A Productivity in Practice Feature
From the August 2010 Issue
Despite the continuing rough economy, there are shining examples of the entrepreneurial spirit showing that the American Dream is still alive and well. Perhaps it is the challenge of the current economy that makes these individuals shine all the brighter. After all, it is a dream borne of sweat, determination, long hours and, more often than not, the rare ability to see future opportunities before others.
For Michael Hsu, it has been a combination of all of the above, plus the benefit of parents who gave him the drive and confidence to succeed. The Southern California CPA has worked for one of the largest regional accounting practices in the Los Angeles area, performing private company reviews, SEC company audits, SOX compliance audits and consulting. He also worked AR/AP in a corporate accounting environment. But in 2009, Michael and two colleagues decided to go in another direction and open their own practice in order to fulfill a client need that other accounting practices were missing.
After the initial challenges of setting up a firm, Michael was soon left as the sole believer and partner of the new firm. Although only 25 at the time, he was apparently quite ready to answer the call and, in the past year, Deep Sky Accounting (www.DeepSkyAccounting.com) has grown from fledgling startup to a professional services firm with business clients in several states, and four staff in two states. The key to their rapid growth, he says, is that they were able to develop a new model that provides clients with a service they greatly need, but often don’t even know exist.
“Most business owners and managers don’t really understand the language and principles of effective accounting, and a lot of them don’t really want to,” Michael says. “What we do is provide them with the equivalent of an in-house accounting department. This gives the business the expertise of a fully qualified financial team that manages their day-to-day bookkeeping, accounting and finances, but without the expense of actually bringing that expertise in-house.”
He calls this an outsourced accounting solution model. “Businesses are rethinking their own internal workflow needs, and the outsourced accounting model can help them streamline and become more efficient.” He notes that it can also give them a more objective perspective on their finances when they suspect internal fraud, as a couple of clients recently did.
To achieve this remote-sourced accounting service model, Michael has taken advantage of personal and professional experiences that have influenced him and shaped his awareness of business. As with many young professionals, he has grown up with technology as a central part of his personal and professional life, so he saw the potential for a practice that could serve the needs of clients in an almost entirely virtual way. This strong faith in technology has allowed him to use remotely located staff to handle much of the engagement work, enabling him to be mobile most of time while generating new business.
With a focus on day-to-day bookkeeping and business strategy consulting services, Michael readily admits that Deep Sky is not a traditional practice. He has actually made it a point to not offer tax preparation or write-up, instead focusing on the virtual services. In short, his goal for this area of his practice is to become a replacement for in-house accounting departments. This niche has helped him develop his client roster, he notes, because he isn’t directly competing against more traditional practices. He even partners with two firms to help his clients with those areas his firm doesn’t offer. However, future growth may well include these more traditional services, since his wife is a tax accountant at another practice.