It's Not About The Money

Jeremy Wells, EA, CPA is the owner of JWellsCFO and recently launched a new business called The HVAC CPA focused on the particular needs of HVAC business owners. In this episode, Jeremy talks about his journey into accounting, how he selected this niche, and how he becomes the trusted advisor his clients need. 

Jeremy Wells, EA, CPA: 
  • (01:11) - Jeremy's path into accounting
  • (09:33) - Deciding to become a CPA as well as an Enrolled Agent
  • (19:22) - Doing things differently in the industry
  • (24:25) - Niching and developing expertise
  • (29:45) - Starting The HVAC CPA
  • (43:55) - Venn diagram of finding a niche
  • (46:56) - Book recommendations
  • (51:03) - Don't try to be everything to everyone


Steve Nay: 

Tyler Smith: 

Creators & Guests

Steve Nay
Strategic tax advisor for solopreneurs. Enrolled Agent; Owner of Daybreak Tax LLC
Tyler Smith
Financial coach for working professionals

What is It's Not About The Money?

Solopreneurs and small business owners: learn about leadership, operations, entrepreneurship, productivity, taxes, client creation, marketing, bookkeeping, and more.

Niching into HVAC professionals, with Jeremy Wells

[00:00:00] Steve: So, Tyler, we've, we've talked a little bit about mentors and, mentors that we know in person that we have interactions with. But also I think there's, there's a flavor of mentoring where you kind of observe from afar, you see their work and kind of take inspiration from it, but they may not even know you exist.

I think Mark Butler may fall into that category for you.

[00:00:22] Tyler: Yes, I have a lot. Exactly.

[00:00:25] Steve: And today I'm really excited that we're going to have Jeremy Wells on to talk with us about his businesses because he has been an inspiration to me as I've started my own tax business. So I'm excited to see uh, kind of meet him in person here on the air and learn from that interaction.

[00:00:45] Tyler: That's a big moment for you. That's awesome.

[00:00:46] Steve: Hello, dear listener, I am Steve,

[00:00:55] Tyler: And I'm Tyler, and this is, It's Not About The Money where we discuss a wide range of topics related to creating and running small businesses.

[00:01:03] Steve: The two of us, Tyler and me are small business owners ourselves, just trying to make sense of the world, one podcast at a time.

Jeremy's path into accounting

[00:01:11] Steve: And today, as I mentioned, we are very excited to have our, our first guest ever Jeremy Wells, EA and CPA. He's the owner of JWellsCFO. Jeremy, do you wanna introduce yourself? Tell us a little bit about your history.

[00:01:24] Jeremy: Absolutely. Well, first of all, thank you so much for having me. It's a real honor to be the, the first guest. I know what it's like to have that first guest on a show and what, what goes into that. So I'm honored to be the first and thank you very much. Uh, Yeah. I'm Jeremy Wells uh, EA four, about five and and a half years, and CPA for a little over a year now.

And that whole time been running my own firm uh, at JWellsCFO. And, uh, yeah, before that I was actually in a whole different career. I was in academia and higher education. And so accounting is, has been still, is a whole new world to me still trying to figure it out. I did not come in the traditional accounting major then internship with a Big Four firm, then meet the firm's night and trying to get a job and all that kind of stuff.

I, I came into this by way of a second career, so Kind of skipped ahead to the front of the line and have been doing things, try to, try to do things a little bit differently than the rest of the industry. Um, But a lot of those things over the last five years or so are becoming more and more common, which is actually a good thing, I think, for the industry and for, for the people we work with.

So, yeah, that's, that's me in a nutshell. I think.

[00:02:32] Steve: Well, great, thanks. I also came into this career sort of the, a similar way. I did a computer science major and I worked in the software industry for. 10, 11 years, and I, I still do, I have a full-time job there, and this is on the side as I'm building it up. So that, that's one of the things that really intrigued me about your career path.

What made you uh, what drew you to accounting after academia?

[00:02:58] Jeremy: Yeah. So when I first got to undergrad um, Now, 20 years ago. Wow. Um, I uh, was pretty intent on law school and I, the, the small liberal arts college I was at didn't have a bespoke uh, pre-law program. So I had to kind of come up with one on my own and it was essentially majoring in political science.

And that was the closest thing you know, that seemed like relevant to trying to get ready for law school. I. So I majored in that and minored in business. I, I actually you know, I grew up watching Matlock with my dad, that kind of thing. But um, you know, I didn't wanna do the typical courtroom stuff.

I actually wanted to write contracts. That's what, that's what I thought I was gonna do, was I, you know, legalese and. Latin phrases and all that kind of stuff. So went with the business minor and that first semester I was a business minor. Took a business law class and an accounting one class. I ended up not liking the instructor of the business law class and I knew for the minor I was gonna have to take more classes with her 'cause it was a small college.

But the accounting class was fine. I, I actually kind of enjoyed that. I liked the logic of debits and credits. I liked you know, how you can roll up t accounts into general ledger accounts, into financial statements and all that kind of stuff. But I ended up sticking with political science, wound up going to grad school for that, and I got a PhD in it and specifically focused on international politics and looking at why wars happen and why civil wars happen, and foreign aid and trade and all these kinds of things.

And got really into that for a while. Unfortunately, I started grad school in 2007 and pretty quickly after that we went into the Great Recession. And when I came out of grad school you know, higher ed has always struggled with getting the respect it deserves from government agencies, especially states.

And it was just really difficult to find a job and. That I, I actually overcame that in a sort, sort of, kind of way. I got a full-time but not tenure track job at a university in Central Texas. My family's from Kentucky. My wife's family is from Florida. So we were just way out in the middle of nowhere and I was in a job that wasn't quite on the path that I wanted to be on.

So, you know, if, if, if. You're an accountant, for example, when you're in an accounting firm, you try to be on the partner track, right? Partner is the, is the top level that you can reach in that firm. Or you know, if you're on more of a corporate track, maybe you want to be, you know, a CxO, right? Something like that. So you're trying to get on that path to you know, promotion. 'cause that's where the, the earnings are. That's where the prestige is.

