Spill the Beans

Hi Scott,

I am a 32-year-old tax accountant earning $100,000 a year -- and I am facing a dilemma. I could (for $300,000) buy in as a partner in the accounting firm where I currently work, replacing a partner who is soon to retire. But I am not happy at this place and have always wanted to start my own accounting business. I already have some clients on the side, worth about 20% of my salary. Would quitting my job and going it alone be the right move?

Ben

Hi Ben

You haven’t said how much partners get paid at your firm, and therefore how long it would take to earn back your investment. But I don’t think it really matters. If you’re not happy there, why would you sink $300k into it?

Personally, I think being in a traditional suburban accounting firm is a really tough business, and it’s only getting tougher.

In the coming years technological advancements like ‘blockchain’ and artificial intelligence will revolutionise the industry. Even now, the bread-and-butter business of tax preparation and compliance is dwindling -- and if Labor gets in they’ve promised to limit deductions for tax advice to $3,000 a year. (Okay, so that last one doesn’t have legs -- I’m sure it just means that accountants will charge clients ‘financial strategy’ fees instead.)

Still, there’s no doubt in my mind that accounting is going to look very different 20 years from now. To succeed you’ll need to be a truly trusted financial advisor to businesses, rather than a suburban cardigan-wearer doing tax prep.

If I were in your shoes I’d do what I call ‘swinging on the trapeze’ -- that is, keep your $100k-a-year job (holding onto the trapeze bar) while you invest time and money into building up your side hustle, then move to it full time when you’re ready (landing on the other side of the trapeze). That way you might just create a business you’ll want to spend the next 30 years in.

Scott