There are definite perks to being a sole owner of a CPA firm: You get to be your own boss, decide the direction of your practice, and grow at the pace you want.
But flying solo also brings a lot of pressure. As the only owner, a sole proprietor carries all the responsibility for keeping the firm from crashing. For those owners who are also true sole practitioners, they shoulder the burden of the accounting work as well.
The terms sole proprietor and sole practitioner are often used interchangeably, and their definitions can vary depending on what state, region, or industry you are in. For this article, sole practitioner refers to true solos, CPAs who run their firms with no other accountants on staff. Sole proprietor refers to CPAs who are the sole owners of their firm but have other accountants on staff who can help with the accounting work.
The JofA talked to 10 sole proprietors, most of whom are also sole practitioners. Some have been on their own for years; others got started just before the pandemic hit. One has retired after 30 years as a solo, while another is working on earning her CPA. As a group, they shared their experiences and offered their perspectives on the ups and downs of flying solo (see the sidebar, “Pros and Cons of a Solo Practice”).
Their stories showcase the diversity of purpose, services, and experiences of those who have dared to go it on their own.
A SUCCESSFUL PIVOT IN THE FACE OF ADVERSITY
When she launched her firm after eight years in public practice, Kathryn Horton, CPA, quickly learned the perils and potential of flying solo.
She started in May 2019, mainly doing data-analytics consulting with private companies and not-for-profits. When the COVID-19 pandemic began in March 2020, her business came to a crashing halt as companies scrambled to cut discretionary spending. When shutdown mandates occurred, “I watched my email fill up with messages from clients telling me they were putting everything on hold,” Horton said. “It was startling to see it all collapse in one evening. I had to throw out my entire business plan and reconsider where I could add value.”
The experience was daunting, but Horton considers it a blessing in disguise because it ultimately spurred her to create a robust firm that could sustain itself going forward. She pivoted to providing independent audit and assurance contracting for national, regional, and smaller firms.
“I call myself the plug-and-play auditor,” she said.
Horton generally takes on duties that normally might be covered by a senior manager or manager. “If the firm doesn’t have the capacity, they can always give me a call,” she said. She works on client-facing teams covering engagement needs from start to finish, relying on her past experience at a small regional firm where she served a wide variety of midsize clients. She also continues to offer consulting on practical applications in data analytics with a focus on big data consolidation, which takes large sets of raw data and produces insights clients can use in decision-making, as well as on forensic investigations.
“The ultimate success is seeing the success of others I work with,” such as her mentees, clients, and other professionals that the firm serves, Horton said.
Starting a new business is stressful, and trying to learn a new practice area adds to it, she said. “If you structure your firm at the beginning to emphasize quality over quantity, stick to what you know, and try to keep it simple. That strategy will create the most beneficial framework for the firm.”
LEANING INTO A NICHE
Robert Whittley III, CPA, found himself unfulfilled when working in public accounting firms early in his career. That’s why, in 2020, he decided to step away from the big-firm life (and a guaranteed paycheck) to start his own firm, Healthy Coin PLLC in Charlotte, N.C.
Four years later, after plenty of pivots and lessons learned, Healthy Coin focuses on serving therapists, psychologists, and counselors in the mental health space.
Becoming an entrepreneur meant a lot of work and sacrifice in the early years, but it has provided Whittley the opportunity to earn more money while also being present for his wife, Melissa, and their young daughters, Harley, 3, and Rio, 1.
“The upside is that now you’re in a convertible, which means no ceilings,” he said. That can apply to growth, as well as income, said Carl Peterson, CPA, vice president–Small Firm Interests for the AICPA.
“You can grow your firm however you want to,” Peterson said, citing as examples the addition of new clients, industry niches, or services — decisions that may require partner agreement in multiowner practices. “You can go any direction without getting approval from others in the firm.”
For those interested in starting their own firm, Whittley suggested taking it slow and testing the water before jumping in all the way.
“You’ve got to figure out if you really want this life,” he said, noting that he rarely had a weekend off when the firm was in its early days. “Start with a couple clients, and you’ll know soon if you don’t like it.”
