How to start a CPA practice: Lessons from a firm founder and a risk expert

Starting a CPA firm can be both exciting and daunting, with financial, operational, and personal risks along the way. In this Journal of Accountancy podcast episode, Michael Meihaus, CPA, founder of Meihaus CPA, shares what he learned after launching his practice. Alvin Fennell, vice president and senior risk adviser at Aon, adds a risk-management perspective on what new firm owners must plan for from day one.

Together, they discuss practical steps, common blind spots, and how CPAs can balance growth with protection.

They reference an e-book created jointly by Aon and the AICPA. The e-book’s first chapter is unlocked, and readers can access subsequent chapters by supplying their email address.

What you’ll learn from this episode:

• The market opportunity that was one factor in a CPA deciding to launch a firm.
• What Meihaus meant when he said “your strengths and weaknesses are enhanced” as a firm owner.
• Some of the many business questions new firm owners should answer early.
• Why starting a firm can, according to Fennell, put CPAs in “a vulnerable spot.”
• Risk-management considerations, including billing practices, engagement letters, and insurance coverage.

Play the episode below or read the edited transcript:

— To comment on this episode or to suggest an idea for another episode, contact Neil Amato at Neil.Amato@aicpa-cima.com.

Transcript

Neil Amato: Welcome back to the Journal of Accountancy podcast. This is Neil Amato with the JofA back for another spring of 2026 episode. Today, we’re talking about how to start your own CPA firm. We’re talking with two experts on this topic, Alvin Fennell from Aon and Michael Meihaus, who himself started a CPA firm.

Alvin is a vice president and senior risk adviser; Michael, as I said, a firm founder. First, Alvin and Michael, welcome to the Journal of Accountancy podcast.

Michael Meihaus: Thanks for having us.

Alvin Fennell: Thank you, Neil. Thanks for having us.

Amato: We’re glad to have you on. I guess for Michael first, how long have you had your own CPA practice and what inspired you to start down that path?

Meihaus: It’s two weeks, actually, a little over two weeks from now will be four years. I started right after April 15. It felt very storied or the perfect moment to go. Also I had a great experience with my prior firm. I stayed on for several months while I transitioned to my own firm. The decision to start it was, for me, multifaceted.

I’d say the two big parts were on the practical side. I live in Southern California and I just saw that, in order to buy a house here, I need to be able to have a little more control and input over my income. I saw firm ownership as the path towards that. But more importantly, I saw an opportunity in the market. I was overseeing our California retirement plan audit practice, and the firm was supporting me as I maintained that practice and started to grow it, but it wasn’t a heavy priority for them.

They just were really successful in some key areas that they were focusing the firm on, which made perfect sense. I thought there was an opportunity to really make these audits efficient and extremely profitable if there was dedicated focus and a lot of support built into those, especially with hiring, process, training, all of that.

I just made the decision after talking to a fantastic individual who had started his own firm. He gave me a lot of insight and perspective. I just decided to try it out. I did the math in my head. I saw the practice I was running before, saw the practice I thought I could run and went from there. I think all risk seems crazy in retrospect, but it seemed very doable and achievable at the time, and I’m really grateful that I did it.

Amato: You mentioned risk. I mentioned that Alvin’s title is senior risk adviser. We will get to some of those risks and Alvin’s area of expertise in a bit. Were there any mistakes that you would say you made along the way, especially ones that maybe you’d like to call out for this episode that were good learning opportunities?

Meihaus: I feel very blessed in that overall, the process, as far as it goes for starting a company and moving on has been relatively smooth — you know, in quotation marks. We had a regulatory change that wiped out 35% of my income in one night where a large number of people didn’t need audits anymore. But I had at least a warning on that. It was a year in the future. That was the big issue I think I faced in my early years with the firm.

But other than that, I don’t feel there were any mistakes. There’s just such a learning process. Maybe not the mistake, but the thing I would have redone is to better understand myself before this process, is I would say your strengths and weaknesses are enhanced, especially when you’re a sole owner or firm in those beginning stages.

