 300K with a part timer. There is a shortage of good CPA's nationwide.
 

#30
j3cpa  
Posts:
38
Joined:
9-Aug-2018 5:58am
Location:
MA
swgordon, cornerstone: thank you for pointing out my shallow thinking and the positive comments.

southparkcpa: $200 would be a little high for what I'm thinking of charging as I'm starting out. But I understand your thinking. Also, thank you for the positive reinforcement that you were able to bill $100K first year like that! congrats. Why do you say that there is a shortage of CPA nationwide?
 

#31
swgordon  
Don't charge too little. Starting out, everyone has the tenancy to charge too little thinking that you have to in order to get clients. But you don't. If you do, you will have a hard time getting those clients up to the level that you should be billing at when your fees do rise to what they should be after a couple of years. Set your fee where you want it to be from the get go and raise it each year to compensate for inflation/cola. I guarantee that clients will not question it.

I started 6 years ago at $175 an hour. I am now at $300 and have never had anyone say anything about it. My minimum corp return started at $800 back then. Now it is $1600. Those $800 clients are only at about $1000 or $1050 and I will never get them up to my new fee level.
 

#32
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1174
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21-Apr-2014 7:09pm
Location:
NC
j3cpa wrote:swgordon, cornerstone: thank you for pointing out my shallow thinking and the positive comments.

southparkcpa: $200 would be a little high for what I'm thinking of charging as I'm starting out. But I understand your thinking. Also, thank you for the positive reinforcement that you were able to bill $100K first year like that! congrats. Why do you say that there is a shortage of CPA nationwide?


So you have received a lot of good advice here... an entry level accountant bills out at around $125-$150 an hour. You have to be worth at least $200 minimum. I bill at $275 but my rate is closer to $300-$350 as we value bill. Shortage of CPA's?? I simply think there is a shortage of good ones. High Volume, young CPA's just doing tax returns are abundant BUT good, counsel minded CPA's are hard to find. If you don't think you are worth $200, you probably need to ask why? A 2nd year staff accountant in a form is billed out at $200.
 

#33
Posts:
2611
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24-Jan-2019 2:16pm
Location:
North Shore, Oahu
swgordon wrote:Don't charge too little. Starting out, everyone has the tenancy to charge too little thinking that you have to in order to get clients. But you don't. If you do, you will have a hard time getting those clients up to the level that you should be billing at when your fees do rise to what they should be after a couple of years. Set your fee where you want it to be from the get go and raise it each year to compensate for inflation/cola. I guarantee that clients will not question it. .


This this this!!!

Biggest mistake I've made in my entire life.

I was warned. Didn't listen.

So hard now to fix.

Now I quote so high it makes me sick to my stomach and I still get few rejections and I get much better clients.
 

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