Matt Fargo, Managing Partner at Kurtz Fargo, Serving Emerging Growth Businesses & Ultra-High-Net-Worth Individuals With Solution Based Strategies And Planning
The firm’s job is to go out and find the right answer to, the best answer. Kurtz Fargo serves emerging growth businesses, with the common thread between those companies being that they are growing rapidly and they need a firm that’s helping them plan and strategize throughout their growth process. Matt Fargo’s firm also serves high-net-worth and ultra-high-net-worth individual clients. It turns out that the planning and the strategy work that is done for a business is very similar to that required to properly serve high-net-worth and ultra-high-net-worth individuals. Unfortunately, most individuals, whether ultra-high-net-worth or not, have never experienced true planning and strategy services with their accounting firm, as most firms, solo practitioner to the Big 4, have not trained their teams to think this way. Kurtz Fargo trains their people to think strategically rather than being purely compliance focused, which is unfortunately where most accounting firms focus all of their time and efforts.
Matt Fargo, Managing Partner at Kurtz Fargo, Serving Emerging Growth Businesses & Ultra-High-Net-Worth Individuals With Solution Based Strategies And Planning
We’re incredibly fortunate with the patient and understanding Matt Fargo of Kurtz Fargo. He’s got a consulting firm with his good friend in Boulder, Colorado. We’re going to talk a little bit about the business and who he serves. Thanks so much for taking the time.
You are welcome.
We started out chatting about the business that you have and the clientele that you serve. Could you dig into that a little bit?
Our business likes to serve emerging growth businesses and that’s a pretty wide range of companies. The common thread between all of those is that they’re growing and they need a firm that’s helping them plan and strategize throughout the process. We also work with individuals that are high net worth and ultra-high net worth. You wouldn’t think there’s a lot of similarities between businesses and individuals, but it turns out that the planning and the strategy of the businesses they want are the exact same thing that high net worth and ultra-high net worth individuals want. The way we’ve taught our people to think, we’ve asked them to think strategically about things and that’s what they deliver to the clients. It’s not always the canned solution, it’s not the obvious solution. We teach our people to think and we teach them to consult. Anytime they’re presented with a problem, their job is to go out and find the right answer, not the answer.
Let’s say for sake of argent, I’m a prototypical client, whether it’s a small business owner or whether it’s high net worth person. There’s a particular process or steps that you take to serve that marketplace. Can you describe a bit of your process when you’re dealing with the entrepreneur in business and then secondarily that high net worth, ultra-high net worth individual?
Let’s give an example of a small startup business. There are always the interesting ones to start out with. In the Boulder community here, there’s quite a few of those in a number of different industries, but a lot of times the first time we’re brought into the engagement is by their law firm and the law firm or their accelerator that they come to us and say, “We’ve got this company and they’re just getting started. What’s the right organizational structure for them?” There’s C-Corp, we got S-Corp, we got LLC. a lot of people will throw an answer on that, and the first thing our team thinks about is, “What are you planning to do? Who’s going to finance the business? Where are your growth plans? How are you going to raise money? What are you going to be delivering to customers over what period of time?”
We’ll understand all of the components around the problem and then we’ll start coming up with the solutions that make the most sense. A lot of times if you’re going to be a venture capital or an institutionally backed a company and you’re going to go through an accelerator program, C-corps can make a lot of sense. If you’re going to be a food and beverage-based company, LLCs can make a lot of sense and we’ve got to be thinking about who their investors are, who the buyers are, all those types of things. What’s the process look like? A lot of times we’ll meet with them and we’ll talk. We’ll say, “Tell me about your business. Tell me about why you guys are starting the company.” It doesn’t end up being much of an accounting discussion to start out with. We want to understand everything and the way we look at ourselves here is we are an accounting firm, but we’re a relationship quarterback. A lot of times they’ll come in here and they might need a bookkeeper or an outsourced CFO or an attorney or a payroll company or a bank.
They might need an introduction to a venture capital fund or an Angel investor. We sit at the center of a lot of those relationships and if we can help make those introductions to folks, then we’re adding a lot of value. When somebody comes into an accounting firm, early stage like that, there’s not a whole lot of work that we can do for them. You got a tax return that you’re going to do at the end of the year for an early stage company. That’s a small task, at least in my opinion it is. All the other things are what’s going to add a lot of value and build the relationship. Five years down the road we might have a good-sized client, but we started it when it was just a little seed.
