ProAdvisor Spotlight: Buying and scaling a CPA practice with Jason Ding

In 2018, Jason Ding left his corporate accounting job to purchase his own firm in Surrey, BC.

We sat down with Jason to learn about the challenges he faced in his new practice, his strategies for growth, and how QuickBooks Online helped him scale his business.

First, a little about Jason Ding, CPA Inc.:

  • Location(s): Surrey, British Columbia
  • Year established: 2018
  • Client industries: Serves small businesses from a variety of industries.
  • Services offered: Notice to reader compilations, financial statements, corporate and personal tax returns, advisory, and bookkeeping
  • Started using QuickBooks: 2018

Want to connect with Jason Ding, CPA Inc.? Check out Jason’s profile on the Find a ProAdvisor directory.

Why did you decide to purchase an accounting firm instead of starting your own?

I spent 14+ years in accounting, working for large corporations in a variety of industries. I’ve worked for retail, construction, trucking, and even publicly traded software companies. When I decided to go on my own in 2018, I felt like my peers were miles ahead, having started practices years ago.

I started looking for my first few clients, but I knew building the relationships and reputation needed to scale quickly would take a lot of time and resources. I wanted to cut down the start-up time, so I began looking into what it would take to purchase an established practice.

In a service-based industry like accounting, it is all about relationships. The more relationships you have, the more successful you’ll be. When you are purchasing a firm, you are really purchasing the hard work the owner has put into building their client relationships. Though the upfront financial investment was significant, purchasing an established firm gave me the start I needed.

What was the process like to purchase a firm?

When I began my search, I connected with a broker that specializes in the buying and selling of CPA firms in North America. The market was extremely competitive. At my price range, I knew I couldn’t be picky. I didn’t have a list of criteria or must-haves, I had to take what I could get. I knew with my experience, I could figure out what was working and what wasn’t to make the firm successful.

How did you ensure a smooth transition for both your clients and employees?

When I purchased the firm, I inherited one full time employee, one part time employee, and 44 corporate clients. I spent the first few months just assessing operations and my employees’ abilities.

My new employees had the skillset to do the job, but I needed to make sure they were willing to adapt as I made changes to the business. After explaining my leadership style and plans for growth, the potential for change energized them. I’m proud to say they are still working with me today.

The transition for my clients wasn’t as simple. I had taken over a business charging extremely low rates that I could not maintain. I knew I had to increase prices, but I ran the risk of losing the customers I just inherited. I met with each client to let them know I would be increasing fees and move from hourly billing to a fixed rate model, but they could expect an improvement in quality. I wanted to prove my value and show my clients the level of service they could expect at a higher rate.

Despite all of these changes, we only lost about 5% of our clients. The 95% that remain are happy to pay more for a better experience.

How did you plan to grow your newly acquired firm?

My plan was to plant seeds everywhere. I leveraged every relationship I had built over my 14 years in the industry and the new relationships I was creating with my clients. I knew if I could get just one successful referral out of each client, I could double my business.

In addition to networking, I invested in digital marketing. I created a website for my business, invested in SEO, developed a content strategy, and got my clients to write reviews.

I more than quadrupled my revenue stream in my first year and a half. I am now on track to hire my 11th and 12th full time employees and have experienced slightly over a 10-fold increase in business since the firm’s inception in 2018.

What was the most challenging part and how did you overcome that challenge?

It was clear right away that I hadn’t purchased a turnkey business. There was very little documentation and process in place, the business was losing 30% of its clients every year, and I had to increase prices if the business was going to survive. I felt like the odds were stacked against me.

However, I realized I had an opportunity to make major changes that would have a positive impact not only on my firm but on my clients’ businesses as well. I took the time to analyze operations and identify what was working and what wasn’t, and made a plan to turn the business around.

What changes did you make to the technology in your firm once you took over?

What surprised me most when I made the move to public practice was how common paper and desktop based workflows were.

Majority of my clients were on desktop software when I took over the business. I wanted to move the firm online because of the potential to automate manual tasks, integrate apps, and eliminate the need for on-premise servers to back up data.

I knew whatever accounting software I decided to introduce to the firm was going to be the only one we used. I didn’t want to train my team on 15 different programs. If my clients wanted to use other software, they would have to handle their own bookkeeping or go to another firm.

I went with QuickBooks Online simply because everything works the way you expect it to work. Plus, with QuickBooks Online packages only offered to ProAdvisors, I could save a bit of money as I grew. It was a no brainer for me.

Were any clients resistant to moving online?

When I was suggesting the move to QuickBooks Online, I told my clients I could handle their books while they were anywhere in the world, even sitting on a beach. I would no longer need them to come into the office to sign papers or drop off receipts. I also explained the added efficiency achieved by integrating receipt capture apps and connecting bank feeds.

I didn’t experience any resistance and now the majority of my clients are on QuickBooks Online.

How has moving online impacted your business?

Moving online has allowed me to scale my business. I don’t need to worry about going into my client’s office to manage the books. I can do the work from anywhere and get access to up to date financial data at any time. Because of this, I have taken on clients across Canada as well as clients operating corporations in Canada but are based in the US, Hong Kong, China, and Mexico.

Want to connect with Jason? Check out his listing on the Find a ProAdvisor directory or follow his firm on LinkedIn.

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