Tim Petrey: Building Raving Fans in the Least Sexy Industry

Anthony Codispoti (00:01)
Welcome to another edition of the inspired stories podcast where leaders share their experiences so we can learn from their successes and be inspired by how they’ve overcome adversity. My name is Anthony Codispoti and today’s guest is Tim Petrey, CGMA, CPA and the CEO of HD Growth Partners. They are an accounting and advisory firm based in Youngstown, Ohio, known for offering business solutions that go beyond traditional number crunching.

They help clients in many industries with accounting, tax planning, payroll services through white glove payroll and strategic consulting. Under Tim’s guidance, the firm has grown from just a few people to over 100 employees with multiple offices and a people first culture recognized by accounting today and other organizations. Tim started at the company in an entry level role and quickly rose to a leadership position.

His background includes overseeing service expansions, spearheading private equity partnerships, and building a culture centered on innovation and client care. Throughout his tenure, he has been part of numerous award-winning initiatives, including top workplace accolades in Ohio. Tim’s passion for helping businesses succeed has made him a sought-after advisor and community leader. Now, before we get into all that good stuff today,

Our episode is brought to you by my company, Ad Back Benefits Agency, where we offer very specific and unique employee benefits that are both great for your team and fiscally optimized for your bottom line. Imagine being able to give your employees free access to doctors, therapists, and prescription medications. And here’s the fun part, the program actually puts more money into your employees’ pockets and the company’s too. One recent client was able to increase net profits by $900

per employee per year. Results vary for each company and some organizations may not be eligible. To find out if your company qualifies, contact us today at addbackbenefits.com. All right, back to our guest today, the CEO of HD Growth Partners, Tim Petrey. Thanks for making the time to share your story today.

Tim Petrey (02:15)
Thanks for having me, man. Looking forward to it.

Anthony Codispoti (02:19)
Okay, so Tim, let’s just jump right in. I want to figure out how the heck you got to where you are today. Maybe let’s start with how’d you put yourself through college?

Tim Petrey (02:29)
⁓ Great question. ask myself that pretty much every morning when I jump out of bed, how did I get myself in this position that I’m in today? I put myself through college washing semi trucks. I worked at the Blue Beacon Truck Wash here in Youngstown, Ohio. I would work 40, 50 hours a week, go to school full time at Youngstown State University. ⁓ Proud alum of ⁓ YSU, as you can see behind me.

I spent a lot of time trying to go back and forth and balance the two of those things. I was just really accustomed to a pretty heavy workload, working 50 hours a week, going to school full time. I was pretty all right with putting my head down and learning to focus that energy into the right thing, which ultimately helped to really translate into some relative definition of success as I entered the workforce and realized that my

My advantage when I got out of the workforce was that I was willing and able to work harder than everybody else.

Anthony Codispoti (03:32)
Where do you think that work ethic came from?

Tim Petrey (03:37)
I think it’s predominantly survival instinct. I think it’s a combination of things. I lost my parents at a young age, was raised by a variety of different family members, predominantly my aunt and uncle. My uncle was self-employed ⁓ and he owned a motorcycle business or he sold motorcycle parts for about 50 years here in our community. I always saw what it took for him to make a living and take care of his family. ⁓

You know, it was Sundays when the alarm goes off. He was up and out it and was going to take care of the building. So I realized early on and saw that it was very evident that that’s what it takes as you’re building your business in those early years is that, know, you’ve to be willing to pour everything into it. And then, you know, being relatively independent and early age, I was I was working and largely taking care of myself at 16, 17 years old. I.

I knew at that point in time that it was on my shoulders. ⁓ So there was never a feeling that anybody was going to come bail me out. So it was, am the backup plan. ⁓ I am the one that ultimately has to come in at the end of the day and figure it out. ⁓ I have had an amazing support structure in my wife for many years. ⁓ My wife has been, we’ve been together for over 20 years. We’ve been married for about 12.

Anthony Codispoti (04:47)
Yeah.