A tax plan is understanding what are the variables in somebody’s world, putting those into a projection type format.
We’ve got the approach that you use. How similar or dissimilar is the high net worth, ultra-high net worth client of your firm from the business owner that you’re talking about?
The planning and the strategy pieces is not too dissimilar. The issues that you’re solving for are different, but the process isn’t too dissimilar. When somebody comes in, usually they’re coming in either pre-transaction or a post-transaction. A very large number of the people that we’re working with have had some event or they’re planning for some event that’s going to put them into that category. If we get them pre-transaction, that’s where we usually start working with them, and there’s a lot of planning that needs to happen around. When’s the transaction going to happen? Have we done the proper planning to not pay any tax that we shouldn’t be paying and to optimize what we need to be paying? Do they have the right relationships around them to optimize everything else? If they’re coming to us first, we’re going to need to make sure that that they’re in a relationship with a financial advisory firm, whether that be a multifamily office or your typical advisory groups. That’s going to be important.
They need to have an estate and trust planning attorney involved. We need to make sure that they’ve got those houses in order and then we talk about the accounting. A lot of times we’re bringing a tax attorney to the table and to start thinking about what the situation looks like, and then we start gathering information and try to figure out where the opportunities might exist. Then we talk and we figure out what opportunities there are and we decide which ones make the most sense to go after and then we do that. When somebody comes in post transaction, there’s a multitude of things that we have to handle.
It depends on how much planning they’ve done in the past, what relationships they’ve had in the past, what planning and, strategy they’ve done in the past. A typical engagement on a year to year basis if we’re not planning for a transaction is bringing a client in mid-year, or maybe it’s quarterly depending on how things are changing for them. Change is what drives how many times we need to be getting together. It’s putting a tax plan together. The tax plan, in our opinion, is not just a tax projection. A tax plan is understanding what are the variables in somebody’s world, putting those into a projection type format.
Once we have a base case scenario, then we start playing with what are the opportunities that exist. If this person has this set of variables and the result of this at the end of the year is going to be X tax due, what opportunities exist. Then let’s start playing with those and running them through different models and saying, ”What if we pay our taxes to the state before the end of the year? What if we implement a certain trust? What if we go down the list of different types of things you can do?” Then you look at what the net effect is in the current year and in the future years. It’s looking at things with all the data that you possibly can and then letting that spark the conversation with the other professionals and come to the right solution. Sometimes tax savings isn’t the best solution. Sometimes it’s something that the financial advisor can do or the estate and trust planning attorney can do. If we all get in one place, we can accomplish the best solution.
It’s lack of surprise.
Sometimes that’s all everybody’s looking for, is just not being surprised at their goal. Maybe the end of the road of all the planning is, “There’s nothing here. We’re doing everything right and here’s how much you’re going to own in six months.”
There’s nothing we can do. It is what it is. What strikes me about all of that for folks is there’s probably misconceptions. I would imagine that as you guys engage with some of these folks, whether it’s pre-liquidity event or post liquidity event, what are the typical misconceptions that you run across from these folks?
It depends on the size of the event, but a lot of people build a relationship with an accounting firm or an accounting software package early on, and then their life changes and they don’t revisit that relationship. One of the misconceptions about our industry is that its data into a spreadsheet or a tax form, it’s either right or it’s wrong. That’s not the case. There are a lot of things that somebody can do to optimize their situation. It’s a problem with the professionals that work in this industry. People don’t think strategically. They think in terms of compliance deadlines and getting those documents finished as fast as possible and everybody complains about how busy they are. It’s not a very inviting environment to ask your CPA questions when they’re talking about how busy they are at the time. We try to change that conversation a little bit. A misconception is that is that there’s nothing that can be done.
Some of that is an educational process because for many folks, particularly the ones that are doing the software-driven version. They don’t know what they don’t know. Shifting gears, we talked a little bit about this when you decided to make the leap. You went from the security of working for a larger firm and you decided with your partner to start your own firm. If you could take us a bit through that thought process and the things that were going on in your mind when you made that decision.
