The Art of Succession

Speaker 1: Alright. Let's talk about quarter four twenty twenty five within GW. One of the big changes that we had, we were implementing Carbon. It was not without hiccups, but it's a much faster, much more intuitive project management system that's got a lot more room for growth. You know, why are we doing that?

Why shift? If the old system wasn't terrible, why go through all the trouble of shifting? And it really comes down to with AI being the future of tax preparation, we have to change our pricing model here at GW. All of our ten forty agreements have been priced as a flat fee. All of our business monthly former retainer clients are now going to be priced as a subscription.

This is a major shift that we are taking in the company. For better or for worse, this is where we're going for 2026. So

Speaker 1: Welcome to the Art of Succession podcast with Barrett Young. Join us as we explore the strategies, stories, and insights that shape the journey of leadership transitions and business success. No matter where you find yourself along the journey, this is the podcast where you'll find the tools to make it happen.

Speaker 1: If you're like most of our listeners, you love the idea of running the show, but you're constantly second guessing yourself if you're ready or the person for the job. Are you missing a key skill? Are you aware of the things you need to know like reading a financial statement or financing the operations of a business? We are here to solve that for you. Our new free ownership readiness diagnostic will rank you from one to four on five foundational pillars of successful business ownership.

It is the ultimate confidence builder that will tell you, yes, it is time to have that conversation or no, these are the areas that you might need a little bit more time to develop. If you're interested in taking that assessment, you can find the link for that down in the description below. My name is Barrett Young, and this is the Art of Succession podcast. We are at the end of season three of the podcast, and it's also our fourth quarter update for 2025. So I started doing these about midway through this year, providing quarterly updates where we are at at GW on our own succession journey, and then also just talking through changes to the podcast, going over a recap of the previous season.

I'm really excited about these quarterly updates. They've proven to be popular episodes, I'm hearing great feedback from them. So if you enjoy these, just shoot me a message and let me know that these have been helpful for you. Again, my purpose in this is not so much to draw attention to us as if we have everything figured out, but to just be along with you as our listeners in the journey of transitioning your business from one generation of ownership to another. Again, my name is Barrett Young.

I'm the ninth partner in succession in an 80 year old CPA firm. Myself and my partner Samantha Bowling. We run the company. We're down to 14 team members at this point, and it has been a pivotal year in 2025, and 2026 doesn't look like it's gonna be slowing down. So just before we get to that, let's talk about season three of the podcast.

So one of the biggest changes you'll have seen in the podcast this season is that we have a new podcast editor. They started about halfway through the season with me. They've been doing a great job on summarizing the guest with an intro. I really enjoy that little two minute clip at the start of the episodes with a little short bio about the guests, and then they've also been promoting the show on the various social media with shorts, TikTok and Facebook shorts, LinkedIn, Instagram, etcetera. That's been noticeable in the downloads.

So just 2025 is the second year of the YouTube channel, and it's the first full year of having a podcast on the YouTube channel. Year one of running the YouTube channel, I think, for the entire year, I had about two hundred hours of watch time, about a hundred and eighty, hundred ninety hours of watch time for an entire year. We're almost to the point of doing that many hours of watch time in a month now on the YouTube channel, which has been awesome. I really take that as a responsibility to provide good content for you as the listener, and I know that the podcast is definitely a big part of that content that we provide. So season three started off talking about processes.

We've really had a lot of guests on this season that are actually in the succession planning or near the exit planning space. David Forster was my first guest for the season. He's a chief operating officer for hire, or outsourced COO, and he talked us through the process of building and selling a couple landscaping companies, and then also a bike shop. Really enjoyed picking his brain just from an EOS perspective as a visionary, and him being an integrator. I enjoyed that conversation a lot.

From there, we moved on to Stephanie Hayes, who is an exit planning strategist, who's also bought and in the process of selling a couple of her own businesses as well. Had some other exit planning advisors on the channel, including Joe Curry, who you just heard from last month, a fellow SIPA and investment advisor that works with business owners transitioning the business. Something new to the show we had this season that I haven't had on before was more focus on franchises. So we had Max Emma on, and then we also had Brando Guerreira. Max Emma is a franchise consultant.

He helps people identify franchises as they step into business ownership, and then Brando is actually purchased a franchise in Northern California, and that was his step into entrepreneurship. So those were really interesting episodes. I hope you enjoyed those as well.

Speaker 3: And the one thing that I've learned is that people will do business with who they who they know, who they like, but ultimately, they trust, especially in smaller communities. Relationships are everything. So I knew that if I wanted to go down the path of business ownership, I really needed to be an active, engaged, giving member of my my community.

Speaker 4: The self awareness part of it will will generally lead to some good discovery of that. And if you're just not achieving what you thought you would achieve by now, you kinda feel like you're hitting a ceiling. That's the first key. I would call that pain. That's for me.

I'm just a fast growth. I wanna go and get this thing going. And so when I hit plateaus or hit a ceiling, that was when I started looking for solutions.

