AA 89 | Staffing Issues

 

For an organization to grow and be successful, issues need to be addressed, and strategies must be implemented. We have a special guest, Nate Hagerty, the CEO of TaxProMarketer and AdvisorProMarketer, the nation’s leading marketing agencies group serving accounting and tax practices. Before starting the agency, Nate was doing some coaching and consulting but got tired of it. Now, he is dedicated to leading his team in the tax and accounting space, developing their expertise without compromising their vision, values, and culture, given all the changes happening in our world today. This episode discusses how he manages the staffing issues in his business and strategies to help increase revenue.

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How To Solve Your Staffing Issues And Increase Growth And Revenue With Nate Hagerty

We have a very special guest. He is the CEO of TaxProMarketer and AdvisorProMarketer, the nation’s leading marketing agency group serving the accounting and tax practices since 2007. He is also a member of Mensa. He is a multi-year honoree of CPA Practice Advisor’s Top 40 Under 40. He has also been published widely in industry publications, and is the author and editor of two Amazon bestsellers. He’s the father of 7 children, 4 of whom he and his wife adopted from overseas. He has a lot on his plate, and he has also a few hobbies. I’m very excited to welcome Nate Hagerty to the show.

Before we welcome him to the show, I know that this tax season was nuts. It’s crazy to think that so many tax pros and accounting professionals think that increasing their fees will lose them clients resulting in lower revenue. Everybody thinks that the way to get more clients is to discount fees cave in, do some free work, and hope that a client will engage with you. The accountants and tax pros, I work with double their firm revenue by following a much newer and far simpler method.

If you want to see how those accountants and tax pros are doing this, then register for my brand-new master class at TheAbundantAccountant.com/masterclass. It’s an investment of 43 minutes, but it will provide you with a lifetime of increased revenue without working more hours or having to get more designations or qualifications. Let’s welcome Nate to the show.

Welcome to the show, Nate.

It is good to be here, Michelle. Thank you for having us.

Thanks for coming back to the show.

I said, “Thank you for having us.” It’s the royal we.

You are a team and you have a team of nineteen people, so using the word ‘us’ is the right choice of word. We’re going to talk about how you personally combat your staffing issues to double your revenue, how accounting and tax firm owners can also combat their staffing issues so they can double their revenue, and how increasing revenue also solves a lot of your staffing issues.

I’m very excited to have this conversation because you shared so many unique things that you do with the team that I’m implementing slowly. I’m very excited to have you here. If you want to share with everyone what it is that you do and from your own words instead of me just reading your bio, I would love that.

Thank you, Michelle. I have two companies, TaxProMarketer and AdvisorProMarketer. The AdvisorProMarketer is a sub-brand with the same team but has a different focus and population of clients. We work with tax professionals and their various iterations in TaxProMarketer and non-tax accountants in AdvisorProMarketer. We do a lot of the same things which is why we’re sister companies. All of it is in one pot. We’re a marketing agency working with accountants and tax professionals.

I’ve been in the industry since 2003. I was the marketing director of a tax firm that grew from $50,000 a year of fee-based revenue to fifteen offices, multi-millions, and hundreds of employees in the span of ten years. I did coaching and consulting. I eventually got tired of my coaching and consulting clients not implementing, so we started the marketing agency to be an implementation engine for accountants and tax pros. That’s the genesis of the business. Along the way, there have been a lot of iterations and shifts in how we handle the vision for our company and the levers that help us to grow. This is the stuff that I don’t talk to accountants and tax professionals a lot about.

Essentially, in the first several years, this was a glorified freelance operation here. We had 3, 4 or 5 employees, and they were executing my vision and that was pretty much it. Several years ago, we figured out that we need to serve people even more effectively and there’s a lot of change happening. We need to staff up. We had to raise our fees a little bit and move into a different model where we became a full-service agency to the industry.

As we did that, we had to staff up and our culture began to form. It was no longer this lifestyle business. It is seemingly a great dream for a lot of people to have a great business to support their lifestyle. I do believe in that deeply but I wanted something more. As we shifted to this agency reality and our staff numbers grew, we figured out that the culture, communication, and values of how we operate became pretty paramount.