There are a lot of things that were going on in our mind at the time. One of the things was there are some industries that we thought were being underserved. At the time, it was the tech industry that we’re focused on. I’ve met the guys who started Techstars and this is back in 2008 and 2009 when I was chatting with those guys. We’re watching this exciting thing happen in the tech industry, in Boulder and in the Front Range, and we wanted to be a part of that. One of the things that I noticed while working on some of these early stage companies at a large accounting firm is that they’re with a large accounting firm. Because there’s a perception and it’s true that we have the skills and the technical knowledge to get the right answer in a complex audit or tax return for these companies.
These companies are actually more complex than their size would show. They have multiple rounds of equity. They have complex data arrangements. They have warrants and options and all these other things. The problem is that, at least in my experience, when you have a small job at a big firm, you assign your interns and your newly promoted folks to them. Did they get the right tax return? Did they get the right audit? Yes. At the end of the day, they did, but what additional value was provided by a bunch of interns and junior folks? Very little value was provided. The other thing is that a lot of these companies, they don’t have CFOs. They don’t have an entire 35th floor of the Wells Fargo building downtown thinking about their accounting and tax strategy and problems.
We felt like we needed to have a firm that had those technical capabilities but could deliver the service in a more effective way. That’s what we wanted to do when we started the firm. You mentioned job security at the time. At the time, 2010, we’re pretty solidly into the recession at that point. Our firm had implemented some salary changes for folks and had done some layoffs. The security of a large firm or at least the misunderstanding that that existed was pretty evident. The risk in my mind of going out and starting your own firm was not that risky. It seems risky, but what’s the worst that can happen? You go out and get another job afterwards, just with a little less money in your bank account. It doesn’t seem so bad.
Kurtz Fargo: There are a lot of things that public accounting does right, but there are a lot of things that we struggle with as an industry.
You were going through this process and unfortunately in the section that we missed, you were talking about day one or day two when you started the firm. I thought that that was an instructive story. If you would, let’s revisit that story.
We took a weekend and we’ve got six pack of beer and we went over to Chester’s house and measured out his basement to make sure there was enough room for me to move in if the thing didn’t work out. Then we built a spreadsheet and we decided that we didn’t think we’d go bankrupt doing this. We were pretty sure we could pay our mortgages. We decided that we’re going to do. I remember seeing our wives, they were actually pretty nervous, but they were very supportive as well.
You had a six month old.
I did. I had a six month old at the time. Chester had a four-year-old and a two-year-old at the time or something in that range and lots of young kids basically. We had to start this thing. Starting an accounting firm isn’t inexpensive. You got to buy software and that’s expensive. You got to buy research tools, you got to buy computers, you got to run an office, you’ve got to buy desks and that’s all not having any clients and paying attorneys to respond to letters that your previous firm sends you.
Between all of those things, we drained the bank accounts to zero, we maxed out the credit cards out. We put the 401k accounts at zero and then Chester ended up pulling some money out of a life insurance account that his sister owned to try to fund this thing. I think the culmination of all that was when my wife went to the store and she was going to buy some baby formula for our six-month old who had to have formula and a credit card got declined. She called me and asked if she can write a check or if there’s something else that you can use and no, there wasn’t. If we wanted to be on the wall with the bounced checks, she could do that. She ended up having to go to the doctor’s office and getting the formula samples for the next couple days until that bank loan closed. We could get ourselves back on track. We pushed it all the way to the edge and then got started from there.
There’s a point where you’ve gone through this knothole for lack of a better term and you come out the other side. When there was a point where you said, “We’ve got something going on here,” how long did that take you from the early days to feeling pretty good about what you had?
I think we felt like we had something going from day one. Chester and I have very different personalities, but we have a very unified vision of what we wanted to create. We come at it from different angles. We sat down and we put together the list of things that suck about public accounting. It was a pretty long list. That was one of the first things we want to focus on. Our goal was never to be a small CPA firm. We wanted to be something special and we knew that it was going to take people to build that. There are a lot of things that public accounting does right, but there are a lot of things that we struggle with as an industry.
High turnover is one of them. We talk a lot about work life balance, but I don’t think the people we’re selling that to understand what that means. I don’t think the firms that are talking about that are very honest about what they mean by that. We have this high turnover as a result. We pay well, but people end up working crazy hours and they get burnt out in two to four years or maybe a little bit longer if they’re tough. What we’re trying to create here at Kurtz Fargo wouldn’t allow for that. We wanted to work with clients that wanted smart and technically adept people who could think outside the box and who could plan and strategize.