Speaker 5: So that just sort of created a whole other, realm of possibility for me. What could I build that were assets that somebody might wanna buy? And now I just think about that in terms of everything that I build inside my business and how can I make it depersonalized as well as packaged up with a a value proposition that someone might acquire at some point in time?

Speaker 6: And so some of them was more or less referred away, but others that were a good fit for another adviser, like, I sold a portion of those clients to that other adviser, which, you know, she's working with young families and which a lot of those were. So it was it was just a much better fit for her. Was a better fit for the clients. And then at this point, because I had added clients, we had increased the fees. It allowed us to kinda do all of that without the business going downhill.

Speaker 7: People ask me why would I wanna pay somebody $60,000 and then pay at a 6% royalties every year opening a pizza shop. I'm making the best pizza at all my grandmother gave me the recipe, you know, no way you guys can make pizzas like that. And I always say it's one thing you do pizza for your family for dinner, it's another one when you have to do 100 pies in an hour.

Speaker 1: Talked a lot about mindset in this season between probably one of my favorite guests in a long time. Just the depth of the conversation that I was able to have with Mark Vinson was fantastic. I would love to have Mark on again. Wisdom beyond his years. The amount of wisdom that I was able to pick from his brain just in my own thinking, my own, what do I want the legacy of GW to be?

What do I want my next step to be after here? I'm still ruminating on that episode personally myself. Leslie Lane, third generation photographer, I really enjoyed her episode because big changes in her life made her realize she was building a job and not a business, and so she completely started to shift her focus through systems and through replicating her ability through other people, so that she could buy capacity for herself and build a business that she would be able to sell someday. Emily McDonald, startup entrepreneur, Rent the Runway, was her business. Angel investor funded, VC funded.

Just talked about the burnout in hustle culture and how she has shifted away from that, and now with her clients focusing on sustainability and making sure that they can continue to bring their best effort to their businesses. And then I had on Oriel Raviv talking about coming into existing businesses and confronting culture, shaping culture, shifting culture within the businesses that he stepped into as well. Then something really interesting, early at the beginning of the season, something I hadn't done before, had a bonus episode, and that was an interview with Jonathan and Renee Harris. They were the ones that had a skincare online store and actually raised their nine children to be entrepreneurs through that business. So I've really enjoyed the episodes in season three of the podcast.

Because the pod match has been so successful with me, who you just heard the interview with the founder this month, Alex Sanfilippo, that has been such a great breakthrough for the podcast. I've actually got all of the guests for season four already booked up. So we've already recorded episodes for the first four months of next year. We've already got guests booked all the way up through June. So we're not slowing down on the podcast.

I am going to continue right now keeping it as two separate episodes per guest. I have gone back and forth with this with my editors, trying to see if now that the podcast has momentum, now that we are getting continual listeners to our episodes, does it still make sense to have a two episode video version of it on YouTube, or does it make sense to bring it back to one full episode? If you've got thoughts on that, I'd love to see it down in the comments below. There's also a feedback form in the description that you can let me know your preference on that. But we're not slowing down for season four.

Again, I've got guests booked all the way up through June, and covered tax season, which I'm very excited about. Definitely in a much better place than I was last going into last tax season as far as guests go. Alright. Let's talk about quarter four twenty twenty five within GW. So we did end up bringing on a new team member.

Jenna has joined us. She's come back from government. She was with us prior to that about seven or eight years ago, left to work in government accounting. She's back. She's been a definite benefit to our team.

She's been able to step in and just immediately start to identify processes that were not being followed, processes that are not consistent across partners and across our team. So welcome, Jenna. We really appreciate having her on the team. And it's just really awesome to see, you know, we've got a team of 14. One of those is a partner in the process of retiring.

His last year will be 2026. This is his last tax season. It's really awesome to see our team working together, our team focused on the future together with EOS. We're doing our level 10 meetings on a weekly basis. We're tackling issues.

My partner Sam and I have been working with the implementer for EOS personally to get through some rough patches, to get through some miscommunication, and make sure we're on the same page for the future of the company. And it's really awesome to have that framework, that operating system that we wanted EOS to be for us. We're now just under six months in on that, and we've got our strategic retreat coming up in May. That'll be we've invited our implementer to that. She's going to help us introduce EOS to the entire team and get everybody on the same page as far as setting rocks, setting their sights on where they want to be with personal development, career growth, and really helping us share the vision of the company for the next three years until our next strategic planning.

So we've got that to look forward to in 2026. In addition to bringing on a new team member, this coming tax season, we're bringing on another part time CPA. She's going to be working on our individual tax returns, and we're going to be training the rest of the team on individual tax prep as well. We had a part time team member with us last year. She's now doubled the availability that she's going to have for us this coming tax season, and she's going to be reviewing all of our entity returns.