Where some of your weaknesses may be buffered in a large organization context, I didn’t realize how much of my own personal strengths and weaknesses would shine in the business, and it’s great to see your strength shine, but then you realize, I’m not quite as organized as I thought I was. Now I’m in charge of all admin work within my firm at first. Or, oh, man, I really work best in a team where I can delegate, and now I’m the sole provider in the firm for now, usually when you start. It was really interesting to learn more about myself as I went through that process, understand my strengths and weaknesses and have to adapt to those in time.

Amato: That’s some good insight. I like the part about buffering and how your weaknesses maybe are covered up, and you have to definitely learn from that. How did you decide on your particular business model for Meihaus CPA?

Meihaus: I’m fully specialized into retirement plan audits, and just for context for who’s not familiar, if you’re a company offering a retirement plan of some sort to your employees and you have over a certain number of people involved in that plan, you need an audit from a CPA firm every year. At least when I was working, they’re viewed as the add-on, bolt-on work. Obviously, the prestige work is going to be your tax planning and consulting and preparation and your financial statement audits for the clients.

Those are the ones everyone’s excited about. Those are the ones you want to learn on and eventually work on. Then the retirement plan on it was, well, we have to do it for the client, so we’ll throw it in, we’ll bid the fee a little bit low to give them some cushion or as a concession for the other fees.

I started to think about, well, that’s a poor mindset. If you view anything as “throwaway” or subpar work then you’re not going to put your best people on it, you’re not going to put your best processes on it, you’re not going to try to improve it. I started to work on these and realize that with really strong training, staffing, and processes, they were extremely profitable.

They could be at a high level of quality quickly and efficiently if done right. And I said, it just seems this could be really effective if done what I thought was right. But the challenge is you have to change structures about how you do things. In a large CPA firm, it’s hard to do that. I liken them to a cruise ship. Amazing benefits and features. You got a lot of people with you, a big team. It’s fantastic.

But to change a cruise ship or to say, I’m going to go off on my own, I’m going to visit this island while the ship goes over here just isn’t really practical. You need to be more of a speedboat or a small yacht type of situation there. That’s how I approached it. I just said, I think there’s an opportunity here. I was convinced of the opportunity, I had conviction, and then I just went for it.

Amato: That was, as you said, about four years ago now. How have client expectations or needs changed since then, and how does that affect someone who might be thinking of starting a firm today in 2026?

Meihaus: I think what changed most was with me and how I viewed my services. At first, I viewed these compliance audits, because that’s essentially what they are, as a commodity. Essentially, there’s no difference from my name versus someone else’s name on the audit report, and I competed on price primarily. That’s fine. When you start a company, you need revenue, do whatever it takes to get the revenue in the door. I started to realize, though, that a lot of people had pain points on these audits.

As I mentioned before, most firms don’t treat these as their A work, so they’re not putting their A team on it, they’re not putting their A processes on it, and it’s not important. I realized that instead of competing on price, I was going to compete on an experience for clients, and we really focused on making it streamlined, as painless as possible, and to have continuity of staffing year over year and really effective technology processes. We saw that that was more of the modification we need.

A lot of clients still view these as problematic, challenging complex audits, but if we made the process easier, it made it quite a bit simpler on their part.

Amato: One of the reasons we’re having this discussion is because Aon and the AICPA have collaborated on a new resource for new CPA firms. Alvin, we’re going to bring you in to talk some about that resource. First, how did it come about that this collaboration is happening?

Fennell: Thanks, Neil. Well, the reason why it came about: We were tending to get a ton of questions in regards to things to consider when starting a new firm. It didn’t seem to be a one stop in regards to getting some of that information, things in regards to questions you’re asked to ask yourself, things to be prepared to deal with planning and questions to ask yourself in regards to preparing for starting up a firm.

