Brandon Hall, CPA, left the security of a position at a Big Four firm to devote himself full-time to his entrepreneurial endeavor. The East Carolina University graduate turned founder and CEO of The Real Estate CPA spoke with Gladstone Capital about the steps he took to responsibly make the leap from paycheck to proprietor, how to sustainably manage robust growth, how to balance a significant other with running a business and more.
On moving from the Big Four to Entrepreneurship…
The first word that pops in the mind is ‘terrifying.’ You’re leaving a full time job with a nice paycheck and you’re going to bet on growing something.
I had already built out The Real Estate CPA just a little bit on the side, but I needed to reduce my overhead.
To do this, I bought a three-unit building and kept one for myself to live in. I rented out the other two. I was living in D.C. so my initial overhead was $2,000 a month. Once I purchased this three-unit property, it shrunk to about $100.
‘All right, well, now I can leave my Big Four job and my Big Four paycheck, because I don’t have any overhead,’ I thought to myself. That made it much more comfortable.
The skills from Big Four that still come in handy…
I’m going to be forever grateful for the opportunity to work at both PwC and Ernst & Young. I didn’t really learn much in the way of technical skills. I built all of that on my own. However, I did learn a lot about just working with people, managing people and understanding the bigger picture.
For instance, when I was at PwC, it was always a game of how do you get rated the top in the class. I failed at PwC. I did not jump into that game soon enough.
I didn’t want to play that game then, but at Ernst & Young, I knew exactly what to do. By the time I transitioned there, I knew exactly what to do and how to play. I hit the ground running, and was rated in the top of the class for what I think was two years.
I didn’t do anything different work-wise, but I just knew who to connect with and what projects to work on because of my prior experience at PwC.
If anything, I just learned how to maybe stand out a little bit more, how to build my own brand and how to make people pay attention to you. That’s what I learned at the Big Four.
Surprisingly, I didn’t take much away from a technical standpoint.
On establishing both a cash flow and a presence on Bigger Pockets…
As a CPA, I already had clients.
Before my transition to full-time entrepreneurship, I was only billing clients from The Real Estate CPA once a year during tax-prep. I switched that to a subscription model so that I could generate the cash flow necessary to function as a full-timer.
Now clients had to pay on a monthly basis rather than one big annual bill.
The beginning of the snowball…
When I quit Ernst & Young, all I had was time.
I believe my business at this point was generating about $70K in revenue. This wasn’t enough to fill up the days. I would just sit around and try to come up with things to do.
That just turned into a lot of writing, a lot of content building and
hanging out on the forums. I was just trying to build my brand even more. It was an interesting transition, because that gap of not really having a lot to do really only lasted about a month.
About a month after leaving Ernst & Young, I was on the Bigger Pockets Podcast and I went from having two inquiries a week to having about 30 a week overnight.
I went from working alone in September or October 2016 to having my mom work overtime by the end of the fall. I had hired somebody on the sales side.
‘I can’t deal with all of these weeds by myself,” I thought. It was pretty explosive growth overnight.
On managing what comes after ‘explosive growth.’
We grew really fast. At the end of 2016, I think we had done maybe $90K in revenue. Today, we’re right around $1.3M in revenue.
That quick evolution over the past year and a half has led to a lot of questions about growth, a lot of process building and the addition of a lot of technology.
However, anything we build to tackle growth-related problems we scale out of within three months.
How do you build proficiencies and put people in places that will continue being viable over the next six months as we double in size? I spent much of 2017 trying to figure that out, and I still am.
When you’re an outlier success…
The other problems that started occurring were not necessarily business problems. I was asking really tough questions, like what does growth really mean from here? What do I want my firm to be known for in the industry?
Does this subscription model even make sense anymore?
How much value can we add to clients who have one or two rental properties and aren’t experiencing exponential growth?
We started asking a lot of these hard questions, and we started playing around with our subscription model, playing around with the price, and we got relatively comfortable for about six months.
