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Marcus Dillon

The Remote Team Retreat Strategy That Beats Software Upgrades Every Time

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Most CPA firm owners spend their improvement season updating software or tweaking processes. Rachel and Marcus Dillon are doing something different. They’re taking their entire 26-person remote team to Mexico for four days of relationship-building, goal-checking, and some serious fun in the sun.

The husband-and-wife team behind Dillon Business Advisors just shared their complete retreat strategy on their latest “Who’s Really the Boss?” podcast episode. Their approach reveals how treating team culture as business infrastructure—not just a nice-to-have—creates competitive advantages no software upgrade can match.

From Monthly Breakfasts to International Retreats

The Dillons didn’t always plan elaborate team getaways. When everyone worked in the same office, they kept things simple: bringing in lunch, organizing breakfast meetings, or grabbing dinner together. Even after going remote with a local team, monthly breakfast meetups worked well.

But as their team spread nationwide, those frequent touchpoints became impossible. Instead of giving up on team building, they made a strategic shift that many firm owners would never consider: two high-impact retreats per year.

The economics work better than you’d expect. Their domestic beach trip to Destin, Florida, last year cost significantly more than this year’s all-inclusive Mexico resort.

“The international all-inclusive option is actually a little more budget-friendly,” Marcus explains. Plus, team members won’t face surprise expenses for drinks and meals like they did in Florida.

This shift is about more than cost savings; it’s about recognizing that relationship building requires concentrated investment to generate meaningful returns.

Using Data to Build Better Relationships

The Dillons don’t plan retreats based on gut feelings. They treat team dynamics with the same analytical rigor they apply to financial planning.

Before finalizing their Mexico agenda, they surveyed their leadership team using Patrick Lencioni’s “Five Dysfunctions of a Team” assessment. The results revealed something important about high-performing teams: excellence in some areas can make weaker spots stand out more clearly.

Their team scored well across all five dysfunction categories—absence of trust, fear of conflict, lack of commitment, avoidance of accountability, and inattention to results. However, the assessment identified their two lowest-scoring areas: conflict avoidance and peer accountability. These weren’t crisis-level problems, just the next areas for improvement.

“When you refine something and it becomes really good, then the next friction point stands out just a little more because now the other areas are running so smoothly,” Rachel explains.

The assessment also came with ready-made solutions. “One really cool thing with that assessment, when it came back, they actually sent activities to try to help build the areas of weakness,” Rachel says. “We did not have to go out and search. We didn’t have to call our friend, ChatGPT, to help us come up with ideas.”

This systematic approach beats generic team building every time. But it requires a crucial commitment: following through on what you learn.

“The worst thing you can do is survey somebody or ask somebody their opinion and not do anything with it,” Marcus emphasizes.

The Mexico Agenda: Four Hours That Shape Six Months

The Dillons arrived in Isla Mujeres on a Thursday, then dedicated Friday morning to formal meetings. The rest of the trip focuses on culture, relationships, and fun. Still, those four hours of structured time drove real business improvements.

They started with celebrations and goal reviews. Marcus shared revenue numbers, client acquisition progress, and team updates. “We share revenue. We share where we’re at on track as far as the goals we’ve set,” he explains.

This transparency creates collective ownership of business outcomes. When team members understand exactly how their work contributes to the firm’s success, they make different decisions about client service and efficiency.

Next came “Turning Conflict into Connections,” their targeted response to the assessment results. Instead of hoping team members will naturally become more assertive, they created explicit permission for difficult conversations.

“Team meetings aren’t only for the leadership team to talk,” Rachel explains.

Angel, their director of technology, covered cell phone security protocols. Then they tackled something that could transform their client service: categorizing clients based on team experience rather than leadership assumptions.

“There are simple clients and complex clients, but there are also good complex clients,” Rachel says. The hypothesis: responsiveness matters more than technical complexity. “The complex clients who are responsive, who implement the advice and the strategies we give them, they’re not as hard to manage.”

They wrapped up with peer accountability training, moving beyond traditional top-down management to distribute leadership responsibility across the entire team.

Beyond the Meeting Room

The non-meeting activities included relationship-building exercises that translate into better workplace collaboration: water activities with paddleboarding and snorkeling, Mexican bingo (Loteria), and a team dinner where Marcus recognized each team member in front of their spouse or guest.