So between those two working on reviewing and preparing 10 forties and entity tax returns, this is the work that traditionally falls on my shoulders and on Sam's shoulders, and our goal is that in this coming tax season, by having them step in with their capacity and take work off of our shoulders, we're going to be able to continue in our roles as Sam as managing partner, myself as marketing partner, and then also in the process of continuing to transition clients away from the retiring partner in this next tax season. So that's got us excited about the coming tax season, and it's been the focus of our attention over the past couple months in our off season here. A very brief time, it feels. It's gone so quickly between October 15 and the end of the year. We immediately jumped into preparing engagement letters, pricing.

One of the big changes that we had that we were in process when I gave my third quarter update was we were implementing Carbon, getting rid of Practice CS from Thomson Reuters, which is the project management system we had been on for twelve, thirteen something years. We went live with Carbon November 1. It was not without hiccups, but it's a much faster and a much, to me, much more intuitive project management system that's got a lot more room for growth. I mean, they're releasing features on a monthly basis. It's a little bit hard for us to keep up with when we're used to being on a project management system that hasn't released features in ten years.

But it's got a good framework for it. We're working out the bugs. We're working it's increasing our communication with our clients because it's got email built into internal communications built into project management. So it's definitely going to be tested this coming tax season, and that's going to be the the big challenge because we started it in November, and it's mostly been off season projects for us on there. And so when we dump, you know, a couple 100 projects, tax projects into it, how is it going to continue to give us the insight we need on where we're at?

So that's gonna be the challenge for this coming year. You know, why are we doing that? Why shift? If the old system wasn't terrible, why go through all the trouble of shifting? And it really comes down to, for us, the future of the business is not in PCS.

The future of the business is on a framework like Carbon that we can continue to grow with. You know, I mentioned I think I mentioned in a previous episode I I mentioned in the third quarter update that I was planning on taking the SEPA designation. I actually passed that, so that's one of the things that I've accomplished in third quarter. So I'm now a certified exit planning advisor. That's out of EPI, Exit Planning Institute.

One of the things that I love about SEPA is that it is a framework for building the value of your business. And they've got five stages of value maturity that they talk about in the value acceleration methodology. And the first stage is identifying, the second stage is protect, the third stage is grow, stage four is harvest, and stage five is manage. It's really interesting here in the value maturity, in the stages of value maturity, that they put protect before they put grow. You would think that a methodology that's all focused on building the value of your company is gonna be focused on grow.

Like, from day one, start growing the value of your business. But what I really appreciate that, and what we've been doing here at GW reflects this idea. Stage two is about protect. Once you've identified where your value comes from in your business, the second stage is protect. And so this is things, if you're a newer company, or if you don't have anything in place for this, it's protecting yourself with a partnership agreement that covers things like death, and divorce, disinterest.

It also, making sure you have key man life insurance policies in place, making sure that you have a structure where all of the value that you're going to dump into this company, all the focus that you're going to be putting on growing this business, is not going to be lost by bad systems, bad project management, things that are gonna let that value slip through the cracks. And so that's what we've been doing at GW over the past year, year and a half. We have been growing the value of the company, but we've also been protecting it. We've changed from fiscal year end of June 30 to a calendar year end. That's simplifying the structure of the company.

That's making it so that future partners are able to easily adapt because it fits a calendar year, which we're all used to already. We have been working on owner compensation within the company, trying to make sense, better sense, better clarity, and visibility to how partners are compensated within the firm. We've stepped away from hourly based compensation models for me and my partner Sam, and we've stepped towards more of a role based compensation where it's much more flat. It makes a lot more sense, and it's easy to calculate when we're looking at the year to date income of the business. So these are all steps that you would take in the protect phase of value maturity within a business, and we've been doing that a lot here at GW.

Some of our biggest projects that we've been working on this fall have also been doing this exact same protect stage for some of our bigger clients. So we have another client that is in the process of consolidating two businesses into one. One of those is itself a fiscal year end, and one of them is a calendar year end, so they're consolidating those into one company to make it simpler, to bring in succession planning, to plan for the future of the business. We have another one that is changing both its payroll system and its accounting system at the same time here in the fall. So we've been busy with these big conversion projects.

I mean, these are not projects that are as simple as sending a file away to Intuit and having them convert it to QuickBooks Online. These are multi decamillion dollar businesses that have a lot of moving parts that all need to make sure that it's all moving, that it's been tested, it's been processed. We've run, you know, payrolls in parallel. We've got AR, we've got AP ready to go so that January 1, the thing just continues to move. That is one of the roles that we play for our clients beyond just the tax preparation and the advice on a quarterly basis or a monthly basis for our businesses, is actually solidifying the structure, simplifying the reporting, making it so that it doesn't take a degree in Excel in order to make sense of your financials, so that anybody can step into that company and understand how the business is operating, if it's profitable, and then how to move forward with it.

You know, that's one of the biggest roadblocks to succession planning in businesses, is a founder or a DIY personality who's got their fingers in so many pieces of the operations of their company, it makes complete sense to them because they've been living in it for twenty, thirty, forty years. But if they try to sell that to somebody else, or if they try to push that on to somebody within the company, they step in without that learning experience, without that past entrepreneurial DIY mentality that got it to this place in the first place, and they look at it and they say, This is a mess. I do not want this. You know, I had a client a couple years ago that was still tracking all of their accounting on green ledger paper, these big books, and he was very detailed, and he would write everything out in pencil or in pen. He was very meticulous in his tracking of everything, and their invoices were still all hand typed, and their proposal process was not modernized, and when push came to shove, when it came time for him and his partner to retire from the business, they could not find anyone that wanted to buy in to that company.

