{"id":52517,"date":"2017-08-12t00:58:54","date_gmt":"2017-08-12t04:58:54","guid":{"rendered":"https:\/\/48e130086c.nxcli.net\/?p=52517"},"modified":"2023-10-05t09:18:40","modified_gmt":"2023-10-05t13:18:40","slug":"baldwin-cpas-grew-small-firm-regional-player","status":"publish","type":"post","link":"\/\/www.g005e.com\/2017\/08\/12\/baldwin-cpas-grew-small-firm-regional-player\/","title":{"rendered":"the five rules driving growth at baldwin cpas"},"content":{"rendered":"
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long<\/strong><\/figcaption><\/figure>\n

alan long: entrepreneur first, cpa second.\u00a0<\/strong><\/p>\n

by ian welham
\nthe accounting success podcast<\/a><\/em><\/p>\n

alan long of baldwin cpas is an entrepreneur first and cpa second. that entrepreneurial mindset is the driving force behind the strong revenue growth, innovative practices, and steady expansion that\u2019s bringing baldwin national attention as a rising regional firm.<\/p>\n

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the practice that started in small kentucky towns such as maysville, (pop. 8,920), flemingsburg (pop. 2,694) and richmond (pop. 30,000), has expanded into louisville and lexington \u2013 and now long is planning his next strategic move.<\/p>\n

whatever it is, it\u2019s likely to be unexpected \u2013 as is the baldwin founder himself.<\/p>\n

alan long rides a harley davidson motorcycle, was once a wedding photographer, and is someone to avoid in a duel (he\u2019s been ranked in the top 20 in his class nationally in competitive pistol shooting). his success formula, which he calls \u201cthe baldwin way,\u201d is based on five future-focused principles.<\/p>\n

1 — adopt an entrepreneurial mindset.<\/strong><\/p>\n

in 1985, at the age of 26, long purchased the oldest practice in his hometown of richmond, kentucky. it wasn\u2019t that he wanted to own an accounting firm. he wanted to own a business.<\/p>\n

\u201ci\u2019ve always been entrepreneurial,\u201d comments long. \u201cwhen i went into this profession, the one thing i liked was that i would be able to own and run a business. i wanted to be able to grow and control my own destiny. i didn\u2019t have a boss. i had to be accountable to myself.\u201d<\/p>\n

since then, baldwin has grown to five offices, 11 partners, and over 60 employees. when he speaks to accounting groups, his message is: don\u2019t be fooled by the numbers; accounting is a people <\/em>business.<\/p>\n

\u201cthe numbers are the easy part,\u201d he says. \u201ci can hire folks. i\u2019ve got computers that will figure the numbers. the hard part is understanding people and dealing with people issues.\u201d<\/p>\n

2 — change is here to stay. embrace it.<\/strong><\/p>\n

\u201ccpas need to get outside their box and their comfort zone,\u201d says long. \u201cwe need to embrace change and thrive with it \u2013 not fight it \u2013 because we\u2019re in a fast-moving world today, and things that used to take years to change now change in six months to a year.\u201d<\/p>\n

as an example, long cites auditing, where he sees big changes coming in the next five years, thanks to big data, artificial intelligence, and advanced data analytics tools. and it\u2019s not only large accounting firms that will be affected. small firms will need to adapt, too.<\/p>\n

\u201cwhen standards are written, they\u2019re not written for any one size firm,\u201d states long. \u201cthey\u2019re written to cover what\u2019s happening in the [entire] auditing world. a small firm can\u2019t enlist the help of watson, let\u2019s get real, but there are still lots of data analytic tools they can use. however, the skill set for the auditor is going to [have to] change.\u201d<\/p>\n

long points out that with data analytics, auditors will be able to audit 100% of transactions versus just taking small samples of huge bodies of transactions. in the process, the standards are changing.<\/p>\n

\u201cmost of the issues are going to be flowing through the income statement. they\u2019re not flowing through the balance sheet. for example, if you\u2019ve got to do defalcation, where\u2019s it going to end up? it\u2019s going to flow through the income statement as an expense somewhere, or as a reduction in income.\u201d<\/p>\n

