Episode Transcript

Please note this transcript was generated by AI and contains errors including missing and misspelled words.

[00:00:00] Meryl Intro: Hi there, and welcome to the podcast. I'm your host, Meryl Johnston. The Lifestyle Accountant Show exists to help today's accounting firm owners build successful firms while also living a healthy, happy life without sacrificing sleep, your weekends, or time with loved ones. Today I'm chatting with Jason Staats.

This is the second of a two part series with Jason. The first was all about his content creation process. And today we're talking about Jason leaving his firm. If you missed Jason's first episode, then make sure to go back and give it a listen. In the meantime, here's some quick background info. Jason ran an accounting and tax firm in Oregon, which he left at the end of 2022.

He started producing video content from his garage back in 2020 and now he's focusing full time on being a creator and running Realize, which is a community for accounting firm owners. You might also know him from his daily YouTube show for accountants, Jason Daily.

[00:01:05] Jason [soundbyte]: That business, you know, sponsorships and all my other content and all of that, that was growing really quickly and it was inevitably going to surpass the money I made from the firm.

But the firm was like, 95% of my stressors, just like managing the team and all of that, there was still a lot we could have done to, to manage that in a better way. But ultimately where I got to is I can either sit in an office, you know, or sit on calls with staff and help them develop and help clients and all that.

And there's a lot of. Yeah. That's a very rewarding thing and you can help a lot of people and really change lives with that. But I had this like incredibly unique opportunity also where I could publish a video and a thousand people would watch it in 24 hours and I just had this like fundamentally higher leverage way of connecting with people and teaching and like it kind of just seemed like a waste to not invest in that.

[00:02:03] Meryl Intro: Jason's going to talk us through the steps involved in leaving his firm, but before we get into that, we back up a little bit and hear about how he came to own a firm in the first place. It wasn't a matter of him going out and starting his own firm. He actually had the opportunity to buy into a firm. We talk about what sparked the initial idea of him deciding to leave, how he approached making a tough decision like that, where he was going to disappoint people, the conversation that he had with his business partner initially and, and how those conversations evolved and putting a transition plan in place.

All of that and more coming right up on the Lifestyle Accountant Show.

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Meryl: Great. All right. Jason, let's dive in. Can you start off by sharing a bit of an overview of all the different businesses and products that you're working on at the moment?

[00:03:50] Jason: Okay. All the things I do. Um, so I used to run accounting firms and now I, most people know me for making content online. So very active on Twitter.

I'm kind of sort of active on LinkedIn, uh, and then I run a YouTube channel. The big thing in the last couple of months is I've been running a daily podcast for accountants called Jason Daily. It's a video podcast, uh, on YouTube and podcast players. And it is just as much work as it sounds like, as it turns out.

[00:04:19] Meryl: That sounds like a crazy idea to me. Daily show. Are you, do you record that every day or do you batch record that and then schedule it out to go out daily?

[00:04:28] Jason: Uh, it's a mix. Most days I'm actually recording daily. Um, from time to time, there'll be something that comes up and so I'll record a couple.

Um, and so who knows, like, in the future, like, if you were strictly optimizing, like, if this was a client facing thing, I would shoot like, you know, 10 at a time. This like, I genuinely enjoy talking accounting stuff every day. I'm just that much of a nerd. And so, uh, most days it's generally just like talking about the day's events and all that.

[00:04:59] Meryl: The content creation part sounds fun to me, but the idea of having to get everything prepped to record the video, is my hair done right? What am I wearing? Is the lighting okay? I mean, that just sounds like a nightmare.

[00:05:09] Jason: Yeah, I know pretty early on like I made the joke because somebody was there like boy chapstick much like try some chapstick sometime buddy And I was like listen if somebody came in and sat in your living room every single day There would be days that you would be proud of that living room and buddy There would be days where you weren't proud of that living room and so we all just need to come to terms with the fact it's a daily show and you're gonna get a mixed bag and Sometimes the hair will be immaculate and other days it won't. That should be fine.

[00:05:37] Meryl: So I think there's a couple of other things you're involved in too. You mentioned the YouTube channel being active on social media, Twitter, and LinkedIn. I know you through a community that you run for accountants, Realize, and I believe you also, I'm also on your newsletter list as well.

So it sounds like there's a couple more things there in the content world. Are there any other projects?

[00:06:00] Jason: I don't think so. There's, you've always got like various. Little projects going on here and there, so like there's a show I'm trying to develop and I do, this year I've been able to do AI consulting with a number of software companies in the space, and so that's kind of a fun little thing I've been doing, but, so we've covered the stuff that takes the bulk of it.

