How to Avoid Falling into the Same Trap with Marcus Dillon

When Marcus Dillon of Dillon Business Advisors first branched out from his career, which included a stint with a Big Four firm, he realized that he had “recreated the monster” that sucked away all his time and energy in his new venture. Because his goal had been to take control of his life by doing things differently as a business owner, he took stock of what had happened and made the adjustments necessary to take the pressure off himself and his employees. This included saying no to old and new clients alike, divorcing the ideas of “work” and “business,” and ensuring his employees, many of whom work part-time, had the ability to properly balance their lives with their work, too. He has continued to utilize that philosophy to build DBA into the success it is today.

Transcript:

Hey everybody, and welcome to another episode of CPA Life Podcast, where we spend time talking to firm owners, industry insiders all over the country, that are really going against the grain and starting to build what what I’ve come to refer to as the anti-CPA firm, firms that are growing, scaling, thriving, and giving people an opportunity to have an amazing career, but not asking them to sell their souls at the altar of their job like they used to have to do. And today, we are joined by Marcus Dillon, who is the president, client CFO and founder of Dillon Business Advisors in Katy, Texas. Marcus, welcome to the show.

Hey, John, thanks for having me. Pleasure to be here.

We’re excited to learn a little bit about what you guys are doing, spend some time talking about kind of where you are today, what some of the things are that you’re doing to really differentiate DBA from the rest of the marketplace, how that evolution has come to pass, how it’s impacting your team, how it’s impacting your clients. But to do that, I think that sometimes we have to flip the script and go backwards and look and see how you got here, how you ended up where you are today. So tell us a little bit about the road that you traveled. If memory serves, you kind of took a stereotypical accounting to Big Four kind of path. Tell us a little bit about what that looked like.

Oh, yeah, no, it’s great to think back. Sometimes you don’t want to relive those days, but it’s good to think about them. So my journey started with the normal, going to university, kind of getting recruited for an internship. I was actually recruited—we went to Texas State University in St. Marcus, and I was recruited by at the time, Arthur Andersen, and had an internship lined up with Arthur Andersen. We all know what happened there. And then a lot of the Andersen partners in that Houston office actually went to EY, so made right on our internship kind of path and became an intern at EY, went back for that traditional Big Four bootcamp for a couple of years before deciding, “Hey, there’s probably something better for myself and my young family, than Big Four life at that time.”

Yeah.

So, left EY after a couple of years, and was really fortunate for the experience that I had there on the audit side, and actually found a firm through a family friend that served smaller clients kind of rolled into an audit role at that firm. And then about three years in, shifted over to a tax role in that firm, and learned both small firm audit and small firm tax. And that experience, after about six years, led me to really want something more for myself, for my family, for a client base closer to home.

So we planted a business in Katy, Texas—bought a book of clients that was just enough for me to take on by myself if I worked the hours that I was accustomed to, and was a stretch goal, if you would. And quickly, the market was good to us, the clients from the firm that I was in followed me, which I was not planning on. And we immediately had some growth, some growth pains. And so quickly, we’re off to the races and hiring people, kind of going down the path of that legacy CPA firm that provided tax, audit, everything at that point, 11 years ago.

Wow. So at that point, stepping away from a stereotypical CPA firm—I’m assuming that probably in your mind is the same thing that’s in the mind of everybody else, when they take that step: “I’m gonna go build a firm, like the firm that I left. I’m going to try to do some things different.” But you blink and you find yourself doing the same things you were doing over there. Is that pretty safe to say?

Yeah, spot on. So 11 years ago, we started out with fewer clients and I was used to, but quickly grew to the point where my life looked the same within maybe three years of what I had left. And what I created within that new firm that I owned, was the nightmare that I was trying to leave in the firm that I was a part of before. And you just create your own monster. You learn from what you were taught by others and just do that, so after we created this firm that really had control over all of our lives as a family—I mean, I had not only myself, but I had my dad working in the firm, kind of just making copies, helping where he could. By then Rachel, my wife had left teaching to kind of join the firm, and was kind of helping wherever she could. And we had also picked up friends and, you know, employees along the way, so we created a monster.

And you get to that tipping point where it was not what we intended to build. And we realized that. We had thousands upon thousands of tax clients, we had an A&A practice that we weren’t really growing, we were just sustaining. And the deadline nature of that type of business at the legacy CPA firm was not what we sought to build.

