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Lessons in Leadership and Letting Go: The Courage to Change with Nate Goodman
John Randolph picks up part 2 of his conversation with Nate Goodman, founder of Goodman CPA, on Episode 77 of CPA Life. Diving deeper into the bold decisions and core values shaping his firm’s future, Nate discusses the challenges and rewards of moving away from traditional tax compliance work, the importance of building the right team, how faith and family guide every step, and more. Nate is candid about letting go of legacy clients and navigating growing pains, as well as about the ambitious goals he has for his firm, including increasing his numbers by 10x over the next several years. But he stresses that he will always seek to accomplish his goals without sacrificing what matters most, and while ensuring that what he does is in accordance with God’s will.
Important Links:
About the Guest:
Nate Goodman is the founder and president of Goodman CPA, a fast-growing, people-first accounting firm. With a background in church ministry and business, Nate took a nontraditional path to becoming a CPA, driven by a passion for helping others and making a real impact.
After taking over his mentor’s practice, Nate led the firm through major growth by focusing on advisory services, work-life balance, and giving back to the community. He’s all about challenging the status quo in accounting, building a mission-driven team, and empowering business owners to succeed. Outside of work, Nate’s a proud dad of three boys and a big believer in making a difference—at work and at home.
Transcript:
Thanks for tuning in to CPA Life, where today we rejoin John Randolph in his conversation with Nate Goodman, the founder of Goodman CPA. Nate continues to share his experience of building his firm from the ground up, the way his faith shapes his firm’s mission, tips and tricks, and more. Welcome to CPA Life.
You didn’t start your business, I didn’t start my business, just because you wanted a business. There’s a reason behind it, there are things that we want to accomplish, there are things that you want to transform. The way you do that is you run a highly profitable, well-run business, and to do that, you need people to help guide you along the way. So it’s amazing that you guys have flipped that script to where compliance is—tax compliance is 10% of your overall business. Has that been a focused approach of what you’ve done, or was it something that you guys just looked up and said, “Hey, this is working, let’s lean into this more?”
No, I’ve invested a lot of money into coaches and training. I knew coming in as a young firm owner too, that I wasn’t going to have the answers—I needed help along the way. And so the coaches have really helped us identify a methodology for when you need to start telling some of those clients, “Hey, we’re probably not the right firm for you, this is not the style that we operate under anymore.” And then for folks that are on the old model, basically saying, “Hey, there’s a lot more value that we could be providing to you.” So methodically going through that client list and identifying opportunities to say, “Hey, if we worked with you monthly or quarterly, look at what we could actually do for you,” versus you just dropping your stuff off at the end of the year when we’re all overwhelmed because April 15th is around the corner and you think we’re helping you find tax savings, but there’s no way we could do that with a thousand other returns to do. And so that’s been very methodical to go through that process of moving everything to subscription-based pricing. And it’s also been a lot of fun.
So one of the things that I wanted to ask you about, if you’re comfortable talking about it—when we talked a few weeks ago, you were talking about how you are basically getting rid of all of your tax compliance business. Is that something you’re comfortable talking about?
Yeah, I’m currently under an asset purchase agreement right now. We should hopefully finalize it by August 25th. So whenever this goes live, as long as that’s solidified, it’s fine. We don’t need other people hearing about it until after it’s finalized. But yeah, we’re selling all of our current tax compliance work, and so that list of clients will no longer be a part of what we’re doing. So this coming tax season is going to look a lot different. We didn’t have a whole lot, we had about 300 tax returns total. That’s going to drop down to about—as we add clients, right now it’s only 70, so between our whole team of eight people, we have 70 returns. If you can do 10 tax returns in the tax season, you should be enjoying your life.
That should make life a little easier for people. So was that decision made again, just to be able to focus more on the strategy and the value pieces of what you can bring to the table to clients and getting out of the weeds, so to speak?