[00:06:17] Meryl: Alright. Well, today I'm really interested to hear about your transition from being a principal in a C P A firm to becoming. I don't know whether you call yourself a full time creator or what's the word you use to describe yourself these days?

[00:06:31] Jason: That's a good question, um, because the only thing worse than telling somebody you're an accountant is telling them you're an accounting influencer.

So, uh, I don't know. I usually just say content creator or I don't, it's. It's honestly, it's hard to explain.

[00:06:46] Meryl: Whatever they're, whatever it is that you're doing now. I'm really interested in that transition before we talk about how you left the firm. Can you give just a little bit of backstory about your transition into becoming a principal at that firm?

[00:07:00] Jason: Yeah. So, um, I was, I ended up being with that firm for 12 years and I went there maybe three or four years. After school, uh, it's in the U S it was traditionally a tax practice, actually 85 year old tax practice. And so at the time I was doing it, income tax work, um, which in the U S is a whole ton of fun.

Um, and then I was going to leave. accounting. I had never planned to be an accountant, which I don't know that many people do. Um, I'd planned to do computer science and then got the first D in my life and freaked out and figured out what's the, what's the degree I'm closest to accounting. Let's go do that.

I got an internship that paid better than any of my buddies, my junior year. And still haven't found a way to leave and that's like the level of intentionality that went into it. But then I was going to leave, uh, maybe five years into being at that firm. I went back and got my MBA, but man, then I just started seeing more people talking about building just an accounting practice within a tax firm, which in the U S is kind of weird.

Like bookkeeping is almost looked down upon by tax folks, but I was into the idea of being able to manage somebody's whole back office. And so I ended up spinning up an accounting practice within that firm. And that kind of gave me a sandbox with which to create and, you know, hire my own team and, and all that, that grew super fast.

Eventually I bought into the firm and by extension, a whole bunch of the work that I had just created. Um, and then had a couple of partners and did that for a few years. Then, uh, decided I was going to go on to the next thing.

[00:08:45] Meryl: And what was the buy-in process like for you? Was that your goal when you were building out the accounting arm at this firm?

Was your goal of, okay, yes, I could own part of this firm one day? I'm interested to hear more about that. I think some of the listeners, that might be relevant for them too, if they're working in public practice.

[00:09:05] Jason: Yeah, I don't know. That's, especially early on in your career, I think, if you... If you identify somebody who's going to be an accountant, that's just kind of where your head goes is that partner track.

Um, that's kind of the default. Um, the closer it got for me, the more it became a question of, okay, I'm now actually saying that that's like a humongous commitment. Like, do I want to marry myself to this indefinitely? Cause I was already kind of on the fence. Like, Is this a thing I want to do forever or not?

To be totally honest, what I enjoyed the most was just creating and building something from scratch and developing the team. And like, in hindsight, those were the aspects of the process that I enjoyed myself. So early on in my career, yeah, definitely. I was probably like, that's just what success is. Like that was the only model of it I had seen.

Right. Um, as I got closer, I was Uh, maybe a little more mindful of what a commitment that was. But eventually that didn't, yeah, that didn't stop me from making the jump.

[00:10:08] Meryl: Did they tap you on the shoulder to say, Hey, in a couple of years, this is what the future could look like. Did you approach them and say, Hey, I'm bringing in all this business I've built out of revenue stream.Come on guys.

[00:10:19] Jason: It was totally like the, the weird, like, uh, high school dating, like, uh, very traditional. thing that, you know, you imagined in your head when you're graduating from college that that would be that this firm basically did reviews once a year. And that was like the only high level meta conversations you ever had.

So the whole year, like you are building to this conversation and it's like, Oh, maybe this will be the year. And Oh, maybe this will, well, one year. All the partners were there and I'm like, this is a, this is a good sign. I think this might be the one. And then we all had this very polite conversation about how some, you know, things might happen eventually.

And I've learned in retrospect, like I think most of those conversations are usually just to keep you from leaving as much as they are. To make a plan. So like it wasn't as if there was a concrete plan coming out of that, but I tell you what, I was floating on a cloud. I was so excited. Uh, so it, it worked.

But, um, yeah, there was, there was like some initial conversations, but honestly, like 12 months after that, I'm like, yeah, I don't know that I actually want to do this. And then eventually came around to I want to build this accounting practice and like if you'll basically get out of the way and let me do this, I think this would be really fun.

Worst case scenario, I, you know, I, I grow your business for you and you have this sort of new profit center.

[00:11:42] Meryl: And so when you bought in, was that because was there another partner exiting at the time or were you able to say, well, that there's actually room for another partner because you've generated this extra revenue stream?

