Patrick Dichter
@patrickdichter
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Following
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Provide quality bookkeeping, tax, and QOE nationwide. Inspired Or Acquired Podcast host. Acquired 3 firms. Fly fisherman and small business geek. NH and COš
Joined April 2014
Updating my bio for new followers - Iāve acquired 3 accounting firms. Appletree provides bookkeeping, tax and consulting to small businesses nationwide. Previous background was sales and advisory. Dad of 3 boys.
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Most interesting video Iāve seen this week. Vail Resorts putting on a master class in pricing and acquisitions:
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My wife had her first customer today for her mobile veterinary biz. Iām geeking out for her.
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Small business owners can make $200-400k doing $1-2M revenue and wear a lot of hats. OR . Make $500k-1.5M doing $3-6M revenue with a reliable team. Just donāt get stuck in between for long with more stress and less income.
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Profit sharing is better than giving equity to key employees. Easier to manage, less legal, gives upside, aligns incentives.
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Our gym lets members who own a small biz hang a banner for free. Brands and community donāt build themselves amiright #sweatymarketing
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Doing 30-60 minutes of work a day while on vaca actually helps me relax and be present. Total blinders and closed email would just stress me out. Anyone else?.
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Iāve acquired 3 accounting firms. Hereās how the revenue retention has gone š.
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Iām trying to close a +$1M small biz while my cousin just sold his fintech company for +$250Mā¦.So thereās that.
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If youāre buying a business you need to increase revenue after your first 2-3 months of integration. Hereās 20 simple, effective ways to boost sales. š° š.
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Levels to wealth:. - ordering appetizers fearlessly .- house cleaner & grocery delivery .- not worrying about health insurance premiums .- full size Halloween candy .- buying ski passes for the fam without wincing . Iām 2/5. Onwards.
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If you buy a business, expect profitability to drop for 6-18 months. Prior owner kept it lean, you have debt payments, and errrybody wants a raise suddenly. Hereās 5 tactics to help:.
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Finally closed an acquisition today! Appletree Business Services is a bookkeeping and tax firm serving +60 small businesses.
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āMy accountant is retiring. Need a new one.ā . - 1/3 of our marketing leads . Could be nothing.
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Woke up at 4am thinking about client issues. Who needs an alarm when you can own a professional services firm.
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Holy roll upā¦my wife is a veterinarian. Her old practice sold to private equity. We move across the country and 3 weeks later the same group buys her new practice.
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Searchers trying to buy accounting firms are delusional. I take calls from them every week giving a dose of reality. After looking at hundreds of firms and buying 3, hereās the realityā¦.
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āI donāt think Iām the best mom, wife or friend all the time. In fact Iāve been told that. But Iām great at accounting and taxā¦.and I can control that and I love my work.ā . - a candidate we interviewed this week. That call is going to haunt me for a bit. š³.
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On zoom going over accounting proposal with a dentistā¦. āThis all sounds good. Whatās the cost?ā - him. āDepends on your insurance! Ha!ā . He didnāt laugh. End scene.
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@SullyBusiness A few break my brain momentsā¦.I got wait listed at Yale and knew kids whose parents donated money and got in with weaker appsā¦.then my perception of wealth was shattered at U of Denver when friends came from old moneyā¦seeing the family safety net of most tech founders.
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My quick bio for new followers - Iām a small business geek. Sold door to door every summer to pay for college, sales manager for a marketing startup from $0 to $35M, and my last few years Iāve been in small business advising. Fly fisherman. Dad of 3 boys.
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How to build a small business budget for 2023 in under an hour. Quick n dirtyā¦letās go! š°š¤.
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Every time a company moves from Quickbooks desktop to Quickbooks online, an angel gets its wings.
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Weāre trying a billboard marketing campaign for 3 months. Itāll cost us the same as the cold email marketing we tried last winter. You think itāll get better results than email? And is our design compelling or too vanilla?
