Episode 5 – Navigating Growth, Burnout, and Client Strategies with Brenda Cannon

Jamie Gruol: Welcome back to this edition of Diary of a Tax Practice Owner. I am so excited to have Brenda Cannon here with us today.

Brenda has a great story that she’s going to share with us today. about she and her CPA husband, Randy Cannon,

have built cannon and associates. There are small firms of six employees and they focus on tax accounting and tax planning for small businesses and their owners. Now, Brenda, I would love to hear how you and your husband got going on building this farm together.

And. Even how you got into the accounting profession. So let’s go way back and start in college and how you found accounting

Brenda Cannon: way back. That goes way back. So actually, my high school offered accounting courses. And so I took accounting in high school and I loved it. I liked organizing numbers, I guess. I just loved it.

So I really didn’t. I wasn’t one of those who went to college and couldn’t. I knew I wanted to do accounting. So I got my accounting degree. It was a few years before I got my CPA. So I worked in accounting for several years. Mainly for law firms. And then got my CPA. My husband actually was a software developer.

So I started my business in 2011. And then in 2014, he joined me. We did have one other partner for a while, and we grew, you know, I started with like a hundred clients and it grew. I took anybody who came in the door, I had no . There was no intake course . There was no practice management.

And we grew and then we realized. We need to be pickier about clients and growing isn’t necessarily you know, just grow, just growing with no plan, you know, so we’re smaller than we used to be, but that’s kind of intentional. 

Jamie Gruol: What was, what did it look like at its biggest point? 

Brenda Cannon: We were up to about 1500 clients at one point and now we’re at about, we had a, we did a big purge before this tax season. So now we’re at about 400, 430. 

Jamie Gruol: Wow. So that’s amazing. What made you make the decision to do that shift in your business and kind of consolidate down to more of a boutique?

Brenda Cannon: Part of the reason was we’re two CPAs shorter than we were. We, one left, one had a baby and decided to stay home. So we thought this is a great opportunity. To kind of let go of clients that aren’t really a fit so That I mean that was part of it, but about I don’t know seven years ago Maybe that’s when I started realizing I could let clients go So, I mean we’d make a list every year but Three years ago we let 80 and then we let go of 40 and then we let go of 276.

So in the recent years we’ve had some pretty big let go. 

Jamie Gruol: It sounds like it. That’s amazing. So do you mind sharing with us kind of, what was the, what made you feel the permission to let go of clients? Like where was that shift in your brain? 

Brenda Cannon: A big reason in recent years was Rebecca Driscoll, she is a coach. She’s and I met with her and She helped me look at worst case scenario if We let all these clients go and then because of our new scheduling thing if we’re going to lose more clients and because of our fee Increase, you know worst case scenario what would happen and we knew we would be fine I mean we might have to you know tighten our belts, but that helped us But we really just wanted to have we want to have business clients That allow us to do their accounting on a monthly fixed fee And their owners and we really like to do tax planning.

So we were tired of cleaning up accounting We’re We still have a few of those, but we’re just kind of tired of, you know, those big accounting cleanup jobs. Yeah. 

Jamie Gruol: I get that. So when you were with Rebecca and you made that decision, was it about staffing that was causing you to need to reevaluate things?

Was it just a desire to shift the way you were working? Did you, were you feeling burnt out? What was it that drove the decision to make a shift? 

Brenda Cannon: Definitely burnout and we really kind of gun shy about hiring I guess and It’s just you know, the industry it’s really tight. And we just thought it was an opportunity to just kind of trim our firm down to the clients that But burnout was a huge, a big part of that.

Jamie Gruol: Do you mind sharing what that looked like for you? Cause I asked that because I think there’s a lot of people that are in the midst of that and don’t know that there is a different way. And it’s not necessarily giving them permission, but just allowing them to reflect and be like, Oh, maybe that’s what I’m experiencing.

I’m looking to make or at least acknowledge so I can make a shift too. 

Brenda Cannon: So I think the people are, you know, one, one reason we weren’t billing some clients enough and rather than another big fee increase, we just decided to let them go. But I think that accountants are worried about it.