[00:11:52] Jason: Yeah, so there were a couple of partners that left. Uh, over the course of a couple of years. And so like from an equity standpoint, there was plenty of room to buy in. Um, we actually ended up more, uh, upside down in terms of really not... So at the time we were about a 40 person firm. And we didn't have any level of like intermediate sort of like manager between the partners and the staff.

And that's because it was historically a more traditional firm that had a bunch of partners. And partners just kind of managed their own book of business and you know, four or five people that were doing their work. But when a number of those partners went away, uh, and it was really just me and a partner, uh, we were missing like a ton of like, you know, management oversight and kind of had to revamp what that org chart looked like and, and make a lot higher level hires than we'd ever made before. So in this case, a number of them had gone away.

[00:12:50] Meryl: So it's interesting hearing about that transition to becoming a partner and just before you left, just before you left, what did your day to day look like there? What kind of things were you working on?

[00:12:59] Jason: So I was the um, kind of ops internal systems and people guy and my partner was the sort of client.

Facing face of the firm from a client services standpoint. So I was able to lean into the stuff that I really enjoyed, which was people development, working on systems, kind of higher level strategy of firm services and that sort of thing. I never had the inkling to go out and start my own firm because I knew that what I enjoyed most was managing the team and managing the business and below a certain size.

I didn't think that that would be quite as much fun for me, but yeah, I was, I was totally out of client facing work, more just working on the business.

[00:13:41] Meryl: Were you a hundred percent in the office or was it remote hybrid?

[00:13:45] Jason: I was a hundred percent in the office, but the accounting practice that I built was. a remote from day one.

So my accounting practice had about 10 people in it and it was all part of the firm, but it was, you know, 10 people around the world. The tax practice was all still in the office is a bunch of people who like, that was the only way they'd ever worked and they weren't particularly interested in working any other way, which got really sticky during COVID.

Um, along the way, I learned a lot about running both types of teams, like What one is suited for and the other not so much and so it was it was definitely a lot of work I learned a lot So like I wouldn't I guess in hindsight, I wouldn't do it any other way but it also in some other ways I Inherited like the worst aspects of both types of work because I was still going into an office every day and all that

[00:14:39] Meryl: And so was there a particular event that triggered you to start thinking, oh, maybe it's time for me to leave?

Can you remember first having that thought?

[00:14:48] Jason: Yeah. So it was almost three years ago now I started publishing online and there was about a year there where I published. two videos a week to YouTube, and that was while I was running the firm. And that was growing faster than I had expected. You mentioned my, I have an accountant community.

Um, so I have this paid community where, where firm owners come and, and it's really just like a peer networking community of like minded people. Uh, and that grew faster than I thought. And that's, that group is really what has financed, you know, me being able to produce videos and build a production team and all that stuff.

And man, all that just took off so much faster than I thought it would. It got to this point of inevitability where that business, you know, sponsorships and all my other content and all of that, that was growing really quickly. And it was inevitably going to surpass the money I made from the firm, but the firm was like 95% of my stressors, just like managing the team and all of that, there was still a lot we could have done to, to manage that in a better way, but ultimately where I got to is I can either sit on an office, you know, or sit on calls with staff and help them develop and help clients and all that.

And there's a lot of, That's a very rewarding thing. And you can help a lot of people and really change lives with that. But I had this like incredibly unique opportunity also where I could like publish a video and a thousand people would watch it in 24 hours. And I just had this like fundamentally higher leverage way of.

Connecting with people and teaching and like it kind of just seemed like a waste to not invest in that.

[00:16:34] Meryl: If I hear those two options to, I'd be picking the creator path too. If I had to pick between being in an office five days a week or having freedom and control and maybe higher upside as well. It would be a big decision.

There's, there's. I imagine things you had to consider but it seems like one has a lot more upside than the other. Did you need to get your wife on board with that? I know you've got some young kids and a family. How did you approach that?

[00:16:59] Jason: So we got a two, a four and a six year old. At the time I made this decision we had like a newborn baby.

and a two year old and a four year old and she's like, you're gonna do what now? Um, and at this point I hadn't pulled a dollar out of, out of the side hustle business ever, like reinvested all that. She's like, okay, so you're gonna, you're gonna somehow replace what we make running a 40 person firm with this other thing.

And it seemed like a pipe dream. And yeah, for us, like in our marriage too, this was the first time, you know, I was working for myself. I was self employed owning a firm, but like buying in the day I bought into that firm, I still had a place to be like, I still had to go into the office. People expected me to show up and do all of these things.