AA 89 | Staffing Issues

Staffing Issues: There’s a lot of change happening. We need to staff up. So we had to raise our fees a little bit and move into a different kind of model where we really became a full service agency to the industry.

 

We discovered that there were unique things that we had been doing that we had not codified. We had not put SOPs around. We started doing that and got so much feedback from our team. Our team started referring their friends. We’re several years in and we’re a multimillion-dollar company in our various iterations. I have 5 or 6 names that I could turn to now if I wanted to hire them. They would love to work for me and then many more because people want to work here.

That’s how the tables were turned for you. For a lot of people who own an accounting tax firm or the tax attorneys that own their firms, the hardest part is finding good people.

We don’t pay top-of-market salaries. Looking at that, those two things operate intentionally. A lot of people believe that to attract great people, you need to pay well. We don’t pay bottom-of-market salaries. I care about my people, but we don’t pay top-of-market salaries. There’s something there. That’s what we have started to talk and think about. I and my COO are starting to think about doing some coaching around this stuff because we realized what we’ve built is pretty unique. That’s why you and I are talking because it came out offhandedly in a phone call and you said, “Let’s talk about it on the show.” I said, “Okay.”

This soft stuff as you call it is probably the most important thing. You mentioned one thing that I do want to bring up because it’s an area that a lot of accounting and tax professionals struggle with. It’s that you had to raise your fees a little bit before you could start making these changes. I’m sure it was terrifying a little and all that. Maybe you can share a little bit about step one, which is you have to raise your fees a little bit in order to start implementing some of this juiciness that you’re going to share without having to pay the staff top-market value. You’re delivering culture and you’ve got a waiting list of five people that want to come work for you.

Every person would be in heaven to have a waiting list of people that want to work with them so they can take a lot of the burden off their shoulders, get some of this tedious work off their plate, and have a team, even if it’s 1, 2 or 3 people. How do the firm owners make that first shift which is raising their fees a bit like you did in order to create some of that extra revenue to then implement what we’re going to talk about here?

These things are pretty cross-industry in their dynamics. I’m in one serious peer group of other marketing agencies. It’s the largest marketing agency peer group in the United States. Marketing agency owners have the same issues with fees, feeling like they cannot find staff, and feeling like they have to pay six-figure salaries for good people. People feel that way even in submarkets, not San Francisco or New York City or what have you. I would go even further before the raising of the fees which is an important step that people need to become comfortable with.

The first step is something that you help people a lot with, Michelle. That is the decision to not have your entire business run through you. That’s a tough thing. There are a lot of reasons why people don’t feel comfortable doing that from the beginning. People have fear and control issues. They’ve got identity wrapped around the success of their business. If you are bringing all the questions of your soul to your business, then it’s going to be hard for you to let go and bring people into your world in a healthy way.

The first step is not having everything go through you. Even before that, the way that people can get comfortable with that is realizing what is keeping them from these decisions to delegate and to bless their employees or what have you. A lot of it comes down to how they see themselves in relation to their work. That’s got to be a question that every person has got to answer for themselves.

We can’t fix that. Dealing with fear, control, identity, and all the things that he mentioned is a personal choice decision that you get to say, “I’m fed up. I’m done.” You’re going to decide to do something completely different. You’re ready for a 180, then the second step is you got to raise your fees from wherever you’re at.

It’s true. It’s great because our industry and maybe the cultural economic cycle is in a moment where it’s not as scary to raise your fees because everybody else is right now. You’ve got a built an excuse. We happen to be in an inflationary cycle We’ll see how long that lasts. You got to keep up with inflation, first of all. A lot of accountants understand that. That’s one simple little thing that might push you over the top.

Build something unique. Share on X

What did you do when you raised your fees? Did you say, “Across the board, it’s going to this?” Did you have a little process?

We had a process.

Is that simple?

When we onboarded new clients, we started out at a higher rate. I had always been very leery of raising fees on existing clients who were paying us a monthly retainer to do various marketing tasks for them. We had 3, 4 or 5 different kinds of levels of service that we were providing our clients. I gave them a 60-day notice and I sent an email. I said, “Mr. Jones, right now you’re at X dollars a month. Starting in the following billing cycle on this date, your fee will automatically raise by whatever it was.” We did an analysis of all of our clients of how long they had been with us and what we were doing for them and got them into the right rate. It took some work to do this.