So, Aon and the AICPA decided to get together and take all those questions that we got over time and build out an e-book that would be easily accessed by any individual starting up a firm and going from there and covering from the business plan, the first thing you do. Doing that brain purge in regards to your idea out on paper and visualize it, and then asking those questions, one, why am I starting the firm? What is the reason behind taking that big leap? Because it is a big leap.

You’re taking on now, where you were as Michael was saying, you were protected by that big cruise ship. You’re out there in a rowboat now in big waters and setting your own course. That was one of the reasons why. Also, we think about the work and planning around the work and being able to do the work. But there’s also other subtle things that you need to consider when starting up your practice in regards to preparing yourself from a risk perspective and then how to answer those risk questions easily.

Then the other thing, too, is as my firm grows, how do I protect myself through those growth phases?

Amato: I think that’s a really good summary, and you’ve touched on some of those questions. There are a lot of questions that any potential firm owner is asking him or herself. But do you want to touch on maybe some of the few key questions you think that need to be answered first?

Fennell: Well, I think some of the main questions come from the development of that business plan. Sitting down and writing things out in regards to what type of firm am I going to be? Am I going to be tax-based? Am I going to be a consulting firm? Am I going to be a solo practitioner starting as the chief cook and dishwasher, or am I going to be bringing on staff and how do I manage that staff, which causes some other risk questions to ask because now you are preparing and managing staff while starting up a new firm. That’s a lot of additional risks to consider.

Looking at the market where you are going to be creating your business, where are your clients coming from? Are you bringing clients from your firm? Is that OK that you’re working with now, or is it going to be ground up? Then looking at the marketing plan: Are you going to have a social media footprint? Those are other risks to consider how you show yourself to the market. Then really when rubber hitting the road, you’ve got a buildup period. How financially stable am I through that buildup period, where’s my break-even point?

Then I think the other thing, too, is setting up and establishing those benchmarks that are showing positive and then being honest with yourself in regards to where you may not be meeting those internal benchmarks. Then how do I get from my first goal, maybe C, but I’m at B, how do I take that leap into the next phase?

Amato: That’s great. You mentioned things like social media risk, maybe things that people haven’t considered. What are some of those risks that new practitioners probably haven’t thought of, and I guess what’s the best way to strike a balance between risk management and growth?

Fennell: Well, I think Michael brought up a good point in regards to reaching out to individuals who have gone through the process. The one thing I have to take a step back and I have to say, I’ve been working with CPA firms for over 30 years. The one thing I can say about the profession, it is very self-supportive. CPA firms compete with each other. But I will tell you the one thing I love about the profession is that they spend a lot of time helping each other out.

You go to conferences and they’re sitting and you can have a CPA from New York and then one from Arizona and they’re sitting down, going through best practices and how they can help each other. That’s one thing about the CPA profession. I don’t think that’s leveraged enough, sitting down. You go through the state society or the AICPA or your local Rotary [Club] and have conversations with individuals that are in the business like Michael and pick their brain.

I think the good question is, what didn’t you anticipate? What were the things that threw you off or were speed bumps or roadblocks initially? That’s how the next individual is going to be able to bridge that gap.

Amato: I think you’re right. That’s a really good one, and Michael has done that and I’m glad you mentioned it because I see it when I go to conferences. CPAs are always talking about, well, I had this issue. How did you work that out when you were starting. And you do hear it in the conversations in the hallways and between sessions and the networking events. Good point there.

For each of you, I guess, Michael first, would you like to leave the listener with one good piece of advice that you’d give to someone who’s just starting. Again, Michael first and then Alvin.

Meihaus: I would just really understand what you’re doing and why and choose a path to go and go for it. I’ve heard a lot about shiny object syndrome, which I think is really applicable when you’re starting a firm is starting a business is to get only the most critical task done right away. That might be figuring out the quality piece in an audit firm. It might be figuring out your marketing plan or how you’re going to develop business. Often cash flow is the biggest piece.