So we started to make small shifts and realize that there was something better that we were hoping for, and started making small changes—ultimately started saying no to people, which is a great place to get to, when you can actually say, “I’m not going to be everything to everybody,” and actually start bringing on the clients that you want to work with, and that give you life. And so by adding on and being selective, that was the first step. And the second step was actually exiting some of the clients that we picked up along the way that no longer fit where we were going. And that can be said of service lines, of team members, things like that, to where if you have that better future in sight, that’s what you work towards. And that’s just ultimately what we did.

You know, it’s interesting when you talk about saying “no” to clients, and that’s never easy. It doesn’t matter how far outside of the sphere of influence of your business that they are, it’s never easy saying “no.” You know, sometimes it’s because it’s good business, but it just doesn’t fit for who you are. And in general, it’s just not easy to say “no” to people.

Sure.

But it astounds me in the marketplace that we’re in right now in 2023 with the shortage of personnel in the marketplace, everybody struggling, capacity, at wit’s end with almost every firm, one of the questions that will ask firms whenever we start to engage with them, if we’ve never worked with him before, is, how much business have you walked away from in the last 12 to 24 months? There are a lot of firms that don’t walk away from business still today. And it just astounds me that they’re not doing that. I know that it’s something that you guys have had to do to get to where you are today,

I will tell you, I’m the worst at it, and that’s why I had to elevate somebody else to be the “gatekeeper,” so to speak, to protect the team and the ultimate business from the clients that we let in the door. Because just like you said, you try to be the nice guy, you want to help everybody that you possibly can. And even maybe from an owner perspective, you see it as revenue—revenue coming in is a good thing, and it kind of sustains the business. But you have to do it with intention. And sometimes the owner isn’t always the best decision maker whenever those variables are in place.

And you brought up new business. So I think the other thing that we came to realize is there is a difference between work and business. Sometimes you bring in work, and that’s all it is—it’s tasks, it’s these annual projects. It’s not really business that sustains and that you can grow with. And when we look back on our journey, at one time our firm was just full of work. It wasn’t full of “good business.” And we had to evolve that and grow the business that we had begun, and kind of exit some of the work. And so that’s just the evolution that we’ve seen over the years, and we kind of lean into even more so now, with how selective we are.

And you know, I think that when you’re starting out in business, you say “yes” to a lot of stuff, a lot of work. And part of it’s out of necessity, part of it’s out of fear, “What if this thing doesn’t work?” But you know, like you said, you look up and you realize 2, 3, 4 years down the road, you’ve created a lot of work for yourself, and it is draining, significantly draining.

Yeah, there’s a point where any client is a good client, and if they pay you they’re even better.

Yeah absolutely!

You’re talking about having somebody that is that gatekeeper. I think it’s interesting that you have somebody in your firm that is responsible for not just sales, but capacity. That’s something that I don’t see in a whole lot of firms. Explain that to me and kind of give me an idea of what that role is and how it brings value to the equation?.

Oh, sure, yeah. And that role is shared amongst a leadership team. Obviously, we have a point person who really looks at sales coming in, and has developed a strategy, and looks at capacity of the team to do new work, and builds out a hiring roadmap for capacity and all of that good stuff. You have to step back, and all the different podcasts and leadership books we read, I realized that I was a “lid” on the organization. If I was trying to control too many different things that DBA would only be as good as Marcus individually.

So I had to open up leadership—I had to open it up to where others were responsible for areas that I kind of let them lead. And you have to be okay with that. Part of that is that inbound or sales, or development role growth, if you want to just call it that. And you can have a place in shaping that, but maybe you’re not the best person as the owner, or even as like a technical person. You see this in engineering firms and CPA firms and law firms, where someone that is technical in nature is maybe not the right person to lead that growth side of the business, because of just experiences they’ve had along the way.

Yep. You know, it’s interesting, when you talk about the “lid,” I just got through reading a book about three or four months ago. It was Charles Stanley’s 30 Principles to live by. And one of the things he talks about in there is “the law of the lid”—that you will only rise as far as your incompetencies will allow you to. And so many times as business owners, like you said, we may not be the people or the person that really has the understanding of what can we or can we not do.

