In this episode of The Art of Succession podcast, host Barrett Young sits down with Jim Morrow, the CEO of Agency CPAs. Jim's story offers a compelling look at the complexities and triumphs of succession planning, particularly within a family-run business. Agency CPAs specializes in tax planning, CFO, and accounting services for digital agencies, but the journey to this niche was filled with personal and professional challenges.
Taking Over the Family Business
Jim's path to leadership began unexpectedly. His father, who ran a small bookkeeping firm, encouraged Jim to enter the field of accounting. After starting his career at Big Four firms, Jim's direction changed when Superstorm Sandy led him to reassess his career goals. He returned to help his father's business, a move initially driven more by familial duty than financial interest.
In 2017, Jim's father received a severe cancer diagnosis, which catalyzed Jim's deeper involvement in the firm. This period was marked by Jim's realization that the business needed a strategic overhaul. His father had managed the firm more as a social endeavor, often prioritizing relationships over profitability. Jim recognized that to ensure the firm's survival, he needed to implement more rigorous financial management practices.
Jim's initial steps involved collecting outstanding accounts receivable and shedding clients who were not financially viable. This shift allowed the firm to stabilize its cash flow and begin growing. Jim's focus on turning the firm around led to the introduction of higher-level services, including CFO advisory work, which differentiated the firm from its competitors.
Rebranding and Niching Down
A pivotal moment in the firm's transformation was the decision to rebrand as Agency CPAs, focusing on digital marketing agencies. This niche focus allowed Jim to tailor services specifically to the needs of these clients, creating a competitive edge. Jim attended a marketing conference to promote the new brand, which quickly garnered interest and led to significant growth.
Jim's leadership was bolstered by a key partnership with Tiffany, an employee who had been with the firm through its toughest times. Recognizing her contributions, Jim made Tiffany a partner, creating a strong leadership team. Together, they fostered a culture of support and experimentation, which was crucial for the firm's evolution.
Lessons in Profitability
Throughout this journey, Jim learned valuable lessons about balancing high-level advisory work with essential bookkeeping services. Initially focusing solely on advisory services proved unprofitable, highlighting the need for a stable revenue base from consistent bookkeeping work. This balance was key to maintaining the firm's financial health and growth.
Looking ahead, Jim and Tiffany are committed to maintaining the firm's current size and client base, with no immediate plans to sell. They focus on creating a sustainable, supportive environment for their team and clients. Jim emphasizes the importance of life insurance and succession planning to ensure continuity in case of unforeseen events. He also discusses the potential for hiring internationally, particularly from the Philippines, to support growth.
Listeners can learn more about Jim Morrow and Agency CPAs by visiting https://agencycpas.com/ or connecting with Jim on LinkedIn.
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The Art of Succession Podcast is brought to you by GWCPA. Twice a month on Youtube, host Barrett Young will bring you interviews sharing the successes and challenges from business owners with their own succession stories. If you've enjoyed this episode, please share it with others.
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Disclaimer: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.