“It’s nice for families and friends to see the impact you have for all of the hours you spend away from them working,” Rachel says.

The trip concluded with karaoke, something they missed at their last retreat when the karaoke spot was too far from the hotel. This time, they brought karaoke to the team.

The Numbers Game

Taking 26 people across international borders, coordinating planes and boats to reach an island resort, and budgeting tens of thousands of dollars is a big investment, and it sends a clear message about how the Dillons value their team.

But the real return shows up in compound effects: reduced turnover, faster problem resolution, better client satisfaction, and the competitive advantage of having a team that genuinely enjoys working together.

While competitors debate software features or chase marketing trends, the Dillons are building human infrastructure that’s much harder to replicate. You can’t download better team communication or purchase improved conflict resolution skills.

Your Next Move

The Dillons prove that systematic investment in team relationships creates business advantages that technology alone cannot provide. Their transparent approach offers a roadmap for any firm owner ready to treat culture as seriously as revenue. The question isn’t whether you can afford to invest in team relationships; it’s whether you can afford not to.

Ready to hear their complete strategy? Listen to the full episode for their detailed retreat agenda, specific dysfunction-busting activities, and the real numbers behind their cultural investment approach. You’ll discover how they handle team transitions, their client categorization exercise, and why peer accountability might be the missing piece in your team dynamics.

Rachel and Marcus Dillon, CPA, own a Texas-based, remote client accounting and advisory services firm, Dillon Business Advisors, with a team of 15 professionals. Their latest organization, Collective by DBA, supports and guides accounting firm owners and leaders with firm resources, education, and operational strategy through community, groups, and one-on-one advisory.

Selling Your Accounting Firm: Misconceptions, Valuations, and Market Realities

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The accounting profession is experiencing a wave of mergers and acquisitions right now, which is forcing firm owners to make tough decisions about their futures. 

In the latest episode of the “Who’s Really the BOSS” podcast, Doug Lewis, the Managing Director at Visionary Group, offered insider insights into accounting firm transactions, drawing from his extensive experience in the field.

Record-Breaking M&A Activity

In 2024, accounting firm transactions set new records, and it looks like 2025 might double those numbers. As Lewis explained:

“2024 was industry-wide across the accounting profession absolutely wild. The pure number volume of transactions that were happening…a lot of people don’t realize how many half-million to $5 million transactions take place almost weekly at this point.”

While big acquisitions by major firms and private equity groups grab headlines, most transactions involve smaller practices that often go unnoticed. This surge in activity is driven by two key factors:

  1. Demographic Reality: The average baby boomer is now in their late 60s, and this generation still owns most accounting practices. Many are discovering that their internal succession plans have either failed or didn’t exist in the first place.
  1. Growth Strategy Shift: Larger accounting firms have increasingly turned to acquisitions as their primary growth strategy. Once firms reach certain revenue levels, relying purely on organic growth simply isn’t enough.

“Once a firm reaches a certain revenue size, it’s extremely difficult to move the growth needle if you’re just focusing on organic growth,” Lewis noted. “The numbers can get staggering on how much new business you have to bring in.”

This creates what Lewis calls a “perfect storm” in the marketplace: Aging owners needing exit strategies are facing off against growth-hungry acquirers who see mergers and acquisitions as their best route to expansion.

Who’s Buying Accounting Firms?

The landscape of potential buyers for accounting firms has changed a lot in recent years. Lewis pointed out three main types of buyers:

  1. Independent Accounting Firms: These firms continue to acquire practices, often opting for equity swaps rather than cash transactions. In many cases, these deals are structured as “mergers,” where the selling partner rolls into the compensation program of the acquiring firm.
  1. Outside Investors: This group includes private equity firms, outsourcing companies, technology firms, and wealth managers who are increasingly getting involved in the accounting space.
  1. Hybrid Firms: These are firms that have already taken on partial or majority private equity investment and are becoming more active in making acquisitions, typically using different transaction structures.

Despite these categories, Lewis emphasizes, “I’ve been a part of hundreds of these things over the years, and I have yet to see two transactions that were ever structured in the exact same format.”

