Building a Business in an Unpredictable Landscape

Today, our guest is Justin Elanjian. Justin is a partner at Aprio, a top 50 accounting firm, which from everything I hear is going to be moving up this year, probably top 40. They’ve been on quite a growth spurt. And I think a lot of it, or part of it at least has to do with what Justin has been doing lately. Justin is in charge of the PPP and ERC, the Employee Retention Credit Services at Aprio. I’m guessing that probably includes some additional service as well. Today, we’re going to talk about how he went from zero to building this practice that didn’t exist 16 months ago in basically no time at all. So Justin, welcome to the show. 

Thanks, Randy. Happy to be here. 

It’s great to have you here. You and I have both been dealing with the ERC, at least you guys at Aprio and us at our firm. And so you and I talk quite a bit. And I appreciate all the insights you give me. But what I really want to get into today is not necessarily the mechanics of the programs themselves, which we can. But I’m just really impressed with what you guys have done and what you personally have done over the last 16 months. As I mentioned in the intro, you are now head of a segment of Aprio’s business that didn’t exist 16 months ago and head of a business that’s, I think, probably bringing in some significant business as well. So you actually, and this is, I find very unique—sticking with the unique CPA theme—you became partner in January of 2020. So you became partner right before everything hit the fan with what we’ve been going through for the last, I guess it’s what, 15 plus months now. You became partner, January 2020. All of a sudden, the world turned upside down March 2022, two and a half months later. And because of the pandemic, all this new legislation started coming out immediately. And  the legislation was out there to help individuals, to help businesses, to help navigate, to help survive and thrive, if possible—to help survive what was going on with all the closures and everything. And the biggest thing at that time, which first started was the whole PPP program. Everybody wanted to know, what was the PPP? How do we take advantage of it? How do we get this money? How do we help us get through this? So all of a sudden, new partner saw this opportunity. I just want to go through that whole process of how you saw—how you figured out, or how you determined and how you went through the process of building this business that, again, didn’t exist two and a half months earlier when you became partner?

Sure. So it really started with a very fundamental aspect of not just myself, but our firm—our slogan, and Aprio is passionate about what’s next. And really, that’s what led to this opportunity to begin with. As many other advisors and CPA firms were doing, not just audits and taxes and other compliance work—I mean, think back to March of 2020. We’re thinking about, what is this pandemic going to mean for us, for our clients? And as being the trusted advisor, how are we going to help them get through this? And that’s really where this all began, was looking for opportunities, knowing that our clients were going to be facing some challenging times. And depending on the industry, the size of the business, what those challenges were may look very different, and what the opportunities were to make their way through a pandemic and navigate that was going to look a little bit different from one business to the next. 

And so it took a moment to pause and step back and look through the various COVID relief programs that were becoming available through the Cares Act and some just prior to, as we look at the Economic Injury Disaster loan and the FFCRA credit. So we’re slightly before the Cares Act came out and just figuring out, we need a game plan. And really one thing just led to the next as to what that may entail, what those opportunities would be. As you noted, the Paycheck Protection Program was the one that really took storm, as we look at, you know, that last week of March, and certainly as it worked its way through April. And at the time, there wasn’t a plan, there was no service line. This was about educating our clients and not even just educating our clients, educating anybody who would listen in our network, because we’ve never faced something like this before. And we knew we all needed to get through this together. 

And so it really just began with a series of educational pieces of content, whether that was a blog post or or an article and then it was a webinar. And then it seemed to be that every time the guidance in the Paycheck Protection Program changed, there was something new to put out. Which foreseen or unforeseen, seemed like it was every 24 or 48 hours. So there was a lot of information being spread. And one thing kind of led to another that’s obviously continued to evolve over the course of the last 15 months. But that’s how this began, was just thinking about our clients—first, how can we help them? The how has certainly changed over time, but the constant of what we’re doing and why has been the same.

