Episode 67 of The Unique CPA is all about the subscription model and how it can be applied to public accounting. Randy talks to Ron Baker, a LinkedIn Influencer acclaimed by Accounting Today and host of The Soul of Enterprise.
Hello, and welcome to the Unique CPA. I’m your host, Randy Crabtree. The goal of our show is to keep you at the forefront of the changing face of public accounting by having conversations with fascinating leaders and bringing you their stories, insights and advice. The Unique CPA podcast is brought to you by Tri-Merit, the specialty tax professionals. Today, our guest is Ron Baker. If you are in this industry, you probably don’t need to hear an introduction of Ron. He’s well-known, but I’m going to try to do a short one. He actually ran as the host of the radio show/podcast The Soul of Enterprise. He’s a speaker, an author, and an educator. He’s been in Accounting Today‘s Top 100 Most Influential, he can correct me if I’m wrong, but I think it’s about 18 years and he’s been in the Top 10 Most Influential for about the last 10 years. He’s in the CPA practice advisor Hall of Fame. He’s a LinkedIn influencer and probably most known for his work with his firm or VeraSage, where their mission is to get rid of the hourly billing and the timesheets. So, Ron, welcome to the Unique CPA.
Thrilled to be here. Thanks for having me, Randy.
All right. Did I miss anything in my intro? I tried to keep it short.
No, no. The one that I always get questions about is “tell me about Disney University” because I usually put that as my postgraduate education, and it was some of the best education I’ve ever had.
Well, I actually did see that. I’m going to have to ask you, what is Disney University? What is that about?
Disney has, ever since Walt started Disneyland in ’55, created a Disney University, and they put all their cast members through it, as they call their team. It’s a phenomenal institution. And they opened it up sometime, I want to say in the 80s, or maybe 90s, to the public and started offering, you know, classes on their approach to quality service, their approach to human resources, employee retention, and those types of things. And I went as a journalist, I was writing a column at the time for Harcourt Brace, and they comped me to go to their Disney approach to customer service, total quality service. It was a three-and-a-half-day course. They put you up, and it’s all inclusive. There was a hotel that you stayed at right there next to the institute’s campus. It was three-and-a-half days, they took you backstage to a lot of different places that the public never gets to see. This was in Walt Disney World, underground tunnels, all that kind of stuff. It was the best education I’ve ever had.
That’s pretty cool. I didn’t know that that existed.
If people are interested, on my LinkedIn, you mentioned I’m a LinkedIn influencer, if you go to that page, I have over 100 articles. There’s a three-part series that I wrote for Hardcourt, as a result of going on called Earning My Mouse Ears.
And it’s in three parts. And you can read that, and it will give you a great overview of the course and some of the things that we got to do.
Alright, that’s awesome. All right, so let’s get into a few topics. And obviously, we have to talk pricing, because that’s probably one of your most, well it is, your most passionate topic. And how did you get on this mission of changing the pricing model within the industry?
That’s a great question. When I left the Big Eight, started my own firm, up to that time, everything I did, because I had my own accounting practice when I was in high school — that’s another long backstory. I won’t bore you with that. But I’ve been charging by the hour, I’ve been doing a timesheet. I sold time, I had my elevator pitch down. I started my own firm with another partner and realized that the billable hour was a crappy customer experience. Because I was studying outfits like Disney, like Nordstrom, like Neiman Marcus, like L.L. Bean, FedEx, these were at the time known as TQS leaders — total quality service. Today, we would say customer experience. This was the pinnacle of customer service, and I wanted to emulate them. And the pricing model didn’t work and I said “That’s it. We’re moving to fixed prices.” There’s too much uncertainty, unpredictability, too many angry customer calls coming in saying, “Why didn’t you tell me it was going to be this expensive?” And my only answer was I spent the time looking at my timesheet. They don’t care about the time.
And so we dived in headfirst, there was nobody on the circuit talking about it. There were no books, there were no consultants. This is 1989. And we did it. And we made every mistake under the sun. And we stuck with it because we thought it was the right thing to do. It was a customer service experience issue. It wasn’t all the economics that I talk about in my books later on, all the offering options, a value guarantee and all the other strategies that we put on top of that. We just did it because it was a better customer experience. And after running with it for about three or four years, we got rid of timesheets, because hey, if you’re not billing by the hour, it’s a completely superfluous data point. You don’t need it anymore because you’re pricing by the hour, you don’t need it. Our team members loved it. They didn’t have to do timesheets in six minute increments like they were prisoners.