How Firm Valuations Are Changing

It seems like the marketplace is really shifting from revenue-based valuations to EBITDA-based approaches, which align more closely with how other industries operate.

“The overwhelming majority of acquirers are shifting from the multiple of gross revenue down to the multiple of EBITDA, which makes sense because that’s how the majority of other businesses trade,” Lewis explained.

Even with this change, gross revenue multiples still serve as a useful reference point. Lewis noted, “Usually the multiple of gross revenue is always going to hover around that one time mark. Some are significantly higher if it’s a niche profitable practice and some are significantly lower.”

A key consideration in this process is how EBITDA is calculated—especially when it comes to owner compensation. Lewis states, “When we look at EBITDA, the true profitability on a firm, we look at it before any single owner in that company takes home a dime. That’s the starting point.”

This can often lead to tension during negotiations since sellers typically view their compensation as separate from the firm’s profitability, whereas buyers see owner compensation as a cost that needs to be factored in.

Another concept that Lewis brings up is what he calls the “scrape”—essentially the return on investment that buyers require. As Marcus puts it: “If the scrape on a transaction’s 10%, 20%, you have to evaluate this business purchase up against anything else in the market, including just going and sitting that cash in an interest-bearing account.”

Building Value in Your Accounting Firm

If you’re looking to sell your firm or transition ownership, there are some proven strategies that can really boost its value. Lewis identified four key areas to focus on:

1. Develop Your Talent

One of the biggest draws for potential buyers is the talent within your firm. While having younger partners can be a real advantage, Lewis stressed that having strong management at all levels is crucial:

“Young partnership talent is phenomenal to have. But if you have strong managers, that next level director manager level people inside your firm, that’s going to significantly help valuation.”

2. Optimize Your Client Portfolio

Many accounting firms struggle with revenue concentration that goes beyond the classic 80/20 rule:

“It’s not uncommon for us to see more of like a 90/10, 95/5 rule inside accounting firms,” Lewis pointed out.

This means that only a handful of client relationships are driving most of the firm’s value. Lewis shared an eye-opening example: when he asked a seller about their top ten clients, they could only name about five or six and realized they didn’t really know what those clients were trying to accomplish.

Rachel highlighted her own experience: “We were spending a lot of time with very low revenue clients, like multiple touch points on these that spent the least amount with our firm. And it didn’t make any sense.”

3. Review Fee Structures

One of the most effective strategies for increasing your firm’s value is to conduct thorough pricing reviews:

“I’ve yet to really see a firm that has priced themselves out of any market, which is shocking,” Lewis noted.

Despite this insight, many firms hold on to outdated pricing structures that undervalue their services. Lewis recommends that firms “aggressively review your fee structures” and set minimum fee thresholds to get rid of unprofitable client relationships.

4. Highlight Advisory Opportunities

While it may not be realistic for everyone to build strong advisory practices—especially those nearing a transition—Lewis suggests a different route:

“If a firm is a little late in the game to really jump start an advisory department, what they should do is be able to clearly state and identify the advisory revenue opportunities that exist inside their base to a potential buyer.”

Clearly communicating these untapped potential opportunities to potential buyers can significantly boost your firm’s perceived value.

Common Misconceptions When Selling

For firms working on a sale or merger, Lewis says there are two big misconceptions that tend to derail transitions:

  1. Unrealistic valuation expectations often stem from anecdotal information about what other firms received. “When you hear, ‘oh, this firm got a multiple of this’ or ‘private equity wants this in a firm’—yeah, they do, but they want one in a firm that’s 20 times your size,” Lewis explained.
  1. Underestimating transition timelines is another common pitfall. “There are a lot of aging owners out there right now who think that when I’m ready to hang it up, I can just list the thing, sell it, and walk away,” Lewis noted. “Those types of transactions where there is not a relatively extended transition period post-deal—those are becoming less and less commonplace in the market.”

Every Firm Will Face Transition

Lewis’s view is simple: transition is inevitable for every accounting practice.

“Every single firm transacts now. There’s really only three transactions out there. Number one is you’re going to either sell or merge the thing. Number two is you’re going to pull off the internal succession. And number three is you’re going to close your doors.”

