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Ep022: CPA Misconceptions with Randy Reimer - Transcript

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Dave: Hey Randy.

Randy: Hey David, how are you?

Dave: I am great. And how are you today?

Randy: I'm doing very well.

Dave: Good, good. Well, thank you for being on the podcast.

Randy: You bet. Honored to do it.

Dave: Let's get started then. So my guest today is Randy Reimer. Randy is a CPA, and he's the founder of a local Houston CPA firm called Reimer McGinnis and Associates. Randy lives in Houston and is married to Kimberly, and they have two daughters and several grandchildren. Randy, welcome to the show.

Randy: Glad to be here. Thank you for that nice introduction. We've been married for 40 years, two daughters and two granddaughters, which is just, lots and lots of girls, lots of ladies. in my family tree.

Dave: And I think Kimberly is your high school sweetheart…

Randy: Junior high school sweetheart. I remember the day when she walked into the lunch room in seventh grade and hard to believe all these years later. Yes.

Dave: That is great. Wow.

Well that, I don't know how you can have been married 40 years because Kimberly looks like she's 39. So I don't know.

Randy: Yes, she does. Looks a lot younger than I do.

Dave: But I'm not real good at math, so maybe I'm not very good at the math there.

Randy: Yeah, exactly.

Dave: So now are you from Houston originally or did you grow up somewhere else?

Randy: Actually, I'm born and raised in beautiful Beaumont, Texas. Southeast Texas. I was born and raised there. It's really kind of interesting as you run around in Houston, there's a ton of people here that are from Beaumont. I'm always amazed when someone finds out I'm from Beaumont within a couple of acquaintances, we figure out we know some similar people that are from Beaumont. So a great place to help people, a great place to be from.

Dave: So do you think, is that why there's so many folks in Houston just because the economic opportunities were better or?

Randy: Yes, absolutely. Yeah. I think that's the real key is that the economic opportunities are so much greater here. Obviously a much bigger town, a lot more to do. Beaumont is still a great town. My mom's still there and I go see her regularly and it's still a great city. But growing up, it was, it couldn't have been more the perfect middle-class America. It was just a great place to grow up and back in the day. So it was great. But yeah, the opportunities that Houston provides is truly, almost immeasurable. I tell people all the time, especially some startup clients that are coming to Houston or are new to Houston. It's like if you're in Houston, Texas, and you've got a great product or a great service and you just do a good job, you can start a business here and grow it here.

It's a great city for people that are truly entrepreneurial that want to succeed and have a plan and just take care of clients. It's amazing. The opportunities that Houston provides so much more so than Beaumont. Discovering and Beaumont, you needed to have the right last name, the right heritage was important. And I literally grew up on the other side of the tracks, so I didn't have some of those same opportunities, but that was a great place to be from, I still love Beaumont. Got to do with my roots.

Dave: Sure. And Beaumont's like an hour and a half from Houston.

Randy: Yeah, hour and a half, 15. Hour and a half. Yeah. Not too far, of course. Famous for really starting the oil boom, and kind of ironically Beaumont should have been Houston. With the oil boom that happened there. In fact, a lot of the Beaumont companies, if you go back and read some of the history of the oil and gas companies, they started in Beaumont but eventually brought their office to Houston because Houston was just a little more progressive and building out downtown and being more business-friendly than Beaumont seemed to be. So kind of interesting how that worked out.

Dave: Because that was where Spindletop was, right?

Randy: Exactly. That's where Spindletop happened, the biggest oil fines of all time. And there was lots of more sort of mini Spindletops around Spindletop. So that's where Exxon Amble Oil and a lot of the oil companies. Getty had a big office there back in the day. So it burst a lot of big businesses.

Dave: That is great. And your comment about the opportunity in Houston. I agree with completely. You may remember back in the eighties, there used to be a joke that anybody in Houston with a cell phone and a leased Mercedes could be a real estate developer.

Randy: Absolutely, yeah.

Dave: And I really think that encapsulates what Houston is all about. It's the most welcoming place I've ever lived, even though small towns kind of have a reputation as being more friendly, I've found the opposite to be true. I find that the small towns tend to be kind of clique-ish and closed. But the thing about Houston is virtually nobody's a native. So everybody's an immigrant here. And everybody remembers when they were an immigrant. In fact, if you're probably lived here 10 or 12 years, you probably have lived here longer than half the people, maybe 15 years. Right.

Randy: Absolutely. Yeah. It's funny because most people that are not Houstonians don't realize how diverse our city is. I mean, it's funny. We just hired a young lady, who actually is from West Africa and just a brilliant sharp young lady. And she was telling us the story where we were visiting with her about how she chose coming to Houston and coming to Texas. And she actually commented that she truly believed that people over in Houston and in Texas were, everybody rode a horse. Everybody, it was just like you'd seen on TV that it was this Western culture. And she's like, "Oh my gosh, I got to Houston. And it's like, there are no horses."

And everybody here is so friendly and there are people from every, every country you can imagine and all the different languages that are spoken. And it's just like yeah, we have an amazingly diverse city. And I think that's another piece of what helps the entrepreneurial ship, if you will. And businesses here is that, they're just, like I say, we're all kind of all in it together. And there's no collect. There's no organization. You must be a part of, to have success. And it's pretty cool.

