- Economics of public accounting firms
- Inbound sales
- Managing others
- Building a team
Blake Goodman left Deloitte as a manager to join one of Kansas City’s fastest-growing companies. Enjoy the read!
Thank you for having me! I grew up in Kansas City and attended the University of Kansas for both my undergraduate and master’s degrees. I’ve always been interested in starting a business or becoming a CFO or CEO and accounting provides such a great base that opens many doors, including paths to the roles I just mentioned.
Yes. I was an account manager for a family company by the name of Pareto Marketing, named after the Pareto principle or the “80/20 rule”. It’s a consultative business that helps small to mid-sized retail businesses identify who is (and who is not) the customer group that drives sales. Their clients either have a good product or good sales model but are using a blanket marketing method, a sort of ‘throwing stuff on the wall and seeing what sticks.’
Pareto will typically partner with these businesses on a two to three-year arrangement. The firm will help the client build a customer base and teach them how to use it. As the name suggests, the general idea is that sales may come from a hundred customers, but 20 of those are driving 80% of the overall business.
Pareto helps build the process and educate the business owners. It’s a great value proposition because business owners aren’t stuck to an evergreen subscription contract. The ultimate goal is to give them the tools to perform on their own.
I participated in the traditional public accounting recruiting process. I interned with Deloitte and then signed on for full time during my MAcc year. I did the accelerated CPA training with Becker and sat for the exam before starting full time in 2010.
I was with Deloitte for just under seven years and split time between Kansas City and Chicago. My move back to Kansas City was triggered by Sprint’s ownership change with SoftBank. Deloitte inherited that business from KPMG and had a need to bring in experienced managers. I got a call from one of the partners in Kansas City and ultimately decided Sprint was a rare and interesting opportunity that would have been foolish to pass up. I was with the firm for another two years before ultimately jumping over to Spring Venture Group.
Overall, I had a great experience at Deloitte. With that said, I never had much interest in the partner track. I liked many things that came with public accounting, but particularly enjoyed the business exposure, meeting with executive leaders and getting an unfiltered look at the logic behind business decisions. As a young professional trying to soak up as much as possible, it was perfect.
The first two years can be described as sink or swim; you get a lot of things thrown at you and it takes just about a year to get your head above the water and catch up to the learning experience.
Senior is a really fun role. You officially start supervising a team. Some people tend to be re-energized or re-engaged at that point because they enjoy that side of the job, myself included.
The jump to manager is the most drastic change and one I enjoyed the most. The role gives you a different appreciation for how the firms operate. At the end of the day, it’s a business and the firms are built to make money. I don’t say that as a bad thing, but you have a better understanding and deeper involvement in the overall model. This includes hiring, merit, promotions, business development, intersect of the different functions (audit, tax, consulting), and profitability of engagements, the office and the firm as a whole.
The level of ownership and autonomy increases substantially when you have that manager title in front of your name. Right or wrong, I think that's probably the biggest overnight shift, as people just view that role as a little bit different from everything up until that point.
A firm like Deloitte is massive…300,000+ employees with revenue of $45 billion+. The different functions (audit, tax, consulting) are technically siloed, but how they complement each other is integral to overall profitability. Speaking specifically to the audit function, the simple analysis is budgeted hours versus actual hours with a detailed split by level (and billing rate). If an audit takes more hours because of poor planning, underperforming team members, inefficient procedures, etc., that hurts the profitability of that specific job.
There are also jobs that are prospect engagements where you go into it knowing the firm will initially lose money. These are typically small, high growth companies that won’t pay a high fee but have strong long-term potential. If they end up being bought in 3 years, pursue an IPO, etc., the fees from those services will significantly outweigh the early losses.
As a manager you’re heavily involved in budgeting each of your clients. If you blow the budget by 20%, you're going to have some conversations with folks at the top to explain why. If the miss is because of a change at the business, then you make that argument with the client Controller or CFO and push for incremental billings to cover the extra hours incurred. Neither of those are particularly fun conversations.
Like I mentioned earlier, I knew early on I didn’t want to pursue the partner track. When I started feeling ready to move on, I targeted relatively smaller clients that were privately-held. My hope was that working for a smaller group would force exposure to areas that I needed to develop, e.g., financial modeling, treasury, equity and debt transactions, etc. Spring Venture Group (SVG) met that profile perfectly and I had already developed a personal and professional relationship with the finance leader at SVG. I also really liked the business model and had heard good things about the people.
When I officially received the offer to be Controller, I called a few Deloitte partners to get feedback and advice. That’s something that I was nervous about at the time but am glad I did it and would recommend the same approach for anyone that is considering leaving. It’s not a secret that most people leave those firms and the partners understand that more than anyone. My conservations were beyond helpful and I appreciated the transparency and support I received. Had I decided not to take the SVG offer, I really don’t think those conversations would have had any negative impact on my trajectory within the firm. To me, that speaks a lot about the people and reputation of Deloitte and other public accounting firms.
I am the Controller at SVG. I joined in 2016 when the entire finance and accounting department was about five people. Now we're around 25 and I manage about 10 of those folks. We’ve got a couple of managers, three to five associates, senior associates, and then I've got payroll underneath my wing as well.