Tim Petrey (05:04)
Um, you know, she has been with me along the way and she’s always been that person that, you know, when I felt I couldn’t do something, um, she told me I was wrong and would just tell me that, you know, there isn’t anything that I can’t accomplish. And she’s always pushed me, um, you know, to get, to get the best out of whatever situation we’re in and make the best out of it. And as a result, we’ve got an amazing life, uh, two beautiful children, nine and six.

Two boys here in Youngstown, Ohio, Canfield, Ohio, and we got a great thing going.

Anthony Codispoti (05:36)
So losing your parents at an early age, how old were you at the time?

Tim Petrey (05:41)
I was four, my brother was 13.

Anthony Codispoti (05:44)
You still have memories of them?

Tim Petrey (05:48)
⁓ you know, it’s hard to tell what, memories are actually yours, you know, at that age, you know, what memories are actually yours and what memories are those that people have kind of like planted into your brain, right? Of all the stories that you heard, ⁓ all the things that you’ve been told. Luckily, I was raised by all of her siblings. ⁓ so there was never a shortage of understanding who my mother was. ⁓ I have great memories of her being a wonderful, wonderful person, a very kind human being.

someone that would always do anything for anyone around her. So that’s the foundation of who I am and who I was built to be was based on the stories that were told of my mother and how amazing of a person she was.

Anthony Codispoti (06:34)
Wow. And you say her siblings, they took you in, they helped to raise you, they helped to care for you. Even still, you know, like you said, by the age of 16 or 17, you were pretty independent, you were kind of figuring out life on your own to a large degree. And it seems like, you know, that kind of built a thick skin, a thick exterior kind of made you ready and tough to kind of go out there and figure things out, work 50 hours a week while going to school full time. ⁓

You went to school for accounting, that’s what your undergrad was in. And then how did you land your first job in that area?

Tim Petrey (07:10)
So that was an interesting story coming out of school. did an internship with a pretty large regional firm here in town. ⁓ Didn’t get hired, interviewed with just about every other firm in town. Did not get hired by any of them. ⁓ A few of them went through multiple interviews, still did not get hired. And I was kind of committed to the fact that I was going have to leave. It was 08, it was 09. mean, was the great recession was going on. There was all kinds of challenges here in the Youngstown area. ⁓

So, you know, it wasn’t just about the fact that I was overlooked. It was a lot of other things that were going on. I had a job lined up out of town and was planning to leave, but it wasn’t for another eight months down the road. So I took kind of like a temp job. ⁓ I got introduced to Harold Davis, who was my original boss, original, then became my partner and mentor and all these other things by one of the guys that I worked with at the internship, the regional CPA firm.

He took a client from Harold. Harold called him up to get the work paper, and the transition stuff. Then I asked Joe at the time, I did you guys have any good interns that you didn’t hire, or got anybody that’d be interested in coming over and helping me out? Joe was kind enough to pass along my name, get introduced to Harold, and I started working at our firm, answering the phones. I was the receptionist. had my accounting degree at the time, but…

When I came there, was like, man, what do need me to do? I’ll do whatever. I wasn’t really planning on being there long-term. I thought it was just going to be a of a stopgap, but I worked there for a little while. I had fun with it. My partner and boss and eventual mentor, Harold, was having a lot of fun with it. He was in kind of like the second version of his career.

we just really had a blast together. And that’s kind of how it started. you know, six, seven months later, when it was time for me to leave, I looked at him, he looked at me and I said, I don’t want to leave. He said, good, I don’t want you to. And I stuck around. it was really kind of just a right place, right time, you know, kind of a situation. But I also think that, the story that comes out of that, that I tell, you know, at the universities is like you.

You never know what opportunity is coming. You never know what introduction is coming. like showing up as the best version of yourself every day is important. mean, it may not translate to success or a job or a client in that instance that you think it might, but you know, sometimes just continuing to show up the right way leads to those opportunities.

Anthony Codispoti (09:51)
You know, I like that this story, Tim, because it’s something that I hear from several of my guests, you know, kind of going through a rough spot. ⁓ Need employment. Take a job that quote unquote is, you know, beneath your skill level. Just because you need something right, and it’s better than sitting on the couch and twiddling your thumbs and just, you know, looking at indeed every day. ⁓ And like you said, like you never know what’s going to happen. You don’t know how that’s going to turn out and what.

doors are going to open from being out there in the world developing relationships. And you mentioned that your partner became first your boss, then a mentor, then a partner. What’s maybe the biggest lesson that you remember him teaching you pretty early on that sticks with you today?