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My wife picked up this incredible cake todayā¦. The bakery flooded last night and had no power. Staff in rain boots, using lanterns, smiling, cranking orders on Xmas eve. Small business owners built different. š¤
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Itās not all profits and glory in small biz M&A. Had a sobering conversation with an operator who bought a lab biz 5 years ago. āIām grinding away. Stressed out. I couldāve made more money working for someone else.ā.
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Iāve yet to see an owner doing their own bookkeeping that has clean books. I will share once I see it if that day comes.
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One year ago today I started the conversation that lead to me buying Appletree. Cold email.
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Accounting Firm Acquisition #3 within 12 months is official. Hereās why Iām excited about this oneā¦. š.
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āDoing my own bookkeeping was a mistake.ā . - Owner who went to Ivy League school and worked in private equity . If that big brain realized this, you should too. Itāll fall behind, youāll make mistakes, and your time is better spent elsewhere.
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2 year anniversary of my acquisition of Appletree yesterday. Time has flown by.
Finally closed an acquisition today! Appletree Business Services is a bookkeeping and tax firm serving +60 small businesses.
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Part of my job as owner is being calm, predictable, and positive for our team. Whatās that look like? On time, consistent meeting schedule, follow through, pragmatic, upbeat. I vent to my peer group and ride an emotional roller coaster - but I donāt let my team feel that.
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Official announcement on another accounting firm acquisition:
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Doing acquisitions is like having kids. 1-2 years later you forget how hard it is and debate doing it again. In other news I just sent another LOIā¦.
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PSA: talk to your accountant before you implement Profit First. 90% of the time I see owners open +7 bank accounts and make a mess then stop doing it 2-3 months later.
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Iām excited to announce weāre now offering Due Diligence and Quality of Earnings services. If youāre looking to buy a business, we can help you earlier and more in depth.
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If you buy a business, hereās your guide to smooth accounting post close. This will help you get clean financials quickly and avoid painful mistakes:.
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Had coffee today with a guy who sold his accounting biz to a large firm. At least 50% of clients churned out. We havenāt lost a client so far after 4 months. Feeling grateful today.
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Maybe the real āSilver Tsunamiā isnāt retiring boomers selling good businesses. Itās the wave of CPAs retiring from 2020-2030.
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My badass wife had a news article about her mobile vet biz yesterday. She didnāt enjoy her career much as a general practitioner and now she loves the niche sheās in.
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I always wanted to join a group of old timers āPanera coffee clubā and then I found #smbtwitter
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Boomer habits we need more of:. Taking notes during meetings .Not replying immediately on Slack.Sending a hand written note . What else?.
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Spoiler alert: running a business is harder than searching for a business.
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Our small biz bookkeeping and tax firm model that creates a win-win for clients and our team. š§µ.
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We brought on 67 small business clients for bookkeeping and tax services this year. We spent $95k on marketing and here's which marketing channels brought the most clients:
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Holiday partyā¦.Mom and dad stayed out past 8pm. Wild times.
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Weāve started structured 1-1s and itās amazing how impactful those 45 minutes are - be consistent, be present, cheerlead and challenge.
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The good news: accountants are loyal employees and like security. The bad news: theyāll also stay in a toxic, overworked environment because change is scary. Just had a A+ candidate decline an offer. But Iāll stay on her like Nick Saban on a 5 star recruit.
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Did I enjoy the pumpkin patch? Yes. Did I immediately get on bizbuysell looking at farms for sale after spending $60 and seeing +50 cars at 9am? Also yes.
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My wife is a veterinarian and the clinic she works at sold to private equity a year agoā¦. They manage completely by spreadsheets. Zero sense of the culture and zero office visits. Feels like the wheels are falling off. Lesson in there.
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No. Your $2M home services business business doesnāt need GAAP financials and accrual basis. Cash basis, good monthly bookkeeping will do wonders.
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Had beers with a business broker tonight. 2 big takeaways:. 1. 90% of small biz owners over value their business .2. Search fund bros are annoy him and all sound the same.