Within academia, you want tenure, right? That's, that's, that's your goal. The position I was in wasn't on that track. Even though it was a full-time position, had benefits. All that was fine. There was just, you know, I, I, within my first couple years, I had already hit my head up on the glass ceiling and that there was no way around that.

So I needed to find an alternative uh, to all that. And I remembered back to some of the classes that I had taken in undergrad that weren't part of the political science curriculum, and I remembered that accounting class and actually liking it.

I just so happened to be at a university in Central Texas that had a pretty decent business school; within that, a pretty decent accounting department. In fact, it's a lot of the big accounting firms out of Dallas, San Antonio, Houston, Austin, they recruited pretty heavily from this department.

And I started taking classes while I was still teaching, still working at that university. So in fact, I would, I would teach one class I, and then the next period I'd go take an accounting class and I'd run back to my department and, and teach another class. I even had some students from my classes that were classmates of mine in some of the accounting classes that I took. So yeah, it was, it was a couple semesters of that.

In the meantime, I was reaching out to accountants of, of all stripes. I was reaching out to CPAs, working in local government as, you know, city and county finance directors because I thought maybe I wanna stay on this public service track.

And I was also reaching out to CPAs online. Ended up meeting one via Twitter. A couple of Twitter direct messages back and forth that turned into a phone call that turned into mentorship. And uh, he is a uh, Uh, CPA who focuses on tax. And so when I told him, yeah, I'm talking with city and county finance directors and filling out that, he said, "That's great if you wanna go that path, but I can't help you there. But if you want to do tax, if you wanna work with individuals and small business owners, then I'm your guy."

I really enjoyed talking to him. Not necessarily more or less than anybody else I'd talked, talked to at that point. But we just really seemed to hit it off. And he became a mentor and this was all happening around 2017, second half of 2017.

And by early 2018 he Brought me under his wing as an independent contractor, started giving me tax returns from his firm to work on. And the more I was doing it, the, you know, more, I was not disliking it. And so first half of 2018, I was still working at that university teaching, but I also started building up my firm on the side working uh, with my mentor to prepare returns in his firm and just learn what I was doing.

And so 2018 just kept doing that. 2019, kept doing that by the end of 2019 felt like I was ready to go on my own. So even though I'd been building up my own book of clients that whole time, I'd been working sort of under my mentor's firm using his firm, his EFIN, to file returns, that sort of thing.

Uh, He was reviewing everything I was preparing. By the end of 19, I felt just confident enough to be able to do all that on my own. So when I came into early 2020, It's all set to be on my own. And then a couple months later, we thought the world was gonna, was gonna fall apart. So that, so that's how I got started in the business.

It was the first couple years. But, you know, covid for the accounting profession was sort of a mixed blessing, right? You know, a lot, a lot of a lot of upheaval, a lot of. Uncertainty, but also a lot of opportunity in that. So yeah, it, it all just came back to you know, just looking for opportunities that didn't seem to be there in the path that I had chosen for myself.

And, you know, it, it, it, things have seemed to have turned out okay so far, so pretty happy about that.

Deciding to become a CPA as well as an Enrolled Agent

[00:09:33] Steve: Another thing I wanted to ask you is how you decided to become a CPA as well as an Enrolled Agent. I am an Enrolled Agent and I've, I've thought about do going the CPA route, but it seems like a lot of, uh, a lot of investment upfront that the Enrolled Agent credential didn't require. So I'm curious what your thought process was there.

[00:09:52] Jeremy: Yeah. So, uh, again, when I came into this, I had no business background. I had no, um, you know, forethought of going into accounting. In fact, I had only just taken that one very introductory level accounting course. So, when I started talking to my mentor, middle of 2017, He actually, you know, I told him I've been meeting, with CPAs, working in government, running their own firms, that sort of thing.

And he said, well, you know, you can do that. Or, there's this other thing you can do. And, and he had actually, been an Enrolled Agent first. Uh, and he was, he had been a CPA for a while when I met him and started talking to him. But before that, uh, he was an Enrolled Agent, he said, so, you know, you can, you can do this. Look into it. Might be a quicker way, into it, because, you know, even though in, you know, out there, in the, in the general marketplace, when somebody says, "Hey, I need a CPA." uh, CPA's, accountants, tax professionals. No. They're really saying, "I need somebody to do my tax returns." Right? And so, for, for the, for the general public, tax professional, tax preparer, and CPA are synonymous.

Within the industry, we know that that's not true. That in fact, you know, most tax professionals are not CPAs and most CPAs are not tax professionals. Right. And so yeah, I, I looked into Enrolled Agent thing about a study guide. Went and took the, the, there's three, parts to that exam went and took and passed 'em all in the first try.

And so by the end of 2017, I had passed the three exams and for my mentor, the deal was, Hey, if you can go pass these exams and I know you're getting your license, then when we get into 2018, you know, start tax season, I'll start sending you work to do. So I was pretty motivated to do that. So I started doing returns for him.

But that whole time I. Yeah, I, I knew in the back of my head, um, you know, this is probably good enough. This is all I'll ever need, uh, to do the kind of work that I want to do. I had no desire to, to do audit and assurance work, which technically is what the CPA license is. And a CPA license is it, it has nothing to do with tax, right?

Even though part of the exam has a little bit to do with tax. Um, it has nothing to do with tax. It really what the, the CPA license lets you do is sign off on businesses' financial statements and say, "Yes, with some degree of, you know, reasonable assurance, I, I think these financial statements are accurate," right?

And so you can trust that if this is what this business says its profit was last year, that's what its profit was, you know, within a certain margin of what we call materiality, right? We might be a few dollars off, but you know, as far as you're concerned, it's good enough.

And, you know, I, I really don't have any desire to do that work. But, again, back to the general public, right? For the general public, CPA means, Tax professional, tax preparer, tax advisor, tax expert. um, Enrolled Agent does too. And, uh, You know, that's, that's great. I just never knew. Right.