Dave: Well, you were talking about the horses and it dawned on me. There is one day a year that there are horses on the street rodeo parade that Houston has one of the largest livestock show in rodeos in the world, I believe. And right before it kicks off, there's a trail ride that comes down Memorial drive. So what would be funny is if one of those people who had that image of Houston, imagine if they were picked up from the airport and they were just driving right down on that day and they show up and they have to wait for traffic to pass. Couldn't you just see those people taking now. Yeah. That makes sense. Yeah, that makes sense. So it makes sense that there's a few cars make sense there are some cars too, but here's the horses I was expecting, but here are the horses I was expecting.

But then these poor people are going to be disappointed because they're not going to see any horses for another year on the streets. So did you go come straight to Houston from Beaumont? Or did you detour?

Randy: I did a detour. I made it, I went to college, not far North of Houston in a little town called Huntsville, famous for a prison and a university. Sam Houston State University is where I went to college. It's kind of interesting. My parents both went to college there, graduated from there. They were both school teachers. And so I had this, it wasn't like I had to go there, but things just kind of worked out. I was, I was fortunate enough to be a baseball player and actually played baseball for Sam Houston, and had a really good baseball program as well as a really good accounting program. So things worked out nicely. My wife and I both went to school there, both graduated from Sam Houston with accounting degrees.

Dave: That is great. And you're the second guest I've had on the show who played college baseball. The other is my former client, Johnny Ryan, Alexander Ryan. And he played baseball for two-lane I believe, and he actually had a, he was given an offer for a major league contract or a professional contract, not major but professional. But he had already accepted his job in Houston. And so he declined. And so I'm sure you did the same thing, right? I'm sure you had plenty of offers. It's not the life for a married man.

Randy: That's right, exactly right. Well, it's really interesting. Of course, I think every baseball player's dream is to play professionally and I'm actually, my father was a ballplayer and played in the minor leagues. Never made it to the big leagues, but it was always a dream. And I actually was hopeful that I would get drafted, but did not and did have an offer to go to a training camp, but I already had enough players or friends that had been drafted or played. And they had already told me the stories of just how many incredibly great ballplayers there were trying for very few spots. And some of their advice was if you're going to got a job and you can make a whole lot more money and you might as well just go do that. And so I never did make that move and went straight to work and I'm glad I did. It worked out great. I still love baseball, still a big fan. Houston Astros season ticket holder for many years, and still love the game still. It's still the best game out there in my opinion.

Dave: Yes. I agree. So you graduated with your accounting degree and is that when you came to Houston?

Randy: Yeah, shortly thereafter, I actually started, my career was kind of interesting. I was going to graduate school at one point. My wife was working for a small accounting firm in Conroe and was driving back and forth from Huntsville to Conroe for a while. And then I got an offer to go to work for a larger firm that was in Conroe. And so I actually came. We moved from Huntsville, moved to Conroe, Texas, which is just North of Houston. And I worked for that firm. It was actually an interesting practice. They had about 100 total people, but they were spread out in small offices like Conroe and Cleveland, Texas, a small town and Tomball, Texas, and Huntsville.

They actually had an office in Huntsville where I went to college. But I worked out of their Conroe office, which was their larger office. And it was a great place to start because they get you exposed to everything, audit tax accounting. We got to do it all for the first couple of years before we sort of specialized. So it was a great opportunity for me. And there's a great town where I bought my first house and we had our first child. So it was a good, small town place to be. So we enjoyed Conroe, Texas, and it was a good start to my accounting career as well.

Dave: So yeah. So what then brought you to Houston? Did you get an office in Houston town?

Randy: Well, interestingly enough, my wife had left the CPA firm and gone to work for Conroe School District, Conroe Independent School District. And it was the controller there and she had met some consultants that were working with the school district from KPMG, which believe it or not, it was called Pete Marwick back then. I got there when it was still called Pete Marwick and they found out about me and I met them and they made me an offer to come move to downtown Houston and worked for what is now KPMG. So I made that move, and really spent most of my time there working, more in consulting in the operation or a division, they call it operations management, where we spend a lot of time looking at organizations and helping them become more efficient, look at the way their systems and processes and procedures were working and give them suggestions for improving them.

A lot of times we were sort of the hired guns as well, where we would come in. And a lot of times some of these organizations looking to streamline their operations, trim some people, trim some costs. And so we were kind of the guys that came in and handed them a plan that said, "okay, we recommend you change your organization chart and you restructure your company this way." And so that did that for three years.

Dave: You were the bad guys.

Randy: We were the bad guys. We were the bad guys.

Dave: Which is good because you don't have to work with the remaining people going forward to see…

Randy: Exactly, right. We like to say we were kind of the hired guns to swoop in and spend a month or two studying the organization and gathering all kinds of data and then come back and deliver our report and run. That was pretty common occurrence for us.

Dave: Sure. Yeah. Before they tried to hang you.