It wasn't necessarily that the revenue was dried up, although they hadn't spent much time on the pipeline either. They had a lot of exposure with just very big contracts, long term contracts. But it was that the systems that they had in place had not been updated for the future. And so when you sell that to someone, when you put that up as an offer by your company, they look at all that and they think, how many years is it going to take me to untangle all this, to modernize all this, to get my customers on modern day billing practices? And all of that just drives down the value of your business when they look at it because that's all unbillable work, work that they have to do, and so it's gonna drive down the value of your company.

Conversely, if you are a business owner who is looking to sell your business, that's probably one of the strongest things that you can do to increase the value of your company in the last couple years, and so that's what we've been doing at GW. You know, Sam has six years until she retires. That's one of her missions, is she does not want this thing to be a puzzle. She does not want this thing to be complex or convoluted when I take over the company, when future partners step into these roles within the company. So simplify, act as if you're not there.

You know, I did a video about a year ago that said the best test that you can take to see if you're ready to sell your company is to step away from it for just a month. Take a long vacation. If you can't do that, then you can't step away from your company for years. You can't step away permanently from your company. And so many of us are afraid to do that because we're like, if I walked away, everything would fall apart, and that's the reason that your business doesn't have any value.

Got off on a rabbit trail there. Do this every quarter. But that's what we've been focusing on at GW. We're trying to simplify. We're trying to make it so that anybody in this company can step into these roles and make sense of them, and it doesn't require twenty years of experience doing it the old way in order to make sense of it.

Speaker 8: I'll then say, it's not going to succeed even then unless that predecessor, that owner or longtime CEO has a life to go to. Even if they don't have some answers for that life to go to, they have to have something developing over here that they can step into or it's not going to be healthy for them. And if they don't have that, it's going to be very difficult to let go.

Speaker 9: By having these administrators come on for me, it has taken so much off of my plate. I don't have to write the blogs anymore. I don't have to do the social media, the quoting, and all of those things. And it's allowed me to strategize more for my business than do the business.

Speaker 10: But I wanna see the next generation of founders confidently telling a VC that they're gonna rest. I wish I had done that. I was much more like, oh, what do you want me to do? Oh gosh, please give me your money. And I'm like, no, no, no, no, no.

The founders who are gonna win are the ones that go in there and they're like, I'm building something incredible, like get in or get out, to be like, I'm confident enough for myself that I'm gonna have boundaries.

Speaker 1: One of the challenges that I've been facing as the marketing partner here and the tax partner, working through these, We talk about simplifying. One of the challenges that I have as visionary of the company is with AI being the future of tax preparation, the future of accounting, even the future of advisory services, we have to change our pricing model here at GW. We have been hourly billing after the fact for as long as this firm has been around. We've had some retainer clients over the years where we do a true up of that retainer, but these models are not going to carry us into the future. That retainer model was still very much focused on, at the end of the year, look at the total number of hours, the total compensation, and true up those retainers.

One of the big shifts that we've got coming out this year, all of our ten forty agreements have been priced as a flat fee. All of our business monthly former retainer clients are now going to be priced as a subscription. This is a major shift that we are taking in the company, changing our pricing model. We'll still have a few clients, smaller clients, one off clients, that are still going to be priced with a range, and then invoiced with hourly. But all of our clients that we see as the core that is going to be moving us into the future, we're shifting to subscription pricing.

All of our ten forty agreements, we're shifting to a flat fee priced in advance. This is simplifying our pricing process. This is simplifying the onboarding of new business. And this is setting all the expectations upfront for the quality of the service, the value of the service, the communication of the service, and how you are priced for it, and when you pay for it. So that's one of the things that we've been working on cleaning up.

Last year, we shifted to retainer model from hourly billing after the fact. The retainer model did not work very well. It took me probably fifty plus hours to reconcile retainers for a very small group of retainer clients. That was very labor intensive, and it was not value added work that we could have been doing to better serve our clients. It could have been work that I was doing to bring in new clients.

When Sam and I looked at the burden of the retainer reconciliation process, how much of it involved my time, how much of it did not easily make sense, especially shifting from one pricing or from one project management software to another in the course of that. We just decided this year we're gonna try we're gonna move to subscription services. For better or for worse, this is where we're going for 2026. So our clients will have a monthly subscription that covers the set services that are included, and there's not going to be any true up at the end of it. There's not going be any write ups or write downs.

This is going to be the subscription with which they are served throughout 2026. There are going to be some hiccups along the way that we are going to encounter there. Some of the questions that I need to answer is how do we bring in a client mid year with a subscription service? How do we ensure that the majority of our clients are continuing on, that are satisfied with us, that they don't just have a subscription for the first four months of the year and then cancel it and walk away with a tax return at one third of the price that's included in that subscription. You know, one of the challenges of subscription service is that you have to continue to serve your clients on a regular basis.