I started teaching this to California CPA Education Foundation, the Cal Society, in 1994. And then I wrote a book in 1998, and the book ended up selling 40,000 copies, which was kind of interesting, because it was a $150 book.
Oh, wow. All right. How long did you have the firm after this then? Or did you just go into, you know, let’s consult on pricing now.
I still stuck with practicing and then started to teach and then started working on the book. Then when the book took off, I really had to make a decision. I was at the proverbial fork in the road — which path do I take? And as the Kiwi say in New Zealand, you can’t sit between two barstools, you’ve got to pick a lane. So, I sold my practice to my partner who still carries it on.
He’s still in practice and that was in 2000. I started VeraSage. And I wanted to get a group of people around me that were really smart, that were as evangelistic about this topic as I was, that would be able to go out there and teach it or live it by example. A lot of the fellows in VeraSage are practicing fellows. They have their own firms, whether they’re lawyers at agencies, or accountants, whatever, they’re practicing this every day. I can honestly say that we have moved the needle tremendously, since VeraSage was founded. And although the billable hours’ death might not be within reach, it’s definitely within sight.
Well, it’s a discussion that comes up on this podcast all the time. I am a CPA, but I hated doing those timesheets. I worked for other firms just for three years and then started my own. I never did a timesheet when I started my own back in ‘91. So, when I heard about you years ago, and what you were doing, I’m like, yeah, that makes complete sense. So, let’s talk about the progression of it then from, you know, whatever it was back then — the fixed fee pricing — to today, what we mentioned at the beginning, is the Value 2.0. pricing.
The history, if you look at our profession, the first thing you have to realize is the timesheet and the billable hour were not invented by accountants, just like we didn’t invent cost accounting. We didn’t invent the timesheet in the billable hour. The lawyers did. The first law firm to introduce both the billable hour and the timesheet simultaneously was in 1919 in a Boston, Massachusetts law firm, by the gentleman of the name of Reginald Heber Smith.
You could kind of call him the father of the timesheet. Now, where did he get the idea? Well, he was Harvard educated. He was heavily influenced by the zeitgeist of the time, which was the scientific management revolution of Frederick Winslow Taylor, you know, the time in motion guy.
He was a complete fraud, by the way. Scholars have destroyed his work. He had a 40% fudge factor builtin. None of his studies could be replicated. Complete, utter fraud.
But he had amazing influence on the culture and this Smith guy picked up on it. So, we didn’t start billing by the hour until the 60s – 70s. Basically, when the computer came around, and we figured out hey, we can just enter a timesheet into a computer and spit out a bill. Lawyers really started doing it in the ‘50s. So, they had a good 20-year jump on us. Heber Smith had a big jump on everybody. He was kind of a pioneer of his day. Billable hours, pricing the inputs — how much effort and how much time do we spend? And then we go into this hybrid thing where we get into fixed prices. And fixed prices say, okay, I’m going to do a scope of work for you. I’m going to do an audit tax return, you know, whatever. I’m going to give you a certain set of deliverables, and we’re going to put a fixed price around it. And I call it a hybrid because it’s not really value pricing, because what a lot of firms do when they fix a price is they estimate the number of hours in advance, tack on a premium or a fudge factor, and then fix it. It’s still better than hourly billing, but that’s pricing the outputs. Value pricing comes along, especially with the books and the way I taught it, and the way we teach it is you price the customer, you’re not pricing, the deliverables, the output, you’re pricing the customer, because value is subjective, and every customer has different valuation. You want to understand what the impact of your services are going to be, so you price the customer. Now the subscription economy is coming along and it’s a tsunami. I mean, all you have to do is look out the window and look at the market. The CEO and founder of Zorah, which is a subscription software platform that runs subscription businesses. He says in five years, you won’t own anything, we’ll subscribe to everything. Now, I don’t buy it.
But I will say this, in five years, we will have the option of subscribing to everything. And whether or not your firm does anything with this, it’s going to have to deal with it because the competition is and subscription is a much better customer experience. It’s frictionless. It’s got convenience built in, it’s got innovation baked into it.