Randy: Yes, exactly. Tried to grab us where we left town. Yeah. I mean, we worked for some great organizations and I worked with a super bunch of people that were just very bright very smart. But of course, as you would imagine, as you've known all the stories of the big firms. I mean, I was in a different city every month and I had two young children and was never home. And while I loved the work, it was just not good for family life and not good for how to raise my kids and how to be a good husband and father. And so I had the opportunity presented to me by a friend that I had worked with previously at my first firm, who had found the elderly gentlemen who was looking for an exit strategy for his CPA firm. And so he convinced me to leave KPMG and join up with him and go acquire work for this gentleman and then acquire his practice. And so that's what I did.

Dave: Okay. And then did you, so let me kind of connect the dots. How long ago then did you form Reimer McGinnis?

Randy: Reimer McGinnis formed in 2006. December of 2006 is when we formed Reimer McGinnis. The previous firm I had purchased around 1991. And we grew that firm, a little bit. And then we kind of got to a spot where we felt like we had sort of hit the ceiling and we'd been approached by another larger firm in town, about merging with them a few times. And we kept saying no, and they kept coming after us. And we finally said, yes. And so we merged with them in 1997. And that firm was called Nolan Larrison. My firm was Larrison Stevens and Reimer. And then we merged with Nolan Associates and became Nolan Larrison back in 1997. And that was a good move that firm grew substantially. I think by the time I left in Oh six. We were about 75, 80 people. So it was a nice size, local CPA firm.

Dave: Okay. And what prompted you to want to leave and start your own firm? Did you see kind of a space or niche in the market you wanted to?

Randy: Yeah, we really did. One of the reasons we left is just, we really, and we'd we tell our folks this today is we wanted to sort of create a different CPA firm. We wanted to create a firm that that was much more employee-centric, much more about our people, had a culture that was just very more like a family and more fun. In fact, one of the core values of our firm now is fun. I mean, we actually love to have a good time and love to hear laughter coming down the halls. And we're... COVID of course has changed a few things here, but we spent a lot of time in our, we have a large kitchen in our office. We purchased our own building years ago and we've got a nice big kitchen and lots of space to spread out.

We have an outdoor covered patio where we like to hang out. And so we really use our space to spend time with our people. And so we really, we really had this desire to create a culture and affirm it was just different. And we really wanted to be small. The firm where we were was a great firm, great people, but the direction it was going was not the direction we wanted to go. So Tom McGinnis and I left that firm in '06 and started Reimer McGinniss and Associates with two other people, who were both at that same firm. One of one of which had worked for Tom for 20 plus years at his prior firm. So we started this thing up with just foUr folks.

Dave: And then it sounds like you succeeded, but you also failed, right? Because you're not really a small firm anymore, are you? How many people are you up to?

Randy: Yeah, we are up to 26 people now. So within 15 years, we've grown pretty substantially from four to 26. We kind of expected we would grow once we started the firm, but we truly had no idea that we would get this big and have this many people. And just like I say, it was kind of somewhat of a surprise to us because it wasn't really our intent to grow. It was really just our intent to serve our clients and continue building long lasting relationships with them. And somebody has asked me before, how did you do this? One of my answers is that the old line, again being a baseball player from know field of dreams was, if you build it, they will come.

And I feel that's sort of what we did is we, Tom and I, and we love to tell the story that when we started this firm, we literally sat at my kitchen table. And we sat down and got a piece of paper out. And we wrote down the clients that we knew would come with us when we started our new firm. Because we had been serving them for a long time and put down our pencil to the paper and had the budget together. And literally our first year revenues were within 2% of what we had targeted. But I guess yeah, aint that crazy? I mean, I guess we're pretty good accountants too.

Dave: Well, I guess the lesson there is for my listeners, if you're trying to forecast something accurately, get Tom and Randy involved.

Randy: Get us to help you. Exactly. Yeah. We were pretty good. We were pretty astonished when we sat down and looked at the end of the year that we had literally almost had exactly what we expected we would hit. So yeah, it was pretty crazy, but yeah, since then our revenues have quadrupled and our staff has more than quadrupled. So it's been a wild kind of crazy ride along the way. And so, but what we felt like is just, we sort of tell people that hey, we're really just servants. We are truly just here to serve other people. We happen to do it with accounting CPA services, but that's kind of who we are. And it was kind of interesting. We were at one of our retreats here last year or so we kind of went around the room, talking about jobs people had, and we were pretty surprised how many people had jobs in the service industry. Restaurants and hotels and retail where they had actually served the public.

We sort of accidentally picked people that come to work for us, that had that same sort of servant mentality. And I believe that's what's been the key for our firm as we've found those types of people and hired those types of people. And they serve the clients just like Tom and I always have, and they've told their friends and they have grown and our firm has just sort of had this organic growth over this period of time. It's just been kind of fun to watch.

Dave: Yeah. It is. And it's been fun for me to watch too, because I mean, just from a full disclosure perspective. So we started subletting. My firm started subletting space at your offices, long time ago, and that's still where our formal offices are. And you all have been the only accountants that our firm has ever had. So that's been 11 years, you guys have served us. And then it took me, let's see, you guys have served us for 11, 12 years this year, but it took a few years to convince me to let go of doing the 10-40 myself though. And I'll tell the story for the listener. So I would, because I'm a CPA by training and I just felt like I had turbo tax and I'm like, I can just, I can do this myself. And it felt like it kind of kept me grounded, but then it got to be for whatever reason, and my wife has her own business.

