As part of my series about the “How to Navigate and Succeed in the Modern World of Finance,” I had the pleasure of interviewing Kristen Keats.
Kristen Keats is the founder and CEO of Breakaway Bookkeeping and Advising, a virtual network of bookkeeping and advisors on the mission is to bring joy to accounting! Kristen is a CPA with over 25 years in the accounting profession.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
After graduating with an accounting degree, I started at a “Big 6” firm (now down to 4), which I think of as a boot camp for accountants. I continued to work in the industry for a couple of years until I had my first child. Then, I started my own accounting practice and worked from home for nine years. After that I worked for a local firm, then at a larger regional firm. Those experiences planted the seeds for starting Breakaway Advising and Bookkeeping (Breakaway), where I am now founder and CEO.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?
So many mistakes… The biggest one is one that you might not think of. When we started Breakaway, I learned that you can’t just come up with a cute and crafty name — It has to be able to be trademarked. This is why you see all these companies with funny sounding and strangely spelled names.
Is there a particular book that you read, or podcast you listened to that really helped you in your career? Can you explain?
Many years ago, I read The 7 Habits of Highly Effective People by Stephen Covey. The concept of the “Circle of Influence” helped me to learn about prioritizing tasks when things get overwhelming. Can you believe that book was written before we had email?!
Are you working on any exciting new projects now at Breakaway Bookkeeping and Advising? How do you think that will help people?
Right now we are doing a video series where we are interviewing business leaders and asking for their advice about coping with the current crisis. We are hoping that these short (7–10 minute) videos will give a new perspective and offer inspiration right now when it can feel very negative and overwhelming.
Thank you for that. Let’s now shift to the central focus of our discussion. Extensive research suggests that “purpose driven businesses” are more successful in many areas. When you started your company what was your vision, your purpose?
I have been a CPA for more than 20 years, and my experience made me realize that we need to make accounting more joyful — for both the accountants and the clients. When accountants feel fulfilled, work reasonable hours, and have community support the clients also benefit. So, we started Breakaway with 3 pillars to bring joy: 1. Leverage technology 2. create community and 3. utilize an off-shore support team.
Do you have a “number one principle” that guides you through the ups and downs of running a business?
Bringing joy. To me, this encompasses many core values. Having integrity brings joy. Building trust brings joy. Creating a community brings joy. We use this as our guiding principle every day as we make decisions and build the company.
Lead generation is one of the most important aspects of any business. Can you share some of the strategies you use to generate good, qualified leads?
I find that the clearer we are about who we are and our values, the more qualified the leads are that we get. If we are good at communicating how we operate and what we are about, it will weed out the clients that aren’t a good fit. In this vein, Michelle Lopez, another founding advisor, and I did a video series about how Breakaway works that we can send to potential clients and advisors as a first step.
If a fellow CEO would ask you for advice about whether to bootstrap or to look for VC capital, how would you help them weigh the pros and cons of that decision?
I think it depends on what the goals are for the company. At Breakaway, we are going the bootstrap route because we have very specific ideas about our company’s culture and how we want to manage and operate it. We want to maintain that control. Because of our structure, we have low overhead costs and our startup costs have been manageable. However, there are a lot of nuanced things that would have to go into that decision for a CEO.
What measure do you use to determine the value of a company? What advice would you give to other leaders about how to get an optimal evaluation of their business?
I am not a valuation expert. However, I have given this a lot of thought as it relates to an accounting and bookkeeping practice. My measure is whether the owner actually needs to be present to run the business, or if there are systems and processes in place that make it easy for a new owner to come in and take over. If the system is set up properly, that’s where you can start seeing multiples of revenue in a valuation.
What would you advise to a founder who initially went through years of successive growth, but has now reached a standstill. From your experience do you have any general advice about how to boost growth and “restart their engines”?
I think success can make founders complacent. I’ve seen this happen in a variety of industries. If a founder can keep in mind why they started the business and what their customers and clients love about them, they can find new and different ways to deliver that as technology changes. I think it means never being married to how things have always been and thinking outside the box. Sometimes hiring a new employee that loves the brand or the product, but has fresh ideas about how to execute, can give a longstanding business new life.
What are the most common finance mistakes you have seen other businesses make? What should one keep in mind to avoid that?
- Not keeping accurate books. The only way you can make good business decisions is to start with correct financial statements. That is why we include bookkeeping in our name, even though we offer so much more!
- Not watching and projecting cash flow!!! Yes, there are all kinds of KPIs and metrics you can use to see how your business is doing, but cash is king.
- Making decisions in a vacuum. Every business should have trusted advisors that can help them navigate all the decisions that a business owner needs to make. It might be a banker or an insurance agent or (hopefully) a Breakaway advisor but being a business owner can be isolated and lonely if you don’t have a good sounding board.
Ok, here is the main question of our discussion. Based on your experience and success, what are the five most important things one should know in order to succeed in the modern finance industry? Please share a story or an example for each.
- Leadership. Managers and controllers are everywhere. Leaders are hard to find. Don’t strive to be the smartest person in the room. Surround yourself with smart people and let them shine. You have to allow for remote work. By now this is obvious. Many accounting firms were not prepared for the COVID-19 crisis because they wanted employees in the office and were slow to react to the stay at home orders.
- Rethink having meetings. We are trying to do away with real-time and in-person communication as much possible so that there is more time available to get value added client work done.
- Expand your staffing beyond the borders. There is a serious shortage of accountants, and accounting students. We have had amazing success utilizing off-shore and near-shore teams to support our advisors.
- Put your employees first. If you hire right and take care of your employees, they will take care of your clients.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Burnout is a huge problem in the industry. We are designing Breakaway to avoid burnout, but it happens whenever people are passionate and caring — sometimes they just do too much. So, my advice is:
1. Have strong boundaries. Make it clear that you are not available 24/7.
2. Charge appropriately! It makes it easier to not work 60 hours a week when you can earn what you want in less than 40 hours (by the way, I am a strong proponent of destroying the 40-hour work week myth).
3. Only work for clients that value your service. Life is WAY too short to work for anyone who is demeaning or doesn’t treat you fairly. Every accountant I know has more clients than they can serve so you have every reason to be picky about who you work with.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
I’d like to think I’m starting a movement :) I want to show the accounting industry that things can be different. I think it starts with getting rid of billing by the hour and having hour requirements for employees. I think our focus needs to shift to bringing value rather than time to our clients These aren’t my genius ideas — I stand on the shoulders of people like Ron Baker and other pricing thought leaders, but I am hoping that I can create a company that benefits more people. Our goal is to build the “Big 4” of Bookkeeping.
How can our readers follow you online?