It’s got an insurance component, hey, they’re going to take care of anything that goes wrong. No matter what it is, service or product. My co-host, Ed Kless, subscribes to a vacuum cleaner from Roomba. It does everything. It sends him the parts, it knows when the bag needs emptying, it knows when he’s out of bags, and sends him everything, the little brushes and all the little parts. It’s not on his radar anymore, the vacuum cleaner just cleans his house. And the value of that transaction or that monthly subscription is much greater than selling him one vacuum cleaner. So, we’re moving to a world that’s based not on transactions, it’s based on relations. And the subscription model puts the relationship at the center of the business model. It’s a completely different business model than value pricing.
So, when you were talking about that, I was thinking everything, five years, everything. So, I’m currently sitting in an AirBnB. So I started thinking okay, am I no longer going to have a house? Is Airbnb going to come out with a subscription pricing where I can just go anywhere, anytime? It’s possible I suppose. Right?
There’s an outfit out there called Rome where you can subscribe to a home in, I don’t know, 30 countries or something. And if you’re a digital nomad and you just kind of wander around, you can just keep subscribing. AirBnB has longer term plans, because they’re figuring out digital nomads just want to park like you have for a while, work remote, whatever. So, I do think we already see those options. You can subscribe to a boat today, you can subscribe to diapers, firewood, beer of the month, wine of the month, we’ve had for a long time, but you name it, I can’t keep up with everything. Today, in 12 cities, I can subscribe to Porsche. It’s called Porsche Drive. For $3,500 a month, I have access to a fleet. I think it’s either seven or nine different Porsche models, and I can change out as much as I want. I can say hey, I’ve got guests coming this weekend, I need an SUV. They want to go wine tasting. Take my convertible away and bring me an SUV. They’ll white glove out an SUV and white glove away my convertible. Everything is included, except gas and tolls, they pay for everything — insurance, registration, they handle maintenance. Everything’s white glove, everything’s concierge, we’ll come out to your home, your office, wherever you are, swap out cars as much as you want. And here’s the thing people say, well, how’s that different than buying a Porsche, or leasing a Porsche? It’s not tied to a car. You’re subscribing to Porsche. It’s a one-to-one relationship. And once you subscribe, they have all this data about you. They know where you drive, they know where you go, they know what your preferences are, they probably know what your entertainment preferences are because your kids are in the back watching DVDs or streaming. They can constantly bake in innovation. And what’s astonishing about this program, it’s been around now for two and a half years, 80% of the people that have subscribed to Porsche Drive are new to the brand. Here’s my question. What are those people going to be driving for the rest of their lives?
Yeah. All right. So then if we equate that then to public accounting, what we’re saying is, you’re gonna have to explain this to me, but it’s the relationship, it’s the value, it’s the they, it’s the you’re. You said this earlier, you’re not selling, you’re building that relationship with that specific client. So is this where we come into, I’m going to say wrong again, Valuation Pricing 2.0?
Yeah. With value pricing 1.0, we price the customer.
Value Pricing 2.0, the subscription. Now I’m just going to call it the subscription business model because it is a different business model. As much as value pricing 1.0, was a different business model than either fixed fee or hourly billing. So the subscription business model doesn’t price the customer. It prices the relationship and people look at me and go, you’re just playing semantical games, what are you talking about? What’s the difference? It’s actually quite a big difference. Because even with value pricing 2.0, if you think about it, it’s still built around transactions, it’s still built around a scope of work. Whereas with subscription, it moves over to the relationship. What happens is the focus becomes the transformation of the customer. We’re actually transforming the customer from where they are, to where they want to be. Now, we don’t use this language as CPAs, but we should, because if you think about what CPAs do every day, we’re like fish in water, we don’t even know it. And I’m not just talking about one transformation, we do serial transformations over the life of our relationship with our customer. We help them retire sooner, we help them retirement plan, we help them buy their dream home, their dream second home, we help get their kids in college, we help plan their legacies. We do all these different types of transformations, but we don’t use that language. We talk in terms of deliverables, and hours and efforts. And the subscription business model, even more so than value pricing, forces you to focus on that relationship. Make it frictionless, make it convenient, give the customer peace of mind. So my model for this, Randy, is when you look at concierge doctors, and their baby cousins, direct primary care doctors, these are general physicians that have gone off the grid – they don’t take insurance.