My wife has several businesses and we just, our situation kept getting more complicated. And then it got to where I would have to go to your offices every year and sat down with my laptop and TurboTax and your team to answer like the 110 questions I had. And then you all just started saying to me, "Dave, it would actually be easier if you just let us do it." And then I think what, what never did it is, because I think Liz told me that first, and then you finally said, "Look, Dave, if we actually charge you for all the time we spend helping you do your return. If we actually charge you for that, it might be more than it would cost if you just had us do it."

And of course being the accountant, once I heard that, then it was all better. And I think that was three years ago. And you guys do a great job. So a question, I'm kind of jumping ahead here, but so at some point you and Tom are going to retire. Are you going to do like that other firm where you're just going to find some stranger to buy the firm?

Randy: No, we are not. Our plan is to not do that. We really wanted to create a legacy firm. And we have already, we've brought in. We just announced, I don't know if you saw the announcement just went out. I think this week that we've just brought in another partner into the firm, a young man named Mike Hewitt who actually started with us as an intern. And again, kind of goes back to the people we've hired over the years. His father worked with one of my good friends at BP in their accounting department. And this young man, Michael Hewitt started with us as an intern. We've had, I think six people or seven people at the time and he's been with us now over 10 years. We've watched him grow, become a CPA, take on client management, business development and training of our people.

And just has done an incredible job. So we're very excited about Mike and we have another partner we brought in, I think three years ago named Max Dunlap, Max was from Deloitte. And so we think we're in a pretty good position for the next generation. Our goal is that Tom will retire a little before me and then I'll retire, but we think we've created this organization that hopefully will continue after we're gone or after we're retired. So we did not intend to sell to the highest bidder as a lot of firms our size, we do get phone calls, pretty frequently. People that are looking to merge us in or acquire our practice. And while we've talked to a few, we just have never felt like that was the direction our firm should go. And so we're pretty committed to being independent legacy practice as certainly our goal currently we've told our new partners, "Hey, the day comes when we're going and you guys think that is the best move for the firm, then that'll be your decision." But we're committed to headed forward and continuing to grow this practice as much as we can.

Dave: Well, as a client selfishly, I'm glad that's your strategy because I mean, it seemed certainly from a client's perspective, it seems like a better future. Then you'd be enrolled up into some bigger firm or just sold off. And I've also got to think it's better for the employees too, to have that continuity and stay at the same location. And yeah. And I think that's a Testament to you and Tom really living that servant leadership approach, because if you looked at what would give you and Tom, the biggest bump in your bank account, the soonest problems selling it to an outside buyer, but it sounds like that's not your approach.

Randy: Yeah. Tom and I. I think one of the beauties, our firm is it's just been Tom and I's relationship. Our values are all the things about us personally are so aligned. It's pretty remarkable that we both are both work hard. We both do the right thing. We both have great families. I mean, just everything. Our personalities are so similar in terms of our core values, but we're very different in terms of the way we practice and who we are. Tom loves nothing more than to sink his teeth into a big, hairy tax return. I mean, that gives him great joy. He really enjoys doing that and ticking and tying and looking at everything and that's that I don't get my choice there.

Dave: Wait, hold on. All these years, I've had the wrong partner with our tax returns. Oh no. Oh, well it seems like it's worked out. Okay. So anyway, go ahead.

Randy: Not saying I don't do it, I'm just it doesn't bring me joy.

I'm much more enjoyed discussing the return with you and talking about potential strategies and things we could do to save you some taxes or whatever that might be, that sort of thing. So I think that's been one of the cool things about our firm and our relationship is we both recognize that we have different skills and different strengths. And we let each other do what we do best. There's never been any animosity or, every now and then he'll tell me, "Reimer, you need to be in the office. You've been out doing too many meetings and going to networking events or other types of things where you've been out of the office too much, you need to be in the office." That's about the strongest criticism I think I've heard from him in 15 years. So it's been a good environment.

Dave: Yeah. That is great. Yeah. Tom's, I enjoy Tom as well. You guys are great team. So let's talk a bit, let's kind of backtrack then to the firm. So what are some of the things that you all have chosen to focus on to develop some, I guess kind of some niche expertise or who are you really set up to serve best? Why don't we start with that? Who do you want to be a hero to, who's that ideal client for you?

Randy: Our ideal client has always been the entrepreneur who is very involved in his business, whose goal is to create something, maybe it's to grow it. Maybe it's to make it big and sell it later, but they really don't have somebody internally in their organization who's really got high level tax, financial, even maybe management skills that they're really knows how to help them get to the next level and plan for that. And so that's our bread and butter is that entrepreneurial business owner who started their own business and kind of comes out of the, I know you've read the book long ago called the E-Myth. So many of our clients come out of that sort of situation where they were really good electricians, and now they have a company that does electrical contracting and they don't know how to run that business.