In the middle of 2017 we’d settled on pretty high prices and relatively standard subscription models. Now we’ve changed all of those again as of last month because we’re just rethinking how we want to grow.
But one of the biggest problems that I’ve faced, again, not necessarily an actual operation problem or what anybody would think of a business problem, but I’ve joined all these mastermind groups. I’ve hired business coaches, and very few people can help me solve my problems because I’ve grown so fast and I’m a CPA firm. Most people don’t look at a CPA firm and think that it’s something that they can scale to a million dollars in revenue in a year. They look at that and say, ‘We’ll help you get there within five years, or a decade.’
If you look at a lot of CPA firms across the country, they’ve been around for two decades and they’re proud to do $700K in revenue. There’s nothing wrong with that. It’s just that I have very few people that I can talk to about my problem, and I have very few people that truly understand what I’m going through. It’s just been very lonely in just trying to connect with people that really know what I’m going through and can actually help.
On hiring a unique staff….
I don’t have any business partners, but I do have 12 employees. They’re all great and I’ve hired what I call entrepreneurs that were not willing to take the risks that I took. Some refer to them as ‘intrapreneurs.’
They all have the spirit, they all have the drive, and they’re all really committed to growing this firm.
We’ve had a lot of strategy talk internally and I’ll tap them every once in a while. I’ll walk them through what I’m thinking and I’ll gain their perspective. But I don’t have a business partner.
I’ve thought about a partner, purely because I don’t want to feel lonely. It’s a scary place to feel lonely and it’s tough.
I’m in an mastermind group with 70 CPA firm owners across the US and very few of them can relate.
That said, is a business partner necessary?…
I forget which billionaire it was that said ‘If you want to get rich, don’t give away any equity or fight tooth and nail for all the equity possible.’ I’ve always felt that that’s true.
I’ve asked myself if I’ve actually needed a business partner. In my mind, a business partner is one that’s going to shoulder the weight of what I’m shouldering, so they’re going to work Saturdays and Sundays-every Saturday and Sunday- because they love the business.
They won’t do it because I dictate that we must. They are there because they want to be there and they want to grow it. That’s very hard to find.
Partner or no, you will need support…
I recently told one of my clients who has opened his own business and is seeing some early success that ‘It’s going to feel very lonely. You need a support group immediately. Don’t wait until you’ve hit $1M in sales. Do it now.’
The people in these groups are one step ahead, one step behind and ten steps ahead. They’re going to help you grow and they’re going to essentially be your partners without actually having an equity stake.
As for me, I’m trying to take it to the next level. I’m seeking out the entrepreneurs who are running the $10M firms or the $50M firms. I want to connect with them and build a mini-mastermind group there.
On finding the right coach…
It’s always going to be trial and error. A really good business coach is someone that is running a business currently and does not want to take on a coach-ee. Those have been the best business coaches that I have found.
They’re business owners that you have to sweet talk until they finally say ‘yes’ because they can see how committed you are.
On marrying entrepreneurship with your actual relationships..
You have to find somebody who is on your side, even if they don’t completely understand your decision to work for yourself.
You have to find somebody who is going to say ‘Yep, that sounds like a good idea.Yep, go quit your Ernst & Young job, pull the trigger, and launch the business.’
Even if they’re terrified, they have to be on your side.
My fiance has been phenomenal with that.
With actual business stuff, she’s not involved. I don’t want her to be involved and she doesn’t want to be either. So I don’t run purchasing decisions by her. She knows that I’ll evaluate things to the best of my ability and if I feel like I need to make an investment, then that’s what I’m going to do.
We do, however, have an agreement that there’s a certain amount of money that I need to transfer into our personal account every month.
Even though I don’t need to run anything by her, she does have a pulse on the business and she knows what’s going on. I keep her in the loop.
We talk about business growth and strategy as well as where we’re going to be in our personal lives. I think that that’s an important conversation. We basically talk about that weekly.