3 — develop areas of specialization.<\/strong><\/p>\n

there are three ways to develop niches \u2013 internally, externally, or through acquisition. long leverages all three to move his firm forward.<\/p>\n

long\u2019s very first niche was contractors, and the baldwin name continues to be known in the bonding circles, and among underwriters and other players in the contracting field. the firm has also developed internal expertise in litigation support, forensic and fraud, and business valuation.<\/p>\n

through the louisville acquisition, baldwin acquired a partner who \u201clives, eats, and breathes not-for-profits, and does an excellent job.\u201d and now the firm is winning new business in that area.<\/p>\n

externally, baldwin conducts frequent peer reviews for other cpa firms. in addition, long is a past member of the aicpa peer review board. he sees peer review as a way to keep up to date, open potentially valuable relationships, and stay ahead of trends.<\/p>\n

4 —\u00a0don\u2019t be afraid to ask for outside help.<\/strong><\/p>\n

\u201ccpas make a huge mistake in thinking they can be everything to everyone,\u201d declares long. \u201cthey don\u2019t seek outside help from the consultants that help cpa firms manage just like we want to help our clients manage.\u201d<\/p>\n

baldwin enthusiastically welcomes the outside perspective, consulting with gary boomer on strategic planning, gale crosley on business development, and alan koltin on mergers. baldwin has also talked with ron baker to explore moving to a value-pricing model and away from time sheets.<\/p>\n

the firm\u2019s hottest growing business segment \u2013 advisory services \u2013 is a combination of internal and external expertise.<\/p>\n

\u201ci think that advisory services are going to be the largest growth area we have,\u201d says long. \u201cwe\u2019re already starting to see it. we\u2019re still in the infancy stage, but our fastest growing service is [providing] more of an advisory role to small businesses.\u201d<\/p>\n

5 — use systems and \u201cchampions\u201d to manage change.<\/strong><\/p>\n

as baldwin acquires new firms, a frequent challenge is indoctrinating new employees in \u201cthe baldwin way.\u201d<\/p>\n

\u201cgetting folks to let go of what they\u2019re doing is always a challenge because most accountants do not like change,\u201d says long. \u201ceverybody wants to go back to what they did last year because it\u2019s easy and that\u2019s what they feel comfortable with. managing change is one of the hardest things, not only for my firm, but for any accounting firm, because change is growing so exponentially fast.\u201d<\/p>\n

changes in the tax law, changes in auditing, changes in technology, and changes in client expectations are all putting pressure on accountants. long\u2019s solution is to develop systems and \u2018champions\u2019 \u2013 individuals in the firm who take ownership of a project \u2013 whether it\u2019s a merger or a new initiative or new service.<\/p>\n

\u201cwe have worked really hard on our processes to keep us all on the same page and moving in the same direction, and [to avoid] the hodgepodge that happens in a lot of cpa firms where individuals are only concerned with their own stuff, and not the firm. ours is very much a firm-oriented approach.\u201d<\/p>\n

many cpas see change as a threat. long sees it as an opportunity.<\/p>\n

\u201cevery time we get a regulatory change from the dol or from any government agency \u2013 even when standards change \u2013 those are opportunities for firms. they\u2019re opportunities that some of us don\u2019t like, but if you give me lemons, i\u2019m just going to have to try and figure out a way to make lemonade out of it.<\/p>\n

\u201csome of this stuff we can\u2019t control, but we need to figure out the best way to help our clients and explain to them, \u2018you need my help, and here\u2019s why.\u2019 sometimes cpas, because of the personality types we are, [react] \u2018oh man, that\u2019s just more work i\u2019m going to have to do.\u2019 we don\u2019t realize that the client is not only willing for us to do that work, but they\u2019re willing to pay us for it. a lot of times, especially in smaller firms, they don\u2019t look at it that way.\u201d<\/p>\n

watch alan long address the national association of state boards of accountancy on reforming the peer review system:<\/strong><\/p>\n

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