We caught up with the brilliant and insightful Nancy McClelland a few weeks ago and have shared our conversation below.

Nancy, appreciate you joining us today. We’d love to hear about the best advice you’ve ever given to a client?

As a CPA specializing in small businesses, I’m especially excited to be able to share the story of the best advice I ever gave a client. I use this example all the time when teaching or consulting, because the lessons are many–and surprising.

Years ago, a former client who had closed her business came to me with a new business partner and a new plan to collaborate — each of them having different areas of expertise and influence. I thought the basic idea was pretty solid, so we started out with some financial forecasting.

Now, forecasting is, in my opinion, one of the first steps any aspiring business owner should take, and it’s an integral part of any business plan. The way we do it is to create four sheets in an Excel file: with the first sheet being inputs needed for forecasting (for example, square footage, price per square foot, different labor positions, number of hours and the hourly wage for each position, cost of goods as a percentage of sales, annual price index, interest rates, etc.); the second sheet is a projection for the Worst-case scenario Income Statement, the third is for the Expected-case, and the fourth is a Best-case forecast. It’s great, because each one is a pro forma “what if” that links to the first tab, allowing you to play around with the numbers — for example, what if we rented a bigger place? What if sales tank? What if labor costs skyrocket? What if prices stagnate? What if we exceed our wildest dreams?

The idea here is that as you’re researching spaces, sourcing supplies and materials, and looking for capital, you can change the inputs, and watch your projected profit go up or down in each scenario. It’s super-handy, and anyone who tells you that you don’t need a business plan — or at least this forecasting exercise — is unaware of how many businesses fail needlessly. Failure is usually preventable… but sometimes it means not opening your business in the first place, and no one wants to hear that. It seems like it will be easier to just have a go at it and cross your fingers, but watching your business predictably fail is anything but easy.

Anyway, the numbers were looking pretty good, but in the Worst-case scenario, it had the owners going without pay for over a year (by the way, it’s not uncommon for this to be the case for a good 3-5 years in many businesses). The new business partner was willing to do this, but my former client was not. She explained that she had a kid and therefore could not afford to go without pay, and had to make at least $XXX per week. I showed her the numbers again and we discussed the situation: were there any changes that could be made to the inputs that would get them to this point? We went through it again and again, but the conclusion was the same.

Here’s where the good advice came in. I explained that if she truly couldn’t afford not to make $XXX per week, then she needed to either change the scope of the project, find additional investment, or walk away from the deal. She kept pointing out that it was only an issue in the Worst-case scenario, and she was *sure* that wouldn’t be an issue. I explained that the entire point of the exercise is that it shows you what could actually happen, and that if you aren’t able to accept this very real possibility, then you were not ready to move forward with the business plan.

As you might imagine, this was a sticking point between them — the new business owner being unwilling to be held responsible for making sure her partner made a minimum guaranteed take-home amount each week — and after arguing about it for some time, they decided to part ways.

Some years later, the new business owner found me again, saying that it had been a blessing in disguise, as many other issues cropped up making her realize it would have been an unwise partnership. Since then, she had come up with an idea for a different type of company, and would I be willing to work with her? We did extensive forecasting, and she eventually opened what has become one of our city’s most beloved small businesses. To this day she is one of our favorite clients, as she is methodical, responsible, creative, passionate, and does it all with one foot firmly grounded in reality. She also realizes that having expert professional assistance in areas where she’s not well-versed is an essential part of building her team. Best client advice ever — sometimes, you need to know when NOT to take a leap of faith.

Great, appreciate you sharing that with us. Before we ask you to share more of your insights, can you take a moment to introduce yourself and how you got to where you are today to our readers.

I love to explain (straight-faced) that the reason I became an accountant was that I majored in Music at the University of Michigan. But it’s true! I’ve always been interested in almost every topic I studied, so I changed majors a ridiculous number of times — linguistics, political science, biological anthropology — and eventually music. I wanted to be an educator and work with childhood development in that space. I interviewed with the Ann Arbor School for the Performing Arts because they had an opening for a part-time job for someone who could teach music theory and serve as the Business Manager. Unsurprisingly, I was the only applicant. In that role, I realized that as much as I loved teaching, there seemed to be quite a few great teachers out there — and almost no one who could keep the books, organize the programs, and communicate with musicians, parents, and kids. That led me to my next job (and still my favorite one ever), as the Business Manager at a world-famous violinmaking studio. When working with their CPA to get the books closed each year, I became intrigued with taxes and began taking classes to learn to do my job better. When I left that position, the CPA attended my going-away party and gave me my first CCH Master Tax Guide, which I still have to this day. She saw a spark in me that I didn’t know I had, and it helped me immensely to have a role model who believed in me. I’ve tried to recognize and encourage that spark in others ever since.

I eventually ended up going back to school to get my Masters in Accounting & Financial Management, took the exams, and received my CPA license. In 2001 I started my own accounting firm, and brought on my first employee about ten years later. Now there are eight of us in the firm — though I’m the only full-time person — and our team is fully remote, except for me. We provide bookkeeping, accounting, tax, and advisory services to small businesses in my home neighborhood in Chicago. One of the things that sets us apart from others is that we truly run the gamut of business operations… we don’t just do bookkeeping, or just tax. We straddle those worlds and combine them with industry technological know-how, creating the opportunity to consult with and teach our clients what they need to know to become good business managers and responsible owners — rather than just looking at tax like a compliance product. We care deeply about our clients and consider ourselves trusted partners in their success.