And maybe someday, I, I would wake up and say, you know what? I wanna try out that audit thing. I wanna try out some of that assurance stuff. You know, maybe I, maybe I want to, maybe self-employment isn't for me. I'd never been self-employed before I started my own firm. Maybe, you know, self-employment won't be for me and I will want to go work for somebody else. And maybe having the CPA license would make me more attractive to them. You know, maybe if, uh, you know, 'cause I started working for, uh, a CPA back in late 2018 after we moved to Florida. Uh, He had just bought his own firm and he too was an Enrolled Agent before becoming a CPA. And the reason he got the CPA license was because he was working for a CPA firm and they told him, We'll, we'll promote you to the highest level within the tax department, but if you ever want to be a partner in this firm, which he did, right, uh, you're gonna have to be a CPA.

And so that was his motivation to do that. And, you know, so both of the, you know, the, the, the mentor and, uh, you know, this boss that I had for one tax season, both of them had been EAs then they also became CPAs. Now they're firm owners and they're both telling me, no, you can just be an EA. You don't need to worry about being a CPA.

And then I'm kind of looking at them saying, I hear you, but you know, you're, I'm, I'm not seeing what you're saying. I'm hearing it, but I'm not seeing it. Um, and so, yeah, I just, I decided to go for it. Um, I've always been a decent student and I knew the exams wouldn't be a problem. And they weren't except for audit. I had to take audit three times. I passed it a third time. Um, but yeah. And, and so yeah, I've been a, been a CPA for a little over a year. It hasn't changed my business hasn't changed me, you know? Um, it's not, it's not like I got the license and all of a sudden a whole slew of people were beating down the door to, you know, hire me.

But, at the same time, you know, it's an accomplishment. And, you know, it, it, it's something that I'm, I'm glad I did. Uh, yeah.

[00:14:49] Steve: Has it been useful in portraying yourself to potential clients of that-- CPA is one that everyone recognizes, where Enrolled Agent takes a little bit of explanation. Is, is, is that useful?

[00:15:00] Jeremy: That's, that's exactly right. Um, so one, you know, it's just inevitable that when, a prospective customer is, is talking to you on a, on a discovery call or a sales call, and they ask you, are you CPA? And you gotta say, well, no, I'm an Enrolled Agent. Let me explain to you what that means. Right? 'cause nobody, nobody outside the industry actually knows what it means. So, um, you know, that, that gets a little, uh, it gets a little tiring, you know, after a while, having to explain that.

Um, The other thing is that, you know, on the, on the other hand, when, when a customer would introduce me to other people, either, you know, referring me or in public or something like that, they would introduce me as their CPA 'cause, again, to the general public, CPA means tax professional. Um, Even though I wasn't a CPA yet, and while I wouldn't correct them, I also would never introduce myself, you know, as that. Right? So, uh, that, that was always a, a bit of an, a bit of awkwardness there. Right. You know, do I, I I'm not going to correct them, but at the same time, I don't, I don't want to be a party to, you know, be being misrepresented as to, you know, what license I actually am.

So that was, that was part of it. Uh, a as well. Yeah. There's tremendous marketing value, to the license. Right or wrong. I, I, I don't, you know, I, I wish it wasn't that way. I wish CPA meant, you know, somebody that can audit financial statements, you know, to the general public, you know, and, and that, you know, tax professional, you know, people would say, Hey, I've got a tax professional, I can refer to you.

But, you know, you can't, you can't change the way people, uh, they can't change the way I. Uh, people talk about that kind of stuff and so that's fine. Yeah. AICPA has done a fantastic job of promoting its brand, which, you know, is why that organization exists. I'm also a member of, two other organizations, the National Association of Enrolled Agents, as well as the National Association of Tax Professionals.

And I think both of those organizations have a lot of work to do, to promote their brands to the point at which, you know, we get some parody with what AICPA has been able to do with the CPA brand.

[00:17:01] Steve: That makes a lot of sense. Okay. Something to consider, then.

[00:17:06] Jeremy: Yeah, absolutely. It, it's, it's, it's entirely an individual thing. You know, yeah, you can, you can, run a great firm. You can Make a lot of money as an enrolled agent. And, you know, I, one, one of my current, uh, I, I would, I would consider him, definitely, a guide, and, somebody I look up to, maybe not quite to the, level of intensity of a mentor.

Um, But he's an enrolled agent and he's also, uh, a US tax court, practitioner, USTCP. Um, but he, he spent the first half of his career in tax working for a law firm. Uh, so he is, he wasn't even working at a CPA firm. He was working at a law firm and he was handling tax resolution and, and, and complex tax cases for a law firm as an Enrolled Agent.

And since then, he, he's in private practice. And he also runs a continuing education company. So he is teaching EAs, CPAs, non-licensed practitioners, about tax law and tax planning and tax strategy and those kinds of things. So again, the, there is no EA vs. CPA debate in my mind.

Um, I, I was, a guest on a podcast one time with two CPAs and two EAs, where we had a discussion about that, and, and really within the industry, there's always gonna be bias within the accounting profession toward CPA. Uh, again, because of the way AICPA has been able to, build up the brand of that license.

But in my mind, there is no debate. It's just two different licenses with two different purviews. And, you know, if it, if I hadn't been an EA, if I hadn't been a CPA, You know, I, I, I don't know. I don't know how I would come down on it, but having, you know, being both, you know, I know that there's immense value in either of them and both together.

[00:18:59] Tyler: I've uh, that's a fascinating story. I. I love the twists and turns. I actually studied political science and Russian in college and, and ended up not doing political science and Russian at the end of the day.

Doing things differently in the industry

[00:19:09] Tyler: So uh, one of the things that stuck out to me was that you said you have been trying to do things differently uh, to what else might be out there in the accounting industry.

Steve is in that industry. I'm not, I'm kind of a consumer of accounting services. Uh, I was wondering if you'd be willing to, to talk about that a little bit. Like what are some of the things that you've tried to do differently and that you see starting to spread?

[00:19:32] Jeremy: Yeah. So there's, there's two prongs to that. One, yeah, absolutely. I come into it as, as a, as a consumer, you know, of the, of the product first. Not someone who's just always been in that provider mentality. And so, you know, I didn't come up with you know, being indoctrinated with the, the industry best practices and, you know, this is the way we've been doing it for a century and this is what's gonna help you become partner one day.