Sure. I think my incompetencies are vast. And I think it’s amazing we have come as far as we have with the roles that I did hang on to, for too long, within DBA. So that’s the piece where having a certain skill set and realizing that there’s a role within any organization that maybe you as the owner, or the founder, don’t have that skill set that the organization needs for that role.

And when we map out the growth of DBA, and we’re so thankful for the history that we have—the team members and the clients that have built that history with us—and when we look forward to the future of the organization that we’re building, it excites us even more, because we can learn from our success, learn from our mistakes—and that’s where honestly, that’s where we learn the most from, is those mistakes—and build upon to create something that’s fresh and new, and that serves a market that maybe not everybody is in, and that’s okay. And so that’s what we feel we’re called to be and do it in a style and a value system that we believe in, and that we can go to bed at night and leave the office, so to speak and lead fulfilling lives after the fact.

Getting back to kind of the history of where things came from. You recently, when you started the firm it was a CPA firm, correct?

Yeah, we were—we had some A&A because that’s my background. I was doing that in a smaller firm. So we had an audit practice, did reviews, compilations. So we had to be licensed, we had to be a licensed firm going through peer review and everything like that.

And through the evolution and the growth of the firm over the last few years, you guys made a decision last year, if I’m not mistaken, and completely went a different direction, and the firm is no longer chartered as a CPA firm, is that correct?

Correct. We began the path to remove “CPA” from our name and to begin the path of no longer being a registered firm. And part of that was you see what’s happening in the larger firms where they’re spinning off the tax consulting side of the business, there may be some private equity, that is the reason for that.

Yep.

But if that large firm doesn’t really have to be a CPA firm, and they’re still successful, and they serve the market in that way, why does my business, as a much smaller business, need to follow some of the regulatory, compliance issues that come along with being a registered firm?

So that’s just where we started asking those questions. And we not only asked them internally, but we asked them externally of our clients and of our, you know, our influence, kind of our circles of influence, people that we respected in the community and really said, “Hey, you know, less probably better than most What do you think if we remove CPA from the name? What do you think about this?” And we got good feedback that was definitely in line with what we were thinking. And that’s the path we went down. So we started removing “CPA” from the letterhead, so to speak. And we still employ a lot of CPAs. And we’re proud of that. But we’re just moving away from being a registered CPA firm, because we don’t think that that’s necessary for the type of business that we do now and moving forward.

Well, and I think that if you like you said, if you look at your website, you don’t see “CPA,” but if you scroll down the list of names, the people in the firm, there’s a whole lot more CPAs, than not.

Sure.

So the functionality of the work, the competency of the people, is still there, you’re just not doing the things that drive a traditional CPA firm’s business.

Yeah. And when we look at CPA, most of our inbound search results, and most of our inbound inquiries, people searched “CPA for tax.” And so if you’re not really in the market to grow a tax practice, an annual relationship tax practice, then that’s also part of the reason why we made that shift. Because as far as tax is concerned, we’re of the mindset with our current base of clients that maybe just need tax services, we’re kind of sold out. Like, we don’t have additional capacity for those type of engagements. And it’s not something that we’re looking to grow. We serve a handful of small family offices with their tax needs. And we’ve structured that the right way and have great capacity there that is balanced. But it’s not open for business where we would be adding additional annual tax projects.

So when you look at the makeup of your business today, comparatively speaking, to what it was three, four or five years ago, what is the percentage of your business that is transactional tax work, versus full service, solutions advisory with clients?

Sure. How we define, I’ll kind of expand how we define full service, because tax is included in that full service offering.

Right.

So a lot of those CPAs that you see on our website, they hold the title of “client controller.” So a client controller, when we talk about that team of three that serves every all-inclusive client, that client controller is really in charge of the past. They’re in charge of historical for that client relationship, and a lot of times that historical deals with compliance—with tax returns, with tax planning, if you’re being more forward thinking. And so with that, there’s still an element of tax within every all-inclusive engagement. And that’s where if we’re able to do that tax throughout the year through good planning, it’s not such a huge undertaking the first three to four months of the year.

And so those all-inclusive clients, they do include tax, it’s just not the core focus, because there’s other elements—there’s bookkeeping, there’s payroll, there’s also advisory, kind of CFO fractional services that are built into that all-inclusive model. So with that, that all-inclusive model those CAAS clients, Client Accounting and Advisory Services, those make up now, probably about two thirds of our business. And so more than a majority of our income is coming in through monthly recurring revenue through those engagements, and we have a set number of those clients that we’re actively growing, based on pod capacity.

