Tyler Otto found out he was losing his job on Thanksgiving Day of 2020. He was working at a hotel management company that, like many others in the industry, was shaken by the COVID-19 pandemic and sold off. He was told he'd be out of the job in January.
But the solution to his pending unemployment was incredibly close to home. His wife, who worked in biomedical engineering, wanted a side hustle that she could manage as they started a family. She'd started a business called Specialty Bookkeepers that brought in about $20,000 a year. "It wasn't our 'let's get rich scheme,'" Otto said.
Otto had lightly entertained the idea of starting his own business in the past, but he was climbing the corporate ladder, getting promoted every two years — there was no way he was ever going to leave the corporate world. But then the pandemic happened.
"I was at a point where either I went and looked for another job, or we looked at my wife's small little side hustle and said, 'Can we grow this into a legitimate firm? We said, 'What better runway are we ever going to get?'" Otto explained, "So essentially, I stole my wife's company."
Otto took control of Specialty Bookkeepers & Tax in January 2021. (His wife now has a less active role in the firm, managing payroll and handling some HR tasks.) The firm would specialize in hospitality accounting, where Otto's experience lay.
"There's a lot of specialty accounting tools that mainstream accounting never deals with," Otto said. "Hospitality is the same, where there's accounting programs like Nimble and M3 that are dedicated to that space. And while those softwares are built to be great for the hospitality industry, we couldn't find accounting firms that actually knew those tools."
During his time in corporate finance, they were always looking to outsource the labor, but they essentially had to train those outside teams. Otto saw the market need and seized his opportunity: "The pandemic, while it was awful because there were hotels that were closing left and right, you'd think, 'Tyler, that's a dumb time to start going after hotels for sales.' There were ones that were going to survive, but they still needed to cut 30 grand in labor. Well, you could fire your in-house accountant and bring us on at half the cost, and there you go."
'Painfully slow' progress
Building up the firm wasn't easy. The first months were excruciating, not knowing if the sales would come.
"You don't know how it's going to work out, if that bet you made is going to pay off," Otto said. "There's a couple of times where I've sacrificed profit to make bets for the future, and in that time, you're wondering if you're going to get the extra clients, if you're going to be able to justify the expense. You don't know."
And the first two clients are the hardest, he said. "You just don't have it all down. It's painful, the amount of rejection you go through the first month when you are financially insecure."
"Early on, you're chasing bad leads because you don't know what a good client looks like," he continued. "And then even when you do find a good client, you weren't practiced enough in sales to hit their pain points and offer them the cure to their pain points."
Otto says the hardest part of being a firm owner is that "progress feels painfully slow in the moment." Of course, in retrospect, growth was quick; in its fourth year, Specialty Bookkeepers & Tax is on track to doing a million a year in recurring revenue. But the responsibility to help his clients, protect his employees and provide for his young family has always weighed heavily on him.
"Personally, I've just had to realize I can't listen to my own internal thoughts after 3 p.m.," he said. "It's one of those things when I start to get negative, I look at the clock and say, 'It's after 3, of course I'm having negative thoughts. I'm exhausted. I can't listen to that guy's thoughts.'"
In the early days, Otto feared he would deplete his personal savings in his attempt to get his firm off the ground. It wasn't until three months in before he felt financially secure.
Making accounting fun and accessible
In addition to being the owner and president of his firm, Otto is also one half of the "UnAccountable Podcast," self-described on its
The podcast is lighthearted and just for fun. "This industry rightfully got its brand of being stuffy and just a really boring industry, and I think there's a lot of people that want to change that," Otto said. "There's people out there that are trying to make accounting fun and accessible, which I think is one of the things that we need to do to rebrand this industry for it to be appealing to the next generation."
Otto extends that attitude to his firm. His communication style includes puns and dad jokes, which turns away some clients, he admits, but he's just fine with that: "If you act the way you want clients to act, you will find people that are like you, and we want to have fun. We want our clients to be fun, and this relationship isn't one that's very stale and stodgy."
Otto isn't afraid to "fire" clients, either, like those who are verbally abusive to his staff. "My staff is my most valuable asset," he said. "I would rather keep a good employee than a good client."
Hiring is another aspect of his firm that might be considered untraditional. The best employees, to him, aren't necessarily CPAs.
"We haven't really valued credentials," he said. "A lot of the accountants we find that have really good accounting skills don't adapt to the tech we want them to learn and pick up. Meanwhile, we're finding a lot of tech-savvy people with some basic bookkeeping skills that we can train up, and they're almost picking up our systems and processes better than someone that has traditional accounting engraved in their brain."
Otto recently made his fifteenth hire. His team is spread across the U.S. and works entirely remotely: "Call it smart. Call it cheap. I don't want to pay for an office space."
Moving forward, he wants to round out the firm's client advisory service product offering to include fractional CFO and tax planning services. "People don't just want compliance. They want you to help them make a profit," he said. "And honestly, it's lucrative."
He also has great aspirations for the trajectory of his firm: "I have the audacious ambition for it to be referred to the Big Five one day, probably after I'm dead, but that's where I want to get this. I know we won't get there, but that's the ambition level we're going for."
But in the nearer-term, he wants to rename the firm because it offers much more than just bookkeeping. He and his wife wouldn't have used the name "Specialty Bookkeepers" if they'd have known the scale the firm would reach, he said.
Otto's advice to those considering starting their own practice is to recognize the shift from being an accountant to becoming a business owner: "Early on, when you are an accountant, you can manage all your clients perfectly. You can adjust to their needs to satisfy everyone and make sure they're happy. But for that to scale, you've got to stop making exceptions for certain clients and breaking your processes and bending over backwards to make it work."
"Then as you scale, you go from being the accountant to being the business owner. All your clients have to get on board with your systems and processes, and that's going to upset some of your clients. You are going to 'fail' them at what they want — which is not what you sold them, it's just what they've decided they want — and you're going to have to say, 'Look, either you get on board, or we've got to let you go.' And that feels like failure."
Finally, he emphasizes that there is no by-the-book path to success: "People who you thought were smarter than you, that were your mentors, will tell you you can't do things that you can. You just have to figure it out on your own."
This story is part of series on how accounting entrepreneurs launched their practices. Look for more