Even if you're only providing a one time per year service for them? How are you checking in with them? How are you adding value throughout the year so that they don't just wake up and realize, oh, wow. I haven't heard from you since March. Why are we on a subscription again?

In that sense, it's more like payment terms. It's not a subscription. That's also one of the opportunities though, and this is what I really am encouraged by. You know, subscription services one of the authors that I really have gained a lot from, Ron Baker, he's read widely on subscription services, books like The Membership Economy. I'm reading Subscription Marketing right now, and he's applied this to professional services, specifically accounting companies.

One of the benefits of subscription pricing that I hope to see come true in the future of our company, for the future of our team, is that we will be able to serve a smaller client base at a larger price point, and subscription services really allows you to be in continual communication with those clients because you're no longer asking yourself, is this in scope or is this out of scope? What is the scope when you're in subscription services? As long as it's a service that you provide and it's a service that is at the tier that they're paying for, the answer is whatever the client needs is going to be included there. And so figuring that out, figuring out what the pricing for those different tiers are, that's the challenge. So the model that Ron Baker looks to is the primary care, direct primary care physicians, and there's actually a medical office that's been doing this since the mid nineties that he looks to strongly for encouragement for this, but rather than paying for in office visits or paying for your copay, you are paying for a set subscription for the year, everything that's included by that direct primary care physician.

Now, doesn't mean that they're going to be doing surgeries for free. This is definitely something that is out of scope of that subscription, but because you are paying for them on a monthly basis, they're able to reduce the number of patients that they see by like a factor of 10. They're able to spend more time with the patients that they do have, and they're able to focus on health, because they're no longer getting paid by you being sick, by you coming and making an office visit. They're now being paid and actually would make more money the healthier you are, and so they're able to focus their attention on the health of their clients, the health of their patients. I really want to see this in GW as we are able to reduce the number of clients that we're serving.

We're going to be able to have more contact with the ones that are in our member list, the ones that subscribe to our firm, so that we can pay more attention to them and focus on the health of their business. We want to be proactive. This is why we got into the profession. We want to be the ones that our clients call when something goes wrong, and we want to be the ones that our clients are calling before decisions are made so that we can prevent things from going wrong. We've put this wedge of the hourly billing model in between us and the client, and by taking that out and saying, You're paying us the same amount whether you use it or not, so you might as well use it when you've got an idea and you want to find out what the ramifications are, what the parts of it are that you are not paying attention to, you might as well contact us and we'll set up an appointment, we'll set up a call, we'll go over the details of it, we'll figure out what might be missing, what needs to be implemented in order to get this maximized, the return of this decision that you're making.

Because we're doing that for a smaller group of clients, we're going to be able to have that customer care. We're going to be able to have that attention for our clients on a regular basis. This is why we got into the profession. For the most part, we want to help people. We want to feel like what we're providing to our clients actually matters.

They value our feedback. They value our attention, but we have to work at scale. We have to work with the masses, and so the clients that we really enjoy working with, the clients that we like to meet with on a monthly basis, they get drowned out by the other nine out of 10 clients at scale that we have to serve at commodity prices in order to be able to make a living. So that's where we're going. We're going to be solving pricing starting in 2026 with the subscription model.

There's definitely going to be missteps along the way. There are going be some clients that abuse the subscription model, and there are going to be some clients that proceed as nothing has changed with the subscription model. And that's what, you know, Ron Baker and the subscription model actually talks about is you're no longer pricing the client like you are in value pricing. You're pricing the portfolio. And so, like, when Amazon or Netflix or, you know, I don't like using subscriptions.

I don't like using software as models for this because they're infinitely scalable, but when a direct primary care physician implements the subscription model, they're able to cover all of their portfolio of clients. Some of them are going to be more sick than others. Some of them are going to take more advantage of the services than others, but across the portfolio, the goal is to be profitable within that subscription. This is a challenge. This is interesting, but again, it aligns with where we see the profession going with AI, with AI reducing the complexity, reducing the amount of time that it takes to prepare tax returns, to prepare monthly accounting, to prepare analysis.

We want to be able to make sure that we are pricing the relationship with the clients, so that they are paying us for our, as I said in the last update, they're paying us for our accountability, our empowerment, our empathy, and our foresight. They are paying us to be the human contact that talks them through the challenges that they're facing as business owners. So that's what we're looking at in 2026. Engagement letters have already gone out. We've had a lot of great response already to the fixed price engagement letters on our 10 forties.

Those are not necessarily subscriptions yet, but I do have a model that I've been working on in my head for subscription services for ten forty only clients. If we can make that model work, we might be able to continue to serve ten forty only clients that are unrelated to businesses, but at this point, the subscription services are focused on our family groups, our business clients, and we're gonna be testing this out in 2026. Alright. One other thing for 2026 that we've got coming up. 2026 will mark our two years of actively implementing AI within our firm, So I think it was February or March 2024, Sam and I were having a conversation.