And so with that, the other portion of that third of the business is really made up from consulting for special projects—which we had a handful of that with PPP and ERC, that’s recently dropped off. But then we have about 25% that’s really made up of about fifteen families that we serve really, really well with annual tax services. And those families are very similar to our all-inclusive clients, but we just serve them throughout the year without maybe accounting or payroll involved. We do tax planning and advisory with those families to make sure that their needs are being met, they’re taking full advantage of everything, and kind of being fulfilled in that way.

So as it sits today, with the team of three structure that you have, and as you referenced, you know, the pods that you have, what was your FTE employee headcount before you moved to that model, and what is that FTE headcount today?

I would say that FTE hasn’t changed too much. So I would always put us around 10 FTEs. We are very fortunate to employ part-time people, and flexible arrangement people who want a great place to work. So we’ve always valued the ability to do that, and we’ve attracted people who are looking for that. So our current team, I think we have about 17 to 18 people employed, and probably, if you were to boil this down to FTE count, it would be closer to 10 to 12. Just given the season that we’re in.

Okay.

And that’s been great for us, because you can manage that number of relationships really, really well and manage that number of that client number of relationships really, really well with not trying to go over 150 clients because of Dunbar rule and everything like that. So we’d like to keep that really small, and serve those clients really, really well, based on the pod structure that we have.

I would say the one thing that has changed—while the two FTE numbers are similar, the one thing that has changed is the type of roles that are within the organization. So we don’t have as heavy of what you would see like “Manager, Senior Manager” and up level people, like you would in a legacy CPA firm, somebody that a partner would really feel comfortable reviewing and signing your return. A lot of our team members are what we would consider client service managers—really just good accountants that do work for clients, and really keep up with payroll, bookkeeping, and some of the compliance tasks. And then that next level up is client controllers, where that is really what I would consider manager and above level. And then finally you have client CFO and director level, where that would be probably senior manager and above kind of designations within a typical firm.

You touched on something and I was hoping that you would go there: You have created a structure that understands that every single person that works for you is in a different season of life. The reality is that each of us are walking a different path. And you have built an organization that understands that, that embraces that, and because of that, is able to probably grab some talent that other firms would shy away from, because in their mind, they’re not being able to bill, you know, 50, 60, 70 hours a week during a stereotypical busy season. Was that something that you guys set out to do? And kind of explain that a little bit to how you came to that and how you work around that.

I think unintentionally at first is how we stumbled into those part-time roles. We kind of, just like with clients, with team members, we kind of took what we could get. And that was relationships where it was people just looking to work part-time, and that we had met through, kind of, different circles of life, whether it was church, or friends and family, and they were just willing to work 20 to 30 hours a week. We saw success in that, and you know, from an overhead standpoint, they aren’t as costly from a benefits standpoint, and maybe some of the things you do, so you can reward them in different ways, with different compensation and different ways to do that, as opposed to what’s required, because they aren’t full time. So we’ve had success in that, and we leaned into it over the last 11 years.

When Rachel joined the team about nine years ago, after teaching for about a decade before, we always kind of thought in our mind, we wanted to create a space where if I created a business just to employ somebody like Rachel, what would be the ideal situation? So when we look, when we step back and look at working parents, people that have a lot more going on, than just what they work on from nine to five, it helps us really see priority and what matters most in this life. And the bookkeeping is going to get done, the payroll is going to get finished, all of that’s going to happen, because you do put forth effort. But it is probably by no means the most important thing going on in that person’s life at any given point.

They have family commitments or other commitments “outside of the office,” so to speak, that are much more important. And we realize that as the business owner and have set up a way so that they can be there for their children, for their parents, for whatever life is throwing at them in that given season. And also, be a part of a team that does really great work for really great clients and use the experience and the education and scratch that itch that they may have on a professional level.

I think that’s something that you guys are unique in. I think there’s more firms that are recognizing and realizing that there’s a lot of talent there. You guys have been able to take that and leverage it and do it in a very positive way that’s helped the firm grow, service customers, and also understand that, you know, especially with our kids—we’ve got a finite window to put fingerprints on their heart. And finding a place that you can plug in and be a part of a community, i.e. work, feel like you’re delivering worth, but also being able to do what you feel like you need to do as mom or dad, or sibling, taking care of parents, whatever the case may be, it’s not always easy in the world that we live in today. And you guys have been able to find a way to make that work tremendously.