And so we find a lot of our clients like that, that have been in the corporate world or work for somebody else. We have one of our favorite client groups is in the oil and gas area. That's manufacturing. And I love to tell the story because they literally started with the guy started in his garage. I mean, you hear that story, that he literally started in his garage and now they have about 15 companies. And I think at their peak, oil has an impact. Price of oil has an impact on our business, but at one point, the combined revenue of all his entities was over half a billion dollars. And literally he started with one company. I was introduced to him by another client's accountant.

She was doing this stuff part-time and he had started growing so much that he needed additional help. And so we've kind of been with that group, all the way through. And so with that kind of client that we can start small with and help them grow. And building that we went from doing just tax work and a little accounting work to doing reviewed financial statements, and they acquired some companies. We help them with due diligence work and actually how to roll them into their company. And so not all of our clients of course do that. But that's sort of the guys we're looking for is that, I'm going to say it starts in the million to 10 million range, and some of them grow from there, some stay there. And we're happy at either spot, but that's kind of our bread and butter.

And over the years, we've sort of narrowed down our... We kind of have clients in almost every area, but sort of our niche areas have really become manufacturing, and we kind of thought oil and gas type clients in the manufacturing space. Then we have a good concentration of clients in the real estate area, really kind of real estate and construction. And then Tom McGinnis has been working in the healthcare space his whole career. And so he has got, we have a lot, he's got a lot of doctor and doctor group type clients, and then the other area we've always been involved in is nonprofits. We've always had again, part of that servant attitude we have here, we've always enjoyed being part of a nonprofit organization. So we've over the years picked up quite a few clients in the nonprofit space. So we do a lot of nonprofit tax work, nonprofit audit work as well. So those are sort of our forks sort of niche areas, if you will.

Dave: Okay. Well, that's helpful. I didn't realize that about the doctor groups or the non-profit. I knew about manufacturing oil and gas and the real estate. So you talked about this one company, that you'd helped. And when I worked at Arthur Anderson, I learned a lesson. The first thing they taught us was if you ever mention a client by name, you can never mention any details. And if you ever mentioned any details about a client, you can never mention their names. So your big client where we can't tell, talk about who their name is now, but is there another client that we could go the opposite direction, who you would not mind if you mentioned that you were a client and maybe some examples of things you've done or has any come to mind that they would love to get some free PR on a worldwide listening audience?

Randy: Yeah. There's a couple. I mean, the one that sort of comes to mind right now, is a company here in town that's called Facilities Electric. It was really interesting how I became involved with them. I had been doing the 10-40 for a gentleman here named David Durette who was, I went to church together, was good friend. And he started having me do his tax return and just to 10-40, nothing exotic. And then he called me one day and he said, "Hey, Randy, I've been offered an opportunity to come to work for this guy. His name is David Hatton. And do you know him?" And I didn't really know him, but I was, I knew some people that did. So I sort of checked on him and found out that he was an upstanding guy.

And so kind of long story short, my friend David joined the other David, and they basically began an electrical contracting company. And my friend David Durette actually had been working for one of the largest electrical contractors here in town. And the beauty of that I guess, relationship in that business relationship is I was involved with them from the very beginning when they set up the company and began doing work and they had a couple of clients already. But the beauty of that story is that Mr. Hatton, who was really the capital behind it and the guy who was putting the thing together, I helped him put an agreement together that would give the other David ownership interest over a period of time when certain milestones were hit. And again, this was goodness gracious.

This was 15 plus years ago now, and now that company has grown in an amazing way, they have multiple companies they've acquired a building. And so I look back at that relationship and that's been one of those that, and they just do fantastic work. They do work with a lot of the large contractors here in town. They've got a HPAC division now and a lighting division. And anyway, so they're a great example of some of the things we're where we've really been an integral part of all that they have done over the years and helping them structure their growth. They've had people run at them to buy them, and we've been involved in some of those discussions, but they're still very independent and doing their own thing. And it's been fun to watch them grow, kind of as we've watched our CPA firm grow, but that's one really good story.

Dave: That's a great one. Do you have another sort of interesting client story? I mean, I've loved working with entrepreneurs, that's who our clients are too, and they're just, I feel so honored to be able to serve these entrepreneurs. You have another story that you can talk about?

Randy: I do, I will. I'll mention one more. We have a client. I don't think they would mind if I mentioned their name. The company is called World Cinema, and what's really interesting about them is they are one of the largest providers of in-room hotel, TV service in the country. If you've been in a hotel, odds are you didn't know this, but behind the scenes, they were providing all the programming in the hotel industry. And I love to tell this story because of this gentleman who owns this company, he has been a client of mine. His firm has been a client of ours. He was a client of Mr. Larrison whose firm I purchased back in 1991. So I've been doing his work since I got there in 1989. And here's the cool part of the story for them.

The owner's name is a man named Chet Dixon. And Chet's a Rice educated engineer. And he saw way ahead of schedule way ahead of everybody else, this desire for TV in the hotel room. And so he had the idea that he could put a VCR in the reception lobby of a hotel. He would wire the entire hotel with cable and in the hotel would tell their people staying there, "Hey, we're going to put in this movie at six and this movie at eight, and this movie at 10."

Dave: Are you serious?

