By Justine Coyne, Reporter Pittsburgh Business Times - Date: Friday, August 9, 2013
Working at a large, regional accounting firm, Kevin McQuillan and Krista Salera felt they weren’t being effective. While the pair worked well as a team, their style wasn’t working in a structure where multiple partners were going in other directions.
In August 2010, they decided to break out on their own and establish The McQuillan Group, a boutique accounting firm. While they were not starting from zero — having effectively negotiated their way out of their previous practice, taking all of their clients and seven employees — there still were challenges.
“We were working for the same clients and trying to keep things at the same level of service they were accustomed to, but how do you match the level of service of a 90- to 100-person firm with less than 10 employees?” said McQuillan, who serves as principal.
They decided to focus on their specialties, serving clients in construction, manufacturing and distribution, and developing a focus on the state film tax credit. While they have some clients outside of these industries, McQuillan said he likes working with small business owners, handling both their business and individual tax returns.
“We’re not trying to compete against other firms across the board, but as a niche firm, we know we can really compete well,” he said.
Salera, principal and director of accounting and assurance, said they knew they would have to invest in two resources: personnel and technology. The firm chose to forgo cheaper software, opting for the same program they used in the regional firm in order to stay up to date on tax law changes and better service clients.
McQuillan and Salera also looked at how they could improve the environment for employees.
“We are in a business that has the reputation for people working long hours, but when it comes down to it, a lot of that extra time is due to inefficiencies,” Salera said. “We looked at the work-life balance of our employees and talked with them to understand their needs. Making a better work environment isn’t always about an increase in salary. Sometimes employees want more time off, more flexibility or the ability to work remotely.”
McQuillan said he wasn’t sure the new firm would make it through its first tax season, as their billable hours exceeded their staff’s capabilities. However, not only did they make it through, they also haven’t had an employee work more than 120 hours of overtime in a tax season, almost unheard of in their industry.
To make sure it had all bases covered, the firm partnered with individuals who had specialties that fell outside of its main focus areas, contracting work that did not have a full-time valuation.
Diane Denis, Katz alumni chair in finance and professor of business administration at the Joseph M. Katz Graduate School of Business at the University of Pittsburgh, said the smaller the company, the more challenging managing resources becomes.
“While big companies should also be focused on using their resources wisely, with a larger firm there is more slack, so you don’t have to be quite as careful,” she said.
With a focus on specialization, McQuillan’s revenue has grown an average 15 percent to 20 percent per year, and the company has plans to grow to 16 employees in the next two years, eventually expanding to 20 to 25 employees within five years.
“No matter the size of the firm, it still comes down to delivering what your clients’ needs are,” McQuillan said. “At the end of the day, it’s still about communicating with your staff and clients to find a way to deliver the best value.”