Yeah. I think it’s going well. I think the other thing that we’re seeing from being open to those relationships—our non-traditional workforce, as far as their background. And we have probably half of our team, maybe a little bit more now, are your traditional accounting path, they went to school for accounting, and kind of have done what I did, right? You know, went through all the different degree paths and went and maybe worked in an accounting firm before they chose to stay home with children, or go be a controller somewhere, whatever that path was prior to DBA.

But then we have a whole other set of team members that they weren’t accounting by nature, and they came in, and they’re great with technology, they’re great with clients, they’re great in sales. And that’s unique to what you may see in a traditional firm. I think that is changing industry-wide, and that’s great, because we do have this problem that’s happening inside of our industry—and most industries around talent and workforce and what the future holds. But DBA has definitely embraced that over the years, where I could care less if you have an accounting degree. I would much rather you come in QBO certified than have an accounting degree. And that’s just one of those pieces that—can you use Microsoft Office, can you, you know, figure things out, and do you have just the different aspects of life to kind of check the box of hungry, humble and smart? And that’s the people that we want to hire every day. We don’t care that you have a 4.0 in accounting. That probably doesn’t go as far with us as it does with some other firms.

Yeah. You also have an interesting dynamic that you’ve touched on a little bit and half of the last nine years, your wife, Rachel works for the firm, right?

Depending on the day. She tries to quit a lot. And so it’s it’s a fun dynamic. And you know, Rachel is definitely my better half. And so I was very blessed to outkick my coverage. And we were highschool sweethearts—we didn’t go to the same high school, but we met actually in Driver’s Ed, and that’s a whole other funny story.

But we’ve we’ve been together now for a long, long time… 26 years.

Wow!

So more than a majority of our life has been spent together as Marcus and Rachel, and so it only felt right that DBA would ultimately become that as well. And it’s not the identity of the firm, but it is fun doing this business alongside her because she’s so much better at certain aspects of life than I am, and she is definitely the person that I can bounce ideas off of.

And working with your spouse isn’t as unique as you would think it is. Because we have, probably a majority of our all-inclusive clients are husband and wife teams, or family businesses—people that work very closely with others that they have relationships with outside of the office. And that gives us a unique perspective to speak into those people’s lives and be counselor and be business adviser and, and everything that goes along with that. And we consider that a privilege, to walk alongside clients in that same manner that Rachel and I run DBA.

It is a unique dynamic. My wife and I have worked together now, well, since I moved the business remote in 2018, we’ve worked together. So she’s been in effect, the office manager and coordinator of everything that goes on in our firm behind the scenes. And it is a unique relationship when you have that balance and have the ability to have those conversations because like you said, that person in your life they can speak into you in the areas that you know you’re not strong in, and they know you’re not strong in, and they’re also not afraid to tell you that. So it’s an interesting dynamic with that. Now, whose idea was it to do the podcast and to also call it Who’s Really the BOSS?

I think it was one of those where we both felt called to do something for couples. And the play on the title, “Who’s Really the BOSS?” is everybody knows she’s the boss.

Absolutely!

And when you talk about weaknesses, and my weaknesses, she knows my weaknesses way more than I do—and she’s not afraid to point them out. And so that’s the fun dynamic. When you work with your wife, I’m sure you know this, that when people learn that you work together, they say one of two things: “That must be so cool that you get to work together and spend that much time together,” or, “I can never do that. How do you do that?” And so it’s hot or cold, it’s never in between?

So I think we balance it out really, really well. There is a lot of stuff that moves from the office into the living room, so to speak, and follows us throughout the day in the evening. So that’s a challenge that we know that clients deal with as well. Whenever you have working spouses in businesses, whether it’s a CPA firm, or a doctor’s office, or an engineering firm, whatever that could be. It’s a unique aspect that we know a lot about.

Yep, yep. And you’ve spent the last few months, I’ve noticed some of the stuff that you’ve posted on LinkedIn has really talked a lot about the importance of relationships outside of the office. It just so happens that your wife is a part of that office. But there was something that you posted about 14, 15 years ago, that she had shared about 80 plus hour weeks that you were in the middle of, to fast forward to, you know, this year, talking about, I think there was a trip to New York, there was a trip to Puerto Rico. And just, again, the importance of what you’ve been able to do with your kids and the activities they have outside of the office.