Whittley joked that when he started, anybody who could fog a mirror could be his client. As the firm grew, he realized he could be more effective, and efficient, by drilling into one area and knowing it well. He narrowed his niche to therapists and mental health professionals, a move that allowed Whittley to scale up his business to eight employees, including himself. His hope is to make the firm an accounting vendor of choice in the mental health and wellness area in coming years.
“We feel like we’re partnering with the right people and indirectly having a positive impact on the hearts and minds of the world,” Whittley said.
Learning how to delegate and hire out tasks was a major challenge for Whittley in the early years at Healthy Coin.
“It’s scrappy and cavalier [to be doing it all], but it’s also really stupid,” he said. “I did it for far too long, and you end up burning yourself out.”
Avoiding burnout is a major impetus for Whittley — who makes sure no one on his team works more than 35 hours a week by being very intentional about caseload management and technological efficiencies. Staff are able to select how many clients they will serve and manage in their individual portfolios, and a strong understanding of workflow gives Whittley and his staff a good handle on the average time it takes to serve a client. Also, they’ve leveraged software to better utilize resources and time and use that technology to do a lot of the heavy lifting in the firm’s work.
“I wanted to build a better culture in accounting,” Whittley said. “I wanted more control over my time, to make more, and have more freedom. Now, as an employer, I get a chance to do that and rewrite the story.”
FINDING HER OWN PATH
When Zunie Nguyen, CPA/PFS, founded her firm, Yogi CPA, she did it to honor the yoga practice she depended on to give her perspective during a stressful period of life as a young professional.
Four years after launching her practice, Nguyen has built a team of five at her Orange County, Calif.-based firm and serves a wide range of clients, including many who focus on mindfulness and financial freedom. She also has clients who are Vietnamese or from other Asian communities.
But her beginning as a sole proprietor was anything but stable. Burnt out from a heavy work travel schedule, Nguyen left her consulting job at a Big Four firm in summer 2019 and took off a few months before opening her business … in March 2020.
The timing couldn’t have been worse, as the whole country shut down in those early days of the COVID-19 pandemic.
“What else can you do? I didn’t have a lot of backup plans,” Nguyen said.
Finding purpose and financial freedom, it turned out, became a core part of Yogi CPA’s origin story.
With barely any clients on her roster, Nguyen recognized an opportunity to build new services as the federal government rolled out plans to help businesses stay afloat with a patchwork of aid that included forgivable Paycheck Protection Program loans.
She knew many small businesses in her Southern Californian Vietnamese and Asian communities could benefit from having a trusted partner to explain these loans and provide guidance through a process that could be daunting for non-native English speakers. With her educational background from the University of Texas at Austin and technical training as a former auditor at a Big Four firm, she got herself up to speed on the program and soon found herself busy with more than a few grateful clients.
“Sometimes in life, if you stick it out long enough, you’ll be successful,” she said about her hustle in those early days.
Another pivot is in the works for Yogi CPA to add more financial advising work to its traditional CPA tax offerings. Nguyen is particularly interested in capitalizing on what is being called the Great Wealth Transfer, where wealth will flow from Baby Boomers to Gen Z and Millennials over the next 20 years.
“I think about that every day, ‘How can we create client services that can help people manage their wealth better?’ ” she said. “How do we get younger business owners and others to handle the responsibility of wealth and become leaders?”
Just as important for Nguyen is to be an example for accounting students to show it’s possible to have a successful career while being true to yourself.
As a Millennial, she said, “There’s a message to younger generations that, ‘Yes, you can be special and unique and be a CPA.’ ” How else, she said, could a CPA name their practice after their love of yoga and have a thriving business years later?
BUILDING LIFELONG CONNECTIONS
John Hurley’s 30 years as a sole practitioner demonstrate the value of making great connections throughout life.
He grew up in Mexico City, where his father and grandfather, both metallurgists, worked for a mining company. Playing Little League baseball with the children of other American expats, he met the people who would become his two best clients.
After moving back to the United States, he initially worked as an auditor and consultant for a regional firm. Following a few relocations, he took a job as international tax manager with the mining company that had employed his father and grandfather, and the company assigned him to Peru. In the early 1990s, Peru experienced a period of unrest and Hurley decided it was time to go out on his own.
