Sam Levy gave a lot of thought to the name of the accounting firm he launched late last year. He didn't like "Levy & Co.," and "Levy & Associates" was already taken. His choice eventually came down to "Levy Tax & Consulting" or "Levy Tax & Advisory Services," and he picked the former.

"Answering the phone 'Levy T&A' just didn't sound right," he said with a laugh.

Many accountants dream of seeing their name on the door of their own firm. The difference between dreaming about it and successfully realizing it often comes down to exactly the sort of careful thought and painstaking attention to detail that determines whether your dream name is already in use - or has an offputting abbreviation.

In some ways, it was the prospect of that hard work that led Atlanta CPA Levy to his decision last August to form Levy Tax & Consulting. "Basically, I was looking for my next challenge," he said. "I've been in a tremendous growth mode over the last four to five years. I have some strong leadership abilities, and I like to be in charge, so I felt like moving forward would represent the pinnacle of my career and I was ready to give it a shot."

Before giving it a shot, though, he gave it a lot of thought.

 

A MAN, A PLAN, A FIRM

Over the course of his 16 years of practice, Levy had worked at two small-to-midsized firms, and had been a partner at the second since 2004. With his client list exploding, he first considered the possibility of launching his own firm in 2009, but decided to go through one more tax season and continue building his clientele.

[IMGCAP(1)]After tax season, he began planning. "Between August 15 and October 15, I spent many, many hours planning to make the move," he said, carefully examining everything: "Office space, how to notify my partners, how to notify, maintain and service clients, doing a budget and financial analysis, contacting a bank for a line of credit, calling an insurance agent for health and general liability. I spent hours looking at projections, what-if scenarios, did an entire budget, talked to the software company, talked to my furniture sales rep, to my IT guys. I worked on this for two months, every evening."

It helped that, from six years as a partner, he understood how a firm worked, and the sort of expenses involved. He was able to look back at his monthly billings for previous years to gauge his potential top-line revenue. That data, along with projections for staff hours and what he was willing to pay, as well as actual quotes for everything from rent to office supplies to computing expenses, went into Excel spreadsheets for analysis. "I just ran different profit-loss scenarios, and got comfortable with the idea that I could actually do this and be successful," he said.

 

BUILDING THE BLUEPRINT

Running the numbers was only the beginning; turning them into reality required nailing down a vast array of details, and all in a fairly short period of time if he wanted to be up and running for the 2011 tax season.

Among the many items on his to-do list:

Incorporation. An attorney had offered to help with incorporating the new firm, but Levy declined. "I'd been advising clients to form their own corporations for so long, I wanted to do it myself," he said. It turned out to be relatively easy, and he was able to incorporate online through the Web site of the Georgia Secretary of State. He also got a required business license from the city of Dunwoody, the Atlanta suburb where he planned to practice, as well as registering with the American Institute of CPAs.

Financing. Levy was able to arrange a line of credit through a banker he has known for years. While his business plan and the consistency of his revenue base impressed his banker, what most interested them was the possibility of access to his clients. "They said, 'Please refer us your business clients,'" he noted.

Office space. "It was really important to me not to be portrayed as a 'single-shingle' practitioner working out of the house," Levy said, so he hired a broker to help him find an appropriate space in Dunwoody. The short time frame and the size of office he wanted - 1,800-2,300 square feet - constrained his choices, but after looking at 10 buildings, he found a space he loved right down the street from the firm he was leaving. Commercial real estate conditions worked in his favor, as he received the first five months free, as well as a full build-out with new carpet and paint. The build-out was completed on December 1 of last year, but as he had wanted to open for business on November 1, the building gave him temporary space right next door, so he could check on construction every day. "It's a friendly market, but I still had to act quickly," he said.

Software. Levy's old firm had used Thomson Reuters' CS suite of tax and accounting products. "I knew the software, and all my client files were already set up," he said, "so I called the rep, and he said, 'You may want to try SaaS.'" Levy wasn't familiar with Thomson's Software-as-a-Service monthly leasing offerings, but the representative sold him on the benefits. "The biggest appeal was the early-on lack of start-up financing - not having to stroke a check for $20,000, and not having to purchase a server, which ultimately saved me between $3,000 and $5,000," he said. And while he experienced a few challenges in getting used to the cloud-based solutions, he also discovered benefits beyond low cost, like being able to hire staff from as far away as Birmingham, Ala. "Two of my part-time tax preparers were able to work 100 percent remotely," he said. "They never came in to the office, and were able to access everything remotely from the cloud."

Insurance. Levy wanted to be able to offer his staff health insurance, but this turned out to be one of the most difficult things to arrange: He got "a lot of misquotes" from agents, and some carriers wouldn't pick him up until he'd been in business for six months. He was eventually able to get affordable coverage, but certainly not on the first try.