It’s very easy to get sucked into AI and should I be running an agent on a Mac mini or something crazy right now? But the fundamentals of business are offer a product that people want at a price they’re willing to pay and then collect on that receivable that you send out. If you can nail that, that’s the fundamentals of business that don’t shift over time. Just have a clear plan on what you’re going to work on right away. It can be really challenging in the first stages because you have to do everything all at once. Just make sure that you’re focused and that your plan involves that.

The second piece, if I’m allowed to, is just know your numbers personally. I looked at how much money was going into my checking account after savings and after all of that and my 401(k) contributions, all of that. I realized, the number that I need in my checking account to pay all my bills was less than my “salary.”

Then I took that number, I said, I have X runway and I know that I just need to get this many clients in each month to survive. That was really helpful to know. I don’t need to replace X six-figure salary right away. I just need to sustain cash flow month by month as I build the business.

Amato: Alvin.

Fennell: I tend to agree with Mike. You want to keep it simple. Understand who you are and what type of firm you want to establish. Create that plan, make sure you’re adhering to that plan, and it’s very detailed in regards to what your goals are as you build out.

I think the other thing, too, is you’re at a very vulnerable spot at the start. Protecting your reputation and having resources available to ask those questions in regards to something as simple as an engagement letter. Where do I go and how do you build out? What’s the proper wording within that engagement letter? Client acceptance procedures: What are the parameters that you’re setting up in regards to how I will be taking on a client? Your billing: How structured and strong and dedicated are you to your billing structure, and is that detailed out in your engagement letter with your client? I think there’s a lot of infrastructure things where you’re building that skeleton to your business that has to be very strong at the onset.

Then finally, from an insurance perspective, making sure you’ve got the proper coverages in place in regards to professional liability, cyber protection — because now you are in full control. You don’t know, coming from a large firm, you know, you’ve got all those things that you took advantage of, but there’s details in regards to protecting your client’s information that you’re totally responsible for now.

I think the one thing to consider is making sure that you have resources from a risk management perspective to ask those questions from a claims perspective, that there’s any scenarios that you’d like to discuss and make sure you have that hair on the back of your neck stands up when you get a question, being able to have a resource for that, and then an insurance individual professional that specializes in CPA firm risk-mitigation tools. Because this is a very niche profession, and there are some specialized items to very much keep in consideration.

Amato: Hey, we’ve covered a lot of ground in a short amount of time. There is obviously far more we could discuss. We will link to the resource in the show notes for this episode. Thank you again for the insights. I’ll give you both a chance to have a closing thought. Alvin, first you, and then Michael.

Fennell: Thanks, Neil. Just to sum things up, I definitely think in regards to looking at starting up your business, make sure that you reach out to an individual that specializes in those risks from a risk-management and a claims perspective and a reputation perspective at the onset. They can give you a ton of information in regards to what to consider in protecting yourself at the start.

Meihaus: My perspective is that if you have that feeling in the back of your head that you’d like to do this, take it seriously. It’s easy to view the risk of starting a firm, which you should do, and it’s appropriate to. But there’s also some interesting risks with never doing that. Don’t forget that when you join the partnership of a firm, you’re essentially making between a 20- and 40-year bet on the longevity of that firm in which you most likely have limited control.

That’s the contrast you get in firm is control versus comfort is maybe the best spectrum to say it’s on. It’s comfortable to be at a larger firm. It’s safer in some regards. It’s less risky in terms of you have to do everything yourself. And at the same time, though, you’re making a bet that in a very dynamic world that that firm organization will survive over the next 40 years. I don’t think that’s a guarantee for every single CPA firm. Many CPA firms will survive and thrive.

But remember that there’s risk in staying put just like there’s risk in moving somewhere new. Consider that and ask your question, is the place I’m at a place I would like to be at for 20, 30, 40 years? Will they be around? If not, is there another place I’d like to be a part of, or is starting my own firm the answer to that question?

Amato: I think that’s an excellent way to close. Alvin Fennell, Michael Meihaus: Thank you very much.

Meihaus: Thank you, Neil.

Fennell: Thanks for having us.