In order to accomplish that, I can’t have a revolving door at the bottom of my organization. I need to have people stick around. We need to pay high salaries that were equivalent to what the other folks are paying at the big four and the other high quality organizations that kids want to go to right out of school. We needed to provide great benefits for our folks that was equivalent to or better than what the other firms are providing. We needed to have extremely low turnover in the organization. We needed to provide the best tools and the best research capabilities.
That’s not easy to do, but we thought about at all in those early days and then we started executing on that. That’s why we’re so different. I haven’t yet found a firm that operates like we do at our size with the clients that we operate with as effectively as we do. I was actually out recruiting in Durango at Fort Lewis College. I like going to small schools because I get to meet some interesting folks. It was interesting, as I was presenting our firm to the students. There were some other accounting firms also presenting to the students and they had been talked to by a number of other national and large accounting firms. It was amazing how excited the students were to go work for a firm in Boulder that works with the kinds of clients we work with and the culture that we have.
I showed them pictures of the inside of our office, and this place is so different. You walk in, it looks like you walked into the wrong office. Did I walk into a tech firm? There’s a bunch of Apple computers on people’s desks. What’s that all about? Why are people wearing jeans around here? It looks nice, but if there’s this different environment, people don’t look stressed out. They’re working hard, but we’ve created something different.
In the beginning, I suspect that you had complete control of your staff news. There’s two of you in the beginning and at some point you, you get to a size where you start, “How do we take in past the culture? How do we inculcate the culture? What was that thought process like?”
Culture’s a tough thing. It’s not something you can necessarily dictate to people. You can’t say, “This is what our culture is and you’re going to be that way.” It’s a culmination of all the personalities in your firm, and the personalities in your firm are usually some reflection of the people who decide who gets to work there. They copy the people at the top. It’s a function of how you address the team. It’s a function of who you hire. It’s a function of how you allow people to think. From day one, one of the things we did as an early company which had very little money at the very beginnings, Chester and I said that it’s our job to take on the risk, not anybody else’s.
The first guy we hired is our tax partner, Jeff Starkey. At the time, we wanted to make sure that Jeff had all the benefits, the salary, all the pieces to make it a secure place for him to be. We did that for every single person. That meant that Chester and I took very little out of the firm until we got pretty far along. It’s probably three to four years into owning the firm before we started paying ourselves back, but we wanted to make sure that people were taken care of at the highest levels before we took care of ourselves. We do that even today. Bonuses don’t go out until every single person in the firm gets paid.
That resonates throughout the culture. We constantly look at what other firms are doing, not just in the accounting industry. Because I don’t think accounting innovates very much, but we get the opportunity to work with marketing, advertising agencies, tech companies, natural foods, and natural products companies. Those guys are at the forefront of innovation. If you think about a tech company, if you’re raising money from a venture capital firm, you’re trying to find how to best utilize every dollar. What you’re looking for is those benefits that have a higher perceived value to the employees, then the cost. We look at a lot of those things and we try to implement them here. Some of those things are simple, like I’m paying 100% for people’s healthcare premiums. Even though healthcare is expensive, the perceived value in healthcare is very high with an employee base. They feel like you’re taking care of them and we want to.
You learn leadership within your family.
Things like a flexible Friday programs and helping people with gym memberships and wellness programs and things like that, we’re always taking in new ideas and talking about it as a team and deciding what is the best fit. Not all of them work and sometimes we do them for a little bit and then we shut them down, but the goal is to create a great environment that delivers for the clients. The way you do that is by making sure that your best people stick around.
We were talking about turnover, one of the things that suck about public accounting. You addressed one of them, you’ve had extremely low turnover.
We’ve had one person leave the firm in seven and a half years. About six months after she left, she asked if she could come back. She ended up going to a firm out east, Deloitte and Touche, to move closer to family. It wasn’t an in-house issue that she was upset with, but that’s been the only person that’s left and we’re pretty proud of that.
We were talking before about the culture in leadership inside the firm. For you, what do you think the key influence is for leadership? How did you learn leadership before coming into this process?
I had a lot of opportunities. You learn leadership within your family. My dad was the CEO of a large company. I grew up in Alaska. He’s a pretty social guy and we had a lot of barbecues and parties at our house or other people’s houses and one of the things that was always neat is that the kids didn’t get sent to the basement or to the babysitter. A lot of us got to hang around those parties and those barbecues and interact with the business leaders and the government leaders that were there. You get to know them as people. You get to know how they think, how they talk, you get comfortable around people of influence. That certainly was something that helped me. I am an eagle scout and I was involved with the Boy Scouts for a long time. I have two girls now and it’s actually exciting to hear that girls can be in Boy Scouts now. I don’t know if everybody’s excited about it, but I am.