“If we don’t hear from you, this is what it will be. You also have an option to upgrade your level of support at a one-time discounted rate. The rate for that is going to be this in 60 days, but you can get in here and we’ll lock it in for at least a year to have us serve you at this upgraded level at a discounted rate. Reply back to the email if you want that or you can cancel. That’s another option if this is not something that you want to keep with.”

We gave them three choices. Those are to stay the same, do nothing and have their price raised automatically, cancel or upgrade at a discount. That worked well. At the time, we had 350 clients and we lost 15 or so. It was about a $15,000 per month profit increase. It helped. We did that a few years ago, but we started raising prices on new clients even before that. It was a process. This is one of the things that you love to talk about.

This is my number one thing.

What do you think about our process?

Your process is good. For every accounting firm owner, bookkeeper, tax resolution expert, tax attorney, tax planner or people with their basic 1040 service, there are so many different ways you can go about it that you and I would be here for the whole eight hours. That’s a big piece of what I cover in our eight-week Sales Mastery Training. It’s one of the first steps.

First, you have to accept or admit that you have a problem. You’re sick of it and you’re ready to do something different. You’re willing to set the fear to the side because it’s not going to go anywhere. I’m sure it was still terrifying where we were like, “I got to send this email to 350 of my current clients with these three different options.” This is a similar process for them as well.

AA 89 | Staffing Issues

Staffing Issues: We lean into encouragement, recognition and trust. And so we just really wanted to name that we’re going to, when somebody does something awesome, we’re going to talk about it.

 

There’s one woman, in particular, I’ll call her Judy. I’m going to have her on the show. We’re going to do a case study on her. I don’t even know if the word terrified is the word for it, but frightened and anxious. I was absolutely berserk and nuts, but she still did it and trusted me in it. Her revenue is about the same. She was up maybe $12,000 or $15,000 for the tax season of profitability.

Her goal was to decrease clientele by 40% to shed and prune that amount of volume. That’s about where she’s at. Imagine increasing revenue by what you did around the same. Yours is monthly. Hers is monthly clients from accounting and bookkeeping, but also one-time stuff. Even a one-time but you got 40% of your time back, that’s huge.

That’s awesome. What a testimony to your coaching, Michelle.

For all the coaches and as you said you maybe want to coach around this stuff, we help you get to the top of the mountain and get there. Most people would get up halfway, turn around, and start going back down. This is to get through those things that are hard, the stumbling blocks, the stumbling sticks or the boulders rolling down on you if you’re up the mountain. It’s that overwhelm where we’re like, “I will wait until next year. This staffing issue I’ll deal with it. It’s not that big of a deal,” when in reality it is for so many people. I would love to hear what the third step is.

We are a part of this digital marketer group. It’s called Digital Marketer. It’s the largest conference for online marketing in the world, the Traffic & Conversion Summit. We were in their highest-level mastermind group in 2015 when they started talking about vision and values. It’s a cliché at least for those of us who were paying attention to business thought leader-type things.

A lot of us, myself included, rolled our eyes and tuned out at these soft things that people would say matter. As a marketing guy, and a lot of accountants and tax pros are probably like this, I want to serve my clients. I want to have a great business, have a couple of people on my team, bring home X amount of dollars and be happy.

We had shifted into building more of a going concern type thing. We were starting to pay attention to this. They shared theirs and we decided, “Let’s try this,” and we put down on paper what we were already talking about with our small team at the time. The magic started happening when we started doing this. We started having these conversations in our weekly team meetings and we leaned into it more and more. I’ve recorded a 40-minute video on our vision and values. Whenever we onboard a new employee, I make them watch it. We carve out a time for every team meeting to talk about something related to these things.

We have 4 vision points, 7 seven values, and 6 culture points. The vision is, “Where are we going? What’s our target?” I’m not going to share all of them, but one of them is that we’re the leading marketing agency for the tax and accounting industry. That’s who we are and that’s where we’re going. Another one is that we are a cohesive loving team of experts who fights for each other and covers one another mistakes. That’s where we’re going.