They may, if they have a big fee increase, they’re going to lose half their client. And or most of their clients, you’re not going to and we just broke it down we looked at the numbers and We realized you know, we’re going to be fine And now we have we can spend more time on the clients that they’re, you know are good clients And the clients that appreciate us, they understand fee increases and like many others in this industry We’ve been under billing and we’re still working on that.

We’re trying to tweak that we use ignition now for our new clients, Still trying to Fine tune that. But I think it’s just, I think there’s just a fear. And it’s I don’t think people need to worry as much about making a big adjustment. I think if you, I think if you sit down and you look at the numbers, And then you see, okay if I did lose half of my clients, what does it look like?

Maybe I had to lay one person off, we’ll be fine and we’ll get closer to where we want to get in that honestly. So the clients we let go, I mean, some of them were also, High maintenance messy, sore stocks. And so honestly, it was quite a relief to not have to deal with that this year.

I mean, it was tough. Some, we were friends with some of them. Some people, some feelings were hurt, but you know, it’s business and, but a lot of them completely understood and, you know, And, you know, we just worded it that we’re having a capacity problem, and so we have to make this big change. 

Jamie Gruol: Well, kudos to you for taking the leap and having the courage to do it.

I think you’re, you have a great point that it, a lot of people are held back by fear. And when you, there’s going to be two things that are going to either, it’s going to force it, right? You make the decision to do it and you have a conscious process where you go through and do it kindly. Or you get sick or something else tragic happens and you have to do it and you have no choice but to do it.

And honestly, if you are feeling in those positions, I think you’ve just given some great suggestion, Brenda, about, you know, decide that what I need is to make this change and that while it can be scary, do the evaluation so that you can know if I raise my prices to this point or I make this massive shift in this direction.

Even if. 30 percent of my clients leave. I know I’m still going to be okay. And I can always go and find more clients to replace those clients that left and find ideal fit clients that can come into their place, right? It’s not going to happen overnight, but as long as overnight, excuse me, but as long as you know that you have the skills to fill your books, And provide a great service.

You can always go find good clients. It’s just a matter of exactly. Yeah. 

Brenda Cannon: And this is the perfect time, honestly. I think this is the perfect time to be doing that in our industry. 

Jamie Gruol: Absolutely. And even if you’re listening to this later on, and you’re in the middle of tax season, start making notes on clients.

You know, we teach people how to use tax, don’t add a tag that’s like evaluate client or something like that. So after tax season, you know, that because this client has messy documents or documents, as you pointed out, or a bad attitude or is not cooperative or is always late. Know that these are the clients that I want to evaluate come the time that I can do that in a peaceful situation and make a decision about it.

Stop kicking the can down the road and perpetrating this exhaustive state all the time because you’re trying to serve these people that are no longer fit and that’s okay. 

Brenda Cannon: And I liked, you said, make a note because you’re going to forget your frustration. Like three months down the road, you’re going to forget, you know, what it was about.

That situation. So if you write it down, it’ll bring back that memory and help you decide not to go through that again. Another tax season, which I don’t like the word tax season. I’m trying to make that go away. 

Jamie Gruol: I would love, will you talk more about that? Because I think it’s going to lead us into a really interesting conversation that I know you wanted to talk about right. how do you evaluate and what are you looking at when you say not another tax season?

What do you say? 

Brenda Cannon: I want to have a regular work schedule like normal people I have hobbies. I want my weekends for those three and a half months every year. So We’re getting we got sick and tired of being sick and tired We set a deadline for our clients like so many clients like so many accounting firms do march 15th For 10 40s and we february 15th for pass throughs And we had no way of knowing how many clients would bring us their tax documents So no way to control that workflow and i’ve mentioned this before but On march 15th in 2019 105 clients gave us their tax documents on that one day in addition to our clients before that And you know when you are sitting there Like I’ve missed so many easters Like even if you know easter like every 10 years it falls after april 15th But we’ve had a lunch with our family And I would just in my mind I gotta get I gotta get out of here I’ve got all these because they’re just piled up and it’s the stress is because people are waiting and then you say You know, we’ll get it done by april 15th But it should be two to three weeks and then you start they start emailing and calling and checking on their tax return You And I got so tired of that I was so burned out and then on october 15th September 15th and october 15th the same you have your last minute clients And I have mentioned this before but I had a new client never should have accepted Like in september, it was a complete absolute mess Oh, I was dead had several rental properties.