They don’t take Medicare, they have a one-to-one relationship with their patient, you subscribe to the practice, the doctor, and they basically tell you whatever you need that we’re capable of doing under our roof – because they’re only general physicians, so you’re not gonna get heart surgery, you’re not gonna get cancer treatment, you’re still going to need insurance for that kind of stuff – but for general things for general physicians, they usually can handle 60-80% of our health needs, you’re covered.
You’re covered. Period. I don’t care what happened. I don’t care how many times you plunge a knife into your palm and need stitches, you’re covered. And they’ll come to your house, they’ll come to your office. The average physician in the United States has 3400 patients, the average concierge doctor or DPC doctor has somewhere between 50 and 600 maximum. So they always have capacity, always have capacity. They can spend more time with you. So its reduced burnout, it’s still incredibly profitable to start running these numbers, a couple hundred bucks a month, 600 patients, you figure it out. They don’t need a large overhead. They don’t need a large office, they don’t have to have a bunch of medical coding and billers, and I’m thinking to myself, well, doctors and CPAs are the same. Doctors keep us physically healthy.
CPAs keep us financially healthy. Why can’t I subscribe to a firm? And that firm tells me whatever you need, Ron. You get audited? You’re covered. You need a financial statement tomorrow, because you’re trying to buy your dream property, we’ll do it. Whatever you need. No more of ‘how long is this going to take? We have to go to the department of paperwork and get a change order.’ This is out of scope. No, it’s not. It’s no longer in scope, out of scope, it’s covered, not covered. It’s an insurance policy. It’s convenient, it’s peace of mind, it’s frictionless. It’s all built around the customer, there are no silos. This would crash silos and firms, there would be no tax department. I mean, you’d still have expertise, the customer is at the center of the relationship and that’s all that matters is helping that customer with whatever they need, that we’re capable of doing. And people say, well, this is like an all you can eat buffet, how do I know I’m not gonna get some fat slob to come in and pig out and lose my shirt? It’s not going to happen; with good client selection, with good pricing and with good staying in your lane niching, in other words, I think this is much easier to do if you’re a niche practice. There’s only so many things they can do. And there’s only so many things the average CPA firm can do, no matter how much they talk about ‘we’re full service firm, blah, blah’, but it’s all crap. They’re not. How can you be a full service firm, you’ve got 20 people working for you. There’s no way you can be an expert in every industry. So the riches are in the niches and that’s true. So I think this model, if we really want to look at a model, it’s the concierge doctors and their baby cousin the direct primary care. And Randy, this model has been around since 1996. So we’re laggards here.
Yep. So this is now your mission, to get this out there to any firm that will listen I assume.
There’s room in the marketplace for lots of different business models. Paul Dunn and I right now are in the midst of writing a book and it’s based around the subscription business model. It’s going to be called Time’s Up.
And this is the ultimate death knell to the timesheet there. There is no room for measuring time in a subscription business model.
The accounting is different, the KPIs are different. This blows out the timesheet, it just makes it absolutely superfluous even though people still argue you would still need time. No, you don’t. And by the way, just on the timesheet issue, because it’s a big bone of contention, we have a survey out there now, a one question anonymous survey. Have you ever lied on your timesheet? And as we know, people fudge on their timesheet, give me a break. I’ve been in this profession since ‘84. And we’ve all fudged on the timesheet. But this just absolutely blows it up. And on the timesheet front, I’m really proud of the fact that Bain & Company and McKinsey & Company no longer do them. Now, I can’t claim any credit for McKinsey dropping them, but I can claim some credit for Bain dropping them. People tell me, well, it doesn’t scale, you can only get rid of timesheets if you’re a small firm. Really? Bain & Company? McKinsey & Company? Really? It’s time for a new business model.
Yeah, it is. I mean, there’s change happening everywhere. Public accounting is not immune to it, and it needs to happen. And so something I thought about when you were talking, but then you already mentioned it, niche, I think works really well with that, because you’ve got this super concentrated expertise and knowledge that you can share and do that. And then the other thing I thought was does this help solve the employee issue? Because everybody’s having problems right now finding employees, does it address that at all?