He set up shop in New Jersey, where one of his two best friends from Mexico had grown up to become a prominent surgeon. He became Hurley’s client and recommended him to other doctors, who referred family and friends to him. Another childhood friend from Mexico City, who had become a private-equity investor in New York, also became a client and referral source.
“Eighty percent of my practice came from the Little League in Mexico City,” Hurley said.
Hurley, CPA/PFS (retired), a former member of the AICPA PFP Executive Committee and chair of its PFP Champions subcommittee, says that financial planning is his passion. However, because he didn’t want to sell products or manage money, he worked with clients’ overall financial ecosystem, including taxes, retirement, and other planning, as well as accounting and management consulting for their businesses.
When Hurley retired in 2021, some of his clients had been with him for 30 years. “Everyone asked me, ‘Can’t you just keep one client?’ ” he said.
His plan to merge into another practice as he was nearing retirement became complicated when the pandemic revealed the limits of the larger firm’s technology. “Make sure the firm is ready to take on your clients and has the same level of tech savvy as your firm,” he said.
CREATING A ‘LIFESTYLE’ FIRM
After working for larger regional firms, Renee Prince, CPA, CGMA, wanted to try running her own accounting practice. Eleven years later, she hasn’t looked back.
Prince now works with one other person — her non-CPA husband — at Renee Prince CPA, PC, out of their Texas home. The firm’s slate of clients is largely made up of small business owners who come to the firm for a combination of tax planning, consulting, and occasional bookkeeping.
She’s been intentional about growing the firm slowly and brought her husband, who had been in the medical field, into the practice early on to build a comfortable life for themselves and their son. Prince is also intentional about taking time for herself and not taking on too much work.
“This is a lifestyle firm where you can support the lifestyle that you want to have, and you can grow to whatever type of firm you want to be,” she said.
One of the biggest challenges of switching to running her own one-CPA firm is not having the access to the expertise and resources available at her previous firm.
When a new tax law came down, for example, a team of people at her old firm would be able to digest the information and generate recommendations and advisories to help advise clients. “When you’re a sole proprietor,” Prince said, “you are the person who needs to do it all.”
To fill that gap of support, Prince tapped into the AICPA’s small firm offerings early on in her sole proprietorship, becoming one of the original members of a young professionals small firm networking group sponsored by the AICPA’s Private Companies Practice Section (PCPS) and made up of graduates of the AICPA’s Leadership Academy. The group has been together for nine years, meets twice a year in person, and regularly corresponds via a WhatsApp group chat to ask questions, share goals, and lean on each other for support and advice.
“We push each other to do more and be better,” she said.
One area where Prince has improved is with her pricing and management of clients. She now goes through her client list once a year to evaluate if the client is a good fit, both in terms of interactions and revenue. That can often mean letting some of those early clients go, a process that can be difficult but one that frees up space to bring on higher-paying clients.
“You have to place a higher mark on your value than you think,” she said.
BECOMING A CPA TO GROW THE BUSINESS
Roslyn Banks didn’t envision becoming a CPA when she opened her financial consulting and tax advisory firm in 2016. Going out on her own after working for Wells Fargo and other large corporations in financial planning and analysis, she was toying with the idea of becoming a tax lawyer.
Less than 10 years later, Banks is on a totally different track. After operating as an enrolled agent, Banks has turned her sights to earning her CPA.
“I realized the CPA designation would give me an advantage in competing for clients,” she said.
Banks has already passed one section of the CPA Exam. Once she earns her CPA license, she plans to expand her advisory business and offer fractional CFO services.
The entrepreneurial life is nothing new for Banks. She grew up in a family business involved in farming, trucking, and landscaping. “It gave me firsthand experience on what entrepreneurs need to survive or grow,” she said.
As a former military spouse who maintains a close connection to that community, Banks counts among her clients military members, veterans, and their families. She has built her business through word-of-mouth referrals, a measure of success that she credits to the trust she has been able to build with her client base.
“I like being able to work at my own pace and manage my brand,” she said. “I get to really understand the lifecycle of a client.”
Banks has also enjoyed putting her knowledge to work writing two children’s books, Adelaide the Accountant and Adelaide and Agriculture, which she has donated to local libraries so that parents can use them to teach their children about money. “That’s what excites me,” she said.