How do you balance those things with stereotypical client demands during a time of year that, it doesn’t change? It’s April 15th is going to be April 15th, then, you know, how do you plan for that, to manage your business where you can unplug and take spring break, like you talked about on a recent podcast?

Yeah, I think the main thing there is, we’ve brought other people onto our team that are so much better at different aspects of our business. One of those pieces, that’s an aspect of our business, is tax. As you heard, like, I wasn’t tax initially. I learned it, and I’m probably—I’m a gray tax guy. So that gets people in trouble, especially when you have a team that you’re responsible for. So the faster that they can move me out of tax and fully into, like, advisory and consulting, the better. And so with that, you know, our team, Charles and other people that are involved in that tax process, they do a really, really good job that time of year. They don’t want me around. They don’t want me touching tax returns. So that’s part of it—they’d rather send me on spring break, and then me kind of fumble through a tax return and mess something up.

But all kidding aside, you know, it really is structuring the business the right way. We have a very limited number of tax returns that we actually complete, because just our client makeup isn’t dependent on tax. Tax is a great business—I loved the revenue, I loved the margins of tax when we were tax-heavy. The problem is, it burns you out, it burns your team members out. It is a very annualized business that has highs and lows.

And so we wanted something a little more consistent throughout the year where we could plan around, and even set a team around. So that goes back to that monthly service model, more of a maintenance throughout the year. And sure, there’s going to be tax projects that come up and that may, you know, interfere with a spring break or going to The Masters, or whatever you’ve got that happens in the spring. But if you plan around it and control your capacity, then that’s what will allow you to live a life outside of the office.

And so, you know, I was able to take spring break. Charles was able to go—Charles is our tax director—he was able to go to Mexico earlier in the year. We had another team member that went to Mardi Gras and she’s a client controller that’s involved in tax, and so she’s going to New Orleans while most people are, you know, up to their eyeballs in forms.

It’s just, you have to realize as an owner, that there’s more to life than the office, and not only for you, but for your team. And you have to embrace that. So it’s not—we didn’t set the business up for Marcus and Rachel to have these luxuries and be able to go out of town and do all of this. We really want that for every one of our team members. And it’s a balance. You have to make sure that someone’s, you know, doing what’s necessary to achieve that balance for others, and you can’t have that disconnect.

But whenever you look at the flexibility that everything in the last I would say three years has allowed for, being in the office, client demands—what we’ve seen, if you are proactive and have great communication with your clients throughout the year, and are available to them when they need you to be, they don’t care if you’re in the office—

Yep.

—in March or April, they care that you return their phone call in September, whenever they call you with a question, right? That means more to them than you working in an office in Katy, Texas, when they don’t realize that you’re in that office.

So I think those are the pieces that whenever you step away, and really ask the client what’s important to them, going to lunch, answering their phone calls, being proactive, and planning, that goes a long way. And then they trust you to get the tax work done, or whatever that engagement is, you know, when you can.

And I think that it comes back to earning a little bit of grace from those clients, like you said. When you’re there, when they need you, at the end of the day, I think we just live in a world where the client doesn’t really care. Are you sitting on a beach in Rosemary Beach, Florida, are you sitting in your office in Katy—if I need you, can I get a hold of you? Then obviously, over time, educating your client on what “needs you” really looks like, because what they may think they need you for is something that can wait.

That’s exactly right. Rosemary’s a great spot, by the way. We prefer Cabo, because we like to go south.

But the main thing to think through there is, when we’re vetting new clients, and even existing clients, most of our clients celebrate that we can do that—that we can travel, that we’ve built the business a certain way, that we’ve employed people that can take point on projects and answer client questions whenever we’re tied up. And that’s what they want, as well, in their business.

And I think they see that in DBA, and it helps kind of solidify that, “Hey, I’m with the right advisor, because they’re achieving this in their business. If that’s something that I want in my business, I’ve got something to learn from them.” And it is that balance. So we feel that we attract a certain type of client that wants that as well. And those clients, sometimes those clients go on vacation with us. I mean, you know, that’s the best thing.