Randy: I'm dead serious. Turn your TV to this channel because prior to that, all you could get in a hotel room was the standard pre-cable programming. Yeah. So he began that whole idea of selling movies into the hotel rooms by literally using VCRs.

And obviously that company now has grown to be substantial, well over 100 million in sales, they operate in every state in the country. Just great company, great people. And of course now they're as high tech as you can possibly be. In fact, it's almost a challenge for them to keep up because the technology is forever changing. They went from obviously analog to digital, to internet-based and Netflix and streaming. And so the last 10 years has been a real constant technology battle for them. But we have been involved with them for a long time from when they were small to as they've grown. And we've done, we do work for the owner. We do work for obviously the company, a couple of other spinoffs they've had over the years that they've had us do tax work for, and we do an audit for them as well. And so it's been, that's been a great relationship I've had over the years has just been one of my favorite clients where my favorite relationship that I've ever had in this business.

Dave: Oh, I can imagine why. So with that in mind, so let's imagine that somebody listening is just about to start a new business. They're just about to embark on entrepreneurship. And they're kind of not quite where to know where to start. They want to not make the 20 most common mistakes people make. So without giving specific legal or accounting advice, let's put that little disclaimer in. But in general, what are some of the, I guess the lessons that you have seen your clients learn or pitfalls to avoid? So what are some things that come to mind?

Randy: I guess the thing that is sort of the thread that I see with all of these clients is they all had a vision. They all had... You hear that probably talked about too much in the business world, but I think about all these entrepreneurs that I've worked for, that started in their garage, that started by running cable through a hotel room with a VCR. I mean, they truly saw something that no one else saw. And I think most importantly probably saw the ability they had within themselves, to make something happen. So it's that, it's really sort of that drive, that desire to go and bring that vision to reality. I mean, I still think that's probably the most important piece as you're starting a business is you've really got to have that vision in your head. And you've really got to have that drive that says, I can get this done.

And then the obvious other one is that we've seen mistakes. I've seen these many of these mistakes is that lack of capital. And then that lack of having the right team around them. Those are probably the next two most important things. And even if you're on your own, you still need good teammates from the CPA side, the legal side, the strategic suppliers or vendors that are going to help you do what you do. Maybe it's your web company or whoever that may be, but you've just got to find the right people that can support you. We've seen clients over the years that have had great businesses, but they unfortunately partnered with the wrong supplier or the wrong service provider in some way, and end up all of a sudden heading one direction and then dropping off the map.

And so I think having the right team around you is critical and then absolutely enough capital to get you to where you're going. To get where you're trying to get to, because too often I see companies just can't hang on. They don't have enough capital. And it seems to happen a lot with those that are coming out of maybe the corporate world, trying to start something and have some capital, but not enough capital and just can't hang on because those clients that we've seen over the years that have really thrived they've been able to survive the downturns and then come out of those downturns and like hyper turbocharged coming out of those downturns because they've been able to survive it. And they've learned from it and become lean as a result and really accomplish more with less. So those are probably some of the real keys that I see.

Dave: So to recap, having a clear vision and making sure that you've got that you're adequately capitalized.

Randy: It's usually important. And the right team, like I said, the right people with you. Let's just again, look at my situation here with Tom. You know what I couldn't, I literally could not have had a better partner. I mean this, and that's just, and then the people, the two people that started with us, I mean just two great human beings that worked hard that shared our values. I mean, you've got a team like that. You can do a lot.

Dave: Let's give them, let's call them out. Was Liz one of them?

Randy: Sure. Yeah. Liz Jackson is one of them, Liz Jackson worked for Tom at his previous practice. I mean, they've worked together for 30 years. And Liz is probably one of the best accountants I've ever worked with. And she did not have an accounting degree. And she sometimes would kind of be down on herself and say, "Oh, I really don't have a degree, but," and she could work circles around most of my degree accountants. So I used to tell her all the time, I said, "I want a whole firm full of Liz Jacksons. I want as many Liz Jacksons as I can get." Great lady, great worker, and believe it or not, Liz has retired. Liz, we didn't think she really would.

She told us she was going to start slowing down. And we really thought because she loved work. She loved what she did. And I think she had really got a lot of value out of her work and made it made her feel good that she was part of our team. But once she got home and wasn't coming in every day, she's like, I'm kind of liking this retired stuff and we've tried to pull her back in a couple of times.

She's like, "No. I'm enjoying what I'm doing right now. So if you guys really need me, I'll think about it, but if you don't, I'm good." So Liz was a key part of that and the other person was Merle as in like Merle Haggard. Merle has been, Merle's worked with me at the old firm was one of my key people at the old practice prior to so remember McGinnis. Merle was just one of those great accountants, a guy who's just loves what he does. He's a older guy. Merle told us a few years ago he was going to retire, but he is still here. Still going full speed. And what's really great about Merle is, to meet Merle. And you know Merle. To some people, he comes across as sort of this curmudgeon-

Dave: Kind of gruff.

Randy: Kind of gruff. Gruff is a good word, but the best thing about Merle is our young accountants here love him.