I want to build my team into their expertise and fight for them. We don’t throw each other under the bus if one of our teammates makes a mistake. We’re going to tell the truth but we’re not going to blame shift. All the mistakes fall upon me as the CEO and the leader of the company. I will take the blame. We start talking about those things.

The value is, “How we’re going to get there?” The culture point is, “What’s the atmosphere of how we’re going to get there?” We added those culture points because we’ve not seen anybody do that, but we wanted to name some of the things that were important to us that if we didn’t name them, they would happen under the radar. What we’ve found are these values. One of them is forgiveness before permission.

Serve your clients in the best way that you can. Share on X

Can you give some examples of the value points first?

This is the value point. The vision is, “Where are we going?” The value, “How do we get there?” Our first one is, “Good is good enough and the perfect is the enemy of the good.” What that means is we want to orient towards execution over getting every I dotted and T crossed. If you take that to an extreme, we don’t want to put out sloppy work, so we have to talk about that with our team. We hire a lot of perfectionists and workaholics. They are going to be oriented towards trying to make everything look amazing before they even do anything with it.

You want them to do something with it even if it’s at 99%. It doesn’t need to be at 101%.

That leads to the second value, which is forgiveness before permission. In other words, we want our team to have an entrepreneurial mindset and solve issues before they even bring them to us instead of asking permission to make any innovation. That requires us that we extend forgiveness if they do something. It puts some pressure on the leader too.

Another value that’s related is, “Find the way before escalating.” In other words, don’t bring problems up the chain, bring solutions. We have to talk about what that looks like when you raise a client issue to me or to somebody under me who’s a manager type in the organization. The person has to make sure that they’ve come up with 2 or 3 possible solutions. If they can’t come up with one, explain what they looked for, why they look for it, why they still can’t figure it out, and why they need help. That changes dynamics.

When people execute this, it takes away so much resentment that happens. It’s the grinding and the gears of teams when you teach people how to communicate well. Some of that requires understanding. When do you send a text message or an email? When do you make a Basecamp project? When do you chat in a campfire or Slack channel or whatever you use? We named all those things.

Naming those processes and the protocols puts the guard rails down in which joy can occur. It’s like putting the train tracks down so the train can go as fast as you want it to go. It really helps. We found as we’ve named these things that most people don’t take the time to train on how we communicate with one another. What do we do when somebody makes a mistake? How do we handle that?

A lot of people talk about family first, but that’s crap. We all make decisions that are not family first like going on a work trip. You are by definition putting your family to the side so you can do a work trip. It’s not family first always. Our spin on that is that our work does not primarily define our identity. It’s important but it’s not everything or who we are. There are some people that don’t have a family. There are single people. There are people who are widowed.

You seven of those points that you talk about in your weekly meetings. A lot of people have a firm, maybe an admin, another CPA or a bookkeeper. This would be shared with everybody on the team.

Including contractors, by the way. We don’t push our contractors through the whole thing but they know what we’re about. We train them on our communication protocols at a minimum. The cultural points are the last little pieces that we talked about. One of them is we don’t need or try to imitate the corporate culture. We’re not going to unnecessarily lard ourselves down with SOPs for every freaking thing. We want to be able to create space for innovation.

AA 89 | Staffing Issues

Staffing Issues: You’re paying your employees. It’s a mutual exchange of value. There’s dignity in that. But it’s not a lifetime commitment.

 

Another cultural point is we lean into encouragement, recognition and trust. When somebody does something awesome, we’re going to talk about it. We’re going to recognize when they’ve solved a thorny issue. We’re going to let people lead stuff that we might feel like they would do a better job in. We’re going to let them grow and trust them. This has made an enormous difference. It’s a big part of why a lot of our employees refer their friends. I’ve got employees that have been with me for 12 to 13 years. I haven’t given them massive raises over the years. I’ve created a place that feels like it’s family.

What are some of the other things that we haven’t talked about that could stand out for an accounting firm and tax firm owner that sits down after tax season? You’re reading this after tax season, so you can spend an hour thinking about the vision, the values, and then this cultural piece.

There’s the entrepreneur operating system that a lot of people go by like traction. They have a core value thing. I’ve got a lot of friends who use that to run their businesses. They do well, but when they share with me their vision and values, a lot of them are airy, cliché and generic. It feels like an exercise for the sake of doing an exercise.