SPECIALIZING IN HARD-TO-FIND SERVICES
William Holtsman, CPA, a sole practitioner in Ripon, Calif., specializes in “1040 orphans.” They are individuals or businesses in need of tax services because they have been let go by other firms for being too small or needing too few services. Holtsman concentrates on clients who have small businesses and/or rental properties.
During his first tax season, he benefited from a local regional firm’s decision to focus on bigger businesses. Holtsman also received referrals from several investment advisers who had clients in need of a CPA.
His clients don’t want to take on tax preparation themselves or work with a tax preparation chain. “They want to have someone to call and ask about making a new business purchase or the tax consequences of pulling money out of an IRA,” he said. They typically have their documentation ready and respond to requests quickly.
“They’re great clients,” Holtsman said. “And the fees are good.”
In addition to tax preparation, he offers business advisory and accounting services.
Holtsman worked in a traditional accounting firm with about 25 staff members for seven years and then moved to another tax-focused firm, but he yearned to be his own boss. “Even at the partner level, there was always someone to answer to,” he said. “I wanted to take on the clients and the work that I wanted and be able to say no to work I don’t.”
While he would consider adding an administrative assistant down the road to help with scheduling and returning phone calls, he likes the freedom of being solo. “I like being able to run my life in an agile way,” he said, “and being a sole practitioner helps make that possible.”
BUILDING A LOYAL CLIENTELE
Lisa Brann, CPA, CGMA, has always had an entrepreneurial spirit, even when she worked at a large firm. She attracted a devoted group of clients who came along whenever she changed firms.
“My clients followed me because I built relationships with them and they trust me,” she said. “I had the knowledge and experience their businesses needed.”
In solo practice in Florence, Ky., since 2006, Brann has been able to focus on the industries she enjoys working with, mainly manufacturing and construction. She provides client advisory and tax services, as well as services to implement accounting technology solutions.
She learned how to network by joining groups such as Business Network International (BNI) and her local chamber of commerce. She used the networking skills to connect with other CPAs, bankers, and attorneys. Early in her career, as a member of her chamber’s ambassadors committee, she met potential clients at new business ribbon cuttings and by presenting the owners of new businesses with a framed dollar bill representing the first dollar they earned. She also became a QuickBooks ProAdvisor when the program launched. “The training and referrals from that program have been key to my success over the last 30 years,” Brann said.
Doing well means working smarter not harder, avoiding extensions on tax returns when possible, and maintaining a high quality of work, as well as identifying and keeping the best clients for her firm and disengaging from or referring the rest, she said.
Brann recommends getting a mentor. She meets with a SCORE mentor once a month, a free resource she describes as invaluable. Also, because running a solo practice can take a mental and physical toll, she recommends joining a gym or finding other ways to keep active, even during busy season. She teaches aqua fitness at her local gym four days a week to hold herself accountable and make her health a priority.
FOCUSING ON EXPERT WITNESS SERVICES
Stephen Kirkland, CPA/CFF, started his career in tax and moved into compensation consulting over time. Seeing a gap in the market, he used the compensation expertise he had built to open his own firm, Atlantic Executive Consulting LLC in Columbia, S. C., specializing in serving as an expert witness in litigation over executive compensation cases.
Kirkland relishes the chance to do work he enjoys without spending time on the business management chores he had to deal with in previous firms. “There is still some administrative work to be done, even for a sole practitioner, but it does not have to become distracting,” he said.
He recommends sole practitioners be as specialized as possible. “It’s almost impossible to maintain all of the expertise needed to provide a wide range of services,” he said, “so focus on what you can do very well.”
Also, solo generalists may face large overhead costs if they need multiple software applications and a wide range of training and reference materials for a full menu of services. Specialists can better focus their expenditures.
And there are other benefits. “Generalists may need to be looking for good prospective clients,” Kirkland said. “But those who are highly specialized find that prospective clients are looking for us.”
As a specialist, it’s valuable to have a network of others in the same field with whom to exchange ideas and get support when needed. “Freely share your expertise with those in your network,” he advised.
Setting and meeting goals are important indicators, he said. “Set an annual revenue target and take home 90% of what is billed and collected.”