So this is the way you should be doing it. All along I. Uh, The other side of that is, is again, back to my mentor. Um, So when I started working with him, he had spent the last couple years building up his firm because a couple, a couple years prior to when he and I connected he had just left the fairly traditional mid-size regional firm that he'd been at. And he had learned all of the things that he did not like about the traditional accounting firm business model. And he set out to do things differently. And so one of the hallmarks of, you know, a lot of professional firms, but especially within legal and, and, and accounting is the billable hour.

For example, right? know, if, if you hire me to be your accountant and I start doing work for you, I start preparing your tax return, or I start doing your bookkeeping, or you call me up just to ask me some questions. That process starts and ends in a traditional accounting firm with me starting a stopwatch.

And when you hang up, uh, the phone or when I finish your tax return, I stop the stopwatch. Whatever time logged for you, I take that amount of time and I multiply that by some dollar amount. You know, my hourly rate. For some people it's $50 an hour. For some people it's $250 an hour. For some people it's $750 an hour.

There's some logic as to why everybody would have, you know, a different dollar amount for their rate. But the objective part of that is the time spent, right with the idea that if it takes me more time to do work for you, then you should pay for that, and I should be compensated for that.

There's a lot of issues with that business model and you know, when I got started five or six years ago within the industry, there were, there were some people that were starting to have that conversation. There were some people that had been leading that conversation for a little while. But the, the general consensus was still pretty much, yeah, that's, that's the way we do it.

I think over the last five years we've seen a lot more of a shift toward not just, we we're tired of tracking time and we're tired of not being able to tell how much, you know, tell a customer how much they're gonna owe us until after we finished all the work for them. It would be nice if we could just give them a price and they could pay it and we could use what they pay us to be able to front load the ability to pay the expenses of doing that work, such as the labor or, you know, whatever new software we're gonna need or something like that.

And so that's one of the, the sort of big things that when I came into it I, I, I've never tracked time, you know, I've, I've been working in this, running my own firm for five and a half years, I've never tracked my time. I, I don't know how much time I spend on any one particular client or project or anything like that, 'cause it doesn't matter. Because the way I price and the way my customers pay me is an entirely different logic than how long it takes me. Right?

So that's one thing. Another thing was you know, when I started working with my mentor, he wasn't interested in hiring me as an employee so that he could then shift his work down to me and arbitrage the difference between his rate and my rate.

And that's the way a, a traditional professional services firm makes money, right? Is they bill the, the customer at the partner's rate, and then they pay the staff their rate, and the difference is the profit, right? Well, that's fine if you're going to scale that model. The problem is it doesn't scale very well unless you are just already a really big firm.

And so the way we started working together was more of an arm's length kind of approach that he wanted to facilitate my learning, my growth, my ability to get experience, but not in such a structured, formal way of employment. And it allowed me the, the opportunity to have some guidance and to have some oversight from him without having to, you know, go through all the formality of, now I'm an employee now I've got a log, you know, clock in and clock out and be on his hours and be available when he needs me. So, so those sorts of things.

But yeah, absolutely it, it was the things that seemed then, you know, so very different I think are becoming a little bit more than norm. But I think overall it's a good thing for the, for the profession.

Niching and developing expertise

[00:24:24] Tyler: That's great. Sorry Steve, I'm taking another one since it's connected to what, to what Jeremy's talking about. But Jeremy, I was just recently listening to one of your YouTube videos and you were talking about some something that really caught my attention, which is trying to avoid doing low value work that you hate as opposed to doing high value work that you want to do.

And part of that seems like finding clients that are the right type of client to enable that. Right? And so I'm curious when you, you know, what you, you, it sounds like you've got a great billing method that's working you really well, but does that require a certain type of client and how do you, how do you find them, I guess?

[00:25:00] Jeremy: Yeah. And so, you know, that's a. It's sort of a chicken and egg problem, right? Um, Especially with firms that are already around, right? You know, when I got started it was, it was a blank slate. I had no idea how to build an accounting firm. I had no idea what an accounting firm should look like when you're building it, right?

So yeah, there, there are those two questions. One the fir-- you know, one question is, you know, what kind of work do you want to do? And, and for whom do you wanna do that work? Now, you can answer that question however you want. You can say, I wanna work with taxpayers, right? If you're a tax professional, you can say, I wanna work with small businesses if you're a small business advisor or a bookkeeper or right. You can go the opposite end of that spectrum and you can get very focused. You can get very specific. And you can say, I want to work with someone that fits this particular niche, right? I wanna work with somebody that is only in this geographic region.

You know, and, and I'll work with almost anybody within that geographic region, but it's only gonna be that region. Or you can say, I wanna work with business owners, but only business owners that are at this part of the journey of building a business. Right? You know, I want to work only with startups, or I wanna work only with established businesses where the owners are looking to exit within the next few years.

Right? And the more specific you get, the easier it's gonna be to say, I know. Right. Nine times outta 10, I know what they're gonna be worried about. I know what they're gonna be concerned about. I know what they're gonna be trying to figure out. I know what kind of questions they're gonna have, and therefore I know what kind of answers are gonna sound reasonable to them.

And I know what kind of advice is gonna sound right to them, to where they're going to have a lot easier time trusting me and therefore following that advice and I'm gonna be more valuable to them. And that's part of the difference between the high value and low value customers, right?

If you open, if you say, I wanna work with taxpayers, well, you know, that's pretty broad, right? You know, the 80 million something you know, tax returns individual tax returns filed in the US right? That's gonna be every thing from you know, unemployed people that didn't have any income last year all the way up to Elon Musk and everybody in between, right? And those two different individuals are gonna have very different right profiles when they come to you. Very different set of concerns, very different set of questions. It's gonna be a very different kind of project, getting that tax return done for them.

Whereas on the other end of that spectrum, if you say very specifically, this is the kind of person I wanna work with, this is the kind of business I wanna work with, this is the kind of nonprofit I wanna work with. Right? Then you can anticipate a lot of that.

I had a feeling for some of this when I first got in to accounting. But since then I've done more and more, you know, learning on my own, research, that sort of thing. David C. Baker is is a, is an author he speaker he, he's got a weekly email newsletter that he sends out, but he is, Prolific when it comes to the expertise of being an expert, right?

