Hanging Out Your Shingle

In order to give you some perspective for your decision-making process, we tapped the insights – and hindsights – of three professionals who have made the shift from employee to company owner. 

Our interviewees are Susan Saidens, SMS Valuation and Forensic Services, LLC; Rich Goeldner, Valmark Appraisal, LLC; and Kevin Couillard, Valuation Strategy Associates, Inc.

BORROWMAN:

What’s the toughest part of hanging out your own shingle? 

SAIDENS:

There are two things that are equally as tough.  The first is not having a steady paycheck.  That takes some getting used to.  Though when you do get the paycheck, you get to keep all of it.  Getting a paycheck every two weeks versus when you get the job done means you have to plan differently.  The second thing is doing soup to nuts, yourself.  That takes a bit of getting used to.

GOELDNER:

The toughest part is balancing practice development time with technical time.  Or, the balance between selling work and doing work.

COUILLARD:

The first thing that comes to mind would be balancing practice development with the completion of projects.  Like Rich, I’ve followed a model of having few employees.  As a result, I’ll joint venture larger projects with experienced people.  Everyone on the team helps to complete the entire project – from lower skilled work up to delivery of the project.  This has resulted in efficiently managed projects, and has freed time for practice development efforts.  Certainly, there are limits to resources and time.  That balance between doing a good job and pure marketing is the toughest thing.

BORROWMAN:

What’s the best question you could ask yourself to test whether you’re really ready to hang out your shingle?

COUILLARD:

The best question is: Are you willing to get out there and develop contacts, referrals, and relationships and prove good work?  Can you do that?  There’ll be an expectation by clients and referral sources that you do good work.  But you’ll still have to get out there and develop a referral base of business by communicating the benefits of working with you.

SAIDENS:

Do you have the fortitude to go through the peaks and valleys?  You don’t have that paycheck every two weeks.  So it’s constantly selling, doing the work and collecting the fee. You have to have the nerves for it.  If you’re uncomfortable with that, you’re going to drive yourself crazy.   You have to know what your financial obligations are and also the cost of doing business and what you need to bring in each month.  If you’re comfortable with that, then go for it.

GOELDNER:

First, are you having fun where you are? By fun, I mean do you still enjoy your role in the company.  Not having fun where you are could be a first sign.  When all you think about, mentally, is the way you would do things if you owned the valuation Company or had your own practice, it could be time to take the plunge.   When you start questioning the basics like marketing materials, questionnaires, systems that are used, or how you interview people, or the policies of your company.  I started looking at things like “if this was my company, this is how I would do things”.  That allowed me to progress to “why don’t I just do this”.  Put my money where my mouth is.

BORROWMAN:

What is that thing that, if you feel it or see it, should be a caution flag for you?  Make you say, “Maybe I’m not cut out for this.” 

SAIDENS:

I think you have to do a lot of soul-searching.  Write down the pros and cons.  And really understand what you’re looking for.  For me, I want to be the best at what I do.  And I felt that being in a CPA firm was very stifling because they didn’t understand my specialty niche which operates very differently from the traditional CPA world of audit or tax.

GOELDNER:

If you’re not comfortable making phone calls and meeting with people you do not know.  The pivotal part of practice development is having the guts to pick up the phone, call an attorney or a CPA you have not met before, and being able to book an appointment and go see that person.  And be enthusiastic about doing that.  If that doesn’t excite you, then you’re probably doomed to fail.  Because the phone is not going to ring just because you hung your shingle. 

COUILLARD:

If you’re afraid to pick up that phone.  If you’re afraid to go see a prospect, I think that would raise serious questions about whether you can do this.  Putting out a Yellow Page ad or a website just won’t do it.  Additionally, if you don’t have a sense of urgency, you might miss some good business.  Unfortunately, clients usually don’t call with a project to start 6 months from now.  It’s usually the opposite – “I need it in two weeks.”  Many times we are the “last person on the relay team” who has to make up the difference in time.  A sense of urgency will be required to meet client deadlines.

GOELDNER:

A real danger is the expectation that you’re going to have this instant book of business because of what you’ve built within an existing firm.  You have to go back out and sell yourself and your capabilities individually, having just left a firm that’s probably larger and probably competing in the same space you’re competing in.  You have to have the drive to smile and dial.  The most effective method to build a practice is one-on-one face time.  And the only way you get that begins with the phone call.  I’ve tried mass mailings.  I’ve tried advertising.  I’ve tried it all.  Nothing replaces picking up the phone and calling somebody.  We’re in a consulting environment, where human touch is important.

BORROWMAN:

What do you do when the “second-thoughts” start to hit you?

COUILLARD:

Since this is a project oriented business, project load ebbs and flows.  Given the size and scope of projects, there’s always going to be periods when you’re extremely busy and wondering how you’re going to get it all done.  And then there’s going to be times when you say “Gee, I could use another project or two”.  In those slow times, I call contacts I haven’t spoken to in a period of time.  I’m a prolific article puller and will pull information, articles, and industry tidbits and send them to clients.  I think it’s that constant contact and developing and maintaining those relationships that helps. 

