Solo or team tax practice?

Hi, I was just wondering if anyone has an opinion about whether it is better to have a small tax practice with 1 or 2 employees, or just to do it on your own.

For instance, I am in a situation where I could try and do things with 1 or 2 employees, or I could drop a bunch of my least favorite clients and go solo.

I can see some benefits in doing it on your own, e.g. not having to deal with employees, payroll, coordinating etc...

and, I can see some benefits of doing it with a team, e.g. being able to hand off the really boring stuff.


Any thoughts?

Going through the same process now so I'm in for the read.
As a solo you will be limited on earnings at some point, or you completely trade your life for the game.
Also difficult to take time away without a team to cover you at the office.
Succession planning is also less available options.

Wondering same thing, except thinking of sharing admin person with another CPA?

Define "better". Some hate the hassle of employees, others want to build an empire. It depends on what your goal is.

Personally, I have been trying for 20 years to build a business with a team in place. I did have 3-4 people working for me at one point, but then the crash of 2008 hit and I had to let everyone go and basically start over. Ever since I have not been able to find staff who have brains, want to work, or think they can do it better on their own. It is a real struggle.

IMHO it really depends on what your long term business goal is and where you are in your life! If you are middle aged and probably thinking of retiring (or partial retirement) in the next 5 years, go SOLO with seasonal employee and limit yourself to do the most profitable returns. Less returns with a high value are much better than a truck load of marginal returns.

I have tried that and that has been my experience.

Are you tax only or do you offer other services? Getting into controllership side is where you can really start making good money without the standard time constraints and lack of work:life balance. There are also different fee structures you could pursue with tax clients to work around all of the issues of having staff and revenue ceiling.

I am solo and people often wonder how I do it. I have just found a rhythm and fee structure that works, and I have a pretty good work:life balance. I'll definitely need to hire 1-2 employees to hit my revenue and income goals but doubt I will need more than that.

Our profession needs a far more accelerated change in how we conduct ourselves. I decided I am going to launch a coaching segment of my business for other solo or small practices looking to get away from outdated methods of EVERYTHING. Hoping I can have it launched by Q4.

My suggestion, based on experience, is to be the only tax pro and the face of the practice - but to hire a helper or two and go small with pay and expectations (don't promise them or expect the moon).

If you are lucky enough (and apply the hard work and time to coach them) to find a good helper or two they can do admin assistant work and data entry - this will create some leverage for you.

IMHO it really depends on what your long term business goal is and where you are in your life! If you are middle aged and probably thinking of retiring (or partial retirement) in the next 5 years, go SOLO with seasonal employee and limit yourself to do the most profitable returns. Less returns with a high value are much better than a truck load of marginal returns.

I have tried that and that has been my experience.

I guess I am pretty far from retirement. Probably >25 years, that being said, I would retire yesterday if I could.

Thanks for the advice.

Are you tax only or do you offer other services? Getting into controllership side is where you can really start making good money without the standard time constraints and lack of work:life balance. There are also different fee structures you could pursue with tax clients to work around all of the issues of having staff and revenue ceiling.

I am solo and people often wonder how I do it. I have just found a rhythm and fee structure that works, and I have a pretty good work:life balance. I'll definitely need to hire 1-2 employees to hit my revenue and income goals but doubt I will need more than that.

Our profession needs a far more accelerated change in how we conduct ourselves. I decided I am going to launch a coaching segment of my business for other solo or small practices looking to get away from outdated methods of EVERYTHING. Hoping I can have it launched by Q4.

We are tax and bookkeeping/payroll, and we do a tiny bit of advisory (which I want to increase, because it seems to be less work than returns). Our practice is in the stoneages, and I am trying to make updates.

Define "better". Some hate the hassle of employees, others want to build an empire. It depends on what your goal is.

Personally, I have been trying for 20 years to build a business with a team in place. I did have 3-4 people working for me at one point, but then the crash of 2008 hit and I had to let everyone go and basically start over. Ever since I have not been able to find staff who have brains, want to work, or think they can do it better on their own. It is a real struggle.

Yeah, good points. My goal is really just to make enough money to support my frugal lifestyle, retire early-ish and have as little stress as possible.

I have no interest in an empire, but I don't want to feel any financial pressure, e.g. having to worry about making payroll or rent etc.

We are tax and bookkeeping/payroll, and we do a tiny bit of advisory (which I want to increase, because it seems to be less work than returns). Our practice is in the stoneages, and I am trying to make updates.

Reach out to me via PM and I'll give you my e-mail so we can discuss various things that can help you move forward with your practice and out of the stone age. I have a pretty significant IT background that has helped my own Firm quite significantly, plus I am very forward thinking instead of short term benefits. Not everyone agrees with what I have to say, which is fine, but I am pretty darn successful as a solo CPA.

