What they don’t teach accountants in college
These days, the cost of securing an accounting degree is rather exorbitant -- well over $100,000 at most private colleges. And lots of hard work to boot.
After that brilliant education and hard work, how well-prepared are you to start your own practice? After spending $100,000, shouldn't you know how to hang out your own shingle as a bona fide accountant? For a professional that is bottom-line focused, where is the return on this investment?
If you want to be a beautician and attend a trade school, don't they teach you how to start your own business for a lot less? If you want to open a McDonald's franchise and attend their Hamburger U, they teach you everything from A to Z on running a store. For Accountants U, where’s the beef?
If someone spends over $100,000 to become an accounting major in college, shouldn't that person know the following basic questions about entering this profession?
- How to start a new accounting practice from scratch?
- The various entry strategies for starting an accounting practice?
- The various business models for running an accounting practice?
- How to price and justify the value of accounting services?
- How to identify a target audience for a new accounting firm?
- The problems with selling accounting services?
- How to differentiate your accounting practice from every other firm in town?
- How to hire accountants and what to pay them?
- How to market your new practice?
- What services to offer and which to avoid?
Oh, I see, there is too much to learn in accounting between managerial accounting, cost accounting, federal taxation, professional auditing, GAAP and Sarbanes-Oxley stuff to answer these basic questions. So, is this taught by one of the Big Four firms? No. How about when I go back and drop another boatload to secure a master's degree? No. What if I work for a Big Four firm and then drop down to a prominent regional firm? No again.
You're kidding me. You mean to tell me that I could spend over $100,000 on an undergraduate degree in accounting, another $40,000 for a master’s degree and spend another five years in public accounting and not know the answers to these basic questions? Ouch.
To illustrate my point, I got a call from a client of ours in Dallas. He's a CPA developing a new practice and we manage the marketing for his practice. He called in laughing from his cellphone to tell me that he had just picked two CPAs as a new client, a husband-and-wife team who had just acquired a new business. Well, it turns out that both the husband and wife worked for over 15 years each at a Big Four firm in Dallas (30 years of combined accounting experience) but spent their entire careers in auditing, which meant they knew very little about taxation. They decided to buy a bed-and-breakfast and needed to hire a CPA to do their tax work because they knew virtually nothing about tax.
Don't feel bad. I have an undergraduate degree in business, a master's degree in marketing and then worked for 14 years in marketing, and I didn't know the fundamentals about starting a small business. While I had taken a class on entrepreneurship in business school and had written more business plans than I care to count, that doesn't mean I can successfully start a business from scratch on a shoestring budget. That's right. I spent nearly 20 years between my education and working in industry before learning these fundamental questions.
To acquire these real-world skills of developing a local accounting practice (and answering the 10 questions above), most accountants will move from a larger accounting practice down to a local firm to learn the basics on a grassroots level, find a mentor who has made this transition successfully, and shorten the learning curve by attending a practice development program for accountants. Ideally, the practice development program is instructed by a CPA who has walked a couple miles in this path already and had success developing a practice.
In terms of ROI, a practice development program is cheap compared to the cost of college, and, it pays for itself after you acquire just one new client. So, if you are looking to start a new practice or take your current practice to the next level, consider taking a marketing and practice development program that is instructed by a practicing accountant. It will shorten your learning curve and help you ramp up your practice much quicker.