As a fourteen-year-old, I got to work in the leather working in basketry area of a Boy Scout camp up in Alaska and taught a lot of early leadership skills from some great people who ran that camp and I got to work there for a number of years. I graduated from Boy Scout camp to working for their high adventure program, which is essentially a mountaineering group within the boy scouts. It’s like No Rules or Outward Bound. I got to guide trips for one to two weeks at a time in the Chugach range in Alaska with a small team. That was a lot of fun. I got to deal with a lot of crazy situations. People sliding down ice slopes towards cliffs, a people falling down crevasses, cutting their legs and have them evacuated them out. You get to deal with leadership things in a very unique environment.
When I came to college here at CU, I got the opportunity to join an outdoor club that ended up turning into a fraternity. That was my first foray into entrepreneurialism. There was eight of us at the very beginning of this club called Colorado Quest. We all became good friends and we ended up joining up with a fraternity called Theta Xi and starting a fraternity on campus. By the time I graduated, I want to say it was about 40 guys. Now it’s the largest fraternity on UC campus and still very successful. That was a unique group as a bunch of Eagle Scouts and the kids with good grades at school. We wanted to create a fraternity that was focused on outdoor sports and high academic achievement. We didn’t see anybody else like that so we built our own and ended up doing well. That was a lot of fun. We had plenty of little black books and lists of things that we wanted to do and planning and how to strategize.
We were the little guy on campus. We had to figure out inventive ways to recruit folks. We’d go buy lists from the university of every kid that got above a 3.7 average that was a male from high school. They don’t give those lists out anymore, but we would send a letter to every single one of them before school started. We had a couple of nerds in our fraternity so they built a website back in the late nineties. We’d send all those kids to our website and they sign a form. We’d bring them out of school early, take them rafting, and we’d make them associates in the fraternity before they ever met anybody else. We fooled them all.
When I think about the seeds of being an entrepreneur and if you were to look at the one or two things, whether it’s the eagle scouts, was there a point where you said, “I’m clearly stifled,” or “I want to be an entrepreneur,” that spark. What do you reckon started that for you?
It always feels like it happened by accident to a certain extent, but it was always there. I always had something in the back of my head that I wanted to start a company. I got the opportunity to work for some great organizations. In college, I’m doing this mountain guiding thing up in Alaska and I got to work for an observatory one summer. Then I get an email from the college recruiting program at CU and they said, “PricewaterhouseCoopers is coming to town and they want to talk to you because you’re an accounting major and your GPA is a certain amount.” Honestly, I went into that first interview and I had a job as a mountain guide that summer in Alaska. If I didn’t get the job, I wasn’t super concerned about it. I didn’t even bother to learn what PricewaterhouseCoopers did. I literally went in there and I figured I’ve seen their name in the Wall Street Journal before, so this is probably a pretty good company to work for. I just switched my major to accounting recently. Nobody in my family is an accountant, so I didn’t know what these guys did.
We had a great interview. We talked about Boy Scouts and mountaineering and all this great stuff. I walked out of there and I thought that was fun. I got a call back a few days later and said, “You should come back for a second interview,” and it’s offered there. I got to work for this phenomenal company for four years and just work with some great people. I’ve actually started to reconnect with a lot of people I originally interned with whether it’s an associate I got to work on some cool accounts, Vail Resorts, Newmont Mining Corporation, a bunch of tech companies. It was great but I got burned out and I ended up turning into my resignation the third year or so, right around there. I remember being at my parents’ house in Durango and talking to a guy who’s a good family friend who was a partner at KPMG. He said, “You’re going to miss public accounting. You get to work with the very top percent of kids coming out of college. That’s why you got to go work for one of these firms. If you go anywhere else, I don’t think you’re going to enjoy it.”