And so it is not uncommon to see Merle sitting at the desk of one of our entry-level brand new staff accountants here, and he's showing them how to do something. And it's like, you just don't expect it. And so he's got this big heart. He may appear a little crusty, but he's really got a big heart and loves being around here. And I think that's why he can't retire. I think he really just loves being a part of this group and having a place to go where we give him a lot of freedom to do what he likes to do. And he's just been, those two people have been a huge part of our success have helped us build the foundation for us to grow this firm. There's no doubt about it.

Dave: Yeah. And you're right. I've I know both of them, I've worked with both of them and you're right. I really miss Liz. And I'm so glad that that Merle is still there. In fact, I even I don't know if you know this, but selfishly, because I don't want Merle to retire. I'm always feeling like I'm doing what I can to keep him around.

I'll come in with kind of an easy question. I'll say, "Merle, I've researched this online. I've like talked to everybody. There's like nobody on earth that knows the answer to this tax question. I mean, I'm out of options. Can you help me?" He's like, "Well, that's the easiest thing to do." I mean, he just, he quotes the code section off the top of it. He says, "This is all you have to do." And so I do that. And then what's the other thing I tried to do, I just be appreciative, right. And then the other one is, I'll also just kind of sometimes challenge him and say, I'll just say something like "Merle you're, it's like time for you to retire. I mean, why are you still here? Don't you..."

Kind of a little reverse psychology that I think because of the crustiness, just to spite, he maybe stays around, but yeah. Merle is also a reminder. I've been a longtime member of strategic coach. That's Dan Seven's company. One of Dan's theories is that, so Dan is 76 and he plans he's like just starting a new 25 year business plan. Well, he doesn't plan to ever retire because in his mind the word retire means to be taken out of service and he doesn't want to be taken out of service. And one of the great things about your firm is that in traditional corporate America, it's a binary thing. You're either fully employed or you're retired. And it always struck me that there's kind of a balance in there that's better really for everybody, but the individual, the clients, and even society. And it's, cause I know like Deb, she's still working with you. All right. Yes. She sort of semi retired right. Living in Arkansas.

Randy: Yes. I mean she is living in Arkansas. She built a house in the country and it was a family plot of property. She's from the Arkansas area originally. And always had a dream of, of building a house in the woods, so to speak, but she wanted to keep working. And so Deb was one of our partner level people here and it was just great and we hated to see her not be here physically. But she's still working full-time for us, completely 100% remotely from her little place in the woods in Arkansas. She'll send us pictures every now and then a bear's off of her back porch. So yeah, she's in the near Eureka Springs, Arkansas, and it's just, we're very fortunate that we can work remotely in our industry.

Obviously we've proven that here with the pandemic here lately, that you can work from anywhere and Deb certainly is not really not missed the beat. We've missed seeing her physically, but we see her on our teams, staff meetings every week and she's still helping us a great bit.

Dave: And I think that's great. And I think that could even be the game plan for other people, because she's already working from home, so she's already set up there. She's already has her dream house. And in theory, it's like she shouldn't ever retire from that. She should just scale back to whatever she wants to do. And yeah. Yeah. Because I think when I think what was it when social security was enacted? I think like the life expectancy was like 61 years old. So it was a classic Ponzi scheme where they really thought they wouldn't have to really pay out to hardly anybody. And then with life expectancy increase in people's health. Yeah, the whole a 65 just seems kind of archaic.

Randy: Kind of silly now. Right? Yeah. I think you're exactly right. We've always been concerned over here from just a space problem. We own our own facility over here and have had to acquire another small building next to us. And there are times we used to worry about not having enough physical space and for the most part, that fear is sort of gone. Now we are very worried about needing more physical space, so.

Dave: You're right. I hadn't thought about that.

Randy: Yeah. So it's one of the beauties of remote working and technology has completely changed our industry. I love to tell the story here that I firmly believe that the day's coming when I don't know, 80% of the population can drop their tax docents into the feeder of the copy machine and run it through the copier. And the output will be a completed tax return that scanning technology and just technology in general is this may made tax 10 40 tax reps so easy for most people. They're always going to be the folks that have more complicated returns that are going to need help. And certainly those that just, they want to outsource a period. They don't want to spend the time and effort learning or dealing with it.

But we're certainly been pivoting our practice in the last several years to be much more of that advisor to our clients, not just a tax preparer, not just a compliance oriented to where we're really trying to help the client move their business forward and have systems in place and processes in place to help them run and manage their business. And so that's been a big turn that we've been going through in the last several years with, especially as we bring in new clients. That hey, we want this type of relationship. We want to be, we'll do your tax return, but we really want to help you go forward as opposed to looking backwards. It's been very well received by a lot of our new clients and to some degree, a lot more fun for us as well to do that type of work, opposed to just tax returns.

Dave: Yeah, that's really smart because it's clear that 10 forties, if they're not already, they're going to be a commodity. Yep. Yeah. That makes sense. Well, geez. We're now rounding the last churn is we're wrapping up the podcast here. So two kind of remaining questions. The first one is what are some of the biggest misconceptions people have about the accounting profession?