We had found out we were both using ChatGPT. We were both using AI at that point, even starting to move into business uses for it. So we were just talking. Both of us had been using it for about six months or so at that time, and we said, what do we wanna do for our team with this? And so we put our entire team on ChatGPT on a team plan, and we gave them guidance.

We built a AI policy for our team. We started talking to our clients about it. We wrote a blog post about how we're testing AI within our workplace. So that was day one. That was two years ago now at this point.

Since then, we've had a custom GPT out there for client use back in last summer. We published it on our website, so it's free and open to anybody to use on a regular basis. Whenever they have a question, They can go and they can understand how GW effectively would answer that question. This has led to I actually found out this month. Last week, actually, as you're hearing this, I will have accepted an award as placing third in the AICPA slash CPA dot com Innovative Practitioner of the Year award.

I've now given presentations at the AICPA. I've given presentations to Thrival. I've given presentations to the MACPA on AI. Here's the thing about AI. We are at the two year mark within our firm.

We are now starting to see regular use from AI. We have some people on our team who use it all the time. We have some people on our team that don't use it quite frequently. We have people on our team that use it all the time and don't necessarily let us know that they're you know, how they're using it or what optimization they're gaining from it. It's a broad, you know, it's a broad spectrum across the company.

Here's the thing that, you know, if you are still on the fence about whether AI is going to affect your company or not, your business, your service line or not, it's time to get off the fence. It will affect every business. Even if you are a tradesman, even if you are a plumber making house calls, AI is going to affect your business. That is not the question. Here's the problem.

If you're still sitting on the sides, you're waiting for AI to prove itself to you and say, I need to wait and see until it has a business use case that makes sense before I jump in. The problem is AI is going to get there. You, however, are not going to be ready for it when it gets there. And this is the biggest benefit that I've seen to having our team in AI for the past two years. It's helped me to see not everybody's gonna jump into this thing and immediately gain value from it in month one.

You have to learn how to use the AI at the same time that the AI continues to improve its model. And if you wait until it's ready, you're not gonna be ready for it. But what our team has gained by two years of constantly being reminded, have you talked to Chad GBT about this? What did Bluejay come up with for this, you know, this tax scenario? Our team is constantly being pushed in that direction.

They're constantly being refined and shaped. They are changing to better use AI as AI is changing and being easier to use, being better to use. And so that is my encouragement to everybody. Don't wait on AI implementation until it's ready. You need to be ready.

You need to start to prepare yourself to be ready when it is ready. It is going to change every industry. We are seeing that. I think I'm tempering maybe my expectations about how quickly it's going to replace every single role just because of some There's this curve and it's the it's like the technology adoption curve and it's got this like trough of disillusionment. We have definitely seen over promising and under delivering with AI.

I think what we're also probably gonna see here in 2026 is a lot of governments cracking down on use of AI. They they want to do it to regulate it and make it safe for everybody. They're probably going to strip it of all a lot of its creativity, strip it of a lot of its usefulness in the process. They're going to be behind the curve on where they are setting regulations. It's not going to keep up with the speed of movement, but that's probably something we're going to see in 2026.

They're not going to be able to put the cat back in the bag, you know, put the worms back in the can, whatever the metaphor is that you wanna use there. It's going to be too late. You know, AI is going to become like cloud computing is today. I heard this comparison about a year ago and it like clicked for me and it's like, oh my gosh, I can't believe these are the same arguments that I heard fifteen years ago towards the cloud. You know, no real business happens in the cloud.

The cloud's fun, and the cloud can be useful, but you don't trust client information in the cloud. And when I started hearing that exact same argument towards AI, no real business is done with AI, or it can be fun, it can be useful for your hobbies, but you don't trust client information with AI. Once that clicked for me, I was like, we've been down this battle before, And nowadays, you know, COVID was a big eye opener for a lot of people who were still making that argument that we don't need the cloud. Their businesses shut down for, you know, good part of a year. Whereas businesses like ours that were already prepared, already had a framework in place for working remotely, were able to adapt and continue to work, and to continue to provide value to the community.

AI is going to be the same way. If you continue to drag your feet, you might make it to the end. You might be able to retire. You might be able to shut your doors. You're not going to be able to sell your company.

Getting back to talking about protect, getting back to talking about the value acceleration methodology, you're not going to have anything of value there for somebody else to want to buy without them discounting it by how much work is going to be required for them to step into that position and update it for the 20 century. So that's where we're at with AI. I look forward to where it's still not using it in any type of ten forty tax preparation yet. There are a couple tools out there that will do a lot at the front end and some that will do preparation or delivery at the back end, but there's really not a tax software yet that's going to actually prepare the tax return. There is a CPA out there who's developing a tax software, Andrew Argue.