I think it does, because it does a couple things. And we’ve already got the empirical evidence from the medical profession. There’s over 1700 DPC doctors now. They’re in all 50 states except I think one or two. So it’s really grown tremendously. I mean, this has been a massive movement in the last six years. What we see is, there’s a high burnout rate among doctors, especially GPs, that’s why nobody goes into GP, they go into specialties, anesthesiology. There’s, in fact, there’s an acronym, they call it the road to, I forget, but it’s the five specialties people pick instead of being a GP. So there’s a massive GP shortage. But the DPC Doc’s they’re not burnt out, why? They have fewer patients.
Right. That’s what I was thinking.
This is the solution. I think one of the reasons people and I don’t think people burn out of our profession, I don’t buy that term.
I did too, but I don’t think, I don’t think you burned out.
I think you rusted out.
And there’s a difference. It’s doing the same thing over and over. It’s not being challenged enough. You pick up a work paper, and you start it and you realize, “Oh my god, I did this on the exact same day, last year, same as last year.” It’s just not growing. And that’s a function of having too many customers. Every firm has too many customers. And that’s crazy. That’s because none of us became a, and this is why I love the concierge doctors and the DPC, doc’s. Why did you become a doctor in the first place? They ask. To help people.
How can I help people if I have 3400 patients?
And I’m spending five minutes with each one of them 60 times 40 times a day? How can I get to know them as people and think a bit and get really in depth family history? Well, why did CPAs enter this profession is to help people. Now you could say, well, I’ll help businesses too. Okay, help businesses help people. But we can’t do that if we have 1000 customers. There’s no way. If you think about even VP 1.0, to some extent, we pay lip service to the relationship. I know we say it’s a relationship business. But here’s the thing, when you look at the business model, what are we monetizing? Transactions.
Subscription model changes that. And that changes it with the right incentives. And it changes that the right way so we’re really living our calling. This is why we enter this profession. We didn’t enter this profession to bill the most hours, we didn’t enter this profession to have the most clients or the largest revenue, we entered this profession to make an impact on people’s lives. And we can do that if we have fewer customers.
And you build those relationships. And it’s more satisfying because you’re seeing what’s happening to these individuals or businesses and you’re affecting it and it’s not, yeah, I can see that. All right, you got me. You’re getting me excited here. I still don’t, half the stuff you say I still have to absorb.
I know this is radical stuff. I know. I’ve been swimming in it for a long time. Yeah, I know. It sounds radical.
For our business, Tri-Merit, we’ve been, I think, value billing since day one, 15 years ago. And we’ve done that from the beginning so I kind of get that it’s just that whole subscription. In my mind, I’m trying to figure out as a niche business that does specialty tax, can we do subscription modeling?
And I knew you were gonna say that, I just don’t see that. I don’t know the structure of that.
Yeah, you have to think through your pricing tiers, I’ll give you an example of an ERP software company that went to subscription, and they’re the leading software company for fashion brands. So small companies that sell fashion across different platforms, maybe Amazon, maybe Shopify, different platforms. And when they started, they tried to price the customer. And that’s very difficult to do with subscription, it can be done if you have very few customers. But if you want to scale, like these guys didn’t get hundreds, or 1000s of customers, you kind of have to put out a menu, you kind of have to put out three or four options and let people decide. And rather than pricing the customer, what it led to was a paradox of choice they’d give the customer you know, 40 Different things they could choose from and have different permutations. And it led to the paradox of choice. Even when the customer did make a choice. Always in the back of their mind, they were doubtful whether they made the best choice. And that’s something you don’t want a customer to feel, that’s a crappy customer experience, always to be second guessing, you know, the level you’re at.
So they said, no, no, we’re not going to do this anymore. This isn’t working for us, it’s too complicated. What we’re going to do is we’re going to segment our customers by the stage of growth they’re in. Are they a startup? Are they coming unto their own? And some of this can be determined by how many platforms they sell on how much sophistication they need in their accounting? Do they need, you know, Intuit QuickBooks to run inventory? Because in the startup phase, they probably don’t, but in a later phase, they probably do. So they did a really good job. The company’s name, by the way, is Aims, A I M S, 360. And if you go look on their website, you’ll see their pricing tiers based upon the type of entity and its phase in the growth cycle. And I think that’s a very interesting way for accountants to think about it. And look, if an accounting firm has individuals and business clients, it can have three options for the individuals and it can have three options for the business clients so that you can still have options, you can still do tiered pricing, but it’s probably going to be something you’re able to post on your website. Unlike value pricing, where you have to price the customer, you can’t post the price. Menu pricing is, you know, we all drive up to McDonald’s and pay the same price. Value pricing is if McDonald’s came out and interviewed you and tried to figure out how hungry you were, before they priced the Happy Meal.