They were oh, it was such a mess I worked 95 hours that week up to october 15th. Like I didn’t know it was humanly possible like God I would so unhealthy that is so unhealthy. 

I heard a Jason stats podcast and he had heard it from jacob overlander about why don’t you schedule your work?

Why wouldn’t you schedule your work anywhere you go? You make an appointment but tax firms just say just willy nilly just drop it off anytime. So I was thinking that I was actually on an airplane and I was had a had my new remarkable tablet and I had a little calendar Template and I was like how many returns can we do in one day and we use firm 360?

And so we did a and i’m sure many practice management software do this, but we did a report to figure out How much time each tax return took and we kind of came up with an average time I mean, you don’t have to do it that way, but that’s what we did the first year.

I heard Jason Statz one of his podcasts and he was talking about scheduling why would we not schedule tax prep and he had heard it from Jacob Oberlander and I just was thinking about it. I kept thinking about it and I was looking On just a calendar template and thinking about and we used our practice management software to figure out how many tax returns like the average time a tax return takes And so we figured out like if we could do Say at the time there were four of us four tax repairs last year.

So if we could do 12 a day 12 tax returns a day. Let’s add a bunch of cushions So we’re going to put eight a day And then we’re going to leave friday’s blank because there’s non tax things you have to do during tax season accounting and maybe payroll or whatever We did that and we sent our clients a communication saying we’re going to try something different We’re going to do a calendar.

We sent them like a couple of announcements, the first one just briefly explaining it, the second one we explained it in more detail, the third one we Explained it in more detail and we dropped the calendar link. We did have some clients who were upset 

Yeah, and so But that’s another reason. Oh another thing we did was our older clients. So we do have older clients that I love. They are very special to me And we called them ahead of time and we got their calendar. We got them booked. So that first year it really worked really well. We said pick a date on the calendar And to give us 100 of your tax documents.

So if you have Like investment 1099s, you may not get those till late February, early March. So you need to consider that if you have publicly traded partnership K ones, it may be sometime in the summer. You need to consider that. So we said, pick a date, give us a hundred percent of your tax documents and we’ll have your tax return prepared three weeks later by the end of that date.

And dates went really fast and It worked so well and what I did just so you know People could give us their tax documents before their date They just needed to buy that date and we had one of our employees the day after their turn in date Went through their tax documents compared them to the prior year. And then emailed that email to me and Randy and will all prepare and said These documents they had last year.

They don’t have this year What should I ask them about and we’d say, you know, ask them about their hsa form or whatever and so she would contact them so In most cases by the time we had got to their tax return. We had everything there wasn’t this back and forth which was huge another thing that worked really well is The status checks have are almost completely gone clients know their date And they’re not checking with us.

So that has been so lovely. 

Jamie Gruol: So we did. Yeah. So one of the questions that comes up for me, and I’m sure others are thinking this too, is how did you handle the conversation around extensions for the client, educating them that the extension is not, you know, the April 15th is not the date that it has to be done.

Jamie Gruol: October 15th is, and how did you handle that conversation? 

Brenda Cannon: So Exactly. Clients are so phobic. Some are so phobic about extensions. In the fall, when we first sent this email out about our calendar, we said, You know, there’s a good chance you might be extended if you haven’t been in the past.

What we did was when we communicated with our clients, the first time about this in the fall, we said that We’re going to do this new calendar thing. There’s a chance you’ll be extended if you haven’t been extended in the past. And so if your income has changed, if you need us to do a tax projection, let us know and we’ll do that in December.

And but still we had clients, I mean, some of the things, some of the reasons why they didn’t want to extend are pretty comical, but That so and there were some clients upset and they had longtime clients and so I called them and we had a conversation 

Jamie Gruol: Yeah, 

Brenda Cannon: and you know having a conversation Is so helpful sometimes just let’s talk about it.