Staffing. From the beginning, Levy had planned to bring Ira Blecker, an associate from his old firm, along with him, but he needed to hire the rest of his staff. At first, he wondered if he should hire "cheap labor" to save money, but a business coach he has been working with for over five years convinced him otherwise. "Her advice was to spend the money, to go out and get talented people," he said. "Don't stress about the dollars - service your clients well in this first tax season and get through it." While he planned to pay well, he kept his recruiting costs low, leveraging social media. An inexpensive ad on Craigslist for a staff accountant brought resumes from over 150 people, including Kyle Askew, whom he ended up hiring, and ads on LinkedIn and Facebook for tax season help brought him "four terrific people who plan on returning next year." In its first tax season, the firm had nine people working.

 

GETTING THE WORD OUT

On Oct. 21, 2010, Levy Tax & Consulting went from plan to reality, when Levy officially notified his clients via his e-mail newsletter that he was starting a new firm.

That was the easy part; the hard part was telling his old firm that he was leaving, which had worried him from the moment he considered setting out on his own. "One of my biggest fears was starting this and being at war with my old firm," he said. "But they were great. They handled things so well." It helped that he told them he wanted to refer audit business to them, as he wouldn't be offering audit services. "The day I notified my partners, they offered me full access to my client files. That was huge for me - it was their way of saying they trusted me, and were willing to part amicably. I remain grateful to them for how they handled the situation."

In the meantime, Levy was also working on letting the rest of the world know about the firm, too. He had hired a design firm to develop a logo. "I lost a lot of sleep with the logo - the image that I was a legitimate firm was so important to me," he said. At first he wasn't happy with any of the looks that came back, but after several iterations, and a consultation with a client in the promotional products business, he settled on one that supported the branding he was looking for.

He also set up a Web site - www.levycpafirm.com. He used CPA Site Solutions, which offers accountant-specific site templates and hosting services for around $50 a month. As it happened, the first administrator he hired had skills in edit and design, and she spent her first week customizing the site. He has received a lot of positive feedback on the content-rich site, which he views as an important part of making his firm stand out from the crowd: "There's a lot of crappy CPA Web sites out there."

To help spread the word, he hired a publicist, and took his business coach's advice to hold an event to celebrate the launch. In mid-January, around a hundred clients and referral sources attended a wine-and-cheese event in his new office. "It was a little out of my comfort level," he said, "but the event worked great. Fortunately there were no wine or food spills on the new carpet."

 

THE BEST-LAID PLANS

No business plan survives contact with reality, and the firm's first six months and its first tax season threw Levy plenty of curveballs.

His first admin left, and another early hire - a part-time bookkeeper - didn't work out. The Internal Revenue Service didn't allow e-filing until February 14, and the delay made it feel as if the firm wasn't making progress. Due to the compressed tax season and unexpectedly high workloads, he had to hire twice as much tax season help as he'd planned, and had to negotiate to add more space to his existing office. Getting his printing, scanning and copying systems to work properly took two months and "drove me nuts."

Not all the surprises were negative, though they all required him to be quick on his feet. While he had planned on bringing along most of his clients, even more came than he expected - and they referred others. And before tax season even started, he found himself acquiring the practice of a local CPA who was ill and wanted to make sure his clients had a solid successor: "The acquisition added more chaos to our mix, but given the situation his health was in, we were humbled and honored to take over and work with his clients."

Tax season is always a struggle, but with a new firm to establish and the influx of new clients, Levy said, "I was killing myself. I was here every Saturday and Sunday, until midnight every weekday. Even when I was somewhat caught up, I still was doing everything I could to navigate the firm to the finish line. I've worked my tail off during tax season in the past, but this was different. It's your show and reputation on the line. There was definitely a lot of adrenaline flowing."

In the end, though, he was "thrilled with the way it went," in terms of both revenue and maintaining the quality of work he was aiming for. "Our clients were serviced with extremely timely and high-quality work. I'm proud of how well we did," he noted.

 

THE NEXT CHALLENGES

With a successful first tax season behind him, Levy isn't resting on his laurels.

"I want to continue servicing my growth, and to add new clients," he said. "I'd like to be less seasonal; I wish my work was spread out a little more throughout the whole year. One of my goals is to ensure that our staff are kept busy over the whole twelve months."

The firm currently has approximately 700 individual clients and 325 business clients, with the former representing 40 percent of his revenues, and the latter 60 percent. Levy intends to grow those numbers, and expressed interest in acquiring more practices, to boost both his book of business and his staff - as long as they don't come with partners.

For the moment, he's savoring the perks of being the boss, like being able to set the firm's dress code - business casual, with jeans on Fridays - and to change it when he chooses: Between April 18 and April 30, he allowed his staff to wear t-shirts and shorts to work (unless, of course, they expected to see clients). He also chose to give his staff an advance bonus on April 15, and relished giving them their first reviews before May 1.

"I've enjoyed this," Levy said. "My dad has owned his own business since he was 27, and it's been exciting to share things with him and compare notes and get his advice on being a business owner."

"It was exciting to start the business in a bad economy," he added. "It had seemed like so long since a new business had started. Most companies are shrinking and struggling, and I'm growing and excited about the firm's bright future."

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