Absolutely!

It’s having a client that you can hang out with for a week on the beach, and then it’s tax deductible.

Right, exactly!

It’s all good. And that there is why they don’t let me do taxes.

Exhibit A, right?

Exactly.

I’ve got a client in the Dallas area that, I think it was second or third week of March, I reached out to her to discuss a candidate with her about something. And when I called her office, they said she’s out of the office this week, and so okay, I had her cell phone, but I didn’t want to call her himself. So she put me into a voicemail, I’ll leave a message for her. They transfer me to voicemail, she answers. And I said, “Wait, you’re—I thought you were on vacation this week.” And she said, “No, I’m on vacation, I’m just working with a view right now.” And I love the way that she put that, because she was working. She said, “I’m just not in the office, John. I’m kind of on vacation. I’m gonna get some side trips planned.” She was skiing in Colorado. So “I’m just working with a view this week.” A great way to look at.

Yeah, there’s definitely that balance of—probably one of the best things that you can do for your team, depending on the time of year, is take a vacation: Be out of the office, go recharge your batteries, be excited when you come back. The work is going to be there regardless if you took off, but your kids may not be, and so like, that’s the piece that you have to keep in mind is we know there’s a finite amount of time, and we have a senior in high school this year that’s about to go away for college. You know, the weeks are numbered at this point. The days are numbered. So it’s just, how can you see that that clock is counting down, and next year there’s going to be another tax season. Everything kind of on the business side is very predictable. But with kids with humans it’s not.

No, no it’s not. And it still surprises me that we have a calendar, it doesn’t change, those deadlines have been deadlines where they are for eons, and how we’re just now getting to a point in the industry that “Hey, we can we can actually plan around this,” is just shocking to me. But it’s what we do.

You know, when you look at kind of where you’ve come from, where you are today, what would you say are the one or two biggest changes that you’ve made that have made the biggest, drastic impacts to your business to let you really enjoy and not dread what you do today?

I think the biggest thing—it’s two—one is being really clear about the clients you want to work with, and how do you shape that client list, I guess you could say. So that’s the first one. The way that you may go tackle that is, you may have a season where you say no to a lot of people, because you’ve got to figure that out for your business.

And then the second stage of that is probably “I’ve got these clients in my care who were great at one point in the life of the business, but they’re not going to be great for where we’re going.” And that’s really unfair to keep a client around, and drag them through something that you’re working through, and that you’re growing to. Sometimes it’s best to disengage that client, or spin them off, monetize, whatever that looks like for you, whatever you feel comfortable. But ending up where you’ve got a really curated list of clients that you’re serving really, really well. So that’s probably the first piece.

The second piece is definitely the team. And we couldn’t do anything without those team members. And, you know, this is your world, so you know better than anybody—our business is only as good as our team. And so when we look at clients that may come in the door, it’s not whether Rachel or Marcus enjoys that client, it’s protecting the team, and is the team going to enjoy working with this client? So those are the type of questions that you have to answer to protect that team. Because if we accept a bad client, and that client delays, and is a procrastinator, and that stops my team member from going to her kid’s soccer game because of that client’s mess, that’s not okay.

And so that second part of your question is definitely the team. So you have to respect who you’re building, who you are called to serve, who you’re a steward of, and structuring that team in the right way for success. So that was a lot of learning for us. And we talked about that pod structure and that team of three. So we had to do a realignment here recently, where it was, we set up teams to work with certain clients, we set up certain roles to work with other people in other roles. Just because of consistency and team across the board, we looked up and we had created a spider web of service, and that spider web was very hard to separate and dissect. So we actually had to do a pod realignment, kind of a reorg is what you would call that in a corporate setting. And we just aligned certain pods, certain teams, based on niche, based on who worked really well together, and it’s been a game changer for us. So that team now works so much more cohesively than it did in the past.

And we know that if someone’s willing to give DBA 25 hours a week, it’s probably likely that they’ll spend about 25 hours a week—there’s not going to be a fire to put out or an emergency to come up. Some of that does happen, but you plan for that. So you build their capacity to 85%, because that 15% can always be filled with fires or training or whatever else you want to do in that 15%. So that’s what we’ve seen work really, really well. And so while the clients mean a lot to us, and you should focus on that, when you’re shaping your business, I come back to the team 99 times out of 100.

