I was recently chatting with some peers about the rapid evolution of our industry and mulling over whether we should consider changing how we educate future accountants. Inevitably, this led to discussions about the only options most accounting majors believe they have: joining big public firms or large private companies. The newer specialties, such as data analytics, technology infrastructure, etc., only seem to emphasize these choices.
But options do exist, and not just in a big firm for which continued growth is a primary objective. Small firms offer so much, from full services to very niche services.
Small firms, of course, come with their own unique set of challenges. My mom once said that “a small firm owner is chief cook and bottle washer.” Yep. It sure would be nice to have a department to handle all the issues that pop up—until that same department becomes an impediment to progress. Pros and cons exist for both small and big firms. For me personally, the freedom and nimbleness of the former outweigh the resources and inertia of the latter.
Like you, I’m sure, my inbox is chock-full of offers to help me grow, either through adding people, clients, or acquisition. If I had voicemail, no doubt I’d have offers there as well. At industry conferences, it’s much the same. Grow—like something is wrong if you don’t. Nothing is wrong.
If control, flexibility, and culture are high on your priority list, there are some advantages a small firm offers.
If you’re running a small firm, you get to decide everything from the look and content of your website to who walks in the door—or if you even have a door. Firm hours, employee schedules and duties, whether or not remote work makes sense, and so on. Policy or procedure change? Let’s take a vote. The “I” has it. The only opposition is time and resources. Pointless meetings sure to suck the life out of you because, well, it’s been a week since the last pointless meeting? No thanks. I’ll use that time on strategy or efficiency. As a small-firm owner, I’ll have challenges that someone in a big firm might not, but it’s my choice.
Some years ago, I talked with a partner of a larger firm I’d previously worked in about technology upgrades I was implementing to take advantage of paperless onboarding and cloud application processes that would allow remote work and clients. He saw the value in doing so but choked on the cost, access, and risk of such an initiative for so many in his firm; it could take years and a lot of policies and training to pull off. He said, “I just can’t do it.” I jokingly replied, “I guess I can change the direction of my little canoe faster than you can steer that big ship of yours.” It was at that moment I realized I had an advantage.
Small firms have the flexibility to change almost instantly. For example, I can learn about a new technology today, get a demo tomorrow, decide whether it’s for me by the end of the week, and, if so, write a check (ouch) and begin implementation next Tuesday. It’s way easier said than done, but with fewer employees and clients, it’s a reasonable option and one I’ve repeated many times over the years.
Flexibility goes beyond technology. Small firms can react to changing markets, culling less-profitable clients more quickly to focus on more desirable businesses, industries, or specific components of the business processes. None of this is to say that you should make quick, unthoughtful decisions. Instead, once a decision is made, a small firm can move on it.
I don’t mean nap time, bean bags, and table tennis—not that there’s anything wrong with those things. Culture is why employees stay or don’t. Do they have work-life balance? Do they know how their work impacts others and the firm? Can they measure their own performance? Are they learning and developing skills? Do they feel their manager is genuinely interested in them as a person? And as is increasingly a factor, do they feel like the firm operates in a way they feel good about? These factors are obviously important in firms of all sizes, but they’re more controllable with fewer people in the mix.
Culture is also why clients choose to stay or not. Do they feel you understand the business? Do they view you as a resource, both professionally and in the community as a fellow small-business owner? A small-firm owner can target specific organizations to support those that genuinely impact the local business community.
Do they feel a personal connection to the individuals in the firm? These factors impact client loyalty, advocacy, and whether they’re willing and even happy to pay the fees you are worth. I know it’s why I look forward to coming in each morning … or not coming in because I work from home as needed.
If you prefer clear personal and professional boundaries, you’ll have to find a middle ground. If there isn’t some reasonable blend, most employees will opt for the bigger, impersonal shop with a larger paycheck. And some clients that don’t feel a similar connection may go that route as well.
It is difficult to cover all the pros and cons of being a small firm. But for every pro, there’s a corresponding con. For every point I made, there is a valid counterpoint. And you may have different experiences and preferences that favor a big shop. It’s just that for me, control, flexibility, and culture matter too much to grow for growth’s sake—which is different than settling.
Being small is not a character flaw; it’s a choice. My choice.
This article does not necessarily reflect the opinion of The Bureau of National Affairs, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Shayna Chapman is the owner of Shaynaco LLC, where she focuses on tax and accounting for small businesses and their owners.
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