I encourage your audience if they are going to do this to be as specific and fresh as possible as you do it. Avoid cliché. A cliché that a lot of people use, and I alluded to it, is work-family. We’re going to be a family. Here’s the deal. You don’t fire somebody from your family. That creates weird co-dependency and pressure to say, “John Jones, CPA, the employee is a family.” Hopefully, you’re a well-functioning healthy team. You can get cut from a team. You can grow in a team, but family creates this weirdness. Avoid these clichés that haven’t been thought through. Does that make sense?

It totally makes sense because if they’re on the team, you can get cut just like in the NFL where they can get fired when the new coach come in.

Even if your brother is a jerk, he is still going to be your brother.

You’re stuck with him no matter what. That’s family. This is still a choice of who you are going to have on your team.

You’re paying your employees. There’s a mutual exchange of value. There’s dignity in that but it’s not a lifetime commitment. The other thing that we did a couple of years ago was a big risk. There’s a friend of mine who runs a coaching company on productivity. His name is Shawn Blanc. He has a course on focus and margin if you google TheFocusCourse.com. He’s got a fairly significant footprint in the coaching and digital creator world. A lot of people in our industry do not necessarily know him, but he’s a personal friend that I’ve known here in Kansas City. He started an experiment a few years ago when he went to Basecamp.

They put on these conferences called The Basecamp Way To Work so people can see what they do. Jason Fried who wrote Rework is one of the founders of Basecamp. There are 50 employees at Basecamp and they manage a user base of 300,000. They’re a huge company with $50 million or $60 million in revenue, maybe more. Their product is good but they limit themselves to how awesome it is.

Shawn went and he learned about their eight weeks cycle of sprints and how they organize those. He started implementing that and he got me to implement that. He then added a significant twist. I can’t take the credit for this. This is Shawn’s brainchild. That is to add a paid week off at the end of each sprint. It turns out there are eight weeks, seven weeks of work, and one week of rest. We call it the sprint sabbatical rhythm.

Our work does not primarily define our identity. Share on X

The reason why we decided to do this is number one, we wanted it for ourselves. I and my COO wanted this for ourselves and our family. It felt a little icky doing it for us and not our entire team. We wanted refreshment and rhythm. We wanted to see what it would be like if we separated our company into two teams and made this work for everybody. We wanted to see if it could create a cross-training environment so that there’s even more unity. We might not get as much done during those times.

What we did is our company was split up into two teams. One team will take a week off, while the other is covering their tasks. The next week, the team that was covering takes a week off, while the other team that had been off covered their tasks. From our client’s standpoint, they don’t know that we even do this. I’m going to start talking about it more openly. We have doubled our revenue since we decided to do this. We’ve discovered that the 80/20 rule played into what was happening.

It’s my favorite book, The 80/20 Principle.

There were some massive benefits that we didn’t even realize were going to accrue. Cross-training is number one. If we have an employee who for whatever reason has life circumstances changed and needs to step away from the team, there are people who are cross-trained on what they do. Although, I haven’t lost an employee in years.

I have redundancy in every part of my business. I’m never more than seven weeks away from a break. Spouses love us. Recruitment is so crazy easy because no company does this thing. It equates to about seven weeks of paid time off. A lot of people offer unlimited time off. What that translates to is Christmas and New Year and people never take their time off. When you enforce it, staff gets refreshed on this regular rhythm and we come back ready to rock. The last few weeks were sabbatical for me. I’m filled with vigor for all of what I want to do.

That’s awesome. I can tell.

This is a whole thing that we’re going to start developing some training around. It’s a pretty dramatic thing. We shared this with our peer group in the marketing agency world. I’ve got about ten agencies that I’m helping them walk through in putting this into their world, and it has already made a huge difference for them. What staff member is going to leave a company that gives them this?

Especially getting paid at not top pay but maybe the middle of the way or a little bit higher above the middle, and seven weeks of enforced time off. I’m all about the ask for forgiveness later program and that there are no rules. A lot of people say they want that or they provide it in their firms or companies, and it’s really not. Everyone is walking around on eggshells with their mouth shut. You’ve provided this culture of joy.