Alright, so this is the question that was running through my head that you just answered for the most part with this subscription pricing, then it’s still not one size fits all?
It could be. If you look at some of the DPC Docs, they have just one option. Now, they might base it on age. So if you’re old-
-pay a little bit more they tier it that way.
Pediatrician DPC Docs do the same, actually, the younger you are, the more expensive it is-
-because they have to give you all these inoculations and see you more often and your infections all against them. But I think you can do three options.
Okay, so it’s still a subscription with tier, is that the right word?
And then also within that it’s different for a 1040 client, obviously, than it is for, you know, a C-corp. Okay, but it’s alright. It’s starting to sink in. I’m getting there. I think it’s awesome. I love it. Like I said from the beginning, I always hated timesheets. I think CPAs have always undervalued their services as well, maybe probably because of the hour. I actually think they undervalue their businesses as well.
That’s an issue I think is out there.
On our radio show, we’ve done lots of different shows on subscription. We’ve talked to some of the best selling authors in the space, like Tien Tzuo of Zuora, like John Warrillow, who wrote the book called The Automatic Customer. Warrillow, he also wrote a great book called Built to Sell. So he’s heavily involved in helping companies sell businesses across all different types of sectors. And he’s also a big proponent of subscription. And he’s told us we are seeing multiples in the Professional Firms space, not one time, revenue, or one and a quarter, or even I’ve seen two and I’ve seen three value pricing firms,-
Subscription firms five to seven.
And even higher he says. Now, this is the market screaming at companies, “We’ll value you more if you have annual, week-earning revenue.” The sad thing is CPAs do have annual recurring revenue. I mean, the big thing about subscription is you’ve got to offer recurring value. It’s all based on recurring value. And, by the way, that has to continuously be increasing. Just the way Amazon constantly throws more benefits at us,-
-if Prime members.
They drop new series of episodes, you notice your price doesn’t change every time they drop a new service?
Yeah, I thought that, yeah.
Yeah, that’s because they’re using the portfolio approach, but they have to bake in that innovation. And CPA firms are gonna have to do the same thing with subscription. If you get into wealth planning, you’re gonna have to make that available. Now, you maybe you do that in separate tiers. But you know, you’re gonna have to bake in some new services as part of the model, but you’re gonna end up with a firm that is far more desirable to purchase at a much higher price than one times multiple, so you’re building something that’s more valuable. And that needs to enter into the calculus as well.
The whole multiples of valuation, everything, just got me thinking, because this is a topic that’s come up a few times recently with me and, and in fact, I think Blake Oliver, you mentioned earlier, was somebody I was discussing this with. Is the business model of the partnership of a CPA firm, something that needs to change? And would this play to that maybe not, but just in general, is the business model need to be different?
Yeah, the structure of the legal structure, the ownership, structure economics. You know, I’ve always hated the partnership model, Randy. I mean, the problem with the partnership model, is it’s a consensus model. It’s not a leadership model. And, you know, Margaret Thatcher used to say, the negation of leadership is consensus, the absence of leadership. And that’s what we see in partnerships. I think it’s one of the reasons why CPA firms are so slow to innovate, whether it’s moving from hourly to value pricing, or getting rid of the timesheet, or adopting cloud technologies.
That took the profession a long time to do that.
I mean, it’s a partnership model. You know, I’m sitting around a table with 15 partners, and you’ll throw out an idea: “Hey, I think we should get rid of the timesheet, or I think we should do this, or I think we should do that.” All it takes is one partner to say, “Oh, you know, no, we tried that during the Rutherford B. Hayes administration. And that didn’t work.” And the idea dies. Partnerships are where good ideas go to die.
No, because- we got this- we’re set up. I mean, everybody, there’s this funnel of people coming up, and then they’re in leadership. And then once you’re up here, you don’t want to change because that’s the way it’s always been.