The whole 80/20 rule really applies there. So we had 10% of our revenue, but it felt like it was taking up 50 to 60% of our time. And when we went and looked at the numbers, we’re like, “Why are we focused on this? We’re hurting the advisory clients that are paying us more, and we’re getting distracted by the folks that are in this traditional model, and they’re frustrated with us because we’re focused on our advisory clients. We want them to be getting a good service.” And we weren’t able to do that as we were making the shift more and more and getting pulled away from the compliance work. So we said, “No, what I think would serve those clients better is by transitioning them to a firm if that’s what they want to do, that they’re optimizing their tax prep-only business.” So that way, when they come to tax season, those clients that are getting sold or transitioned out, for lack of better words, those clients are going to get better served. So we’re doing them a service by making the conscious decision to do this versus trying to continually serve them because we are just trying to hold onto something that at the end of the day is not going to serve them well.
And I think it’s safe to say, from my perspective, what I’ve seen, Nate, and maybe it’s the situation that you guys are in, and this is not only a client issue, but it’s an internal people issue. Sometimes the folks that helped you get from point A to point B or point B to point C are not the right people to help you get from point C to point D. Doesn’t make them bad people, doesn’t make them bad businesses, doesn’t make them bad employees. They’re just not right for where we are today. And the other reality of it is, again, from a client perspective, I think we’ve all been in situations early in the development of a business where you say yes to a lot of stuff that, you know, you fast forward the clock two years, three years, four years, five years down the road and you’re scratching your head going, “Man, I can’t do this anymore.”
That’s right. Yeah, we experienced that a lot, where I was like, “Man, why did I accept that client when I did?” Now looking back, it’s caused me a lot of pain.
Yeah! And the answer to that is, you said it because food needed to be on the table, you said yes.
“Oh, hey honey, I got a new client. This is great. We can buy an extra box of Cheerios.”
Yeah, it becomes a different dynamic and I think that at the end of the day, people get that, people understand that things change and therefore you need to change as well. I’ve got a client that had to go through an exercise recently where they hadn’t adjusted pricing in almost five years, and they had some clients that they were working with five years ago that were $1–2 million businesses. Five years later, they’re an $8, $9, $10 million business and they’re paying the same price and working twice as hard and twice as long on their books because there’s more transactions. So you have to have some of those conversations of, “Hey, what was good yesterday is not good today,” so we need to figure out how do we make this better? What would you say has been—through the change, through the growth—what would you say has been a couple of the biggest challenges that you guys have faced and what have you learned from those?
Yeah. The first has definitely always been staffing. It’s like, finding the right team members and learning to set clear expectations and clear communication, with, “Here’s the goal for your position, here’s what we’re trying to accomplish,” and then if they’re missing the mark, having clear, candid conversations on, “Well, I was expecting this when you started,” and maybe they were expecting something from me when they started. Let’s get it all out in the open. But instead, it was very much like we kept moving forward but not addressing some of the issues. So staffing from the point of internally, how we talk to team members, how we deal with conflict, that has always been a challenge that we’ve been trying to take steps to learn from and get coaching on, read good books on how to have good conversations with team members. That’s been probably one of the number one challenges in learning to grow myself as a leader is, “Hey, how do I help people along in their own journey and where they’re headed to create those opportunities?” So that for sure has been a big growing area.
Learning to say no to the wrong clients, and yes to the right clients. It was usually just yes to both. And then learning to also tell people when it’s, “Hey, we’re probably not the right fit anymore.” We waited probably a year longer than we should have to start telling people that and allowing them to self-select out. And so obviously you deal with heartache and pain through that because clients have expectations that aren’t met and you have expectations for clients that aren’t met, and so everyone’s frustrated. So I think those two challenges have definitely been big ones for us to overcome and learn from. I don’t think you ever make it. One of our core values is to constantly be learning and be teachable, right? So can we always say, “Well, I’ve never made it. I’ll never make it as a leader. I’ll never be somebody who’s the perfect leader that can fix all your problems, and I can help you, and I can be the perfect listener, but I can get 1% better every day and try to get a little bit better every day.” So those have been two, maybe two big challenges so far.