[bctt tweet=”It seemed to be that every time the guidance in the Paycheck Protection Program changed, there was something new to put out. Which foreseen or unforeseen, seemed like it was every 24 or 48 hours.” username=”TriMerit”]

So I love that passion about what’s next. That obviously fits perfectly into—this was obviously next. And, you know, just as important as anything you guys probably have been working on. In fact, I think I stole this from someone else. But I’ve said often this year that the CPAs have probably done some of their most important work they’ve done in their careers in the last 15 months, because, you know, helping navigate through this pandemic has been a challenge. It’s been amazing—CPAs and IRS as well—because everything has been running through both of those. So what I want to talk about is the whole, you know, pitch about what’s next. That’s great. You guys are a large firm. How were you able to be so nimble and just jump into this? I mean, just this stunt where you start with a one-man operation, and I think now—I’ll probably steal some thunder—I think now you’re a group of 50 plus that are working on this program. So how, as a big firm, were you able to be so nimble, and I’m guessing that’s just the culture of the firm, but so nimble to be able to start this program, out of nothing?

It really comes down to leadership. And that’s a huge component of what’s enabled us to do this. There’s a lot of opportunities, situations, perhaps, where it says, oh, there’s no such thing as a bad idea, share all the ideas, but sometimes that doesn’t happen even when that’s spoken within an organization. But this is an example of, we hold true to that concept. This is about bringing an idea that we had no idea where it was gonna go, and determining whether or not we’re just gonna pursue it and how. And fortunately with the support of our managing partner, our board, and undoubtedly, what we call our growth team, our marketing team, because they put in quite a bit of time and effort as well to help us put out content, awareness, and things of that nature. There are certainly some things that we had to evaluate, as we go through the process, to make sure that we’re making sound financial decisions too, because by no means were CPA firms exempt from being impacted by that pandemic. And so we did certainly have to give some consideration to what that looks like as you think about some unknown market for some unknown service for some unknown price. But yet, we’re asking for resources. So how do you work through that, and that was a big component of what we addressed in the beginning and why we started our team, which we continue to add to. It was primarily, if not exclusively, based off of existing employees. That allowed us to pursue an opportunity, but mitigate our risk, because we weren’t taking on new costs as we went through that effort. And that’s really where that started. That’s a big selling point, too, as you’re looking for support in tackling an unknown.

Yep, for sure. Although this was middle of tax season, that we know, at this point, got extended as well. So I’m guessing there weren’t a ton of available resources, but at least you had them. And how many employees does Aprio have? I know it’s a significant number. 

At this time now, we’re a little over 700. 

Yeah. And so at least there’s a bigger pool to choose from. That had to be quite a selling feature to say, hey, in the middle of tax season here, I need to borrow or steal these individuals. So we can help build this program where we have no idea what the revenue is going to generate for the firm. But apparently that’s the buy-in from leadership that you mentioned. 

There certainly is, you know, there’s a couple of things to keep in mind. Part of that from a cultural perspective—one of our fundamentals here at Aprio is, we call One Aprio. There’s no “my client” or “my service.” We look at that collectively as a firm. That really shone through, and this effort is also a little bit different. You know, it’s interesting to have this conversation. Here we are, late June of 2021. Because when we had this idea in the beginning, it was about building a team to get through an eight week covered period. And clearly, it’s gone well beyond that. So certainly circumstances and decision making has changed from where we once were. But that’s also been part of the continued ability for us to be flexible and pivot as things continue to evolve.

So let’s talk about the whole—you being the guy leading this, being two and a half months into your partnership appointment. Are you the one that brought this to the firm? Was it your idea? How did you become the guy to run with this?