GOELDNER:

The post-buyer’s remorse, right?  If you’re questioning why did I do this, you have to look one level below and ask yourself why you are asking that question.  You have to go beneath the surface and ask where is my doubt.  In the end, you can identify a weakness.  Ultimately, where you think you see that weakness is really where your concern is and why you doubt what you’ve done.  You have to look beyond the “Why did I do this?” question.  In watching other practitioners go through those doubts, I see them having trouble getting out and selling the work, or not having enough capital to last.   The third element, too much work, is sometimes an issue.

SAIDENS:

My husband was a driving force in my going out on my own.  He has always been a great believer in me.  So, if I ever have any second thoughts (which I don’t), he’s there to pick me up.  The second thoughts are not whether I should be doing this on my own, but just the overwhelming sense that I am doing it on my own.  It’s not questioning whether I should have gone on my own, it’s saying to myself “Wow!  I really have my own business”  I’m probably busier now than I was when I was a Partner in a CPA firm.

BORROWMAN:

Everyone talks about getting their ducks in a row.  What is the “duck” that you wished you’d had lined up a little better?

SAIDENS:

I think I should have researched more into health insurance.  I have had such problems obtaining the insurance coverage I want because there’s so little available for sole proprietors to choose from.  Not all the individual plans offer the type of things you want in health insurance.  And it’s extremely expensive.  It takes a lot of time to shop around and it’s a lot of work.

GOELDNER:

I think I would have preferred to have the systems and templates I want to use already built and in place.  The first proposal I issued took three days.  With templates in place it would have taken 30 minutes.  I had to develop a proper presentation of my services, the contractual arrangements, the limiting conditions.  There are significant differences in how I want to present my practice compared to the valuation firms I’ve worked for.  I wish I had spent more time working on collateral material, the marketing brochures and advertising, early on in the process.  You can do that work at home after hours building all the systems you’re going to need in order to be a turnkey operation when you leave.

COUILLARD:

Probably having excellent marketing materials ready to go.  I had business cards and letterhead, but I didn’t have the nice brochures.  So, I felt a little empty-handed going to visit folks in the beginning.  On the operational side, we were ready to go.  I had a mentor early on who gave me some good advice about building your technical skills and a good technical foundation.  I’ve probably focused more on that than the practice development or slick advertising.  I think it’s paid off in the long run, because the good work brought more referrals.

BORROWMAN:

Is there ever a time when you finally like you’re successful?  What’s the evidence you see that has you feel that way?

SAIDENS:

I still haven’t achieved my goal with my new business which started on March 1, 2005.  I achieved being a Partner.  Now I want to build my company.  So, I don’t think I’ve “made it”.  I just know there is so much more to do.  I’m a Type A personality and I’m never really satisfied.  I’m always looking to improve.  I never rest.  I do feel successful because of the referrals I’m getting from Partners at other CPA firms.  They know me, know my work, and there’s no conflict because they’re not concerned that I’ll take their clients.  That’s a benchmark of feeling successful.

GOELDNER:

You have to reach a point when you can go to sleep at night and not think about where the next job is coming from.  Mentally and physically, worry can kill you.  You have to make the assumption that work is coming.  You still have to be proactive, but along with that you have to have the faith that as a result of your efforts, you’re going to get the work in the door.  Half the battle is simply standing up and getting hit.  In other words, it’s a numbers game.  If you’re out there seeing enough people, and you have enough “touches” you’re going to have enough opportunities.  If you train yourself to think that way, it’s easier to go to sleep at night and not worry about where the next project is coming from.  I have no idea where my revenue will come from two months from now.  But I know, as a result of my marketing efforts right now, there will be fruit from the seeds I’m planting now.  You have to plant a lot of seeds and it takes awhile for those fruits to grow.

COUILLARD:

Clearly for me, its people calling that I don’t even know that said “I got your name from this accountant”, or “I got your name from this attorney”.  I get those on a regular basis.  I don’t get them every day, but on a regular basis.  Those times that someone thought well enough of me to refer my name are probably the biggest confirmation of success for me.

GOELDNER:

There are two specific instances where I felt that I have achieved success.  One is when my take-home cash was equal to where I was at my previous firm.  That’s the bare minimum, though, because I want some return on the entrepreneurial risk I’m taking.  Then, it’s a matter of setting your expectations about how much you do want to make.  Another milestone for me was taking my daughter to school and knowing that I’ll be back in a couple hours to see a play that she’s going to be in.  The dollars are a reality, sure.  If I can’t make the house payment, it doesn’t matter that I can get to my daughter’s school.  But, then, there’s the autonomy and flexibility to get more involved with your community and your family in ways you wouldn’t have had before.  I can put a higher priority on my family, and make it stick.  It’s also a milestone when you can take the risk of not getting some work in the door by declining an appointment or a project in order to give schedule priority to your family.