Do you guys—one of the questions that I always think is interesting, because I don’t think there’s a right or wrong answer—I think it’s what they figure works best for their firm. Do you guys, as an organization, track time? And if you do or don’t, what’s the reasoning behind that?
We didn’t for a long time and we just started in June and we worked to get buy-in from the whole team. I was like, is this something we should do, and here’s some benefits to it and here’s the cons to it. The cons is you gotta sit there and log it all the time. I said, “The benefit is if you’re telling me you’re overwhelmed and you’re doing a task that I don’t understand why you’d be overwhelmed, well, we can go look at time now and say, ‘Oh, it took you this long to do this specific task? Let’s actually work on that together,’ and we did not have that data before.” So we really approach timekeeping from the perspective of, this is going to give us an idea of where our problem clients are, what areas you might need help in. It’s less of a, “Why aren’t you working and you should be billing more,” we don’t look at it from that perspective. So we didn’t, for the whole existence of the firm until the last two months, and the whole team as a whole decided to do it. It wasn’t like, “I think we should do this,” and everybody has agreed it’s helped them organize their day, stay on task, be able to understand where weak points might be with either a client engagement, a mispriced engagement. And for us as leaders, we can go in and say, “Oh, we have opportunity here and I can help you in this area now. I didn’t realize that that’s where the struggle was. You might have felt so overwhelmed that you didn’t know where it was either. You were just overwhelmed.” So, yeah, we do now, and it’s been an overwhelmingly positive change.
Well, I think it’s just like any KPI measurement. I think in any organization, if used in the right way, if used—that tool in the right manner and people can see the value in it and people can learn from it, people are going to have no problem wrapping their head and their hands around it and leaning into it. One of the things I talk about with our staff and in some of the KPIs that we measure is, in a perfect world where we are today is, I’m having a conversation with you about where you need to spend your time and what you need to be doing, but that conversation transitions to, in six months, hopefully you’re coming to me and saying, “Hey, I’m looking at some things here from a productivity standpoint and I’m frustrated and here’s why,” and it is because we’re looking at this data together and you’re beginning to understand through the process of working together with me, how I vision things as a leader. So you can start to see things and head things off and come to me and say things like, “Hey, this client that we priced at X, that’s not a good price point because here’s what they told us, here’s what we’re doing and here’s the investment of time that we’re having to put into it. I think someone needs to have a conversation with this client.”
Yeah. We just had that, we looked at our time in June and we have a really large contract and we had to write it down. And I was like, whoa, that’s very helpful!
Yeah, when you get to shine a bright light on those things, it is amazing what comes out of those conversations. When you look at headcount today, I think you mentioned you guys have eight people, right?
Yep.
Where do you see the firm over the next six to twelve months from an FTE perspective, twenty-four months out, and from the standpoint of personnel, what are key things that you look at that you guys have said, “Hey, this is a Goodman’s CPA type person. These are the type of people that do well in our organization.”
Yeah, so I’ll actually reverse it. So we’ll start ten years from now because we just finished our Vision Traction Organizer from Traction. So ten years from now we hope to be serving a thousand direct medical care clinics.
Wow.
Another kind of big, hairy goal that’s out there—that feels so unattainable today. But that was part of the process—it should feel big. The other thing is we want to save our clients $15 million in taxes in one year.
Oh, in one year?
In one year. Last year, we saved our clients $1.7 million, and so now we get fifteen times that would be what it would be to get to $15 million in one calendar year. So that’s like ten years down the road. So the staffing would look larger, revenue would have to be larger to support that budget. So we backed into, well, what would it need to look like in three years? In three years, we’d be serving 150, and then our team size would be about 25. And the way our team structure works is you have a client CFO, you have two advisors underneath them, and then there’s four associates—two associates per advisor, and then each advisor, and two advisors report to one CFO.