And learn something new about software or technology every day, Kirkland added. “Technology makes it possible to serve clients all over the country efficiently and eliminates the need for staff and heavy overhead expenses.”
BUILDING A BUSINESS AT HOME
Shayna Chapman, CPA/CITP, CGMA, never thought she’d be a sole proprietor after seeing her father working hard as he ran a small accounting firm in Gallipolis, Ohio. Chapman envisioned living in a big city, working in a corner office doing exciting things in a corporate environment. At the start of her accounting career, she was working at a regional firm in Charleston, W.Va. (not the big city she had envisioned) when her husband became ill, and they realized they needed to be closer to family in Ohio.
She and her husband, Jon, became partners in her father’s small-town accounting firm in 2005, which her father retired from a few years later. Her husband passed away in 2013, and Chapman rebranded and transformed the firm a year later into Shaynaco LLC. She now employs three people and is focused on serving businesses with fewer than 50 employees in her rural farming community.
“There are wonderful things about working for yourself that I didn’t realize when I was younger,” she said.
Chapman has been grateful to have the flexibility to be present for her son’s upbringing. Now 20 and attending the U.S. Naval Academy, he was 9 when she became both a solo parent and the sole owner of the firm. Fulfillment also comes from partnering with others in her rural community to help their local economy thrive.
Over time, she has incorporated technology into Shaynaco, from going paperless in 2007 to being fully on the cloud today, and brought her small business clients along with her to incorporate technology into their accounting operations.
Chapman is now thinking about how to ensure her firm will be an asset she can sell when she chooses to retire in the not-too-distant future.
“I want this firm to be an asset and not just a job that when I retire, it disappears,” she said.
To build value, she may bring on another CPA or enrolled agent to have room for more complicated tax strategy services at the firm.
“It’s not all roses,” she said. “All the pressure is on me, but I get to design that pressure in a sole proprietorship.”
Pros and cons of a solo practice
Flying solo with your own firm has its ups and downs. The firm owners interviewed for this article provided some pros and cons to consider.
Pros
- Getting to work end-to-end with clients.
- Launching a practice and balancing other life priorities such as coaching your kids or supporting a spouse in the military.
- Being able to make all the decisions and follow your own vision.
- Using tech tools to, for example, handle client scheduling, which makes it easier to set up a solo shop without admin or staff help.
- Focusing on your skills, knowledge, and expertise. These revenue-generating capabilities are the firm’s greatest assets.
- Choosing a specialty with little competition and letting the clients come looking for you. Specialty services also tend to be more lucrative than traditional services.
Cons
- Feeling isolated. Volunteering with not-for-profits and serving on boards, as well as attending tax conferences and other accounting profession-related events, can help sole proprietors connect with other practitioners and entrepreneurs.
- Paying for expensive health care and other benefits.
- Wearing all the hats, taking on unfamiliar duties such as admin and marketing, and not being able to delegate.
- Having to experience a huge learning curve. A solo firm is more subject to variables with a significant impact than a larger practice, and, without a road map, there’s a lot of trial and error. Rely on a strong support network when you get started.
- Dealing with the stress and potential liability of relying entirely on your own judgment, especially when working with sizeable wealth or asset amounts. Join a sole practitioner group where you can update your knowledge and share experiences. Also attend gatherings such as the AICPA ENGAGE conference, where it’s possible to ask speakers questions and meet other practitioners.
About the authors
Anita Dennis and Sarah Ovaska are freelance writers based in New Jersey and North Carolina, respectively. To comment on this article or to suggest an idea for another article, contact Jeff Drew at Jeff.Drew@aicpa-cima.com.
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Articles
“Time for a Tax Practice Tune-up,” JofA, May 1, 2024
“Tips for Building a Firm to the Right Size for You,” JofA, Dec. 1, 2023
“Business Model Transformation: ‘Single Best Decision I’ve Made,’” JofA, Oct. 24, 2023
“Grow Your Firm With Intention,” JofA, April 26, 2023
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“An Unorthodox Path to CPA Success,” JofA, Oct. 12, 2023
“How One Small Firm Drastically Cut Its Busy-Season Hours,” JofA, Aug. 3, 2023
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