And what are you worried about? I think they understand now that i’m in it when I mean we meant it when You might be extended and that is that’s how it is. And so let’s do projections So what we’re going to do this year is we’re going to send the calendar out probably in september And say pick a date In november late october november december just through the first week of december because I would like to have a christmas this year.

Yes to give us your year to date tax stock so we can do a tax projection So that first year we did lose about 70 clients, which at the time was about 10 of our clients and Maybe five of them verbally said it’s because we don’t like this calendar thing. We had raised our rates also pretty good.

So I’m, I think it was a combination of reasons. And this year we’ve gained some clients, so we’re probably at about a break even this year. Yeah. We did lose some clients. About 20, but I think we’ve gained that many. So we’re about stable at about 400 to 430. That’s good. I will say though, that the clients that like it, the clients that like this calendar process are the clients we like the most.

They’re organized, they’re responsive. They like having their own date. Not this general April 15th date. And our calendar this year ends April 20th. So that’s for business and individual. So we will not be crunched at all for That October 15th deadline. I’m happy about that because I will be going to the OU Texas game on October the 12th.

Good 

Jamie Gruol: for you. Good for you. I love that. That is so interesting. So I think a couple of things that I heard is one, the thing that made it most successful is one, you communicated well, right? You did not surprise your clients by going out with like full new process, whole new system. You took a period of time and had a communication plan in place and walk them through and kind of.

Jamie Gruol: Started introducing them slowly to what this new experience was going to be like. That is one of the most critical things that even people moving to new software forget to do, right? Like they just think, Oh, I’m just going to send this email and then it’s going to be done and your clients are going to adjust.

No, they don’t. They need to process and go through the change process as well. When you’re doing new things like adding this calendar, moving to new software, I’m moving to automations where there’s like a change in the way you’re doing it. That is so important. So I want to just commend you for that.

Brenda. The next thing I heard is that you guys weren’t afraid to try and change and do something. Now, I am curious if it had not worked out well, would you guys have just deemed it a test and moved back to the old way? Or were you pretty committed to this at the time? 

Brenda Cannon: I was pretty committed to this. Yeah, but I mean if it didn’t work I don’t know i’d probably change So i’m so burned out. I probably just start a gardening business or something. I don’t know i’m, I was so I think part of that is you know to make bold changes some people have to be just Done and that I don’t know why it took me all these decades to get done and that’s one reason why i’m so passionate about this because I think back when my kids were little I never had spring break with my kids And i’ve worked every weekend and I mean I didn’t miss soccer games and I didn’t miss band stuff you know I remember I went to one of garrett’s band concerts and I just went to hear his little band and then I left And then I won a prize When I wasn’t there, they called my name Garrett’s mom in here you know, you give up so much, and I, for the younger tax preparers that have young kids, I just, I don’t want them to have to live that way anymore, and you don’t have to, you really don’t have to and it’s a learning curve with clients.

Like they’ve been through this for two years next year. They’re gonna and I promise you they will have that an alarm on their phone For when that calendar for the ones who really want to not file an extension. They will they’re taking it pretty seriously now 

Jamie Gruol: Yeah, they’re gonna respect that email that comes in January in December and says schedule your appointment, right?

Brenda Cannon: Yeah, that’s right. That’s exactly right 

Jamie Gruol: So what I think is fascinating about this is Brenda, you, it’s opened up your calendar, right? This is giving you back one, your, the lifestyle that you wanted as an entrepreneur and a business owner. You now are actually able to enjoy your weekends, your evenings, your family time, which is so valuable.

The thing that I’m curious about is a lot of tax repairs and. Professionals, honestly, entrepreneurial kind of minded people, when they start freeing up this time, they start thinking a bigger, right? Like I am curious if you will share with us kind of the journey that you’ve been on over the last year and now looking at creating software for others that can help them to implement the scheduling system themselves.

Would you share more with us about what you guys have going on there and kind of in the future? Yeah. 