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The range of SMB accounting:. Bare Bones Bob pays $2k/year. Bookkeeping DIY, payroll DIY, meets tax pro once a year. Lifestyle Larry pays $42k/year. Pays for bookkeeping, payroll, bill pay, quarterly tax meetings, and has fractional CFO. Both own a marketing agency doing $1.5M.
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Friends donāt let friends choose Quickbooks desktop over QB Online.
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PPP round 1 worked. It also took 5 years off the life of every accountant.
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If youāre in a service business, you should be billing labor 3-4x the cost. 2x or less is a slippery slope. And donāt forget owner production time that doesnāt get accounted for or billed.
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Service businesses are hard enough. Donāt make it harder by building custom software. Off the shelf CRM, POS, etc will do just fine.
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A few weeks ago I said Iām going to stay focused and not get shiny object syndromeā¦.and then 5 good accounting firms for sale came across my desk.
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Between now and April 18 your tax pro is going to:. A) fire you as a client .B) raise prices 50% .C) retire .D) die at their desk . Hereās why the shit storm is happening š
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Small biz owners hate paying taxes in part because they see it everywhere and feel the transaction. Payroll taxes, sales tax, corporate tax, income tax, capital gains tax. Employees just have a direct deposit with a haircut. If they felt it like biz owners theyād riot.
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Firing someone sucks. But hereās how it always goes: .- This doesnāt feel like itās not gonna work out .- Ask myself if we set clear expectations and gave adequate training .- Give a warning .- Doesnāt get better.- Fire them.- Feel bad for 1-2 days .- Realize we shouldāve fired.
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Called the plumber after my 3 year old clogged the toilet. Confirmed why everyone wants to buy a plumbing company.
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Iām friends with 4 people who bought accounting firms last year. 3 of them feel like their house is completely on fire. Tread carefully and know youāre in for a knife fight in year 1 buying a firm that does tax. Understaffed + change management + staff relationships + client.
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Acquisition #1 is the hardest to pull off and you might have to āoverpayā but then everything changes.
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Iām convinced you wonāt take the leap to buy a business unless youāve got a little crazy or chip on your shoulder. Comfy folks donāt leap.
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If youāre not making +$80k profit per year, donāt worry about being an S Corp.
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New bookkeeping client had 13 bank accounts and credit cards for 1 business. Thatās about 10 too many folks.
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What gets your business from zero to $1M revenue: hustle, moving fast, saying yes to everything, wearing all the hats. To go from $1 to $5M you have to unlearn most those habits - delegate, plan ahead, let your team own it, say no to a lot.
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Iām under LOI on another accounting firm acquisition and need to decide go or no go this week. Iāve been getting cold feet and still feel 40% yes 60% no. Hereās the scoop:.
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How to be ahead of 90% of businesses $1-5M revenue:. - Spend more on digital marketing than your car payment .- EOS implemented .- Monthly bookkeeping .- Have +10 google reviews .- Reference checks hiring .- Consistent leadership and accountability .- Raise prices yearly.
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Double down on whatās working. Donāt chase shiny objects. Double down on whatās working. Donāt chase shiny objects. Double down on whatās working. Donāt chase shiny objects. - me talking to myself
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Of the 200 accounting firm owners at this association conference thereās 2 of us who come from a searchfund/ETA background. Kevin has a MBA from Harvard. I have a Hawaiian shirt from Hawaii.
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Iām at the age where Iām excited about the Herman Miller office chair I just scored on Craigslistā¦.
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It was fun to do this article with Hampton and reflect on how weāve grown 3x in 18 months and show behind the scenes, even though Iām a tiny fish in the amazing group of entrepreneurs in Hampton.
Hampton member @patrickdichter is not an accountant. But that didn't stop him from buying (and 3Xing) an accounting firm. After just 18 months, they're on track for $3.5m. Here's a breakdown on the acquisition, growth channels, challenges, untapped opportunities, and moreš
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Had a few alarming calls last week with people running to close on businesses where theyāre overpaying by 50-100% and underestimating the work by 200%. i.e. wedding biz Covid bump that doubled SDE in 2022 and YTD 2023 is down 40%. No seller note. No due diligence help or.