And with that change of, “Hey, we’re hungry for this goal of a thousand direct medical care clinics,” there’s revenue numbers behind that, but for us it’s more about what impact can we have and what kind of budget can that create. And so in three years, that’d be about 25 team members—so three CFOs, six advisors, and twelve associates.
But if you’re going to come and work with us, you’re going to be somebody—you mentioned these three things—you’re hungry, you’re humble, and you’re smart. So hungry for growth, right? One of our core values is ownership. You’re able to get hungry, get after it, take ownership over what you have. You genuinely care about your team and the clients that you serve. So you understand who their kids are, what they’re trying to accomplish as a company, and you get behind that. And then you’re also behind what we’re trying to do to impact the direct primary care space. You’re reliable, you’re able to—if your clients show up for yourself, show up for your team. And you’re confident. I think that goes in line with being smart, capable of doing the job, but you’re humble enough to admit that you don’t know it all. We still always have something to learn.
And so I loved those three words that you had mentioned because hungry, humble, and smart really sums it up. Do you want to be part of something that’s growing, that’s making an impact? If so, being part of a growing organization also comes with its challenges, because there’s growing pains. So are you somebody who’s willing to grow through the growing pains with us and help us build it? Versus just—we’re not going to flatline, we’re not here to just say, “Let’s stay stagnant.” But there’s two other kind of key pieces that go with that for me. Number one, it has to be God’s will that we should continue to grow. I don’t want to grow for growth’s sake, I don’t want to sit up on a pedestal somewhere, and number two, I have to be able to see my family. I’m not going to be gone all the time because the number one place where I can have an impact in my life is with my own kids and my wife.
That’s right.
So we kind of have—vision is like, this is where we want to go, but we’re not going to give up those two things in order to get there. So we do have goals—we set goals for moving that direction. We’re looking for people that are behind it, and we’re excited about it, but we’re also going to make sure we’re taking care of each other along the way.
I like that. I think that is so critical. I think it’s something that gets lost so much when people start to look at, “Hey, I want to grow something. I want to build something,” but they’re going to do it at the detriment of their family. And I think that there was a point in my career about ten years ago where I unplugged for two years, sold a business, and had the opportunity to completely unplug for two years, and when I stepped back into the game, I was in the middle of an interview with the CEO of a company and he asked me, “What were you doing that timeframe?” And I told him, and he said, “Do you think that was the right decision?” I said, “That was absolutely the right decision because my girls have fingerprints on their hearts that will never get rubbed off. Never.”
Yeah.
And to me that is priceless because those formative years, I’m a huge baseball fan, played baseball my whole life, a couple of years out of college and in college. And one of my favorite players was Cal Ripken. I remember reading a story about him one day and the story—they asked him, “Why did you stay in Baltimore your whole career? Why didn’t you ever leave Baltimore? Because you could have made a whole lot more money playing in a much bigger market.” And it came down to his family. And it was a conversation that he had with his dad, who also was a baseball player and a coach, and his dad told him one day, “Your kids’ hearts and your kids’ minds—this is going to get old school for just a minute—but your kids’ hearts and your kids’ minds are like a tape recorder. And you have a choice: Your voice can be on that recorder twenty years from now, or somebody else’s voice can be on that recorder. It’s your choice.” And so he chose to stay in Baltimore with his family around not only his immediate family, but his extended family. And I think you can have it all. I don’t think that you have to choose one from another.
So I admire what you’re saying in regards to the importance of, first and foremost, God’s will. And second of all, I gotta be present for my family. And I think that looks different for everybody. I don’t think it’s a consistent picture for everybody. I think it looks different for everybody. And I think that that’s something that—building the firm, like you guys are talking about building—that’s something that I think you guys recognize.
You’ve still got to work hard. We’ve got to put in the time and make it happen, but we also make sure we keep our priorities right.