They introduced me to this other firm, CBIZ Mayer Hoffman McCann. I spoke with a partner out of LA. They had done a big acquisition of a ton of small firms and midsize firms throughout the country. They had a cultural issue to solve, so we are building programs around national training and technical offices and leadership within offices and all these things. It was a fun run for a number of years, helping develop all these programs which you take for granted at the big national firms. It was a little bit by accident. I went over there because somebody said, “You should check out this company.” While I was doing all my accounting work, I got to also work on all these internal leadership programs. Then when that wasn’t scratching the itch for me or I didn’t feel like we’re adding the value to the types of companies I wanted to add value to. That’s when we left and started Kurtz Fargo. I don’t know that I ever said, “I want to be an entrepreneur. I should quit my job and do that.” It never quite came up that way.
Kurtz Fargo: The growth is driven by telling people about it and making sure they know and making sure that we stay in front of people.
You said there are 22 people on board and you’ve got construction going on upstairs. You’ve made the decision and there’s room in the one upstairs.
We can grow twice as big as we are right now in that space.
As you think about the thought process, “We’re going to move. We’re building out for growth,” what are your thoughts on key drivers for growth of your firm?
We try not to be a heavy sales organization. We try to do good work with the best professionals and the best clients in town. Then we hope that those guys tell the other what we did for them and so far it’s worked well. I don’t think we have had a year where we’ve grown less than 30%, and it’s been much, much higher than that in previous years. The drivers for growth, some of it’s just focused on the partner side. It’s what industries do we want to be influential in. Early on, tech was something that we’re focused on and we still are very focused in tech in and we made an effort to show up. We went to the events, we met people, we talked to them, we try to be as genuine as possible and that’s not very hard. Just be yourself. You talk about what you’re interested in and how you can help people.
The tech industry is such a great industry around here. People latch on to people being genuine and they say, “I want to work with that guy,” or “I want to work with that guy’s company.” We’ve more recently put a lot of effort into the CPG industry or the natural foods, natural products industry. We’ve spent a lot of time working with marketing and advertising agencies, with real estate development companies. There are all these groups that we work with that we do an extremely good job at and we have deep experience there. The growth is driven by telling people about it and making sure they know and making sure that we stay in front of people.
There’s downtown real estate here in Boulder which is extremely expensive. We have clients in New York City and they’re are paying more than us per square foot. Not all of New York is, but there are some areas and, but we choose to be down here because we bump into the people that we need to be bumping into on a daily basis so we don’t get forgotten. We don’t want to move out to outside of downtown Boulder and have people forget about us. Personal relationships are how business works and so we need to be down here.
You mentioned that you and your partner had a common vision, but you had different skill sets. When you made the decision at some point and said, “I’m going to pursue the skill set that I possess to drive growth,” and your partner’s going to pursue his skill set, what are the different skill sets that drove that thought process?
I don’t know that we ever talked about what either one of us was good at the time. We’re both the guys who wanted to put the pedal to the metal on our career and we’re going to figure out a way to get somewhere. We just happen to have offices next to each other at our last firm so we ended up talking all the time. I’d say at the very beginning we weren’t good friends. We just knew there was something about that other guy that I probably should partner with him if I’m going to do something. We got a couple opportunities to work together, but at the beginning I don’t think we were good friends. We just knew that we both had a similar vision. I’m a big believer that good partnerships aren’t two people that are similar. It’s usually two people that are very dissimilar.
They have complimentary skill sets and so it’s not unusual for Chester and I to disagree on an approach to a problem, but neither one of us disagrees about solving the problem. It’s just what’s the right way to get there. It ends up creating a healthy environment and it permeates throughout our entire organization where we actually encourage people to speak up and challenge the status quo, whether it’s an intern all the way to a partner. What did we think about skill set lies? If you get into the details, I’m probably a little bit more socially interested than Chester is. Chester is good at sitting down and focusing on certain details. I talk before, he thinks before he talks, some of those types of things.
I was thinking as you were talking about how you grew up in Alaska. I think there’s many folks from Alaska that have a particular mindset and it is part of the culture up there. I think about your comment is, “I speak my mind,” and that would be common. I’ve been up to Alaska a few times and I would see that as a common trait. Looking out into the next three to five years, what do you see is the growth or evolution of your company?
We get asked that a lot and it’s hard to put your finger on it because if you were to ask me, “Matt, seven years ago, where would you be today?” I wouldn’t know how far we’ve come. To say where we’re going to be in five years from now, I can say what we’re planning to do five years from now, but I don’t know that that’s actually where it will end up landing. You mentioned people speaking their minds and that’s been part of our culture from the very beginning. It’s be real, be who you are and say what you think. There was an attorney that we worked with early on when we were starting the firm. I remember coming in my triple pleat slacks that I bought from men’s warehouse that I wear everyday to work. I remember walking into his office and Mark was sitting there wearing a Robert Graham shirt with cuffs up and corduroy pants. At the time he was the managing partner of a very large firm here in Boulder and I remember him talking about wearing jeans and how that could be a brand for us.