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Hereās the 7 most costly mistakes I see repeatedly with small business owners trying to grow from $0-2M. š š§µ.
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New life goalā¦.to ski as well and often as my dad at his age. Heās 70, super healthy and still rips. Heāll get +40 ski days this year.
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The vet clinic where my wife is an employee got bought by big PE. Staff are dropping like flies, not much help from corporate. Iām sure the P&L looks great but capacity is shrinking quickly. I want the opposite for my acquisitions - happy staff, pay raises, more support.
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Great trip to Miami with our mastermind. 10 accounting firm owners ranging from $500k - 6M revenue. Everyone shared financials, goals, and got constructive criticism.
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So there I was trying to keep our labor under budget this year when a great A player candidate landed in my lap. new manager starts tomorrow.
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Bad bookkeeping can be very expensive. Example #735. You have a $50k deposit from a loan, line of credit, ERC, etc. Bookkeeper categorizes it as income. If it doesnāt get caught youāll pay $10-15k in taxes on that overstated income. Ouch.
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@SMB_Attorney And then he asked you to coffee and did a 47 minute presentation on all the logical reasons whole life insurance is a great investment amiright.
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Good bookkeeping is the foundation. Then you can get insights from a fractional CFO, brilliant tax planning, or smart wealth management. Otherwise youāre paying advisors to look at bad data.
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Iām working on a blog article about small business scorecards and leading indicators. SMBs are fragile. You need to look at data weekly $0-2M. Then monthly data $2-5M. Unfortunately many poor bookkeeping and no data.
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The GOATs of pricing power:. Pumpkin patch .Wedding vendors .Airport bars.Locksmith.
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Weāre hiring! If anyone on #taxtwitter is looking to join a great team after 4/18 Iād love to chat. Hereās our Accounting Manager role. First year is $80-110k, second year $90-130k. Will help you get EA or CPA. Remote role with reasonable hours. More details š
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A candidate Iāve been pursuing for 10 months might join usā¦. If I think someone is an A+ player I will stay in touch forever to find a seat on the bus for them.
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One of our tax managers feels like he won the Super Bowl this week. A client had massive growth during Covid and got audited. After reviewing everything and talking with our tax manager, IRS sent a no change letter to our client.
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If you run a professional services business itās key to pick a lane and stay in it - pricing, value prop, client profile, staff, etc. You cannot be Honda to some, Audi to a few, and a Bentley to your favorites. FWIW weāre a Toyota - reliable, not the cheapest, good value.
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If you have a fractional CFO and bad bookkeeping, youāre paying them $200-300/hour to try to make sense of messy data. Solid bookkeeping is the foundation and will get you the most value from a fractional CFO.
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My favorite reports in Quickbooks Online: . - Trailing 12 month P&L with monthly columns on cash basis .- 90 day Accounts Receivable aging summary .- P&L for last year with % of revenue for each line item.- Balance Sheet at year end vs current . Yours?.
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Each tax season we try do something nice for our staff. Mobile car detailing for our local office staff today. Remote staff are getting care packages shipped. I saw @bhallcpa do this 2 tax seasons ago and stole the idea.
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My friend bought a fencing biz two months ago. Didnāt know anything about fencing. Sheās already DOUBLED production by optimizing the schedule, planning better and inspiring the team. SMB inspo of the week.
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People who can read a balance sheet: I should hire someone to do my bookkeeping. People who canāt read a balance sheet: I do it myself and my Quickbooks is clean.
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Our tech stack has +30 SaaS subscriptions. Accounting firm owners have to be mad scientists constantly evaluating tools and going through the fun of migrations.
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Seeing my wife open her vet biz and my sister in law start at agency recently reminds me how much confusing crap there is for new entrepreneursā¦. Opening LLC, banking, state registrations, tax questions, getting paid, W9s, legal, credit cards, Quickbooks online, etc.
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