You know, at one time, there were something like 316 department stores. And then of course, you know, but Sears was a big player. But then, Walmart came out. And then of course, this little guy from Bentonville, Arkansas had a different idea. And it wasn’t even on Sears internal memos. Walmart wasn’t even on their radar screen. And all of a sudden, they just crush everything in their wake. And this company called Dayton Hudson, kind of like Macy’s, whatever, they’re a big player in the space. But they did something, they said, “You know what? With this new startup, Walmart and Kmart, we can’t continue to do what we’re doing.” They spun out a new entity, with a completely different business model. They called it Target.
But that’s a rare, rare exception that a company has the foresight to do something that disruptive. But if you want true innovation, spin out a new business, and cannibalize the old one.
Yep. That’s awesome. Well, Ron, it’s time to wrap up. I could go on forever. I appreciate the conversation. If anybody wants to get further educated on V2.0, or subscription pricing, how can they find out more about it? Where can they look you up? Where can they get a hold?
Best place is TheSoulofEnterprise.com. And up there, if you go, we have shows by category, so we have run in Ed’s favorite show- or shows by category I think it is- and one of the dropdowns is Subscription Business Model. And you’ll see all the shows that we’ve done on subscription, all the interviews with the leading authors. Or, they can find me on LinkedIn, I’m one of the influencers, as you mentioned, so they can follow me there. They can also email me, I’m happy to talk to our colleagues; firstname.lastname@example.org so they can email me. I’m also on Twitter, @RonaldBaker. And I’m happy to continue the conversation with people because I think the professions have another hinge point, you know, pivot point in history, where, we’re going to see new business models. We’re already seeing some CPA firms adopt this model. It’s already out there.
And it’s gonna keep coming and whether or not you’re doing anything with it, you’re going to be affected by it.
I agree. I agree completely. And I think everybody, do not ignore it, for sure. Well, Ron, thank you. I appreciate the conversation. This is something I’ve been hoping to do for a couple of years. And you were very gracious. I just emailed you last week and you set up a time right away. So I appreciate that.
Thank you, Randy it was great to chat with you.
Thank you for joining us today. And you can find all the links and show notes for today’s episode as well as more about Tri-Merit at TheUniqueCPA.com. Remember to subscribe and join us for our next episode where we’ll be going beyond compliance into forging new pathways of delivering value to clients, diversifying your revenue streams and leading edge management techniques and styles.
About the Guest
Ron Baker is the founder of VeraSage Institute, the leading think tank dedicated to educating professionals internationally. His mission is “To, once and for all, bury the billable hour and timesheet in the professions”. He also hosts the radio talk-show The Soul of Enterprise: Business in the Knowledge Economy on www.VoiceAmerica.com.
Ron has toured the world, spreading his value-pricing message to over 250,000 professionals. He has been named on Accounting Today’s 2001 to 2007, and 2011 to 2021, Top 100 Most Influential People in the profession; voted among the Top Ten Most Influential People in the profession in 2012—2021; selected as one of LinkedIn’s Influencers; inducted into the CPA Practice Advisor Hall of Fame in 2018; and received the 2003 Award for Instructor Excellence from the California CPA Education Foundation
His most recent book,The Soul of Enterprise: Dialogues on Business in the Knowledge Economy, is the seventh he has authored.
Meet the Host
Randy Crabtree, CPA
Randy Crabtree, co-founder and partner of Tri-Merit Specialty Tax Professionals, is a widely followed author, lecturer and podcast host for the accounting profession.
Since 2019, he has hosted the bi-weekly “The Unique CPA,” podcast, which ranks among the world’s 5% most popular programs (Source: Listen Score). You can find articles from Randy in Accounting Today’s Voices column, the AICPA Tax Adviser (Tax-saving opportunities for the housing and construction industries) and he is a regular presenter at conferences and virtual training events hosted by CPAmerica, Prime Global, Leading Edge Alliance (LEA), Allinial Global and several state CPA societies. Crabtree also provides continuing professional education to top 100 CPA firms across the country.
Schaumberg, Illinois-based Tri-Merit is a niche professional services firm that specializes in helping CPAs and their clients benefit from R&D tax credits, cost segregation, the energy efficient commercial buildings deduction (179D), the energy efficient home credit (45L) and the employee retention credit (ERC).
Prior to joining Tri-Merit, Crabtree was managing partner of a CPA firm in the greater Chicago area. He has more than 30 years of public accounting and tax consulting experience in a wide variety of industries, and has worked closely with top executives to help them optimize their tax planning strategies.