And those two things in the economy that we’re in today, and in the place that we’re in, in the public accounting, advisory, consulting space—I don’t think there’s ever been a better time, and a more opportunistic time, than today, if you’re a firm owner, to really take a critical look at your client base. Because there’s a lot of business out there. If you’re halfway decent at selling, you can pick and choose who you work with. And I don’t mean that negatively, but you can begin to say, “This is who we are, this is not who we are. And we’re going to go deep in this. And we’re not going to any longer be a mile wide and an inch deep.” And like you said, when you do that, I think you get rid of that spide rweb effect that you’re talking about and your people have the ability to replicate knowledge and replicate tasks in the same manner.

Spot on.

And not be spread all over the place.

Yeah, if you’ve got—life is too short, so, and I can be saying this from a place of privilege, because we’ve got clients and team members, and I’m not there where I was 11 years ago, grinding away, you know, in my 20s. I’m glad I did it then, because I had the energy to do it, then versus now.

Yeah.

But I think those are the things to keep in mind, life’s too short, if you’ve got a crappy client, or you got a crappy team member, move on. Like it is just if it is so painful that you dread answering that phone call, or that email, or you dread having that person in that meeting, do them a solid and refer them on, or release them to go find their next relationship. And that’s the piece where we’ve just gotten really mature about that in life. And we know that we’re not for everybody on the client side, and we’re not for everybody on the team side. And we’re okay with it, honestly. And just, we know that it’s kind of a balance in both of those. And if we’re not called to be a $10 million or $20 million organization with hundreds of team members, that’s fine. You know? That’s not going to change—I don’t want that to change what my day-to-day or year-to-year life looks like with my family and other things that are in my life. It’s just, it’s one of those where you have to really determine what’s important to you and stick to that.

Absolutely. If somebody is listening to this and and they will reach out, talk to you about some of the things that you’ve done in your firm that you’ve been able to successfully pivot, and take it down a path from where it was 11 years ago, or maybe there’s somebody out there that really resonates with where they are in their personal life, and they’re looking to make a career change to a place that they feel like they can plug in and be a better part of, what’s the best way for somebody to get ahold of you and talk to you about those things?

Yeah, I’m pretty active, as you said, on LinkedIn. And so you can find me on LinkedIn, Marcus Dillon, Dillon Business Advisors. You can also email me, Marcus@DillonAdvisors.com. Dillon is “D-I-L-L-O-N”—that gets misspelled a lot.

But one of those where I would much rather answer questions, kind of help people anywhere they’re at in their journey, because I was fortunate enough to have mentors along my journey that did that for me, so I kind of see that as repaying, you know, for people that helped me out. And I won’t share anything that looks successful, I’ll share all my mistakes, because I don’t want you to make the same mistakes I did. Because those were painful for me.

Absolutely.

I don’t want them to be painful for you. So I’ve made plenty of my life, you can just ask Rachel about them all. And, you know, that’s something that we can definitely chat about, if somebody wants to reach out.

I want to thank you, Marcus, for being candid, laying out kind of the path that you’ve been on, spending a little bit of time talking with us today, and helping shine a light on some of the things that can be done in today’s marketplace to build a firm that is extremely employee-centric, while also making it a firm that focuses on delivering exceptional service to clients.

I also want to applaud you and Rachel and the rest of your leadership team for all the hard work that you guys have put in to build a firm that really is going against the grain in the CPA community that we’re faced with today. So again, congratulations on what you guys have built, and much continued success.

Hey, thanks, and I couldn’t do it if it wasn’t for the help that we’ve had along the way, and our faith that guides us. And, you know, it’s one of those where every day could be a challenge, if you want to look at it that way. I think a word for us is “growth.” And it doesn’t have to be dirty growth. It could be personal growth. It could be faith. It could be whatever you want. But I think that’s something that we look at with our team, with ourselves, with our clients, every day. Is this person looking to grow? Are we looking to grow and get better? And that’s just something to live by.

I think that’s a great way to approach it and look at it.

I hope that everybody has enjoyed our time here together today with Marcus. And if you don’t want to miss any future episodes, just hit the subscribe button and make sure that you are getting a consistent taste of CPA Life. Until next time.

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Important Links:

Dillon Business Advisors

Who’s Really the BOSS? Podcast

Marcus Dillon on LinkedIn

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