Like he, he is the expert for experts. That's one of the ways he's been you know, described in the media. And he is very much of the mindset that you need to be as specific as you can on who you want to work with, because the real expertise and the real ability to advise comes from recognizing patterns over time, right?

When I see a small business in this kind of situation and they make this sort of decision, here's what tends to be the result. And therefore, should I advise this new small business that I've never worked with before, should I advise them to go left or right at this critical juncture? Well, because I've worked with 500 other small businesses just like them, I know that they should turn left instead of right, because that tends to work out better nine times out of 10.

If you're not being more specific right about who you wanna work with, it's much more difficult to see those patterns and there's gonna be a lot more noise, right? Therefore, it's gonna be a lot harder to pick up on the true signal there. And so I've tried to get more and more narrow over time, right?

Rather than, you know, what, what the, the, the sort of opposite approach that might be. Well, you know, you, you get more experience, you get more knowledge, you get more understanding, and therefore you can be more valuable to a broader, you know, array of people, it's not untrue. I'm just also not sure that's the most effective way to apply the expertise that you've built up in the marketplace.

[00:29:42] Tyler: That makes a lot of sense. Thank you.

Starting The HVAC CPA

[00:29:45] Steve: Well, maybe this is a good place to ask about The HVAC CPA and how you started that uh, how you decided which services to offer under that umbrella, how that fits in with JWellsCFO.

[00:29:57] Jeremy: Right. Yeah. So, you know, when, when I back in January, my wife and I did a sort of you know, end of year review, right? You know, we wanted to sit down and say, for, for the business, 'cause she and I are partners in life. We're also partners in the business. You know, I'm the one that does all the work.

She, she's not an accountant, but she has an MBA and she's worked for businesses, you know, and her parents have been business owners. Her dad's a chiropractor that owned his own office, right? So she grew up and she knows you know, what business is all about. Probably better than I do. Right. You know, I'm the academic, I'm the, but, uh, You know, so we had that meeting.

It was the, it was the first day back to school for our daughter who was in kindergarten. And we spent the, the day at one of the hotels in town. And I printed off all the financials from last year. I printed off some notes, some ideas, some plans and we sat down and we just spent four or five hours just going through all of it.

And it. We noticed some trends. We noticed some things that, you know, I as the one actually running the business, I'd spent some money on that, you know, she wasn't happy about and I didn't have a good explanation for. We also saw some trends in terms of revenue, you know, where, what kinds of clients we were attracting, what kinds of clients we didn't have as good retention numbers, you know, that with other kinds of clients.

And, you know, one of the things that just kind of stood out was, you know, the, the world, the economy has just changed a lot over the last few years. Right. You know, a lot of that's covid obviously. Um, But you know, there are some other things that are on the way right, that we're either just starting to see the first stages of or that, you know, might be coming here in the next 5, 10, 15, 20 years.

One of those is, you know what a lot of people are calling the silver tsunami, right? We're going to see a lot of professions where we just have this transition between the you know, current ownership, which tends to average out in the fifties and sixties and the next generation of owners and workers.

And when you take that and you combine it with the way we raise children and the next generation in this country to think about their career opportunities. When you look at the shift in mentality in general from between employment versus self-employment. And when you look at just the ability to find workers in a lot of different industries right now.

One of those industries that really stood out to us, and I've got a couple clients in this industry and, you know, I've consulted with that, that are ongoing clients that, you know, my firm is doing ongoing bookkeeping work and tax work and advisory work, this sort of stuff. Um, And then a couple others that I've consulted with. And that was just one of the industries that we kind of looked at and said, you know, this, this is interesting. Right. Um, And, and that's the probably more broadly, you know, just the home services, but really specifically within that is HVAC. We're in Northeast Florida. Uh, We're just outside of Jacksonville, Florida. Um, And you know, HVAC is a year round business here, right.

You know, our, our, our air conditioning is running 11 at 11 and a half months outta the year. Right. And so there's a lot, and there's a lot of variation within that industry as well in terms of business model. Right. So just like in the professional services and, and especially accounting, we've got discussions of what is the, the best way or the most effective way to charge our customers.

What's the most effective way to build relationships with new and current customers? So, for example you know, typically when. You know, when, when do we call an HVAC person? When, when our AC stops working in the middle of the night, right? Are you calling a business that is the first one to show up in your Google search and you've never worked with them?

And so they tell you uh, either call back during normal business hours, right? Um, Or, you know, they do have a 24 hour emergency line, but they'll send somebody out on Tuesday and it's Friday night. You know, these sorts of things. Or do you have, do you build an HVAC business around the concept of the subscription model, which is, which is you know, sort of taking off in accounting.

And I like to think that I use important aspects of that and the way that I build the relationships with, with my customers. Uh, But uh, there are HVAC companies now where you can subscribe to them. And if you are a subscriber and you're paying them either a monthly fee or an annual fee then you get prioritized when your system goes out or when it's time to get that you know, six month checkup or, you know, you get a regular cleaning during those six month checkups.

They'll come in and they'll clean out your vents and all the, all the passageways to the vents and all around the outside unit and all those sorts of things, right. But then there's a lot of businesses that just haven't caught onto that. And and part of that is because, one, the ownership's getting older, right?

And, and they just started running the business in a time before all of that existed, and they just haven't, they've chosen not to adapt uh, or to incorporate any of that into their own business yet. I. And then two you know, maybe they just don't have the capacity for it. Right. You know, there are a lot of individual operators or small family operations that they, they're, they're busy enough just keeping up with the one-off repairs and installation calls that they get.

They, they just can't imagine adding on regular, recurring services that they have to commit to, you know, these sorts of things. And so there's just a lot of opportunity, I think, in that industry. And you know, we're seeing that right now. I mean, it, it's summer it's July as, as we're sitting here talking you know, we've got heat waves going on in the country.

You know, I, I've got friends posting pictures of their thermostats on Facebook where their system's running on high and it's still 5, 6, 7 degrees higher than what they've got the thermostat set to because they just can't keep up because it's so dang hot outside, you know? And so you take that and then you add onto it one technical aspect of it which is, you know, we've got we've got New policies in the tax code that are incentivizing homeowners especially to invest in newer technology.