Like it wasn't. It wasn't the way I'd always imagined being self employed where, you know, you roll out of bed, put some sweatpants on and you're like, am I going to go to work today or not? It was like, no, you had a building full of people who needed you to come there because I mean, we had a physical building.

So every single day I, you know, a gutter had falled off, fallen off or something like that, that you didn't want to have to deal with. Uh, yeah, that like coming into this year was really the first time where it's like, you don't have a whole ton of people you're responsible to. And ultimately like, that was why I was turning up for work every day before was all of the staff and all that, that I was responsible to.

Um, and so like charting what this life looks like. Where my biggest anti goal coming into the year was I'm not going to build a big old team because that as much as I love that I became a big stressor and you end up being tied down in the business, the more of the team you build, I think, obviously a ton of asterisks on that.

But yeah, like what that looks like for the family, like kid access, working from home when you got little tiny babies running around that don't understand boundaries. Yeah, it's been a whole, it's been a whole thing. I want to come back to that.

[00:19:01] [AD]

I'm interested in the, in how this story progressed. So you must have got your wife on board. And then how did you bring it up with your business partner? What was that initial conversation like?

[00:20:31] Jason: So I've been super, my business partner and I had a, had a very good relationship. And we still do. Um, and I was very transparent about the things that I was doing, like always.

Because all the stuff I do is very visible. And so we were always talking about it. And all of that, um, and it eventually, and it was maybe a year before, you know, I left the firm, it got to a point where I was, you know, I just had to be really realistic with him about here's where it's at, and here's where it seems it's going, like, and I know this is really hard for a hundred reasons, but like, what do you want me to do?

Like, it was kind of this situation where You know, really early on, we tried to, you know, we started talking about it and having a plan for it and, and, um, you know, a firm like that where we didn't have a ton of managers in the middle and it was really led by just a couple people. You take one of those people out and that's a really big, really big change.

I mean, there were people there who were there for my vision, my vision for running an accounting firm. There were people there who I had hired off of Twitter. Like there's letting a lot of people down and turning a lot of things on their head when you leave like that, but it's one of those things where, um, I just, I just published a video about this on Sunday, but kind of what it boiled down to for me was I didn't want to be the guy that would put his cape on every day when he went to work and be the hero for his clients and his colleagues and all that stuff, but ultimately be a crappy dad and husband and like your family, be the one to pay the price for it.

So. There's probably a path where I could have done all the things, um, but ultimately, like, I had to not be so afraid to disappoint my clients and colleagues that I would then disappoint my family instead, right? And that's, like, the really hard, like, You know, selfish kind of making those hard decisions for yourself part of it.

[00:22:36] Meryl: I love the way that you frame that because it would have been any option there is hard if you're going to disappoint somebody. But what's really important and I think for all of us or most of us, it comes back to family first and things find a way of keeping on going and so it's hard to disappoint people.

But it makes sense to me that with the freedom of not having a big team and being able to work. from wherever that you can be there. You've got a lot more flexibility. Yeah, it makes sense. But, but I think it can be hard to do that. And I hear comments for not just in the accounting industry, but people say, Oh, I work an 80 hour week for my kids.

And I think, really, do you really, or is that more about your own ego and which is fine too, but wanting to progress in your career. So I think it's, it's easy to cover up the, the, why we're doing things and. And it's hard sometimes to get to what's really important. So you had started to have some conversations with your business partner and would have been aware, okay, we need to put in place a plan, Jason's going to go down this other path.

But I imagine at some point you also would have had to have a conversation about your your equity in the business and do you still own part of that business or as part of you leaving did you sell your stake in the business?

[00:23:56] Jason: I sold the whole stake back to my partner so I'm, I'm out, out.

[00:24:01] Meryl: And is that something you'd had addressed in an initial partnership agreement and it was pretty clear or did you have to navigate that as part of these conversations?

[00:24:10] Jason: No, it was broken in a number of ways. Like there wasn't a great way, the way the, the agreement was written, there wasn't a great way to navigate it. Ultimately, one of the things that was appealing to me about buying in in the first place was had a really good relationship with really the one like managing partner I was working with.

And we kind, we just kind of had a enough trust there to have a mutual understanding that, you know, at the end of the day we are mainly accountable to each other. And, you know, he had gone through some life transition things, too. And the main thing, we were both in agreement that it's like, you know, at the end of the day, we'll find something that ensures we're gonna, you know, take care of each other, not leave the staff hanging.