At the end of the day, my role is similar to a traditional controller role. However, SVG has grown rapidly since the business was started and that has brought me an accelerated amount of exposure and involvement that I wouldn’t have received elsewhere. The experience and learning opportunity has been fast, exciting and professionally rewarding. We did a minority sale in 2018, refinanced our credit facility, implemented a new ERP, acquired commercial office space for our corporate headquarters and satellite sales offices, changed lenders and treasury groups, changed auditors, etc. That’s a lot of change in four short years and all of those experiences are incremental to building a department that can support SVG’s rapid growth curve.
When I joined there were about 200 employees and today at the end of October 2020, we've got about 1,400, so very significant growth in about 4 years.
At its core, Spring Venture Group is an insurance brokerage in the senior healthcare space. Our main product is Medicare supplement, which is, as it sounds, a supplement for Medicare. We have an over-the-phone sales model which is very different from the traditional distribution approach where agents meet with you across a coffee table and pitch products for life, home, auto and everything in between.
Our marketing is mostly internet driven. Among other avenues, we are marketing our brand online through Google, Facebook, etc., or acquiring leads through third-party relationships. The marketing produces inbound calls which are routed to our sales organization. We don’t do any cold calling. Our sales professionals work to find the best product for that customer. One differentiator of our business is that our sales professionals are carrier agnostic, meaning they are going to get compensated the same regardless of the plan or carrier that a customer chooses. The model is built on aligning the incentives of our sales professionals with the incentive of the end consumer. It creates a heightened level of trust between the sales professional and consumer which is a win for everybody.
The company will continue to grow as our runway is nowhere near ending. There are 10,000+ people aging into Medicare every day, so the volume of potential customers out there is growing rapidly. While our core space will continue to be senior healthcare, the sales and marketing engine we’ve built can eventually be applied to other products which creates long-term growth potential that I’m really excited about.
I don’t think many people really know what they want to do coming out of college. That’s why public accounting was attractive to me. It gives you a lot of experience and exposure in a very condensed period of time. I think it really accelerates the learning process and helps people figure out what they like and don’t like. For those making the change from public accounting to private business, I would use your experience to help gauge what’s appealing. Public company vs. private, industries you find interesting, global vs. domestic, etc.
After moving to work for a business, one thing that’s very different is you lose the luxury of hindsight. When you’re in audit specifically, you are typically looking at things well after they occur. In practice, these are businesses where people are making decisions based on the information available at the time. There is no crystal ball. When you move over to the private side, you build an appreciation for the decision-making process. You can’t just look at what happened seven months ago and offer critique.
My only other advice would be to not underestimate the importance of learning how to manage people. For most, managing people is something you’ll do whether you stay in public accounting or leave. For me, a big part of that development is a simple mindset shift to put the desires of others ahead of yourself. Everyone has different goals. The sooner you can learn and understand what each team member wants out of their role the more effective you can be as a manager.
I’ve been fortunate at SVG to have been given the autonomy to build my team from the ground up. More often than not, I end up hiring who I think is the best overall candidate, and that’s rarely who most closely fits the job description. Most businesses are always changing…I would much rather have someone that’s flexible and hungry to learn versus someone that can do the current role well but lacks the ability or desire to try new things.
I think that is very relevant with Kill Busy Season. Typically, recruiters like to look at talent coming out of public accounting as a square peg, and look to fit you into only senior accounting level roles. It should be more of an approach that thrives on… how do we find good talent that are smart and driven? Let’s get them in the right environment or organization, and then they can do pretty much whatever comes their way. It's not rocket science to teach somebody A, B and C as part of an accounting close. However it's pretty hard to teach work ethic and just general desire to learn and grow as a person. That's what we try to focus on, and then we'll find the right thing for you to do once you get here. I think that’s the motive behind Kill Busy Season too…allow smart, driven and hard-working professionals to find career paths that don’t have tunnel-vision.
New experiences and people. Hiring new personnel is always interesting to me. I think a lot of an applicant’s decision to take the job is driven by their trust in the hiring manager. So when somebody says to me, I accept, I want to work here — that's a big personal moment of satisfaction for me. But it also creates a great deal of responsibility for me. You have to understand that this person just made a monumental decision in their career and personal life to join me and our team. I owe it to that person to get them a good experience and offer them an opportunity to learn and grow. I owe it to them to listen to what they want and to help them progress to their next career move. That's the most important part of my job. If we have perfect financials, that too is great, but if I have a team that likes doing what they do and they feel like they're growing both personally and professionally, to me, that's more rewarding than anything that I can do from a business perspective. And if they are growing personally and professionally, it’s going to be long-term beneficial to the team and company.
I have a handful of folks. Some are internally at SVG, some are from Deloitte, some are family members.
I am very transparent with the people at SVG, which I think is a really healthy thing for people to do. That transparency allows for real relationships and produces valuable professional conversations. That applies to the people I manage as well. I will talk very openly about what my team members want to do. The worst possible case is that somebody comes to me and puts in their two weeks and they've already accepted another job without us having any conversation. That means I haven't done my job and that I haven't made it clear to them that you can always speak openly about opportunities. I always want my people to stay, but I also want what's best for them. Having somebody on your team that doesn't want to be there is bad for everyone. They need to be able to leave and go to the right thing.
Ultimately the long-term goal is to lead a business. For me, I need to really believe in the business and the people to be emotionally invested myself. If you can find a business that gets you excited and then build it with good, quality people that look forward to working together…professionally, I’m not sure what can top that.