Absolutely. Yeah, I think there is a balance there. You need to find it. I had a gentleman who was a very—still to this day, is a very good friend, worked for me years ago, and he used presence with his family as an excuse not to work hard. And through the course of conversation, I told him one day, “Look, you’re going to look up one day and you’re going to resent your family because I believe you’re using them as a reason not to have to work hard.” And he’s a dear friend to this day, but he’s gone through some tough issues career-wise because of the decisions he made in the middle of his career, using his family as a crutch to not have to work hard, and he’s having to work a lot harder now to make up for that. So you’re right. I think that you still need to work hard. I think God honors hard work. That’s been one of my mantras for years: God honors hard work and He honors it not only in the realm of building something, but also financially as well as with your family and the fruits of that work.
So when you look at where the firm is today, as you project out over the next 6, 12, 18, 24 months, what would you say the biggest goals are that you guys have that are first and foremost, forefront of your mind moving forward?
Yeah. A big piece for us is getting the right team members on the bus, and people that are dedicated to what we’re trying to accomplish. We want to—like, we use revenue as a number to track because you can actually measure it. So in three years, if we look there, we’d be around $5 million in revenue. That would give us the budget to be able to have about 25 operational team members, and then we’d have the ancillary folks around them to support them. We want to have a remote-first work environment, and so we know that talent is all over the U.S., but we don’t want to have to force people to move away. And then we also, because we’re fully remote, then we would start to have twice-a-year team retreats so we could actually connect in person, because there’s value in that. AI is going to make it even more important for us to shake hands and look people in the eyeballs.
And so we have the revenue goal, we want to serve around a hundred—probably in two years, at the 24-month mark, we’d have about 75 to 100 direct primary care clinics that we’re serving, and the team around that to support them and deliver good services. So that’s the short-term target that’s in sight, and we’re focused around how do we bring the right team members on, the software to support it, marketing that’s going to drive interest in the firm, and the sales team to be able to actually make it possible to have the budget to bring those people on.
All the fun things that go into running a business, right?
That’s right!
Yeah, it’s those evenings you walk out and say, you know, “Why am I doing this?” There’s a business owners group that I’m a part of here locally in our community, and one of the guys put it best—he said, “There’s days that I walk out of my office and I say, man, I can’t believe I get to do this for a living. I can’t believe I get to do this and I get to have this kind of a lifestyle because of what I do.” He said, “But then there are other days I walk out saying, I do not make enough money to do this.”
Yeah. I feel so blessed. We talk about that all the time. I mean, I was just at home eating lunch with my kids—you know, who gets to do that in the middle of the day? Just go have lunch with your kids. So there’s tons of benefits and there’s days that I’m like, I’m ready to throw in the towel. Why am I doing this?
Yeah, exactly. Exactly. I said to someone the other day, they said, “How’s it like working for your boss?” I said, “Trust me, I quit at least twice a month, but I show back up tomorrow.”
That’s perfect.
Well, Nate, you’re obviously doing a lot of things right. The future looks bright for you guys and what you guys are building. So if there are folks out there who may be considering a job change or other firm leaders who are possibly kicking around doing some of the things that you guys have done in your firm, what’s the best way for people to reach out to you, connect with you?
You can look me up on LinkedIn and send me a direct message that way, just Nate Goodman, CPA—I think I’ll show up there. But the other place is our website. If you go to GoodmanCPA.LLC, you can click “Contact Us” and then you should be able to get in contact with us, or you can send us an email at Info@GoodmanCPA.LLC. If you want to email me directly, you can just email me at Nate@GoodmanCPA.LLC and I’d be happy to have a conversation with you.
Perfect. I’ll make sure that all that contact info is in the show notes below. Thank you again for joining us. I’ve enjoyed learning a little bit more about the firm and kind of the vision and where you guys are going. Good luck into the future.
Yeah, awesome. Likewise.
Thanks again for joining us today, folks, and learning a little bit more about Goodman CPA. Make sure and find all of Nate’s information in the show notes down below. If you like what you heard today, go ahead and subscribe to the podcast because we have several other great conversations teed up in the coming weeks to show you that there definitely is an opportunity to have a great career and a personal life as a public accounting professional. Until next time.
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