This reality completely changes how we should think about firm value. Building value isn’t just something you do when you’re getting ready to sell – these core business principles improve outcomes no matter which path you take.

As Rachel put it: “We need to be doing these things as well if we’re hoping one day that one of our current team members or a future team member is going to want to buy or continue the legacy of our current firms. We need to make them attractive to the people who are working in them as well.”

In today’s red-hot market for accounting firm deals, the winners will be those firms that consistently build value through disciplined business practices instead of waiting until they’re about to transition.

Want to hear more from Doug Lewis? Listen to the episode, and don’t forget to subscribe to “Who’s Really the BOSS” for more insights on building a valuable accounting firm.

Rachel and Marcus Dillon, CPA, own a Texas-based, remote client accounting and advisory services firm, Dillon Business Advisors, with a team of 15 professionals. Their latest organization, Collective by DBA, supports and guides accounting firm owners and leaders with firm resources, education, and operational strategy through community, groups, and one-on-one advisory.

Design Better Habits, Build a Better Accounting Firm

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When Rachel Dillon began her 4:30 a.m. workouts in January 2010, she only knew she needed a routine that fit her teaching schedule. She had no idea this personal commitment would eventually shape how she and her husband, Marcus Dillon, run their accounting firm, Dillon Business Advisors. Years later, they discovered that the same habits guiding their health journey could also help them overhaul their business.

Starting from Excess and Finding Focus

In 2016, Rachel and Marcus merged their firm with a mentor’s practice. This left them juggling more clients than they could serve effectively. At the same time, they were both working with a nutrition coach to improve their health. Seeing how steady, daily actions led to personal change, they realized these principles could solve their firm’s overload problem.

The final puzzle pieces came together when the Dillons read James Clear’s Atomic Habits. They recognized they’d already been applying many of his ideas to their personal lives and their accounting practice. This sparked an intentional approach to three principles that continue to guide their growth today.

1. Make It Obvious and Easy

A big lesson from Atomic Habits is turning good intentions into obvious, easy actions. The Dillons did this by scheduling important firm tasks at the start of each year. They get quarterly client meetings, team scorecards, and even vacation windows on the calendar long before anything else can crowd them out.

Rachel explains, “What gets measured, gets managed, and what gets scheduled is more likely to happen.” 

Going on a family vacation during spring break is nearly unheard of in accounting firms as it often falls right in the middle of the March 15th and April 15th tax deadlines. But the Dillons started blocking off spring break in small steps. At first, it was just a few days, but then they eventually built up to the entire week. This helped them balance busy season deadlines with time for family. Over time, team members also learned that when tasks and priorities are clearly laid out, everyone stays accountable.

2. Environment Design

Environment design means shaping spaces and systems so the right behaviors become natural. When Rachel and Marcus wanted more flexibility for their team, they began transitioning to remote work. Before going fully remote, they tested digital tools like Microsoft Teams so people became comfortable collaborating online. They also invested in proper desks, monitors, and other equipment rather than letting everyone rely on a single laptop at the dining room table.

According to Marcus, “If someone stayed on one small laptop for five years, they wouldn’t be as effective. Actually spending money on environmental design was a good call.” By building a flexible, remote-first culture, they kept talented staff who valued autonomy. They also served clients more effectively because team members had the right setups to do their work.

3. Identity-Based Habits

Finally, the Dillons aligned their daily actions with the values and identity they wanted for their firm. Marcus and Rachel emphasize transparency, so they share their objectives early—even when they’re unsure how plans will unfold. For example, they’ve begun exploring possible firm acquisitions to grow beyond the standard one-client-at-a-time model. They keep their team in the loop even before potential deals become certain.

“Transparent leaders do this,” says Rachel. Their team appreciates being trusted with big-picture thinking and offers ideas for making acquisitions smoother. Marcus adds that their firm’s vision and values mirror their personal ones, so it feels natural rather than forced. When beliefs, words, and actions match, big changes tend to stick.

Personal Habits Fuel Professional Results

The Dillons’ story shows that lasting change often starts with personal commitments. By applying principles of habit formation to their firm—making tasks obvious, designing supportive environments, and acting consistently with their values—they’ve built an organization that embraces growth year-round.