So, for example um, with the Inflation reduction Act that was passed earlier this year we've got expansion of some tax credits where if you install a new energy efficient central Air or furnace, right? Uh, Or water heater, you know, a lot of different components of your home's infrastructure if they're energy efficient, if they meet certain criteria, then you can get a tax credit on your next tax return you know, back for some of those installations for some of those costs.

Right. So, you know, as someone thinking about working with the HVAC companies specifically, how aware are they of those credits? How much education are they giving to their customers on what they need to do in order to be eligible for that? How are they incorporating that into their sales and marketing materials, right?

So I think this gets back to You know, something, another trend, especially in the accounting industry that you know, over the last few years seems to have picked up more and more, which is this concept of advisory, right? So you go to your accountant because you need a tax return filed, so they file your tax return and you don't hear from them again for 50 more weeks, right?

Because you don't, they, right? There's nothing to be done or said until you need another tax return filed next year, right? But people have tax questions all year long, right? Even, even relatively simple tax returns, right? Have aspects of them that mean there are gonna be questions throughout the year, there're gonna be concerns throughout the year.

People do stuff throughout the year that are gonna have an effect on their tax returns, whether they're employees or business owners or homeowners. And we can either, right? Say, we'll figure it out next year when you come back. Or we can say, we will be there with you all year long to help you answer those questions, address those concerns, right?

Figure this stuff out, plan ahead. See if this is something you want to do this year, or maybe you wait until next year. Right. Or maybe you were thinking about doing it next year, but you really wanna go ahead and do it this year. Right? Those kinds of opportunities are, are where we really step up and become the trusted advisor that we, we say that we are for our customers.

And I think even in the more you know, and, and I say this lovingly, but in the more blue collar, the more, you know, trades oriented businesses, there's an opportunity for that as well. Right. You know, so when was the last time you got tax advice from your HVAC installer? HVAC repairman? Right.

It probably hasn't happened, but they're in a key position to now, you know, and, and I'm not saying they should be preparing your tax returns for you, but Right. You know, they, you should be having a discussion with them when they come out and do their next service check or do their next cleaning check, right?

And say, Hey, did you know Right. Your, your system 8, 10, 12 years old, right? Did you know that if you invest in a new system now this, you know, incentive is, might be available to you depending on how you do it. You know, can I have a conversation with you about that? So, you know that those are some things that I'd like to see happen in this industry.

And I've talked with other accountants about it that work with HVAC companies. I've talked with some of my clients about it. And yeah, I think there's just a ton of opportunity, uh, in this industry. And so yeah, I, I, I started a business around that. So you know, we'll, we'll see how that goes. I'm starting to put out content.

And, and yeah, we'll see. The, the reception from other accountants has been great. Other accountants have been really helpful with ideas. And, you know, we'll, we'll see. We'll see what happens.

[00:39:50] Tyler: That's, I, I am fascinated how you connected the idea of the business model to kind of like a, almost a generational change. It's interesting because I actually had an HVAC technician out a couple months ago, and they offered me a subscription and I was like, whoa. And it kind, I, I was like actually excited about it.

I never heard of anything like that before. And like you said, you know, now I get prior, you know, they waive the after hours charge if it, you know, There's a bunch of kind of perks that go along with it, and it's pretty much the same cost as just like one service call for the whole year. So anyway, that really resonated with me.

I think that's, that's a, I like that trend

[00:40:25] Steve: I also recently signed on with a, with a subscription for HVAC, and they'll come do the inspection for free. And then a lot of it afterwards feels like uh, upselling of like, here's a bunch of things that we could do you, but not in like a super pushy way. But I like the, just the, I've always, I know who I'm going to call if something goes wrong and they will put me to the front of the line as much as they can.

[00:40:48] Jeremy: Yeah.

[00:40:48] Tyler: Well, and Jeremy's point, if the upsell is like a tax rebate, then hey, all the

[00:40:52] Steve: Right. That's, that's, I had never thought of that, but that's such a great opportunity for them and their customers and you as the accountant to be able to provide that kind of guidance.

[00:41:02] Jeremy: Yeah. So, you know, you gotta, you gotta think like that, you know, your, your average HVAC tech or even HVAC company owner is not a tax expert, right? So even if they're getting industry guidance on, Hey, these tax credits are available, you should be telling your customers about this. Tell them what, right?

Like, I, I, you know, I'll start the conversation, but then they'll have a question. I don't know how to finish it. Right. Then what do I do? Right? Then I just tell 'em, well, you gotta go talk to somebody else to answer those questions. Right? So your attempt to establish that expertise is, is not gonna get you very far.

Right. So, right. How do you make up for that? Right. And, and one is, you know, you work with an advisor in that space. That can guide you on how to have that conversation. So for example, right. You know, I, I as a, as a tax advisor, one of the common you know, issues that comes up with my customers is their investments.

Because if they have for example, some sort of tax advantaged retirement account like you know, their 401k or something like that then you know, they might have questions about that. Well, I can tell them what the tax implications of putting more money into an account or taking money out of an account would be.

But once that money's in that account, I can't really tell them what to do with it. Right. Then you gotta go to a financial advisor or an investment advisor. Right? So I need to have referrals ready. You know, I, I need to have people that I've already vetted on their behalf. And it doesn't necessarily mean they have to work with those people, right?

But, hey, look, I know somebody in your area or somebody in your age range, or somebody that will meet one of these qualifiers or one of these characteristics that I know you care about because you and I have this ongoing relationship. 'cause we don't just talk once or twice a year to get your tax return done.

Right? And I know you two will probably hit it off, so let me make this a referral for you and then you can get the help that you need. That actually boosts my expertise, right? Because I'm helping build relationships. I'm helping you get your problems fixed, even though I'm not the one actually doing it, right?

Bookkeepers is another one for small business owners, right? I don't necessarily want to do all of your bookkeeping for you. You know, some businesses I do, I'll help 'em with the bookkeeping. Some businesses, they either don't need a bookkeeper or they don't need a CPA firm doing the bookkeeping. They need somebody who is specifically a bookkeeper that can, you know, add them on those sorts of things. So I'll make that referral.

And, and I think that is, is, you know, we, we need to expand that beyond just the professional services. Right. You know, we, we need to put that into the trades as well, especially, you know, if we've got built into the tax code, these sorts of tax incentives for that. Right.