And yes <laughs>… I’m also a semi-professional go-go dancer. In fact, our company got its name many years ago, from a client. Fun story: at a go-go themed dance event at Unity Park (a pro bono client) in our Logan Square neighborhood, I was in full costume (think Nancy Sinatra, “These Boots Are Made For Walking”) when I ran into a client picnicking with her family, who said, “look, kids — it’s the Dancing Accountant!” The name stuck, and since then, I have had the honor of dancing at a few client events throughout the city, as well as at my regular gigs.

What do you think helped you build your reputation within your market?

Being active and invested in our community is the key, I believe, to our success — and it’s something that permeates the culture of our firm. We shop at our clients’ stores, eat at their cafes and restaurants, and use their services. We have a personal interest in their success, because we believe the vibrancy and character of our neighborhood depends on thriving small businesses lending their unique vision to our city.

We believe in the value of relationships. We view every client relationship as a partnership, and truly believe that our success is a result of theirs. We are committed to providing close, personal attention to our clients. So building a reputation, keeping in touch with clients and fostering loyalty is *actually* a function of the investment of time, energy, passion and support — which comes from the integrity on which we pride ourselves. Our clients can tell we care, and they know we are sincerely rooting for them.

Nothing illustrates this more than our dedication during the pandemic. It was my greatest fear that once it had passed, the neighborhood would have no small businesses left — those with capital, like big chains, having weathered the storm and moved in on our space. But in fact, we only saw two clients have to close up shop during that time. As one client put it, “Nancy extends her deep desire to help small businesses succeed not only to her own clients, but to small businesses in general. In the pandemic she hosted regular free and open zoom sessions to help us all make sense of the relief funding available, the rules around which were often shifting and opaque. It is not an overstatement to say that her group and individual guidance were a core reason my business survived the pandemic.”

The Dancing Accountant blog and my Microsoft Start column are an extension of this dedication to community. I started writing as a way to share important topics with my clients, but it took off, and the constant feedback from being able to reach so many small business owners, and the bookkeepers and accountants that advise them, is a massive reward.

Do you have any insights you can share related to maintaining high team morale?

First, I’ll say that there’s nothing easy about managing a team of people, remote or on-site. If you’re a small business owner struggling with staffing issues, know that you’re not alone. I see you and I empathize. Juggling the needs of clients, the objectives of the firm, your personal goals, and the well-being of the people you work with is not easy stuff.

But… it’s worth it. Our team members are the life-blood of what we do — they allow us to help so many more companies than I could (and used to) handle on my own, and one of the keys in our hiring practices is to only work with people who love and lift up small businesses. Every one of us cares deeply and personally for our clients, and we are rewarded by their successes. Even small moments of joy, when we’re able to make someone’s life easier, or help them understand a key aspect of their operations.

We also only hire and work with people that we personally like; those that make us feel more comfortable in our own skin, and with whom we’re happy to share our hopes and dreams, as well as our fears and doubts. We have quarterly paid “happy hours” where I send everyone cocktails and snacks and we get together on zoom and brainstorm, as well as just catch up socially. We text each other encouragements and give each other gifts. I truly believe we all sincerely like each other.

That said, it’s not just buddy-buddy. We do have fun, but it goes further than that. As a boss, I have to check myself when I want to share my own struggles. Sometimes I have to remind myself that it’s not about me, it’s about them. I need them way more than they need me — it’s an important fact that we have to remember. Our focus needs to be on treating them with respect, sincerity, and helping them become the best they can at the work we’re giving them. Asking if they want to work on something, for example, and if not, asking why, and giving them resources so that they get to a point where they do. Providing paid educational opportunities, and time — your own time, which shows their value. Giving them meaningful work, at fair pay, with benefits that fit their needs, and letting them have agency. And of course, flexible hours and remote work help.

I think the part that’s hardest and yet also most essential is to give them the work-life balance that we want for ourselves. We run the business, right? But that means we have to pick up the slack when necessary. If someone’s husband or mother is sick, they need time off to deal with that. If they decide to have a baby or take time off for a sabbatical, it’s important that we support them in these choices. And when they experience personal tragedy — the loss of a loved one, or a divorce, or anything else — we need to be there for them, and help them cut back on their workload. They need to know that in truth, nothing can be more important than their personal lives — not this job, nor anything else. We work to live, not live to work. It’s so hard to be the person who juggles all the needs of our clients, but ultimately, I have to believe that our clients will support the position that we are human beings who step up and help each other when we are needed. And I truly believe this fosters loyalty among team members as well as clients.

Contact Info:

• Website: https://www.thedancingaccountant.com/
• Facebook: https://www.facebook.com/nancythedancingaccountant
• Linkedin: https://www.linkedin.com/in/nancy-mcclelland-cpa-mafm-9b6792/
• Youtube: https://www.youtube.com/@NancyLuisaTube
• Other: https://proadvisor.intuit.com/app/accountant/search?searchId=nancy-mcclelland https://www.alignable.com/chicago-il/the-dancing-accountant

Image Credits
Zak Jacobson, Lis Rock, Mark McClelland