When Paul Miller decided to go into business for himself about
18 years ago, he quickly discovered a shortage of advisors to help
him. So he capitalized on the do-it-yourself spirit he learned from
growing up on a dairy farm, and taught himself how to create a
Since then, Business by Design, Inc., his Edina,
Minn.-based firm, has evolved into a company that provides exactly
the kind of guidance he was looking for then. "Our primary
engagement is in business coaching and planning for small business
owners," says Miller. "Our secondary engagement is the tax planning
Through his own experience getting his firm up and running,
Miller identified an opportunity to provide resources for small
business entrepreneurs who need guidance in planning and running
their operations. Details such as incorporating or long-range tax
planning aren't something many small business owners have time for.
And many businesses don't know quite where to find the help they
"A lot of clients tell me their accountant just can't answer all
their business questions, but I defend the accountant by asking the
client if they've ever paid their accountant for anything other
than tax preparation," says Miller. "When the client says 'no,' I
explain that if you don't engage in a different kind of
relationship, you're not going to get a different end result."
The word "different" is a good one to describe the approach
Business by Design uses when serving clients. "We're not in the
accounting business, we're in the relationship business," says
Miller. "I've never solicited tax work. We solicit an engagement
for business planning, and then based on that relationship and the
positive results we deliver, clients are going to come back and use
other services like tax preparation."
The firm currently works with about 600 small-business owners.
Each relationship starts with the firm assessing the client's
current business structure and needs, whether it's setting up a
corporation or a basic bookkeeping system. Miller uses the example
of one new client who is a real estate agent. "Based on her
earnings and expenses, I can save her about $7,000 to $8,000 in
taxes by understanding and maximizing her business structure
compared to what she'd been doing before," he explains.
Business by Design approaches its clients' needs from a business
coaching and planning perspective. As Miller notes, he's less
interested in preparing tax returns than he is in creating valuable
relationships. "Before this real estate agent came to me, someone
asked her why she would pay anyone to incorporate when she could do
it herself," he says. "It didn't take long for her to see her time
could be much better spent doing other things."
Because Business by Design doesn't operate like a traditional
tax and accounting firm, it doesn't bill its clients the same way,
either. Instead of billing by the hour, the firm uses a fee-based
model. A typical engagement fee is between $4,000 and $6,000, which
includes the initial planning and implementation of the agreed-upon
strategies, as well as related services such as phone calls,
meetings, and emails.
The firm's approach is to continue
building the client relationship from there, adding on other
services for which it can charge a fixed fee. Handling payroll or
bookkeeping for a small business might run about $200 per month,
and that generates additional revenue. The combination of the
initial fee and additional services is the firm's long-term profit
And it's something clients appreciate, Miller believes. "It's a
lot easier for the client if they never have to be concerned that
the clock's ticking the moment I walk into the room."
What's more, clients do see the difference, both in the level of
service and the value. Using the same real estate agent as an
example, Miller says she met with five or six other firms before
coming to him. After their initial meeting, she told him no one had
ever gone beyond the basics of accounting to discuss other aspects
of running a profitable business, such as recordkeeping and
"Clients like her may be paying us an up-front fee of $5,000,
but when they realize that our comprehensive approach can save them
$7,000 a year in taxes, it's pretty easy to see the value," Miller
Fearless about the Fees
Paul acknowledges that moving to an entirely fee-based billing
model might seem intimidating to traditional accounting firms-not
to mention that it takes effort to make the transition.
His advice? "You have to have a leap of faith that you can go
out and generate fee-based income," says Miller. "The trick is to
get beyond the mindset of everything being tied to your time and
production so you can find a different outlet."
He adds that some firms might consider hiring someone to go out
and generate other kinds of revenue, in order to transition to a
Miller has found additional value in his own business by
operating as efficiently as possible. Using Thomson Reuters
products, particularly Practice
CS, is the "cornerstone" of the efficient integration
of systems. It also helps the firm provide a consistent experience
to clients. "Any time clients call, I want them to be able to get
the same information no matter who they talk to," Miller explains.
"It can be a challenge to get everyone doing the same thing, and
that's a huge advantage of Practice CS."
Business by Design also uses a combination of web-based
technology and phone calls to communicate efficiently with clients.
For example, the firm regularly reviews clients' tax returns with
them online, instead of in person. This way, they can discuss any
open items and make necessary adjustments before the return is
finalized-saving everyone time and effort.
"I handle about half my appointments by remote access right
now," says Miller. "But even if a client isn't coming into the
office, I still have an opportunity to cement that relationship by
showing them what we saved them on their taxes through good