So, yeah, I think it's a great opportunity for both the HVAC companies and whoever they're getting advice from to work together and, and really help out a lot of, a lot of homeowners.

Venn diagram of finding a niche

[00:43:55] Steve: What advice would you have for somebody who's still trying to find their niche.

[00:44:00] Jeremy: Hmm. Yeah, that's a good, that, that's the perennial question, right? Is uh, you know, I, I,

[00:44:07] Tyler: That's me.

[00:44:08] Jeremy: Right. Um, So, you know, I, I think the sort of way to go about doing this is, you've gotta look at that Venn diagram. Right of, of three different overlapping circles. Right?

And one of those circles is this is something that I care about. Like I said, we're in northeast Florida. You know, we, we live and die literally by whether our AC works. You know, so that's something that I care about. It's something that everybody around us cares about.

The second one is, this is something that I actually know something about you know, a little bit more than just enough to be dangerous with it. Now, I'm not saying I know specifically about HVAC, but I know the business models. I know the, the businesses themselves. 'cause I have customers that are in this. So I see their books, right? I see their financials, I see their tax returns. I talk to them and I know what their concerns are when it comes to running their business and leading their daily lives. So I feel like I have a little bit beyond just enough knowledge to be dangerous to that industry, right? I feel like I've, I, I could actually be an advisor to people working in that industry.

And then you know, the, the third thing is, is this something that, you know, I can actually maybe make some money at, right? Like, you know, and I, and I know that runs against the, the title of the podcast, but uh, you know, at the end of the day, you, you, you really do have to make some money, right? You know, it's not all about the money. It's obviously about do you actually care about this and do you actually care about the people in you know, that group that you're trying to serve, and do you think you, do you really think you can help them? But then, you know, can, can you build a business around that? Can you make some money at it?

And when those three things overlap, that's when you really gotta hone in on that and ask yourself some serious questions about whether, you know, you wanna start a business in that or not.

And, you know, it's, you're, you're. You're more than welcome to say, you know, I, I don't necessarily need a business around this. Let's just keep it a hobby. Let's keep it fun. You know, that's fine too. And, and, and lots of people do that with, with lots of different things. But, you know, I, I think if you're actually in it to, you know, provide for yourself, provide for your family, those sorts of things, it's when those three things overlap that you really owe it to yourself to, to at least try, you know, spin up a quick website, you know, come up with a, with a URL, spin up a quick website, put together you know, a signup form for a mailing list and start putting some content out there. 'cause again, you care about it, right? You know a little bit about it.

Put some content together out there. Write up some tweet threads, write up some LinkedIn posts. You know, record a couple videos, put 'em on YouTube. Doesn't have to be good. Just put it out there and see what kind of reaction you get.

Thanks, that's great

[00:46:43] Steve: advice.

[00:46:44] Tyler: I'm gonna run off and do that. Actually, no, we, this is something we've talked about a little a lot lately on the, on, on the podcast is you know how to niche and, and I That's great advice. Thank you.

Book recommendations

[00:46:55] Steve: Another question that I always like to ask people is, what is a book that you've read that you think about a lot? So this could be your favorite book, it could be something you read 10 years ago and you're still think about it every day. Or it could be something that you read recently. Kind of whatever comes to mind.


[00:47:09] Jeremy: Yeah, this is yeah, it, it bring me back for a whole other episode, so we, I can just the list, right. Um, No, seriously though. So, so I co-host a podcast with another CPA, Chris Hervochon. And the audience for that podcast is is other accounting firm owners not necessarily CPAs, but accounting firm owners and aspiring accounting firm owners.

And we actually did an episode where we each not too long ago, maybe about six months ago where we each went through our top five books. And, and so you know, would definitely look up CPA Advisory Show, top books. I think that'll probably get you pretty close to wherever that episode is.

But yeah, if I had to really narrow it down to just one You know, it, it really depends on who I'm talking to. Right. Because yeah, I probably, I, I, I probably keep 20, 30 books going in my, on my Kindle app, on my phone at any one point and, and every, and I've actually got a streak going pretty decent streak.

I think I just crossed 200 straight days of opening that app and reading through, reading through at least a page or two of a book. But I'll flip a flip around to different books. But uh, this whole time I've been trying to figure out what one book uh, I would, I would recommend um, been hedging against that.

I, I don't know. I, I think and I'm actually going back and rereading this one right now because the author is about to come out with, with sort of a follow-up book to this But one, the, the, probably the, the, the best book that would be applicable to almost anybody right now is Tiago Forte's Building a Second Brain.

I. And, and that's the one that I would recommend right now. Because I, I think the, the best thing, you know, we live in the knowledge economy right now and you know, this is, that's a phrase that comes, or at least I get it from Ron Baker, who is a, a CPA and accountant who talks about value pricing and subscription pricing within professional services firms.

But. You know, he says, we are, we're in the knowledge economy, right? That you know, your ability to serve people, attract an audience, make money, provide for yourself, comes from what's in your head and how you make that valuable to others. And I think the key to doing that is to have some system for collecting, organizing, distilling, and then actually putting all of that out there to where people can actually find it. If you just keep it all in your head, it's not doing anybody else any good. If you're just putting it out there, but you haven't really thought about it, if you haven't really put that through a workflow of actually considering, you know, what's my take on this? What do I really have to add to this? You know, then you're just putting a lot of fluff out there. Right. You know, chatGPT is great. But we've got a lot of people that are just putting prompts in chatGPT, taking whatever it spits out and throwing it on a website, you know, and calling it a blog post.

That's not good either. What we need is people really taking in their slice, their particular relevant slice of what already is out there, and then putting their spin on it and putting that out there for people in a readable, you know, an interesting sort of format. And, and I, I think building a second brain is a model that can really help a lot of people think about how to do that, how to build that workflow, how to build that system for themselves.

So yeah, I think, I think that's the one that I would, I would recommend right now to, you know, not knowing anything about who's asking for that recommendation.

