Solo Operator Blues: Adding Advisory Services is a Good Idea … But Hard to Actually Do

I write often on this blog about the struggles of being a solo operator. I do this, even though sometimes I say too much on a blog my clients read, because I think it’s important for people to know what life is like for us solo operators. It ain’t easy. And it’s getting harder and harder to stay in business.

(Also, anymore I use my blog as a “dear diary,” so these posts are also a form of catharsis for me.)

Whenever I write about the struggles of solo operators, I like to bring up my post back in April called “The Tax Field is Broken.” If you haven’t read it already, read it now.

Advisory Services

The struggle in this field is, most of us (especially the smaller operators) are built on volume. We need to do a lot of returns in order to survive. Because taxes have gotten so hard, it’s hard to get ’em done. This in turn feeds frustration and burnout. Everything. Is. So. Hard.

To help solve this problem, the experts say we should add advisory services, where we take time with each client for planning. This eases the burden of compliance work; you can work with fewer clients, with deeper relationships, where things are actually properly planned, instead of the rolling trash heap that comes with so much of the compliance/volume work. You’re still doing the compliance work, but it’s part of an overall system of planning and staying on top of things.

While I often use this blog to rail against “experts,” I want to say this in bold: I agree with the experts on this. Us tax pros SHOULD get into advisory services.

In fact, for the last year, I have been a member of a group that helps accountants switch to offering advisory services. I’ve spent a lot of money on this program, and while it’s been mostly a good experience, the fact is the tax field is still broken for us solo operators, even if we implement advisory services.

Here’s why.

I Can’t Conjure Staff Out of the Air

In “The Tax Field is Broken,” I wrote about how what I really need on my staff is another brain. Taxes are so hard these days, and having another brain to help me examine all angles is something I desperately need. This is far more pressing to me than administrative help.

Yes, dear client, the fact that your emails and phone calls go unreturned really isn’t a priority for me. (There I go again saying things I shouldn’t say in a public forum that my clients read.) “Administrative help” is low on my list of priorities. Not screwing up your tax return or some other filing is what my priority is. This means I need a BRAIN (like, a licensed professional), not administrative help.

Unfortunately I can’t do what the big firms do — I can’t just say “okay, let’s hire another staff accountant.” 

This is a major problem with tax work …  and the issue is even WORSE when trying to add advisory services!

Advisory Services and Staff

There’s no doubt that advisory services can increase the amount of money coming in. I’ve gotten a few clients signed up on the advisory track over the last few months, and each is paying anywhere from two-times to five-times what they’d pay just for tax preparation.

So far so good, right? Yes, but….

The need for a brain on staff is EVEN GREATER when trying to deliver advisory services.

The whole point of advisory is to move away from “just” preparing the tax return. This means planning and more planning. This means the complexities of taxes are even GREATER when someone signs up for advisoryThis means the lack of another licensed pro (or two or three) on staff is a big problem.

And here’s where the “broken” part is: I can’t just go out and hire staff today to solve this problem. To use business lingo, I can’t just “scale up” like a bigger business could.

If a bigger firm needs another staff accountant, they just hire someone, or more likely they take an existing staff person and switch their roles. I can’t do that. 

Theoretically the additional billings from advisory might be able to help me afford to pay another licensed pro; get them in, get them up to speed, and make even more money. Theoretically.

The problem is, as I have drawn it up (and I have put a LOT of thought into it over the last few months), I need 2 CPAs or enrolled agents (and really 3 would be optimal) plus another pro in an intermediary sort of position, plus a bookkeeper who could double as an admin person. I have an entire organizational chart drawn up.

This is what I know I need in order to really make things work. Now put yourself in my shoes: this is at least 4 positions (5 would be optimal). I am a solo operator who has always “just” prepared tax returns. How on earth am I going to afford to do this?

The bigger firm has two advantages over me: 1) if they want to offer advisory services, they already have EXISTING STAFF, and they simply switch people’s roles and alter job descriptions; and 2) if they need to hire additional staff, they just do it.


Without getting into a bunch of details about client situations on this blog, here’s one example of the struggle. A client has formed an S-corporation to serve as a management company for their existing business. There’s a retirement plan involved, and employees leased through a staffing agency. And the client bought, through the business, an old building which likely qualifies for historic preservation credits. They found a third-party administrator for the retirement plan, which takes care of the retirement and leased-employee issue. But there’s still the S-corporation itself and the historic building. With a bigger firm, the following would happen:

  • The firm would say “here’s our CPA with 30 years of experience with retirement plans.”
  • The firm would say “here’s our CPA with 20 years of experience helping professionals set up management companies.”
  • The firm would say “here’s our staff accountant who has spent 15 years dealing with all types of oddball credit claims.”
  • The firm would say “here’s our bookkeeper, who’s a Certified Quickbooks Professional, who can take care of your bookkeeping.”

This client is a perfect candidate for advisory services. And I ended up firing them, because I couldn’t adequately serve them. I’m at a competitive disadvantage compared to bigger firms. By extension, my clients are at a disadvantage too.

What to Do

In the advisory group I am in, I asked, when I signed up, if any solo operator had successfully implemented a switch from compliance work to advisory. I was told “oh yeah, it’s easier when you’re solo because you don’t need to convince partners.”

I think this answer was based on the assumption that I was the only owner but that I had staff.

A few weeks ago I finally figured out a better way to ask the question to get to the heart of my issue: how does a TRUE SOLO OPERATOR implement this? The answer was “Hmm. I think there was a gal in South Carolina who did it by hiring someone to prepare all the 200 tax returns on her list, while she switched to just handling advisory services.” But then I was also told no one has heard from that “gal” in a long time.

When I research the other group members, they all have multiple staff. Some have 15 or 20 staff members or more. Even the smaller firms have 2 or 3 partners and probably 5-10 staff.

And then there’s me.

To be clear: I could afford to hire administrative help — part-time anyway. But that’s not what I really need. I need a licensed professional, because taxes are so hard. I need help looking at all angles.

There Used to be a Place for Us

Us solo operators used to be able to thrive. Back in 2011 or 2012, I was part of a Google Hangouts group (back in the old Google Plus days). There were over a dozen of us on those video chats. We met weekly for several months. This was “mark-your-calendar” fun. I loved those meetings.

Many of us in the group were solo operators. Not 100% of us, but most of us. We all were small operators, if not true solos.

And we were happy. We laughed. Those meetings were fun. 

We talked about the struggles of the field, and griped about clients sometimes, but not a single person in that group was negative. Taxes were hard then too, but it wasn’t like it is now. Us solo operators had a place in the tax world and we all seemed to enjoy the work.

My how things have changed. The organizer of those meetings — an EA with 400 clients — walked away two years ago. He didn’t sell his practice (though he probably could have). He was so fried that he just flipped a middle finger to the field and left. He owned a building and had 2 administrative staff. He let his staff go, and sold the building.

He took a few months to figure out what he wanted to do next, and then decided to take classes to work for the railroad. He got a job as a maintenance man, where he works outside most days, making sure the trains can roll through safely on his stretch of track. This man was an EA with 25 years of experience in the tax field and he left behind a life’s worth of work because he couldn’t take it anymore.

This man is my hero.