Brenda Cannon: Yeah, so we were using Calendly and Calendly is great. But it has times on it And so clients thought oh I have to come bring my tax documents at 11 30. No You can bring it or upload your tax documents anytime Up to that day if it’s a midnight on that day.

We don’t care so there was some confusion there and then we used an api called make to When someone picked a date over to Airtable so we could track which clients had picked a date and which clients hadn’t picked a date. And Chad Davis I Adore him. He’s just the bee’s knees. He helped us do that because I don’t have much experience

But we found there were some kinks with that also like when they picked a date They enter an email and we, it would match it up with air table. If they use a different email, it would match up. So our admin had to go and every day kind of check it and manually put some in that didn’t transfer over.

So I was thinking about that and I have a client who’s a software developer and I was just visiting with him and I said, I think, I don’t think there’s any software that does this. It, you know, so he, we talked about it and he, You know, he thought he could you know do something exactly what we want So he’s working on it and we will have a beta within weeks.

He’s very close. So it so you can download your client contact information. You’ll email them They’ll and I think it’ll have like different Like events not really an event but for tax prep and there’ll be a place for businesses a place for individuals That was another Area where clients got confused and you know when you send an email, they read the first five words I mean you can add colors you can add little pictures But the attention span, you know 

Jamie Gruol: Yeah, it’s a 

Brenda Cannon: problem And so like I had one client that has four businesses and an individual and he picked one spot on the calendar that can really throw you off.

So This kind of makes it a little more Understandable that oh, I need to pick one for my business if you pick one for individuals. 

Jamie Gruol: Yeah interesting. So they’ll get to it. It’s a software that will facilitate them selecting the slot on the date without it being dated as a time. And then it will do the follow up sequence as well, reminding them that their data is running what they need to provide to you and all of the bells and whistles that you couldn’t, you weren’t able to necessarily create through, you know, Kind of, I like to call it Frankenstein’s tech stacks, right?

Like we piece them all together and try and make them work. So you’re going to beta it this year. Do you anticipate being able to make it available to others that are looking to use it? I think so. 

Brenda Cannon: I think so. He, I just talked to him last week and he said, I’m going to have something for you to play with.

So I need to play with it. But he’s thinking of all the different scenarios to think about. So yeah, I’m hoping we’ll have something available, you know, by I hope October 

Jamie Gruol: I love that you, now that you have kind of this opportunity of improving your own practice, now you’re looking at how you can help others to prepare and prep, or not prepare, but to help others increase the efficiency in their own practices.

That’s so fascinating. 

Brenda Cannon: Thank you. 

Jamie Gruol: I would love to hear, Brenda, in the last couple of minutes, where do you think your practice is going to go over the next Five years or so. Do you anticipate growing? Are you happy with the size that you are now? Do you want to bring more team members on if they come back and they are interested in coming back online?

Brenda Cannon: I do think we want to grow, but very controlled. We are super picky now about our clients and that’s something we still need to tweak. Like our new client questionnaire, our discovery meetings. I think we still need to work on that. I would love to have a niche, I don’t know. I don’t. And when you partner with your husband, there’s a little bit of, we have to agree on things.

Doesn’t always happen overnight. 

Jamie Gruol: Yeah. It’s a challenge when you have a partner and you have to build things together. That’s very interesting. I just had an interesting conversation with someone about niching and how a lot of people try and force a niche and I don’t think there’s always a need to have a niche, right?

If you enjoy, Working it with small businesses and local businesses, then that’s your niche, right? Like you specialize in that. And if you enjoy working with contractors, businesses, or, you know, pet grooming salons, like you can find a niche in that. And I just think that there’s become a lot of hype around niching because you can use it to target people on social media and that can be powerful.

But also if you’re building a successful business off of referrals and you’re getting a similar type of client time and time again, They can continue to meet your higher quality standards as you’ve gained over the years. That’s all that you need. And if you’re happy working with them, that’s enough.

Brenda Cannon: Thanks. Yeah, I do think like small businesses and tech, that’s what Raydi says, small business tax planning, that can be kind of 

Jamie Gruol: That’s huge. That’s huge. It’s absolutely huge. It’s such a need because there’s so many loopholes and opportunities and programs that can be taken advantage of to help that specific market and whether they’re a home cleaning business or somebody who’s running a really successful car wash, like they all need the same guidance on that.