[00:50:37] Steve: That's a great recommendation. I'll put that on my list. I'm uh, right in the middle of Ron Baker's book Time's Up right now. I'm also like constantly reading three or four five books

[00:50:47] Jeremy: if you're a professional services firm owner, then go read, read Time's Up. Um, 'cause yeah, that's a book too about, uh, running a professional services firm for sure.

[00:50:57] Steve: Great. We'll put links to all those things you mentioned in the, in the show notes here.

Don't try to be everything to everyone

[00:51:03] Steve: Well, is there anything you wish I had asked you that we haven't, or Tyler, do you have other questions? I.

[00:51:12] Jeremy: Hmm. No, I, yeah, go. Go ahead. T.

[00:51:15] Tyler: no, no. I was just gonna say no. I think this has been, I. A joy hearing from you and your experience. I actually, you know, there is one other that we had in here that I thought might be interesting. Something that you've learned that falls into the category of unknown unknowns that has made an impact on how you run your business, because those are the ones that kind of surprise you, right?

[00:51:35] Jeremy: Yeah. Right. God, it's funny, I just saw a post a couple days ago about the Rumsfeld Matrix. And uh, and it reminded me of, of that because, you know, I taught international politics all in the, I. Late two thousands, early 20 teens. And so, you know, a lot of, a lot of discussion about 9/11 and the Iraq War and the fallout of all that.

And you know, that, that entire George W. Bush administration. So yeah, that was a little bit of a blast for the, from the past for me. But the, the unknown unknowns of. Business again, I, I came into this with no business background and so for the last five years, I've, I've been playing catch up with myself trying to figure out what it means to be a business owner, even though I already, you know, was one. And I think a, I think most business owners find themselves uh, in the, in this place, I think the, the, the biggest unknown. Unknown. Until, until one day it just hits you. Either you read it in a book or on a blog post or see it on YouTube video or something. It is that the, that. That process of building a business at first is invigorating. It's exciting. But one day it's just gonna completely exhaust you and burn you out, and you don't know when that day is. So you've got to, you, you know, e everything in business, everything in life, but especially in business, is a trade off. Like you can build a business that is going to be really valuable to the people you work with.

But then you've really gotta get clear on who you wanna work with. Or you can build a business that's gonna make a whole lot of money, right? But then you've gotta figure out how to scale that, which means taking yourself out of, you know, different aspects of the operation constantly, right? You know, you, you, you start off and you're wearing all the hats and you get to a point to where, you know, very quickly you need to be wearing almost none of the hats if, if you're gonna survive that process.

And so you're kind of already going down one of those paths before you realize it. And then you've gotta decide whether that's the right path for you. Now, are you trying to scale this business or are you trying to build. A business that's really valuable to a select group of people that you actually want to work with.

I don't think it has to be quite that you know, one or the other, but the, the longer you try to make that middle ground work where you're trying to be, Everything to everybody. Boy, you're gonna, you're gonna really wear yourself out and burn yourself out very quickly if you stay down that path for long.

So, so either you've gotta scale and you've gotta figure out a way to bring on a lot of people to help you build that business. And then recognize that there's gonna be a pretty big sacrifice in terms of the profitability, in terms of your take home pay doing that, or you've gotta be, you've gotta teach yourself how to say no.

And, and recognize that, yeah, I'm, I'm sacrificing a short-term opportunity to bring on a new client, make a little revenue or something like that. But in the long term, this's gonna pay off because, you know, everything has an opportunity cost. Every uh, every decision has an opportunity cost. And every time you say yes, you're saying no to a hundred other things.

Every time you're saying no, you're saying no to one thing. But you're giving yourself the option to say yes to any one of a hundred other possible things, right? And so, you know, that's, that's sort of the direction I wanna take my business. I think, I think I'm gonna work better in that direction. But again, until, until that decision is just slapping you in the face, you, you don't know.

You don't know that you're hitting that point to where you've really gotta figure out what kind of business am I actually building here? And so for a long time, that's definitely an unknown unknown. But yeah, it, one day, one day it'll slap you in the face and, and you know, it, it'll either be burnout and, and you'll just have to kind of, and, and I've had clients get to this point, right?

Where I've had to kind of talk 'em off the ledge because yeah, they're just like, I can't do this anymore. I'm like, yes, you can. We just have to make some hard decisions, right.

[00:55:44] Tyler: Yeah, that's a, that's a beautiful note to end on, I think. It's all about the trade offs.

[00:55:51] Jeremy: Absolutely.

[00:55:53] Steve: great

[00:55:53] Jeremy: of people run away from 'em, but I love 'em. I, I think, I think that's where we as advisors can be incredibly valuable, right. Because people know it, people know what's happening. That that's when they really need their handheld though. That's when they really need a lot of assurance from us.

Right. And, and that's our job as advisors is not tell them what to do, but to make sure they know that they'll be okay. Right.

[00:56:13] Steve: Yeah. Well Jeremy, thank you for taking the time to talk with us today. All this great advice, great ideas. I know I've learned a lot from this, so hopefully our listeners will as well.

[00:56:26] Jeremy: Good deal. Absolutely. Well again, appreciate you guys having me on here. If uh, yeah, if anybody, you know, has any, any questions or just wants to talk about any of this further I'm pretty active on social media, especially Twitter. Uh, You know, I say that, who knows Twitter will be? Who knows what Twitter will be between now and when this episode actually drops, month after that.

Right. I think it's X now, right? Um, But uh, so, so whether it's Twitter or X, by the time this, this episode hit your ears uh, I'll be there. Um, Still uh, or, you know, any of the other social media. I'm there too. I think Steve, I think you and I met through LinkedIn so you know I'm there too as well.

[00:57:04] Steve: That's right. And we, they can listen to your show, CPA Advisory podcast if they're if that interests them or if they're in the accounting space like you and I are.

[00:57:13] Jeremy: Absolutely. Absolutely. And we, and we have lots of, like I say, we've got episodes that are good for those outside of accounting professional services uh, you know, just general business owners. But yeah, most of our episodes do focus um, you know, our, our, our audience is particularly accounting firm owners.

But yeah, definitely got a few episodes there that I'd recommend even to non-accountants.

[00:57:33] Steve: Yeah. Great. Okay, well thanks and we will see you all again on another episode of, It's Not About The Money.