Tim Petrey (10:40)
I’ve got a laundry list of amazing lessons from Harold. I think the main one that he was always beating into my head was to be a good listener. Listening is 85 % of the battle. That applies to so much. I didn’t realize that at the time. When he was teaching me these lessons…

We would go to client meetings, we’d go to prospective client meetings, we’d go to meetings with potential referral partners or whatever. Almost every time we’d get back in the car together and we’d leave wherever we were meeting these people and head back to the office. And he’d say to me, Timmy, do you think I talked too much? I think I talked too much. I should have listened more. So like in his mind, his brain was programmed to just try to listen more.

And I saw that on multiple occasions where there was an instance where we went to a client and we said, Hey, we’re good at all these things. Here’s a word great ad and spreadsheets and taxes and accounting and whatever else. And then we let the client talk. Right. And then, then we found out what it was that they needed from us. And had we started with that, the conversation would have been so much easier. You know, we, if had we started with listening to them to understand what they needed and what would have made their life better.

then we immediately could say, we do that really well. Here’s an example of that. Here’s a case study. Here’s how we have done that well in the past. ⁓ so he really, ⁓ forced me to change how I communicate and really think differently and be very intentional about, you know, could just conversations with people. And that, that led to then realizing, okay, well, this is very applicable for clients. ⁓ and we were growing and we were adding clients and we were

⁓ you know, finding our own relative definition of success there. And then as I was learning how to manage people at a larger scale, ⁓ that came right back into it. ⁓ and we, we really tried to make that a premise of how we were running our business was we listen to our clients, we listen to our community, we listen to our people. ⁓ and that, that listening to the people actively listening, genuinely listening to our people on a regular basis, I believe is the reason that we’ve, we’ve had so much growth and had so much.

opportunity for success here in our industry. ⁓ Getting those types of ⁓ cultural recognitions year after year ⁓ in a time where being good at culture is not easy ⁓ really means that we’re doing something well. And I think that I can really credit a lot of that to that foundational lesson that Harold has taught about just listen, shut up and listen.

Anthony Codispoti (13:27)
So it seems to me that growth comes from good sales and marketing, not listening to your employees. Tell me how I’m wrong.

Tim Petrey (13:36)
⁓ having great employees means that they’re going to do a great job. And if your employees are happy with what they’re doing on a regular basis, people genuinely feel purpose and what they do every day. Accounting isn’t the sexiest industry in the world, man. You know, it is a largely a pretty boring industry. There’s a lot of people that are naturally somewhat introverted that are in this industry, but

At the end of the day, the moment that that flips and you see it happen in people’s careers where they realize I have an opportunity to like make a meaningful change in someone’s life and I can help them alleviate the financial pressures that they have by doing a great job at what I’m doing. And the minute that people see that and they flip that switch from this is my job to this is my career and this is my passion. Everything changes, right? They’re happier. They love what they’re doing.

And then ultimately the service that they’re giving to a client is like nothing they have ever experienced in our industry. Right? So when you put those two things together, what happens is you get then organic referrals of a different magnitude, because now your clients aren’t, aren’t just okay with what you’re doing. The average NPS score of the public accounting industry is pretty darn low. ⁓ people are not generally raving fans of their accountant. ⁓

But that’s always been what we set out to do is create raving fans and create people that truly love us and what we’re doing, ⁓ primarily because of that, the purpose that it gives to us every day. mean, that’s the fuel that gets us jumping out of bed.

Anthony Codispoti (15:15)
That makes a lot of sense. You know, the power of the word of mouth referrals is just incomparable. You’re already coming in as somebody who’s been validated, trusted. Aside from sort of those organic word of mouth referrals, what have been some of the big growth levers that you’ve pulled along the way?