So it’s true. Yeah. Yeah. Yeah. Brenda, I’m going to wrap up with the last question. And the last question is always, I would love if you had a moment to just give some inspiration and feedback to someone who’s maybe in the earlier stages of their business. What would your kind of, what do you wish someone would have told you back in 20 maybe 2012 when you were starting to build your business that would have maybe changed things so you didn’t have to experience the burnout that you experienced later on in your business?

Brenda Cannon: I am probably would have been pickier about new clients, but I do understand you’re starting a business. You can’t be too picky but You know at least create some processes about You know the type of client you want and then keep a list of maybe clients that aren’t a fit that when you’re able to weed out some of those that is one thing and set boundaries And time with your family is so precious.

It flies by. don’t give up your time with your family for your, there’s no emergency. In our industry like, yeah, 

Jamie Gruol: yes. Yeah. Yeah Jessica always says that there are no tax emergencies nobody’s gonna die around tax situations, but they are not emergencies. You will not die from them 

Brenda Cannon: That’s exactly true 

Jamie Gruol: No, I love that. I think boundaries is so important. I think people We don’t often slow down enough, especially in the early stages of our businesses to evaluate what is, why am I doing this? And it’s likely not because you want to be working 60 or 80 hours a week.

It’s likely not because you need to have, you know, bring on all these people and all these team members to grow dramatically. If you’re looking to just, Make enough to be able to financially support yourself and your family and you want to have time with your family, then start building the boundaries and telling people no and holding the line.

I think there’s a lot of people that do a lot of things that they wouldn’t necessarily do. Because they’re afraid to say no or they’re afraid to hold the line with people. And that becomes a very slippery slope because if you do it with one and you don’t have the courage, you say I did it for them.

I should do it for this guy too. And then all of a sudden they’re like you, where you’re working many hours a week to just get it done because you have committed. And I’m so glad to hear that you found the solution to your challenges and boundaries through the scheduling and were open to the idea of being okay with people that maybe left and decided that wasn’t a fit for you because they aren’t.

But you know what? There’s a whole lot of people out there that are looking for someone exactly like you. So that’s true. That’s true. Yeah. I love that. Brenda, I would love to have you share where people could maybe hang out with you, follow along on your journey. If you’re sharing out in the socials somewhere and let them know so that they can maybe follow you along with your scheduling processes and maybe someday get to partner with you and helping them to schedule as well.

Brenda Cannon: Yeah. On Twitter, I am At bsu cannon And I do have about 75 people have contacted me wanting to know more about the scheduling So i’m setting up some zoom meetings So if anyone wants to be part of that they can email me at brenda at cannon cpas. com 

Jamie Gruol: Awesome. That is I’m I hope that you get some great market research and learning what people are looking for.

That’s such a great place to start when developing a software solution. And you know, it meets your needs, but to have it be, you know, the needs of several other case studies is so valuable. So go and reach out to Brenda so you can start scheduling your clients and have that be event that is something that you’re celebrating because your tax season is going to be controlled.

You’re no longer going to have the rush to the end, the deadlines, including even the rush to extension season deadlines. Create a job for you, or I shouldn’t say a job, but create more structure in your business so that you’re not creating these Super packed, overactive tax seasons of, you know, January through April.

It’s just not necessary. Look at how you have a career and as a professional, you’re providing a service over a period of time with due dates involved, but it doesn’t mean that you have to meet the initial due dates of April 15th and March 15th with such. Reckless abandon, I think is kind of the word that’s coming to mind because it feels like people just think they have to do that And it’s huge stress So well, thank you brenda for introducing us to another way of thinking about the tax season and quotation marks there Because it is no longer a tax season.

It’s a career and a professional career at that So step into that role and be that for your clients they’ll appreciate and appreciate it. And so will you in the long run? 

Brenda Cannon: Thank you for having me. I appreciate it 

Jamie Gruol: Yeah. We’ll talk to you all next time on our diary of a tax practice owner.

And until then, have a great week.