To learn more about how Rachel and Marcus continue to evolve their firm and stay true to their values, listen to the full episode of the “Who’s Really the Boss” podcast. You can also visit Collective.cpa for more resources to help you design a modern accounting practice.

Rachel and Marcus Dillon, CPA, own a Texas-based, remote client accounting and advisory services firm, Dillon Business Advisors, with a team of 15 professionals. Their latest organization, Collective by DBA, supports and guides accounting firm owners and leaders with firm resources, education, and operational strategy through community, groups, and one-on-one advisory.

Building Sustainable Accountability: How to Maintain Momentum Year-Round

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Every January, millions of people set out to transform their habits, only to find themselves struggling by mid-month. In fact, the second Friday of January is known as “Quitters Day,” when many throw in the towel on their New Year’s resolutions. For accounting professionals, the challenges compound: a 2024 Forbes study reports that 50% of resolution-makers quit by March—precisely when tax season intensity is at its peak.

In a recent episode of the Who’s Really the BOSS? podcast, Rachel and Marcus Dillon of Dillon Business Advisors (DBA) acknowledge these hurdles but also share practical ways to overcome them. As accounting firm owners, they see firsthand how easy it is for accounting professionals to abandon both personal and professional goals amid looming deadlines and long work hours. Yet the Dillons have developed reliable strategies—grounded in accountability and careful planning—that can keep momentum strong year-round.

The Unique Pressure on CPA Firm Owners

While most people struggle to sustain enthusiasm after the holidays, accounting firm owners have a double challenge. January’s fresh start quickly collides with ramping up for busy season, and by the end of March, many people’s goals have fallen by the wayside. After April 15th, it’s tempting to celebrate the season’s end or simply recover, making it even harder to pick up abandoned routines.

“I just do not like January at all,” admits Marcus. “A lot of us grew up in accounting—we dread January and starting the year new.” When you start with a clean P&L and the celebration of last year’s successes ends, accountants often feel they’re starting from scratch. Layer on the time crunch of tax deadlines, and it’s easy to see why many resolutions vanish by March.

Rachel adds, “You think ‘I just need to get through the next few weeks or this deadline,’ and really, you just let everything from January and February go.” Instead of waiting for post-deadline recovery to refocus, the Dillons recommend building accountability systems that prevent goals from slipping in the first place.

Goals for 2025: Firm Growth and Beyond

The Dillons prefer the concept of measurable goals over open-ended resolutions. DBA heads into 2025 with clear objectives:

  • Organic growth. DBA plans to add 15 new monthly recurring clients in 2025. With a price point for each client at $2,000 or more per month, this goal translates to adding $30,000 in new monthly recurring revenue by year’s end. To manage quality control, DBA limits each “pod” to two new client onboardings per month.
  • Potential firm acquisition. Beyond organic growth, the Dillons are open to non-organic expansion through the right acquisition. This approach provides additional career advancement opportunities for existing team members.
  • Technology & process improvements. Newly hired Director of Technology, Angel Sabino, will evaluate DBA’s IT systems and relationships to ensure they can support future growth. The team plans to expand its use of Keeper for client workflows and more automation in their onboarding process. They also plan to eliminate software they’re not fully testing or utilizing to free up room in the budget and focus on enhancing core platforms.
  • Team development. Client Service Managers meet monthly to share best practices, while Controllers hold their own dedicated development sessions. This ensures training and collaboration throughout the year. New and existing SMEs (Payroll, Tax, QBO) serve as go-to resources for the rest of the team. DBA plans to hire additional staff, including a Controller and a new Client Service Manager Assistant through TOA Global.

“Even though goals like these can feel daunting, we break them down,” Marcus explains. “We track them month by month, adding them to our weekly meeting agendas and quarterly reviews. That way, no one person is carrying the full burden, and we can re-evaluate often.”

Personal Accountability: Small Steps, Big Payoffs

Both Rachel and Marcus rely on personal accountability to stay on track.

Fifteen years ago, Rachel began a morning weightlifting habit and hasn’t stopped. In 2024, she hit 302 workouts—exceeding her personal target of 300—by tracking each session in a free app. Visibility of her progress, especially late in the year, motivated her to stick with the plan.