Tim Petrey (15:36)
We’ve done a lot of unique acquisitions. So during that period of time that we were growing, we acquired about 13 to 14 really small sole proprietor kind of practices. didn’t really like marketing wasn’t something that we ever did as we were growing in the early years of our business. We didn’t have a really recognizable name. We didn’t have a super recognizable brand.

you know, we were building a firm in the shadows of some really successful firms in our community that have been around for a hundred years. ⁓ And so we needed, we needed to kind of do something different. We needed to get an opportunity. We needed to get an at-bat. ⁓ And then once we had that at-bat, then we were able to prove ourselves. And as we proved ourselves, then that compounded with the organic referral. So we’d go in and we’d buy, you know, these really small little practices. Maybe a sole proprietor was doing

two to $300,000 worth of tax returns and bookkeeping and stuff like that. ⁓ And they’d be at the tail end of their career. They’d be looking for, know, ultimately those people were looking for a good place for their clients to go to because they have very good, you know, relationships with those people. ⁓ So we were able to have some pretty favorable deals put together where we didn’t have to put up a whole lot of money. We worked together with that person and really create a custom retirement plan for them. How many hours do you want to work?

clients do you want to work on? We’ll handle the rest. We’ll pay on an earn out basis over a period of time as those clients stick around. And then, you know, that, created a bunch of things that I guess I didn’t expect. mean, number one, you know, that person that stuck around really helped train and develop a lot of our people because they had decades and decades of great experience. Um, and then those people, the clients that they were serving were really happy about the fact that their person that took care of them for years.

was going to have a comfortable retirement that they had a good partner that they were able to hand things off to. And then they trusted us. So therefore the client trusted us. And then as we were able to really focus on providing the highest level of service that we could to those people, you know, they stuck around, then they became our clients. They were their clients. They became our clients and they were for their friends and family because, we, were trying to create raving fans with.

Anthony Codispoti (17:58)
So at what point were you invited to become a partner?

Tim Petrey (18:04)
So this was an interesting story. I about 23, so I’d been working with the firm for a couple of years straight out of school. my partner was, again, this was kind of his second act and he was really trying to figure out what he wanted to do. He was really into business coaching. He was a playwriter. He was a great accountant. He was a great harmonica player. had all these things he wanted to do and he was

you know, to some degree, going through a midlife crisis, like trying to figure out what he wanted to do next. And I think there was a moment where, you know, he was really considering selling the firm to another regional practice. And he sat down with me and he’s like, hey, I’m thinking about doing this. What do you think? And I meet my immediate response was know way, man. I really, if there’s anything I can do to stop that, I will.

I’d love to, I’d love the opportunity. I love how to figure it out. and he was kind enough to say, yes, we’ll, figure it out. I mean, I’d love to see you buy into the firm. I’d love to see you, you know, figure how to make this happen. But ultimately, you know, he had to take a risk on me. had to take a risk on him. ⁓ I had banked a couple of years of my bonuses that were, that I was supposed to get for bringing in new business.

And I use that to pay for like my first maybe 3 % of the business and then would continue to just kind of, I wasn’t making much. was making 40, 50,000 bucks a year. And every time I had earned a bonus, I’d say, keep it. Let’s keep it and give me more ownership. And then I went to the bank. I went to the bank at 24 years old and ⁓ yeah, yeah. I went to the bank and I said, Hey, ⁓ I want to loan for $300,000.

Anthony Codispoti (19:47)
⁓ you were young still. You were young still. Okay.

Tim Petrey (19:56)
And they looked at me like, all right, tell me more. You know, had a terrible personal financial state, but not terrible, but I didn’t have anything. Right. I had student debt. I had a house with know equity, had a car with barely any equity, whatever. ⁓ And I kind of just I told him the story. said, hey, this is what I want to do. And I’ve got this guy that’s really dedicated to sticking around and teaching me. They knew him. He had a great reputation in town. So that bank took a chance on me. That bank gave me that.

Um, and it proved to be the spark that changed everything. Um, the, the, the former president of that bank is still one of my really close friends. Now he’s in retirement and, and, uh, doing some other things now. And, um, but they, they gave me that start. I bought it in the firm at, at, uh, 20, 23, 24 years old and took over as the managing partner right after that, uh, 20, around 24 years old.