Randy: Probably the biggest misconception, is still that if you're good at math, you're a good accountant. I think that's been something you've heard for years. Oh, you're good at math. Well, you should work in the accounting world. Well, I mean, while math is important and certainly we deal with a lot of numbers, it's not nearly as important as for example, understanding accounting in general. We love to tell our young ones here that we would like them to be involved with the actual keeping of the books and understanding double entry accounting. Because if you understand that in our world, you're a better auditor, you're a better tax preparer, you're better at helping your client put together financial statements. So the fact that you have to be good at math is probably one of those. And then the other one certainly is that the old misconception of what was the joke. The difference between an accountant and an actuary, an actuary actually looks at your shoes instead of their accountant looks at your shoes, their own shoes.

Dave: Yeah, because they're a little more outgoing than the actuary.

Randy: They're a little more outgoing. So they look at your shoes versus their own shoes. Yeah. Actuary looks at their own shoes. There's this common misconception that the stereotypical accountant who doesn't have a personality would much rather just be holed up in their office, amid stacks of books and spreadsheets. And most people don't remember the green columnar pads and that's the conception of most accountants. Whereas I kind of just, if I was to look at my calendar, for example, I mean, I'm meeting this afternoon with a client of ours who owns a lot of oil and gas Wells, and he owns a lot of real estate. And the whole purpose of our meeting this afternoon is to say, okay, what can we do to minimize tax? We're literally half an hour and a half on our calendar, look at his tax situation and say, what can we do?

What are some ideas? And he's got all kinds of personal components of kids and wife and charitable ideas and all these different things. And so the work that we do, and the work that really provides the most value to our clients is way beyond the preparation of a tax return. And so I think those are probably two of the most biggest misconceptions.

Dave: Well, that's good. And so it sounds like your ideal client is that entrepreneur like five 25 million in revenue kind of range, or maybe even a little bit smaller if they're getting started.

Randy: Yeah, they could be smaller.

Dave: Yeah. And then for team members, do you all hire like for specific needs or are you kind of always on the lookout for really special people?

Randy: We are always on the lookout for people, but we tend to hire as we are getting, the workload grows. As people are getting, becoming overwhelmed, we'll look up and go, we probably need another tax preparer. Or we've made a conscious decision to increase our audit and grow our audit practice. So we now have two full time auditors with an audit partner who we have some others that will jump into the audit side and work. So we have definitely hired to fit some needs, but we are always looking. We just hired a young lady here not long ago, we were not looking, and she contacted us. It was kind of interesting. She really had a lot of initiative and a lot of drive.

And we just, we were impressed with her resume and her aggressiveness, if you will. And so let's talk to her. I mean, we're not really looking for anybody, but let's talk to her. And she came in here and just kind of knocked our socks off. And in fact, we usually have a process here where we have a lot of people interview every candidate we bring in and a couple of my mid-level folks had interviewed her. And when she was here, they came off to my office and said, Randy, you need to meet this young lady. You need to come down here and meet her. So we hired her, and she's working out really, really well.

So I would say that we're always on the lookout for talent, because we definitely are learning it is hard to find talent in what we do. Especially from our size. A lot of the accountants and CPAs that come out of the big firms, but they don't want to stay in public accounting. Even though we have a much better work-life balance and a much better culture than a lot of those big firms that when they come out, they just have this idea that they don't want to stay in public accounting. And so they hit the industry. So finding people that want to work in our space has become exceedingly difficult in the last several years. So we find someone who's interested who sort of fits our personality profile. And if we got a spot for them, we'll hire them.

Dave: Okay. Well, that's good to know. So as we wrap up, are there any questions I didn't ask you that you wish I had?

Randy: I don't think so. I mean, I think we've covered everything. I guess one of the things that has been our big plus for us, and I don't know if we've visited about this much, is we did implement the EOS model in our firm, about five years ago. Entrepreneurial operating system, a book called Traction by Gino Wickman, who's also a big Dan Sullivan fan strategic coach. And I think that's where he got his start, but we implemented that in our firm about five years ago. And that's been, I think that's been a big key in helping us really sort of crystallize our values, our focus, our targets, our niches, all those things that system requires has been a huge help for us.

And so we were already a very transparent firm in terms of we shared with our people here, how we were doing and how profitable we were and the bonus pool and those sorts of things we've been very transparent, and EOS sort of just helps you with that even more. Everybody knows our goals. They know we have a scorecard that everybody in the firm gets to see every week as to how we're doing towards making progress. And so that's been a huge plus I think in our organization. I have a leadership team that meets every week. Anyway, that's been one of the things that has really been a plus.

Dave: Oh, okay. Well, that is great to know. Yeah, I'm a fan of that work. And we have also utilized the EOS ourselves. So it will get, well, thank you for pointing that out. Well, Randy, this has been really enjoyable for me, and I really just want to tell you how much I appreciate our friendship through the years and how much I appreciate just the great work you and your firm do. And I feel very appreciative to do business with you all.

Randy: Well, thank you, David. We appreciate it as well. It's been a great relationship knowing you all these years and we look forward to many more.

Dave: Great. Well, that sounds great. So with that, we'll wrap it up and I hope you have a great afternoon, Randy.

Randy: Thank you very much. You too. You take care.

Dave: All right. You too.