Chester and I talked at the beginning, we said, “Is that going to be okay? Wear jeans to work? Visit clients wearing jeans and Matt doesn’t tuck his shirt in? Is that the right look? Is that what we want to communicate?” What we found is we don’t want to be sloppy, wear nice things, but that’s who we are. We like to be casual, but we like to be straightforward with people and we want them to know us for who we are. We look different and that’s memorable for a lot of people. You walk into a room and you’re pitching a relationship to a client and three different firms walk in wearing the same outfit, giving out the same color brochure. You come in with no brochure and sit down and start talking about what they need and show them how you work rather than giving a pitch. You’re wearing something different in you and you look and you act genuine. That’s been our winning solution since the beginning. I learned a little bit of that a lot from Alaska.
Listening to you, it seems such common sense. That’s absolutely what they want, do your level best to deliver what they want. Take care of their interest, that would seem to be an obvious concept, but doesn’t seem to be prevalent.
I don’t know that a lot of clients truly know what they want. Some do, but I think what people want that they don’t ask for is they want a professional to think with them about a problem. They want to come in and say, “Here’s what I perceive my issue to be. What do you think?” A lot of professionals, whether it be legal or accounting or architecture, you name the profession, are good at providing specific answers to specific questions, but they’re not good at thinking outside of what the person asked. That’s what we try to change in the conversation when we’re having it with a client.
Somebody comes in and says, “Can you do a corporate tax return for us?” The answer is, “Yes, we can do a corporate tax return, but that’s not the question. The question is, should you even be a C-Corporation? What does your business do? Is that the right solution? What is your internal accounting function? Do you have somebody on your team that knows how to do a bookkeeping and accounting? Do you need to be introduced to an outsource CFO team or a controller in house?” Sometimes the simple questions end up exploding into something much, much larger than that.
Sometimes the simple questions end up exploding into something much, much larger than that.
As you look back over your career before starting your firm, we all hopefully have a mentor somewhere that shows up. What do you think the best piece of advice that you’ve ever gotten from a mentor in the past might be?
I’ve had a lot of mentors over the years, whether it be through Boy Scouts or in family or in the fraternity. I don’t know the best advice that I’ve ever got. I had one manager at PricewaterhouseCoopers guy named Marcus and I remember turning in my first work paper that Marcus was going to look at and he looked at it and he tossed it to the side and he said, “Matt, is this your best work?” I said, “It’s pretty good, right?” He said, “If you’re not willing to take this and go give it to the CFO of the company, then you shouldn’t be giving it to me.”
That was always good advice is do your best. We talked about that at Boy Scouts all the time too. That was one great piece of advice. Sam Fogelman, who has a good family friend and partner at KPMG, I chalk it up to him for staying in public accounting. I left PricewaterhouseCoopers, we’re sitting over in Durango over a bottle of wine and he’s telling me about how great of an industry it was. I honestly at the time was pretty sour on it. He made me realize the special things that make public accounting great.
I’ve learned a lot from associates and interns as well. You spend a little bit of time at a college campus and you see that spark in people that are excited about coming into a new industry. You realize, “Can we hold onto that? Is there something we can do within our firm to take that excitement about it and not crush it by making them do copies for the first bit of their career and allowing them to maybe sit in a room with a client and hear those things?” I’ve had a lot of mentors over the years, a lot of influences, but I can’t say that any one particular has been the most important.
You’ve mentioned Boy Scouts multiple times. In the most recent ruling, young ladies can now be in boy scouts. Looking at that and you go two girls. How do you see that? How do you see the Boy Scouts benefiting from that change?
I’m not sure yet. I could get pretty political pretty quick and I’m not a very political guy. It’s funny because it was such a big influence on me and I wanted to be able to bring the benefits that I got from that to my girls. I’ve been involved in fundraising for scouts for a long time, even a long time after I had two girls and we’re going to have any more kids. I think it’s such an important program and it teaches leadership better than any other program that exists out there for young kids. I was always a little bummed out that it wasn’t available for girls in some way. I don’t know a whole lot about Girl Scouts and I don’t want to make too much commentary about it. My perception of it wasn’t that it wasn’t bringing the same rigor to the table that the Boy Scouts did. There was a number of times I actually sat down and thought about going out and getting the Boy Scout handbooks and some of the merit badge books and going through it with my girls.