And... So, ultimately, that was why we just had to have those really frank conversations. Um, and for me, you know, it wasn't what I've probably heard the most since I've shared that, is like, oh, congratulations, you sold your firm. Which, I think, honestly, completely misses the point. I have so much gratitude for the ridiculous things that I do now.

If you told me three years ago, I'd be publishing YouTube videos, like I wasn't a, I wasn't like a movie nerd guy, like the theater guy, like that was not me. And now I publish videos and have somehow been able to make a business around that, which I never could have imagined. So like, I have so much gratitude.

Transitioning out of the firm, the main thing that I want to be mindful of is that that firm without me is very, very different. A different size probably makes sense. There's a lot of clients who are there that probably don't make sense anymore. And staff who honestly are probably gonna go find somewhere else to work.

Um, and so the most important thing to me was that I left the firm in a place where it could rebuild around my partner and like make the best version of that firm. for him. So I, as much as I think all of this can be glorified and like selling your firm is like the ultimate outcome. It was really the opposite for me when I'm moving on to something else.

Like I'm optimizing life for like, what is that next thing going to be? And like, what am I, who am I going to be as a person on the other side of that? Um, I was at a, you know, fortunate place where I had that, like, side hustle and that next thing was making money already, so I wasn't super dependent on this buyout.

But for me, and because I was in that fortunate position, that was kind of a secondary thing. Uh, like when you marry that with the guilt with going to like the fact that like you're leaving some people in a pinch and no, it's, I didn't like, I didn't like drive off, drive away from the firm that day and like go buy the Lambo or anything.

[00:26:58] Meryl: I like how you frame that. Are there any lessons in that process you think for other accountants? I think it's not uncommon for one partner to want to leave, um, whatever the reason is. Would you have any tips? for another accountant who's a partner in a firm that's trying to exit in a way that you described that can keep that keeps a good relationship with the other partner or partners that enables the firm to continue running.

Is there anything that you recommend they think about or anything you learned from that process?

[00:27:29] Jason: Uh, yeah. Having partners sucks. Um, the more partners you have, like it's just so much bloody work because you have to maintain those relationships. Like they are like Marriages that you just have to invest in, and you have to make the time for, um, the more partners you have, the more inelastic that agreement's gonna be.

For me... Man, like I'm such a millennial, like I just with the attention span issues and like the notion the when I first came to the practice, and this is a very traditional practice, it was written into the partnership agreement that if you left before you were 65, you literally would just give away, you just hand over your shares.

Imagine me, a 34-year old or anybody, I don't know, under a certain age, imagine doing the same thing until you're 65 years old. I'm just not wired that way. And I don't think most people are. Anyways, all that is to say, the more people you're going into business with, like the less of that inherent flexibility there's going to be because you just, you have to account for a lot of people and their opinions and like, what's a fair way to do that.

Whereas for me, just having a single partner that I knew I had a great relationship with, like we were kind of going through all of this together. His goals were retirement at a certain age. My goal was to have flexibility and be able to do this other stuff that I enjoyed and watch my kids. I had a kid smack in the middle of tax season.

So like knowing that about each other, like we kind of just tried to optimize for the stage of life that we were each in. And that worked for us because we had that trust, but it's hard. Like if you're going in with a bunch of other partners, like that is a very.

[00:29:11] Meryl: So with your new projects, do you work on those with partners or, cause it looks like you have operators or people that, that do a lot of the running of the, some of these things, are they partners or are they people that you hire?

[00:29:23] Jason: No, that was an anti goal too, is one spouse is enough, bless her heart for now. I've got, to be totally honest right now, literally all I have right now is a, as a contractor that is like a junior video editor. And like that's it across all of my stuff that is the only person that I have that helps with anything It's gonna take some time to come back coming back around to like running a team and having partners and building something big and ambitious and I know I know myself well enough to know that, like, I'm sure I'll circle back to that soon.

I'm just like coming off, you know, just the burnout of having done that for a while and need to kind of recharge my batteries.

[00:30:03] Meryl: Interesting. For some reason, I thought you had multiple people helping. So in Realize with the mastermind matching, is that you that doing that?

[00:30:10] Jason: Yeah. No, that's me. That's yeah. Yep.

[00:30:18] Meryl Outro: I'm really enjoying recording season two of this podcast. And hearing all of the unique partnership stories out there. I think Jason's story is unique in that he bought into an established firm, whereas most of the other guests I've been interviewing for this season established new firms of their own.

And then hearing about his transition to pursue life as a content creator was also interesting. There is one key takeaway that stands out for me above all else in this episode, and that is about getting clear on what is important in life. Lots of people want things from you, whether it's family members, clients, team members, and sometimes to look after the people you care about most, you have to disappoint other people.