Making the switch from the highly structured world of accounting to being an entrepreneur can seem like a giant leap. Many of the accountant stereotypes are what prevent CPAs from making the leap into entrepreneurship, but I would argue that the best accountants would be great entrepreneurs. There is an article by Entrepreneur.com on the top 10 traits of successful entrepreneurs. Let's look at them from a CPA perspective.
1. Full of determination
According to the AICPA, the passing rate for 3 out of the 4 sections of the CPA exams is below 50%. Not to mention, this is some pretty boring material (sorry Tax Code and Accounting Standard nerds). Accountants are generally hard working and ambitious.
2. Not afraid to take risks
Okay. This one can be a hurdle, but don’t fret.. Coming from such a regulation driven environment can be a little difficult for an accountant to adopt a wild marketing strategy or make a risky move. However, accountants often face grey areas in compliance and advisory roles where they are forced to be creative and come up with a solution where guidance doesn’t exist for the set of facts. I found this to be a frequent practice in the State and Local Tax (SALT) area where I practiced. Often the jurisdiction doesn’t have guidance on a subject so you pool the best resources and choose a position based on the facts. Building a business is often vague. You make assumptions based on data and knowledge and tweak those as you go.
3. High level of confidence
The world of accounting has such a hierarchical layout that accountants are often hesitant to being an entrepreneur, asking, “Who am I”. Being able to understand a P&L, leverage, margins and cash flow are major pieces to running a business that give a CPA a leg up on a lot of entrepreneurs. You often see a variety of businesses and operation and management strategies across industries. Don’t sell yourself short.
4. Craves learning
In public accounting you continue to learn or you die. The ever changing regulatory environments are a mess to navigate. The mandatory continued education requirements for CPAs also prepare you to know that you will be learning your whole career. The scope is a little broader in the startup world, but the concept is the same. Learn and adapt or watch your career/business come to a stop.
5. Understands failure is part of the game
If you are the accountant that has to have your work done perfectly before having it reviewed, you will be in for some adjustments. Be prepared to have every idea questioned. I often receive feedback and implement it only to receive feedback to revert to the original idea. Everybody has an opinion on startups because nobody knows the answer for something that doesn’t exist. Your plans will be broken down and criticized constantly. You will fail at a lot. Learn from it and move on.
6. Passionate about his or her business
Anybody that works 80-100 weeks during “busy season” will have the passion to move their creation forward. If it is something you have sacrificed your accounting “career path” for, you better be passionate. If it is something you are doing because it “beats another busy season”, well you’re right about the type of work. However, your business is always there with more to do.
7. Highly adaptable.
Dealing with clients and their ever changing requests is great preparation for the adaptability needed for a startup. Your assumptions will change and you will be forced to adapt. Just give the change a smile as you would the client and get to work.
8. Good understanding of money management.
9. Expert at networking
Lasting success in public accounting is based on your ability to foster lasting relationships with clients and be a trusted advisor. I was only in public for a few years, but I always saw the quickest ones to ascend to partner had this trait. Those relationships are key in building a business. You will be asking for favors and investment constantly and will be expected to reciprocate with value.
10. Ability to sell and promote
Depending on the CPA's experience this can be a strength or a much needed improvement. If you are good at selling things like tax returns, consulting advice, and audits, imagine how good you will be at selling a cool product or service that you created and people go out of their way to get rather than a legal necessity. The ability to sell is the cornerstone of entrepreneurship. You can be a great developer, finance wiz, or visionary, but selling that vision and losing the fear of rejection is paramount. An organization led by someone afraid to sell in the startup world, probably won’t last long.
CPAs have all of the traits and abilities to be entrepreneurs. It all comes down to your desire to do so. I was lucky to go from public accounting to a company (OtterBox) that had high entrepreneurial values and encouraged creativity before venturing out as Co-Founder of Stow. Every experience and job you have can be preparation for when you get the bravado to dive into the vague world of entrepreneurship.