He's, you know, somebody who's been pretty leading in the CPA space for a long time. He's developing a tax software that's got AI implemented from the ground up in the actual preparation and analysis of the tax return, but the difficulty there is gonna be rolling it out to 50 different states. He has been approved by the IRS to be an e file authorized provider. Interestingly enough, or sadly enough, it's the first tax software that's been approved for that since like 02/2010, when Thomson Reuters came out with UltraTax. So we have had no new developments in the tax software space in fifteen years.

Speaking of Thomson Reuters, they say that they've invested like $6,000,000,000 in AI implementation. We haven't really seen that on any of the established platforms yet that they have, so maybe they're working on it in secret and gonna be a big release, a big moment. What we have seen is we've seen them buying other software that has some of this more cutting edge, some of this more interesting developments going on. They've acquired SurePrep and SafeSend Returns within the past two years. Thankfully, they haven't ruined SafeSend Returns yet.

SurePrep has been kind of stable. Does look like they're gonna shut down TaxCaddy, which was part of SurePrep. So that's where they're investing their dollars, but we haven't seen any big releases in ultra tax. You know, one of the challenges that they have there is the majority of tax software that CPAs are using is still very much server based. So you've got UltraTax, you've got Lacerte, you've got ProSystemFX.

These are all installed on a computer. They're not cloud based technically. They are hosted on a server. And so when you talk about implementing agentic AI, when you talk about implementing where AI is currently, where it will actually do things for you, that's very much cloud based, And they would have to wait for something like a, what is it, DeepSeek is the China based, licensable, server installed private AI that you can use. Firms would have to put something like that in place in order to use server based AI currently at the moment.

And so, you know, our preference as CPAs for something that is stable, something that is recognizable, something that is efficient, like UltraTax, like Lacerte, is going to be killing us when it comes to AI implementation. We've stayed away from, we have not invested our hours into something that's cloud based, like Thomson Reuters has a system called GoSystem. Our firm uses that for tax prep. We've been there for fifteen years because it was the cloud based tax prep solution at the time, but I talked to other CPAs and they've never even heard of GoSystem. One of the benefits of it is it is Chrome based, and so when AgenTik AI is reliable, is able to work within a password protected portal access situation, when we can trust it to do that, the cloud based software is going to be better optimized for that within the space.

Speaker 11: I don't ever see it replacing us as the talent, the voice, the people. Right? Last thing I'll say on this is since AI came out, my small team of just a handful of people can do, I mean, triple, quadruple more than we were able to beforehand. Things we never imagined we all would do, we can now do easily because it has enabled us to do that. That's helping us serve the people we wanna serve even better.

Speaker 12: Like, me me and people, everyone is doing their best, and over time, you know, you it's you get with clutter. And just like in a in a in a house or anything like that, there's just clutter. That clutter kind of interferes with the way that you can operate.

Speaker 13: This kid who's playing Minecraft, I also notice him. He's got other capabilities. Right? I'm paying attention to him. I'm having a conversation.

I generally do not believe that that teens don't wanna do anything. In fact, I think it's the opposite. I think they turn in on themselves, and I think that's what's going on. They don't feel like they're good at anything. Their hormones are going forward.

They wanna be they wanna be noticed, and they want other people to like them for their genuine ability to to bring value to people.

Speaker 1: That's 2026. I don't think by 2027 that we will have something in place, but who knows? At the speed that this is moving. We're going to continue through 2026 with our tax prep, for the most part, as we have been with collecting the documents, using SurePrep to get it into the tax returns, preparing and reviewing the tax returns, keying the trial balance, tying in the trial balance, you know, everything required for a business return or an individual return. There's not gonna be too many big changes in our processes for that for this coming year, but we'll see where we're at this time next year when we start to look at the following tax season.

You know, I have this conversation with my team. They hate it. But, you know, I've done this will be my twentieth tax season at this point, and, you know, I got to a point probably seven, eight years ago where I started saying, You know what? I'm in this profession, and this tax season is what this tax season is, but we can make improvements next year because I still got 20 of these to go. You know, at 26 years old, when you just finish tax season, you probably don't want to hear that you've got another 40 of these ahead of you in order to really nail it down, but this is the incremental progress perspective that I've gained as a business owner.

This is the long term perspective on your career that really benefits you. When you get continued forced reps on something and it's not there today, that means that doesn't mean that today is failure. That means that there's always tomorrow. There's always the next time. And so if you can get to that place in your own mindset as a As an employee or as a business owner and say, yesterday.

We can't do anything about this past tax season except learn from our mistakes, and choose one thing, two things to improve the next time around. You know, if you start making incremental progress, if each person within a firm, let's say you've got five people in your company, if each person in the in that company chose one thing that they personally were going to take accountability of, that they were gonna take charge of and improve for the next tax season, that's five improvements for next year. You multiply that over ten years, that's 50 improvements that you've made to that tax prep system over ten years of the growth of that company. There are going to be a lot more changes necessary. There are going to be a lot more room for improvement.

Some of those changes you might go back on, you might shift, but looking at the long term perspective, 50 changes over the course of ten years is huge, but most of us say, that one sucked. I need to recover from that, and then we do the exact same thing the next year. You know, in a lot of the books on mindset shift on, improvement, they talk about deliberate practice. Practice is not the same thing as deliberate practice. Practice is doing the same thing over and over and over again.