When you make the choices as this sabbatical does, what I’ve found is it embodies some of these values in ways that just talking about it doesn’t matter. We put our money where our mouth is and they start owning it a lot more. They start feeling the dignity of their role that I care enough about them to give them that time.

For part-timers, what we do is we do an average of their last quarter’s weekly pay and give that to them. It evens out the ups and downs of if they do more one week or another. I have 19 employees, 20 of us total, and 13 might be full-time and the rest part-time. For the part-timers, it’s an amazing thing because part-time workers get time off and they don’t get paid. It’s a totally awesome thing for them.

AA 89 | Staffing Issues

Staffing Issues: There’s people who are cross-trained on what they do.

 

It embodies these values in ways that I could talk about them until I’m blue in the face but let them feel the dignity of having this. I onboarded a new assistant. We don’t give it to them within the first three months when we hire like we do a probationary period whenever we hire somebody to make sure it’s good for them and good for us. The new assistant that I have had her first sabbatical and she was texting me or posting stuff in Basecamp on projects she was doing. I had to be like, “You are on sabbatical, stop.” It felt weird but she loved it.

Nate, thank you so much for taking out the time to share this with everyone. Now is a great time to implement this so you can combat your staffing issues and maybe see it’s not only about the hours worked and the dollars you pay. There are a lot of little elements that can keep people doing great work but not being a perfectionist, and being able to have other ways to double your firm revenues. Thank you so much, Nate. It’s always an honor to have you here. This is a great topic. How can people find you in case they want help in getting some leads?

We’re at TaxProMarketer.com or if you want to be very special and never talk about taxes with your clients go to AdvisorProMarketer.com. Either way, we will bring us to the same team and we can figure out your target market focus. We have a free membership there. We’ve got a bunch of resources, materials, and recordings of webinars that you can grab. You can figure out a time if you want to meet with me or my team. That’s great. It’s an honor, Michelle. I love what you were doing and building. Your approach is very refreshing in the industry.

Thank you. I appreciate that. We’ll have you back again, hopefully, very soon.

Thank you.

What an amazing episode with Nate Hagerty. Remember to go to his website. You can book a call if you’re interested in wanting to get some more leads. How can we create a culture of joy? I talk a lot about putting ourselves first and making sure that we take care of ourselves in order to be able to take care of your staff, clients, team, families and significant others, and yet this is the point that most people will let slip.

It’s the corporate culture, company culture or firm culture that you put together with your vision and your values, and implement some sabbatical. If you can’t do seven weeks on, one week off, maybe there’s something in the middle that you can implement. How can you create a culture of joy today? Joy and building this culture will help double your firm’s revenue. I promise you, it has worked for not only me but also others.

I did an episode with a guest a while ago where he has a million-dollar CPA firm and they take vacations during tax season on rotation. He went on vacation in mid-March and his staff goes on vacation during tax season to get a break, recharge, and come back to deliver better service and better-quality work for their clients. That’s what it is. Burning the candle at both ends isn’t going to cut it. Being burnt out isn’t going to do you any good or anyone else because then you’re going to want to throw in the towel, maybe go get a job. If you’re in a job, you’re like, “Doing a firm is not for me.”

I have a brand-new masterclass. If you want to see how Mark and others are doing this so they can double their firm revenue using a much newer and far simpler method, make sure to go to the TheAbundantAccountant.com/masterclass. It’s an investment of 43 minutes. Have a pen and paper, and take notes. This will provide you a lifetime of increased revenue without working more hours and having to get more designations, qualifications, CPEs or anything like that, and how you can implement putting yourself first, which I talk about in 43 minutes, so you can create a culture of joy. Once again, make sure to register, grab a pen and paper and I’ll see you there.

 

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About Nate Hagerty

AA 89 | Staffing IssuesNate Hagerty is the CEO of TaxProMarketer and AdvisorProMarketer, the nation’s leading marketing agency group serving accounting and tax practices since 2007. A member of Mensa, Nate is a multi-year honoree of CPA Practice Advisor’s “Top 40 Under 40”, has been published widely in industry publications, and is the author & editor of two Amazon bestsellers. He is a father of 7 children, four of whom he and his wife adopted from overseas. Yes, he has a lot on his plate, and has few hobbies.

 

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