Almost 2 years later - what did you do? Did you hire? Are you solo?

Today, I had some problems with my main admin person.

She left a few open loops to where clients provided everything that is needed and was asked of them, but those replies (emails) were filed away and we didn't find out until weeks later resulting in very poor CS.

This is extremely frustrating and I wonder if I should just handle this myself. Sure, I make mistakes but not many (if any) open loops like that.

I know you are not supposed to expect perfection, and I realize that this result was a limitation of my own systems and ability to coach and train...... but that stuff is REALLY hard and time consuming.

Is it worth it?

Today I don't think so.

Is it worth it?

Today I don't think so.

I am starting to believe the same thing, although I would still keep an admin as they are easier to find and train. I just can't find tax preparers. In the two years since this was posted, I've gone through 3 staff. Two last tax season and one this year. I don't see how people are able to hire and scale.

I did have a thought yesterday that maybe I need to merge with another owner in the same situation so we can hire better staff. I don't know what the solution is.

It was an easy decision for me. I saw so much dysfunction in the various places where I had worked, and I wanted no part of recreating the same. Yet I felt that it was inevitable if I became the boss and had to impose long hours on others during tax season. Solo it is.

I have ultimate control and freedom. But...my income did top out when I simply could not take on any more. But that was ok, it was a very good income. I have cut back now, and since I am not making money off of the labor of others, I have traded ease of pace for less income. So, it is all about your priorities. I am very happy to be solo, especially when I hear from everyone who has employees how difficult it is to find people who are good and committed.

It was an easy decision for me. I saw so much dysfunction in the various places where I had worked, and I wanted no part of recreating the same. Yet I felt that it was inevitable if I became the boss and had to impose long hours on others during tax season. Solo it is.

I have ultimate control and freedom. But...my income did top out when I simply could not take on any more. But that was ok, it was a very good income. I have cut back now, and since I am not making money off of the labor of others, I have traded ease of pace for less income. So, it is all about your priorities. I am very happy to be solo, especially when I hear from everyone who has employees how difficult it is to find people who are good and committed.

Very similar here. I was a 4 employee firm from inception in 98 to about 2002. In 2003 I decided to NOT replace my "Sr acct". My other accountant was my admin. She got an EA and i told her,. work like an owner and I'll pay you like one. We were a very successful 2 person firm from 2005 to 2021. We billed out 400K plus. She got paid over 100K. We also had FP revenue.

If I were advising a young CPA I'd say stay small, specialize, save 10 to 15 percent of your gross billings(401K/SimpleIRA/regular acct) every year and invest in index funds. I did and have saved in the "hood" of $2+ million just from the accounting business. If you do that, you can retire younger.

I sold the FP practice and she moved on to a quality mid size firm and loves it. I am working about 8-12 hours a week from 5/1 to 12/31 and 35 hours a week in tax season. This profession, after a grueling start for me where I almost gave up, has blessed me.

I am still of the solo mindset, though I realize I'll cap out on income potential (don't care, I am never returning to the hell I once had in my career). I hired two employees to do the monotonous work that bogged me down, but I know I will need to look for replacements for them since they'll age out before I do. With two quality staff and just me, I can achieve my gross and net income goals while still having a life.

People are stunned when I say I just filed my first tax returns of the "season" this week, including only one S-Corp--mine! Still waiting on procrastinators that will be extended tomorrow.

Well, my admin assistant is out sick today, and if I needed any reminders of how valuable she is, it's evident. There are so many little time consuming things like setting appointments and sending invoices... Individually they seem insignificant, but just try getting serious work done on tax returns at the same time!

My business was purely solo from 1996-2005 and I had decided it was time to stop working for myself, precisely because of the lack of admin support. Then I got dragged back in 2006, hired employees and had visions of a firm with multiple accounting professionals. That model didn't work out so well, but since 2015 it's been me and an admin assistant and that's been a very successful combination. (Since I have a 9-year track record between major shifts, maybe I'll change my mind soon? I doubt it.)

Well, my admin assistant is out sick today, and if I needed any reminders of how valuable she is, it's evident. There are so many little time consuming things like setting appointments and sending invoices... Individually they seem insignificant, but just try getting serious work done on tax returns at the same time!

No doubt. I consider myself a "solo" practice but I would never in a million years do this on my own with admin support. My admin is worth her weight in gold. I pay her well, let her take time off in tax season, and give her benefits. She's part-time and I often wonder if I were to add another part-time admin if I could squeeze even more work out.