It builds muscle memory, but you're not focused on improving your skills with each practice. You're just focused on optimizing on efficiency. You're focused on doing the exact same thing. This is why CPA firms, you know, a CPA retires at 70 years old, they've run their firm for forty five or fifty years, and have no value left in that firm, it's because they haven't run their firm for fifty years. They've run the same firm 50 times.

They've not made incremental improvements each year and grown within that company. And so when you shift that and you start focusing on deliberate practice, it says this is now baseline. This was the change we implemented this year. We can't rest on that anymore. This is now the baseline that we're gonna make this next change for the coming year.

And you start to stack that up, and that leads to massive shifts over the long term. You know, you think about fitness, you think about training. You can't jump from, you know, deadlifting 135 pounds to deadlifting 500 pounds within one training session. It takes years and years of progress. You can't just dead lift a 135 pounds, you know, 600 times, and then all of a sudden expect that you're gonna be able to dead lift 500 pounds.

You have to incrementally increase what is challenging to you, what is hard to you each time that you go into the gym. When it becomes easy for you, you're probably not going to be stressing yourself. You're probably not going to be pushing your muscles anymore at that point. And so at the point that tax preparation, at the point that running your business is now easy for you, that's probably the point where you need to choose something that is hard. You need to now say, I'm I'm glad this is easy for us.

We are not facing the same problems that we were three years ago. You shouldn't be there either, but you shouldn't then take that chance to coast and say, cool. We have no more problems. We're just gonna ride this out into the sunset. Every year, you need to choose what is now our new definition of hard for 2026, and then once you get through that, what is our definition of what's hard for 2027?

When you get through that, what's our definition of what's hard for 2028? And you continue to do that, and then ten years from now, you look back and you're like, wow, I can't believe we thought that those were problems in 2025. Look at where we're at now. Look how far we've come. You are going to grow as a leader in the same way I said you need to grow to be where AI will be in the future.

You're gonna grow as a leader so that you're better able to meet those problems that are waiting for you ten years down the road, but you can't do that unless you're continuing to push through those problems each year and choose your hard, for the coming year. So what I've just talked about here is kind of a little insight, a little peek into the shift that I am making in the YouTube channel moving into year three here in 2026. For the past two years, I have built a generalized succession planning YouTube channel. We have the art of succession hosted there. Our videos have been strongly around, you know, buyers who are stepping into the the shoes of a business owner, sellers who are looking to sell their business.

One of the things that I wanna do with the YouTube channel, as we grow it, is start to refine who that focus is. Like, what differentiates us from other succession planning channels that are out there? One of the things that we came out with this past quarter was the ownership mindset score. This is a 24 question test that you can take. It's linked in every podcast video that we have.

You can find it down below. This is to help you as an employee shifting into the mindset of a business owner. What do I need to learn to be ready to take over this company? And really, my hope for this is also that even if you are an employee and you decide you do not want to be an owner of a business, because you look at the at the landscape, you look at what's required of it, you say, no, I am happy to be a really empowered employee within this company, that this would give you the insight to see that, to make that decision, and you would still continue to grow in the responsibility, grow in your development as an employee as well. And so as I was looking at that, as I've looked at some of our most popular videos on this channel, and as I look within our own team and, you know, identifying who is going to step up, who wants to continue to grow as an employee, who wants to take ownership, I started to get this idea that I wanna shift the YouTube channel in that direction as as well, as a whole.

Like, what would I say as a business owner if I were talking to my employees and saying, this is what you need to know in order to step into the ownership of a CPA firm? You know, when I went out on my own, and I hear this from a lot of my peers, they're like, man, I went out on my own being really good at taxes, being really good at accounting. I had no idea how to run a business. There was all this behind the scenes stuff that I was never clued in on. I had the same experience.

I'd never invoiced anybody before. I'd never done a proposal before. I'd never assembled and delivered a tax return before. I'd never registered, with the state or with the IRS. There's all of this behind the scenes stuff that you deal with when you go out and you start your own company, or when you buy an existing company.

And so I want this channel to focus on that behind the scenes transition from employee to ownership mindset. I think that that's a need in the marketplace. I think that that's a need on YouTube, and I think that that's a need when I talk to my peers, are also business owners, who say, I would love to sell my company, but there's nobody in my company who is stepping up, who is wanting to buy this, who is stepping into leadership. Nobody who's initiating those conversations. And so as I'm thinking of that as a business owner, as a YouTuber, as a podcaster, like, what would those conversations be that I would have in order to help somebody take that step, take that leap before they're out on their own and they have to figure it all out the way that, you know, I learned, the way that we learned, trial and error on the fly in the moment.

So what would those conversations be, and how do I build a YouTube channel, around those conversations? So hopefully, that's a benefit to you. I hope that you've enjoyed this fourth quarter update. I'm looking forward to bringing you season four and entering 2026 with you. I wanna thank you for watching the art of succession, and I will see you on the next one.