We talk about different things all the time at home that I learned there. What do I think about it? I don’t know how they’re going to implement it yet. It’ll be interesting to find. I got to read about it some more, but if my girls can even get just a little bit of a nugget of the benefit that I got from it. I think they’ll be successful. It doesn’t have to be that the boys program has to be diluted by girls being involved. The program as a whole can be accelerated by girls being involved. It’s going to bring leadership to more people. They’re going to have to be thinking about what’s the right way to have girls interact with it. Maybe they have separate troops, maybe they have separate packs or dens at the Cub Scout level, but that the lessons that scouting teaches certainly apply to both sexes. The way they teach it certainly applies to both.
I moved a lot, so I stopped somewhere between Cub Scouts and whatever’s next. I think about my exposure to Eagle Scouts. They said 75% of the Air Force Academy is an eagle scout. Pretty impressive as a testament to the value. I think about the young ladies out there and we have certainly enough scandal in the news currently about misbehavior. I can’t imagine that it wouldn’t be a welcome additional tool for the young ladies.
I can see it being that way. I’m sure there’s going to be a lot of people out there that are upset to see change, but I can’t think of a better organization to lead that change. That’s what voice God’s always has been about, and that’s what Eagle Scouts are all about. To be able to experience small bits of leadership as a seven or an eight-year-old all the way until you’re eighteen years old and get the opportunity to lead people to make mistakes, that’s some of the best things I learned was what happens when you show up late for work? I learned that when I was fourteen years old, probably my second week working at boy scout camp and I got read the riot act.
I bet you can see that now. It’s one of those defining moments. Shifting gears, a parting advice either for the business owners similar to you, you’re the entrepreneurial spirit or just a broad guidance of something that you might make a difference for the listeners.
I’ve been doing a lot of recruiting lately so I’ll talk to the college kids first and then maybe that’ll bleed into entrepreneurship and business owners. One of the things I tell people when I’m recruiting and I’ve had a unique step through the accounting world, I got to work for big firms and midsize firms and now a small firm. I’m all providing extremely high quality work. I get to see what you learn at each of those. People always ask me, “What’s the best place to go? Should I go work for the national firms? Should I go work for one of the small firms or the big firms? What’s the best place to be?” I said, “Go with the firm that best reflects your personality and go with the group that that’s the people you want to be influenced by.”
Kurtz Fargo: Go with the firm that best reflects your personality and go with the group that that’s the people you want to be influenced by.
That resonates from students all the way through business owners. If you surround yourself with professionals, whether you’re coming in from school, if you’re surrounding yourself with professionals that want to put their career pedal to the metal and they want to learn and they want to operate in a different way, you’re going to learn a lot. It doesn’t matter if it’s in the biggest firm in the world or little Kurtz Fargo in Boulder, Colorado. If you’re an entrepreneur and you’re surrounding yourself with the best professionals, not the cheapest professionals, not the most well-dressed professionals, not the ones that have the best advertising, but the ones that influence you and that you want to be influenced by, you can create a team that’s special. That’s the secret sauce to a lot of people’s success. You see a lot of successful people surrounding themselves with the same people.
A high quality team.
That’s the most important thing.
I can tell you this was a pleasure. I appreciate you taking time out of your schedule. It’s great to hear the story and the influences. I can’t thank you enough.
About Matt Fargo
I specialize in providing assurance, tax and business advisory services to emerging growth, small and mid-sized businesses.
Specialties and Industry Expertise:
– Early Stage Companies
– High-Tech Software and Manufacturing
– Creative Agencies
– Mining and Extractive Industries
– Consumer Products
Technical Accounting Expertise:
– Stock Options and Share-Based Payments
– Complex Debt and Equity Transactions
– Software Revenue Recognition
– Acquisitions/Purchase Accounting
– Financial Forecasting and Modeling
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The post Matt Fargo, Managing Partner at Kurtz Fargo, Serving Emerging Growth Businesses & Ultra-High-Net-Worth Individuals With Solution Based Strategies And Planning appeared first on My podcast website.