How Value Pricing Built a Practice & Saved a Father-Son Relationship
Jun. 24, 2011
Sometimes, things need mixing up. Chris Farmand, who grew up in a Florida family centered around the accounting practice led by his father and two uncles, was destined for a career in accounting. His parents knew it, the rest of his family knew it, and his teachers knew it. But even though he’d been in college and majoring in business finance for a couple of years, he wasn’t quite sure he wanted to admit it to himself.
After all, having lived most of his early life in the midst of spreadsheets, 10 keys and timesheets, it just didn’t seem all that exciting, and he had a few other ideas he wanted to try out. Surely there was something more entertaining, more interesting and, perhaps, further away from home.
Enter stage left.
Chris had been involved with acting and an improv comedy troupe, and emceed at a local comedy club while away at college in Gainesville, Fla., Realizing a degree in food and resource economics was going to land him on a farm in Ocala, he decided to take his show on the road, and headed to New York.
Ahh, the good life. The improv life with no script. He attended acting classes at the Upright Citizens Brigade and worked occasional gigs way off Broadway. To perfect the stereotype of an actor in New York City, he also worked as a waiter in a few notable Manhattan restaurants, including Molyvous and at RM, one of Rick Moonen’s establishments.
Exit stage right.
Well, it was the good life when there were gigs, during the right spending season and when he could hold a waiting position. Unfortunately, those three variables would conspire to motivate Chris to move back to Florida to finish his degree, to which he added an additional BA in accounting and an MBA. He soon added the CPA and CITP credentials to his accomplishments.
“It didn’t take very long for me to realize that I couldn’t help but be a better accountant than I was a waiter/actor,” Chris notes.
So it was back to the family firm. But while Chris had finally accepted his fate as an accountant, he hadn’t completely shaken that creativity bug. After seven years, he decided to hit the road again, but this time to start his own practice. Chris saw an opportunity with the changing business world to start a firm that would welcome new technology and workflow ideas, so in October 2010, he started Chris Farmand + Company PLLC in Jacksonville (www.farmandcpa.com), with his father as a partner.
“After 35 years in the profession, I think my dad was really looking for an exit strategy, and also so he could spend more time being a grandpa,” said Chris. But things weren’t always smooth, either before or immediately after the move. He says that one of the areas of the traditional firm he never understood was relying on the billable hour.
“Every Monday morning, I called it ‘Bloody Monday,’ because my dad and I would take between 9 a.m. and noon to go through the WIP report, and that set the tone for a disastrous week.” This became one of the driving factors in him implementing a “value billing” model, which uses fixed fees for services instead of hourly rates that can vary and confuse clients.
They spent several months establishing their pricing structure, he says, including interviewing clients and gauging their interest and reaction to the change. He found inspiration in “The Firm of the Future,” and other books by Ron Baker, founder of the VeraSage Institute (www.verasage.com), a think tank that promotes value pricing structures. Since changing many of these business processes, especially the pricing paradigm, Chris says that not only has business been better, but his relationship with father has improved.
“Our clients have been ecstatic about the change. Now that they know what their accounting and consulting bill is going to cost throughout the year, they can budget it better. It’s also helped clean up our AR, which used to be a real headache. (You can see Chris talking about his transition value billing in a video interview with Bill Sheridan for the Florida Institute of CPAs at
http://www.youtube.com/watch?v=Oa5Pf2ZSIG8 or by searching YouTube for “Value Billing, One Firm’s Journey.”
Chris has also transitioned to a more streamlined workflow, centered on a single suite of professional tax and accounting programs, the integration between modules helping reduce redundant data entry. The three-person, full-service practice specializes in tax and virtual bookkeeping services, as well as implementation and training of small business technology. As one of the most experienced auditors in the area, Chris’ father also continues to provide client services from both firms.
Chris’ practice scored a 335 on the Productivity Survey, a free web-based tool (www.CPAPracticeAdvisor.com/Productivity) that helps firms assess their workflow and technology usage, and provides benchmarking against similarly sized practices.
As his firm has evolved and started to grow, Chris’ clients have trended younger and more tech savvy, like himself, which makes the technology consulting side of his practice more successful. This lends to more cordial and interpersonal relationships with some, such as the family that runs the travel services company (www.iwantacruise.com), and slow-food enthusiast and brew master Ben Davis, who also owns Intuition AleWorks (www.intuitionaleworks.com).
Chris is increasingly active in the profession and is a member of the THRIVEal+ CPA Network (www.thriveal.com), an online community of “new-age CPAs” founded by Jason Blumer. He also belongs to the AICPA and FICPA, and has a blog at www.Apr16.com.
But Chris is far from being an “all work” kind of guy. Although he has remote access capabilities that allow him to work from virtually anywhere, he manages to mostly leave work at work, and spends the rest of his time with his wife Razan and five year-old son Rami.
The Farmands, part of a large community of Christian Palestinians in the Jacksonville area, also keep close to their heritage, visiting Ramallah annually. And Chris is the treasurer of the non-political and nonprofit group Ramallah American Club of Jacksonville (www.ramallahclubjax.com).
Though having achieved a good measure of success in a short time, his overall philosophy hasn’t changed dramatically since his days doing improv. “Let’s laugh together,” is his mantra, whether he’s talking to a friend, a client or an IRS agent. (And by the way, he claims to have actually heard one laugh back.)
Chris Farmand, CPA.CITP, MBA
Managing Shareholder – Chris Farmand + Company PLLC
Productivity Score: 335
Practice Specialties: Virtual bookkeeping; Business and individual taxation; IRS representation; SMB tech consulting
Education: BS, Business Management; BA, Accounting; MBA; North Florida University and University of Florida
Professional Associations: AICPA, FICPA, THRIVEal+ CPA Network
Most Recent Conference: AICPA TECH+ Las Vegas
Photo credit: Photograph by Cheryl Joy Miner – www.cheryljoyminer.com
See inside July 2011
Tax Document Automation Tools Come of Age
This is our first annual review of tax document automation tools. While we have presented feature articles on this topic in the past, this category is rapidly maturing to include some common feature sets. Internal estimates from vendors based on data provided to CPA Practice Advisor suggest that around 1% of all individual income […]
Cornering the Market on Premium Outsourced Accounting Services
From Finding Their Legs to Finding a Distinct Niche Jennifer Katrulya, CPA, and owner of BMRG admits that there was a harsh learning curve to get her firm where it is today. And where is that exactly? The bright lights of Supa-Successville! Katrulya, like many firm owners, did her time in the world of public accounting and corporate offices. “I left my last firm in 2004 to start my own practice,” she recalled.