“I track everything so I can see how far I’ve come,” Rachel explains. “When we traveled to New York, I still got up early because I knew I had a goal I wanted to meet.”

Marcus uses a structured approach spanning faith, marriage, health, and more. “I assign a measurable goal or metric to each category—did I do it or not?” he says. That clarity helps him refocus on days he would rather skip workouts or other commitments.

“Sometimes I literally break a workout into percentage points. If I’m halfway done, that’s 50%, and I tell myself I’m not going to quit at 50%. Same when I’m at 75%. It keeps me motivated.”

Accountability Strategies to Withstand Tax Season

How do you maintain progress toward goals when you’re knee-deep in client work? The Dillons recommend three main strategies:

  1. Break it down. Make goals specific and measurable, then divide them into weekly or daily steps. Whether it’s limiting client onboarding each month or aiming for 20-minute workouts, smaller tasks are more achievable.
  1. Keep it visible. DBA incorporates goals into weekly meeting agendas, ensuring they’re never “out of sight, out of mind.” Similarly, Rachel’s app and Marcus’s weekly check-ins with his accountability partner keep them aware of their personal targets.
  1. Stay flexible. Life happens—especially during busy season. The Dillons suggest building in reassessment milestones (e.g., a mid-year retreat in May or June) to pivot if goals no longer make sense. Instead of abandoning them, adjust and realign.

Looking Ahead: The Collective by DBA Event

For accountants seeking deeper connections and guidance, the Dillons’ peer community, Collective by DBA, is hosting an in-person event on May 5th–6th in The Woodlands, Texas (with a third-day session on May 7th for forum members and one-on-one advisory clients). 

Registration opens on January 28th, and only 50 seats are available. The retreat provides an opportunity to fine-tune your firm’s processes, swap insights with other leaders, and solidify your goals for the rest of the year.

“If it’s anything like our event last May, it’ll fill up fast,” Marcus says. “We’re building an agenda that dives into topics like firm growth, technology, and team structure—all the areas we’re working on ourselves.”

Maintaining Momentum Beyond January

While most resolutions taper off by March, the Dillons prove that real progress can happen any time of year—with the right structure. By breaking down targets, checking in frequently, and involving others, firm owners can continue working toward their goals well past busy season. Whether you’re building better habits in your personal life, scaling your firm, or both, the key is accountability—layered at the individual, team, and organizational levels.

Ready to learn more? Tune in to the Who’s Really the BOSS? podcast for the Dillons’ full conversation on goals and accountability, and consider joining them in May at Collective by DBA’s in-person event. Even in the throes of tax season, sustainable, measurable goals are possible when you have a plan—and a team—to keep you on track.

Rachel and Marcus Dillon, CPA, own a Texas-based, remote client accounting and advisory services firm, Dillon Business Advisors, with a team of 15 professionals. Their latest organization, Collective by DBA, supports and guides accounting firm owners and leaders with firm resources, education, and operational strategy through community, groups, and one-on-one advisory.

A Fresh Look at Accounting Firm Transitions Puts Quality of Life First 

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In a recent episode of the Who’s Really the Boss? podcast, attorney Sara Sharp joined hosts Rachel and Marcus Dillon to discuss the evolving world of accounting firm ownership, legal compliance, and how forward-thinking solutions like phantom equity can help firms thrive. 

Sara, who works almost exclusively with CPAs on practice transitions and day-to-day compliance, sheds light on key issues every firm owner should consider—from multi-state employment laws to IRC Section 7216, which requires tax return preparers to protect clients’ tax return information or face possible criminal prosecution. Sara also discussed how creative ownership structures can bridge the gap between traditional partnerships and the need for modern flexibility.

From Compliance Challenges to Ownership Solutions

Rachel and Marcus initially engaged Sara to revisit the Dillon Business Advisors (DBA) employee handbook, recognizing that multi-state compliance for PTO and other policies was becoming increasingly complex. What started as a routine legal audit soon expanded into a broader conversation: How do small and mid-sized firms protect themselves legally while also planning for the future?

“A lot of people think signing up with a PEO solves everything,” explains Rachel, referencing how DBA initially assumed their Professional Employer Organization would handle compliance. “But we still discovered plenty of state-specific requirements.”