Anthony Codispoti (20:54)
What did you use for collateral in the loan?

Tim Petrey (20:58)
Nothing. Me, my personal guarantee. You know, mean, and it was at the end of the day, I mean, they had some collateral based on, you know, what, what the business was doing. But at that time I was only buying half of the business. You know, it was a minority ownership share in a service based business. There’s know collateral. There’s know assets, right? There’s filing cabinets and old tax returns. ⁓ Maybe some accounts receivable, but you know, not, not, not much. ⁓

Anthony Codispoti (21:03)
Okay.

Mm-hmm. Yeah.

Tim Petrey (21:28)
You know, so was really kind of a testament to the fact that, if you go to the bank prepared and you’ve got a good store and you’ve got good projections, you got a good plan, you got a good relationship. My credit score was impeccable. I had always taken that very, very seriously. ⁓ The deal cashflowed. Everything worked. I was willing and was proving to the bank, Hey guys, I can live off of $50,000 a year very comfortably. So I will throw any and everything at this to make sure that this happens.

And they just had confidence in the fact that ⁓ I was going to do what I said I was going to do. Plus, you know, they were pretty familiar with Harold and he had a pretty good reputation. from their perspective, it wasn’t a tremendous amount of risk, you know, absent all the missing pieces of collateral.

Anthony Codispoti (22:14)
Sure. ⁓ Okay, let’s hear in a bit more detail about the services that you offer because CPA firm could mean anything from accounting to tax returns and beyond. Let’s kind of hear the full breadth of what you guys do.

Tim Petrey (22:30)
Yeah. So we, started as primarily tax only, uh, we were doing tax returns, tax resolution work for people. Um, you know, when they would get behind in, in taxes, they’d come to us, we’d help them figure it out. Um, and then we started to kind of just add little bits and pieces along the way. We, we had some of those acquisitions that had some concentrations in different areas. Um, we had a lot of, know, the traditional write-up work and a test work, compilations, reviews, low end audits.

⁓ payroll was something that we were doing a lot of in the early years. And then, you know, as, as we got more mature, as our business got more mature, we started to really think about, you know, how do we smooth out our revenue throughout the year? How do we make this where we’re not making all of our money in the first four months of the year and then trying not to lose it the remaining eight? So did a lot of tax work have then ultimately transitioned.

A lot of our tax work and what we call, we refer to as tax maintenance packages. So we do the tax return. We do year round tax planning with our clients. They get unlimited email access to our team throughout the year. You know, there’s so many conversations that are happening with chat GPT and Gemini and all these other apps, ⁓ and Tik Tok and all this, the reels and whatever people that are coming out with finance and tax strategies online that allows for us to have just good, engaging conversations with our clients throughout the year.

be very proactive about the tax planning work that we do. tax, tax planning will always be a huge core portion of our business. The payroll business has really grown over the years and we can get into that in a little bit. But recently over the course of last couple of years, the part of our business that’s grown the most is our outsourced accounting team. So we have found that there’s a substantial pipeline problem in the accounting industry overall, know, 75 % of CPAs

five years ago were at retirement age. So in 2020, 2021, AICPA did a study and 75 % of the active CPAs were already at retirement age. So there’s like for every five people that are coming into the industry, there’s one coming in. The math is just bad. So we saw that in our business and realized that a lot of our clients were going through that as well. So we just started, we, we started to build what was originally called MyChief.