So as much as I’d love to take credit, I owe credit where credit is due. So one of my partners that leads our retail franchise and hospitality practice was actually the inception of the concept, made a ton of sense, knowing that restaurants and hospitality were the first ones to take the biggest hit, perhaps, maybe the one that has the longest period of time where they’ve been impacted by the pandemic. And so that’s actually where it started. And I still distinctly remember the Cares Act was signed into law. It was March 27th — I’m 99.9% sure that was a Friday. And I think by that Sunday evening, there was an internal webinar we hosted with some counsel we were using to kind of understand the program. And it was at seven or eight o’clock on the Sunday evening, and attend if you can, and I tuned in, because I could have nothing better to do on a Sunday evening. It was tax season, we’re used to working during that period of time. 

And it caught my interest, and I started kind of getting involved in that just from a different market, because my primary industry focus is other than retail, franchise or hospitality. And through just curiosity, and I’m looking for opportunities, we’re kind of running dual course for a period of time. And then we all came together in an effort, actually, in supporting a large national bank, through their PPP efforts and supporting them in their customer communications and education. That’s actually what really brought this team together and really formalized this process. Because what we were embarking on was new territory, different market base, different visibility, as we think about what that looks like to not only our network, but now educating significant networks of other institutions.

Alright, so you became addicted. To see in that webinar, as I can understand, the same thing has happened to me with all these incentives out there, it’s just been an amazing opportunity to help businesses. So PPP was the big thing that started—I mean, there was the FFCRA and the FMLA. And there was other incentives out there, one of them, which was the Employee Retention Credit, but most of us didn’t pay a lot of attention. Because when that was first defined, it was as an either-or: we take a PPP or we take an ERC, and not either. But then come December 27th of 2020, that all turned on its head. So we had another scenario where we, you know, kind of like when PPP came out, all of a sudden, we had to adapt, and we had to run with it. And now at the end of December of last year, all of a sudden, ERC was now available to clients, going back to March 13th of 2020, when we thought that they were not eligible. So now you have to go through this whole process again, now all of a sudden, I’m sure, you were looking at it already, but now you had to be nimble again, and now we’ve got another new program—it still existed, but new to most of our clients that it’s available. And so the same process you went through, it’s just like, you know, we’re prepared a little bit already. But now let’s get ramped up for ERC as well.

I’d love to say yes. But unfortunately, that was not the case. You know, we did have awareness, we had a team. And we had supported some clients through the Employee Retention Credit, those that for one reason or another, weren’t eligible for PPP. But as you know, it took a whole new life on December 27th, increasing value of opening up to PPP, extending to 2021, the list really goes on. But this time, as we looked at this, and we were kind of already making this transition, but as we looked at this, this was now going right back to the beginning of yet another busy season. And unbelievably and much kudos to the entire team that went for eight months strong of managing their existing workload plus PPP. We knew we weren’t in a position to make that ask again and to go through that a second time as we returned to the beginning of a calendar year. So as this hit, we were in the process of reevaluating what we were going to do with our PPP team. And now, this Employee Retention Credit, we knew we had to bring them together. So that that was a given. It’s very hard to make the appropriate decision in a vacuum. In this case, knowing one side without understanding the other. And so that’s how we brought PPP in ERC team. We actually call it our perk team here at Aprio because they are just so intertwined. That’s when things really took a very different direction. And we actually started hiring significant numbers of employees solely dedicated to this team. This is all that they do day in and day out. Fortunately, we’re still able to keep some of our recurring team members that were part of PPP but a lot of them did have to return back to the services that they were customary to providing. That’s where we really went all in. And we became more formalized in our process. And we’re really set up to take this to a much greater scale in 2021.

Yep. And then we’ll talk about that in a second. But then there’s been some other programs, did you get involved in the Restaurant Revitalization Grant as well and anything else that’s been added to your docket of services?