Sara points out that many accounting firms face challenges such as:

  • Multi-state labor laws require unique PTO accrual rules or payout stipulations
  • Contractor vs. employee misclassification can lead to costly fines
  • Sec. 7216 regulations mandate specific client consent forms when outsourcing tax prep or using contractors

Addressing these issues up front, says Sara, frees firms to focus on strategic goals like offering innovative ownership pathways.

Why Traditional Partnerships Feel Precarious

Despite the compliance work, most of Sara’s clients ultimately want guidance on ownership transitions, whether selling to a third party, merging with another practice, or rewarding top team members. She uses “one foot on the boat, one foot on the dock” to describe how many owners attempt to ease out of the business while transferring equity to new partners. This can create a drawn-out process where any sudden shift—divorce, health crisis, or relocation—throws everything off balance.

“You can set up a five-year partnership buy-in plan,” says Sara, “but if something goes wrong in year two, you’ve got a mess on your hands, with partial owners and complicated payouts.”

Phantom Equity: A Modern Alternative

At DBA, Marcus and Rachel wanted to recognize two key team members—Leslie Reeves, CPA and Amy McCarty, MBA—without forcing them to buy into a rapidly appreciating firm. “We’re not just talking about hours and ‘butts in seats,’” Marcus explains. “Leslie and Amy bring strategic value that far exceeds any traditional measure of partner track.”

The solution? A phantom equity plan. Sara helped them design an arrangement wherein these employees receive financial benefits tied to firm performance—just as if they owned a small percentage—but without actual stock in the company. They would still see real economic participation in a potential sale or buyout event.

“We’re going to treat you economically as though you are a 1% owner,” Sara notes, “but you’re not on the cap table. It’s simpler, and if someone leaves, they aren’t stuck with actual shares in the business.”

For Marcus and Rachel, this addresses talent retention—rewarding employees who already act like owners—and risk management: no messy buyouts if life circumstances change.

Evolving Valuations: From 1X Revenue to 8X SDE

Another factor driving new ownership models is how valuations have changed. Sara observes that many accounting firm owners still assume they’ll fetch about 1X gross revenue. Yet private equity, family offices, and younger entrepreneurs increasingly evaluate profitability. Instead of valuing a practice based on gross revenue, they’re basing it on earnings—often 4X to 8X seller discretionary earnings (SDE).

“Now that people realize it’s about cash flow, we see more sophisticated questions,” explains Sara. “Do you have digital relationships with clients? Are you reliant on face-to-face drop-offs? Efficient, profitable, tech-savvy firms can get premium multiples.”

Younger generations of accountants prioritize work-life balance and operational efficiency. They’re less inclined to log 70-hour weeks or maintain a physical office for clients to drop off paper forms. Sara says this cultural shift is clear in her legal practice:

“I’ve got buyers in their 20s and 30s who want to do everything in the cloud, automate workflows, and raise rates so they don’t have to manage thousands of low-margin returns. They’re running the business more cleverly.”

Looking Ahead: Aligning Compliance, Culture, and Ownership

As more firm owners realize they must adapt to multi-state employment, shifting professional values, and new valuation formulas, legal compliance and innovative ownership structures become intertwined. Whether ensuring your employee handbook meets Colorado PTO law or sending out proper Sec. 7216 disclosure forms, or designing phantom equity plans, the best solutions are protective and empowering.

“Firms want to preserve culture, recognize talent, and plan for what’s next,” says Sara. “But you can’t marry that boy just to keep from hurting his feelings,” she quips, invoking her mother’s advice on knowing when to walk away from a bad deal—or a rigid tradition that no longer fits.

By balancing compliance groundwork with creative reward systems, forward-thinking firms can attract and retain top talent, command higher valuations, and sleep peacefully at night, knowing they’ve protected themselves and their employees.

To hear more about Sara Sharp’s legal insights and how DBA structured its phantom equity plan, listen to the full episode of Who’s Really the Boss? podcast.

Rachel and Marcus Dillon, CPA, own a Texas-based, remote client accounting and advisory services firm, Dillon Business Advisors, with a team of 15 professionals. Their latest organization, Collective by DBA, supports and guides accounting firm owners and leaders with firm resources, education, and operational strategy through community, groups, and one-on-one advisory.