[bctt tweet=”We started the ERC program with an internal team. And then it really has exploded, the opportunities to help clients.” username=”TriMerit”]

I just got off the phone, as we’re planning on the approach for Provider Relief Funds. It’s another one of those programs coming out of the Cares Act. But now with the reporting requirements, you know, it really turned into COVID relief. I would say a three letter acronym, but then you get shuttered venues in there as well. So it really became anything COVID relief, kind of came back to the same group. That’s where we spent our time that allowed us to really dive in and focus. As we’ve certainly learned throughout this process—and some programs more so than others—you can’t dabble and give the right guidance and advice. It changes too frequently. It gets too granular, you’ve got to make sure that whether you build an entire team, or dedicated individual, obviously depends on the size of the business and the opportunities to make it make sense. But you’ve got to really understand what you’re doing. Because there are certainly risks associated with all of these that we have to be mindful of, in addition to bringing the monetary value to our clients.

Yeah, I agree completely with that. We’ve kind of taken the same path as you, you know, we started the ERC program with an internal team. And then as it really has exploded, the opportunities to help clients, it’s been external hires now as well. So same process. And it’s been fun. I mean, it’s rewarding to me. My next question is, then, this is a finite program. This is not—in five years, you’re not going to be partner in charge of PPP and ERC, because it’s not going to exist. Hopefully, we’re not going to exist. So what’s the transition then? First, how long do you think this run’s going to go with these services? Obviously, ERC we can amend returns for three years and PPP is wrapping up, second round of it now. So what do you see as the lifespan of this group that you put together?

I imagine that we will still see continued workflow through at least this time, probably next year. I think as we look at, you know, we’re still having businesses that will become eligible for the first time in Q3 and Q4 of 2021. And by that I’m thinking about those recovery startup businesses. That’ll be the first opportunity. But in addition, you’re still going to have some of these other businesses, maybe not so much on suspension criteria. I certainly hope not. Hopefully these government regulations will have eased up. But I think we’ll certainly be seeing businesses with a 20% decline in gross receipts in Q3 and Q4, as unfortunate as that may be. And therefore, I think we’ll see continued opportunities through at least this time next year. It won’t surprise me if we still see some businesses coming forward in a year or more than a year from now and saying, alright, let’s go back to 2020 and see what’s happening and pick up kind of the scraps or what’s there and monetize those opportunities. I just don’t know that we’ll see it in the same scale, more than 12 months out from where we are today. But I tell you with PPP, if that’s the use case, I’ve been wrong before. 

I understand, and I agree completely. I think, you know, as we get potentially more guidance, or we just become more informed ourselves, there’s still some question marks out there that we all interpret away, and we base it on tax code and legislation. And there could be different guidance that comes out that is gonna say, Okay, now we got this other group we can go look at. So I can see that keep going.

The question will also come into play is, how soon will the IRS start auditing? Employee Retention Credit claims—you know, if you have that start coming up, and depending on when that takes place, and my understanding is, we’re starting to already see some of those taking place now.

Really, I haven’t heard that yet. Oh wow.

So in the event that those come sooner than later, despite the fact that that statute of limitations was extended thinking that we won’t see any audits for two or three years, because they added two years on the back end. If those start coming sooner, then the team may very well extend, as who better to support a business in going through the audit than the team that helped document the eligibility, perform the calculations and go through that process on the front end. So I think that’s probably a really big variable. That’s an unknown as to what that looks like. That would completely change or could completely change the timeframe in which this is still operating at full steam.

Yeah, I think we’ve learned over the last 16 months or 15 months now not to plan too far ahead, because we don’t know what’s going to happen next. But that being said, what are you planning? I mean, this is going to wind down. Have you put something in place that, you know, obviously, maybe you’re the team that is, on a flip of a switch, you can jump in and do the next thing. We’re gonna have new legislation this year, maybe, you know, we expect new legislation. Maybe it’s something around that. Do you have a plan moving forward?

There are lots of plans ready, I just don’t know which is the right one. But as we look at this, and one of the things that we’ve certainly learned as a business, as we certainly learned about our networking, just really is a change, not only here in America, but we’re going to see this all over, is access to information. We’ve seen this trend coming, going to the internet for data. But that’s been very different as to how people have digested information when they wait with COVID, when they were forced to access things remotely, there wasn’t, you know, for at least a period of time, sitting down face to face at a table and walking through something. Everybody did that a little bit differently. But the ability to access necessary information on demand became significantly important. And that’s not likely a trend that’s going anywhere anytime soon. So as we think about this, and you think about some of these trends in the marketplace, for the profession, and getting away from things like the billable hour, and looking at value pricing, and particularly subscription models.

Subscription, three tier, all that. Yep. 

What options then become available as you think about one of the things that we did for PPP and for ERC and with some financial institutions is building a resource center. And is there an opportunity for a kind of a pay to access particular information? Now, whether that’s technical about a program, whether that’s advisory, what have you, there’s a lot of information that’s out there, there’s a lot of information that advisors have certainly accumulated over time that needs to be captured and can be delivered. Now, in scale, it doesn’t require a phone call, it doesn’t require a meeting anymore. This can be delivered in bulk, and people are receiving it that way. They want it that way. I think there’s certainly an opportunity that’s worth exploring there to see where that goes and what exists. It’s worked extremely well for us with PPP and ERC, I think from just our network, as we look at that, from the beginning of COVID, I think when we had our followings and such from newsletters and distributions, you know, that was, I think, 40 to 50,000 unique individuals, that’s more than doubled over the last year. So there’s certainly opportunity that’s out there, and a really great way to be able to kind of break down some of the geographical barriers—whether they truly existed or were perceived to exist—this now provides opportunity to reach markets, anywhere, whatever that market may be for a business may be different. But all of them should be on the table at this point.

Yep. And that whole, you know, access to information—you and I probably, at least in my mind, have probably educated more people on ERC than anybody else in the country, I’m guessing. I know you’ve done quite a bit of webinars and writing and blogs and all that. And so have I and it’s been fun just to know that you’re affecting other people’s opportunities to gain these incentives. So with that being said, I think it’s probably time to wrap up. But this has been an extremely interesting story for me to hear. And you and I have talked about this before. And that’s why I thought it’d be a great podcast. I’m going to summarize just that whole ability that you guys have shown to go from zero to 100 miles an hour in the flip of a switch. And then I’m sure it probably felt like a flip of the switch. But it’s been evolving there the entire time, and be able to bring this opportunity. So I’ve just been extremely impressed with it. Some closing thoughts on your end?

My closing thoughts, and not to sound cliche, by any means. But I think what we’ve learned with all of this, if there is something that you have an idea, and you’re not sure of whether or not to pursue it, this was for sure the use case that said yes, that you need to look and move forward. If you’re passionate about something, continue to explore. This has been, as you noted, one of the most rewarding things you can have done and been involved with, certainly, from my perspective, been much more rewarding than issuing a financial statement. Having opportunities to impact decision making of businesses and really at the end of the day, employees of those businesses and families of those employees. Pursue a passion full force, and find the right people to support you in doing such. That has certainly been the lesson learned and that is my words of wisdom here for anyone that chooses to listen to such.

And I think that’s great. If anybody does want to get ahold of you, where can they find out more about Justin?

LinkedIn is a great place. Certainly that’s where we also post a lot of our information and our content. So if you visit LinkedIn, just as a last name, Elijan is e-l-a-n-j-i-a-n. And then also take a look at our blog. That’s where we post all of our information. We do house kind of mini resource centers to what I just described for both PPP and ERC if you take a look at our service pages. So if you visit aprio.com. And in fact, if you go straight to our blog, and go aprio.com/whatsnext. You’ll see all of our content and it’ll allow you to find different pieces of information, whether or not you determine to sign up, but you can certainly find how to reach myself or my team and other information we’ve put out as you navigate your respective client relationships, or business decisions, depending on what seat you sit in.

All right. Well, I really appreciate you being on today. I had a great time and it’s always awesome talking to you. So once again, thanks for being here.