And it was an outsourced CFO platform. And what we realized through that kind of evolution was it’s not just the CFO portion that people need. It’s full soup to nuts. They need the entire accounting department outsourced. They can’t hire anybody and retain anybody in those positions for the right price. So they bring us in. We’re very efficient. We’re very good at what we do. We leverage automation. We leverage AI. We leverage global talent. So we’re able to come in and

completely replace an internal accounting department. Not only replace it, but instead of them getting inconsistent reporting, instead of them having to manage that person like an employee, they’re getting a very high level product. They get video reviews of their financial statements. We build their budgets with them. We do cashflow forecasting and analysis with them. We help them with succession planning.

we’re leveraging AI and using agentic AI to help build very detailed levels of financial analysis for our clients, dependent upon their industry. And as those models get better and better trained, the quality of output and the quality of interactions we have with our clients has really gone through the roof. So we really wanted to position ourselves as something that

You know, we didn’t want to just be taxed. We didn’t want to just be payroll. We didn’t just want to be the traditional service suite. We wanted something we could do year round, had good cashflow opportunities, was scalable. And most importantly, put our employees in the position where the work that they’re doing is purposeful. The work that they’re doing is something that they’re helping someone. They see that. They see the impact that they’re bringing, not only that client, but to their community.

And as a result, we’ve got more engaged employees. We’ve got a much healthier business. We’re not as ⁓ subject to the crazy cycles and cashflow issues of the traditional accounting firm.

Anthony Codispoti (26:58)
That’s pretty cool stuff. did this? Accounting ⁓ outsourcing? Did this come about through one of the acquisitions that you made? Or was this an idea that you guys had and you birthed it from the ground up?

Tim Petrey (27:12)
So it’s a good story. It’s almost like, you know, I prompted you with this and I didn’t, but I got a call from a client. I was on a fishing trip with another client in Southern Ohio and I was supposed to be there for the weekend with them. And I got a call from a client who was completely distraught. was a good friend, long-term client of ours. picks up the phone and he’s talking to me and he’s telling me that his CFO had a tragic accident and passed away in a motorcycle accident.

completely unexpected. was a young guy. He was just an absolute rock star. ⁓ Brad was somebody that he was always, he was great to work with. He was somebody that understood his industry and he was just, he was spectacular. And I got the call from the owner and he said, Brad, Brad passed and I need some help. And so I told him, said, I will be there. I’m leaving early. I’ll be there as soon as I can. We’ll figure it out. And I get there and

And the guy is just beside himself because this guy that was his CFO was running the show. He had complete control of the finances. He was great at his job. So the owner didn’t worry about it. There was know checks and balances. was know worry about, I need to know everything that this person is doing? And so we worked together there through that process, ⁓ helped him ultimately.

keep the wheels on the bus. came in, I worked that job. acted as their CFO while, you know, still running our business for about six months. And then built a process, hired somebody, trained that new person and then stepped out. And then the same thing happened another couple of months later with another client. had a CFO controller that didn’t pass away, but they just abruptly left. Some, there was some big change in their life and they left. took like the…

the key fobs for the bank along with them. It was just like in the middle of the night, see you later, I’m out. And in those two instances, the relationship and the bond that I formed with those two clients was unlike anything I had ever experienced. These are guys that are running big successful businesses. The one guy is running a really successful steel business and big strong guy, big strong personality. And I saw the vulnerability in him.

And then when we fixed it and we ultimately got him into a better position, I saw the gratitude and the appreciation for the work that we did. He called me up, one of the guys called me up and said, Hey, Tim, I got an issue. need you to come to the office real quick. So came to the office and this was after we had already kind of solved the problem and hired somebody else. And he just used it as an excuse to give me to come to the office, took me back into the conference room and the conference room was covered in fly fishing equipment.

And this is, fly fishing was never really my thing. It was his thing, but I had done it with him and I really enjoyed it. And actually the fish that’s on my wall behind me is from the fishing trip that he took me on after this all happened. ⁓ And so, I see that fish every day and it reminds me of why I’m doing what I’m doing. And when I went through that process with him, I said, there’s something here. ⁓

I, the way that I feel right now and the purpose that I feel is very different than when I just do a tax return for somebody. love doing tax returns. love meeting with people, but it wasn’t the same. You know, this was when I see this person at the grocery store, they’re going to come up and shake my hand and give me a hug. You know, if they see my kids, they’re going to tell them how, how much of an impact that I made in their life. ⁓ so like from a, when you start thinking about like legacy and you start thinking about.

what mark do I want to leave on the world? When you have the opportunity to do that kind of work and have that kind of impact on people’s lives, that was something different. So that’s really how it all kind of came to fruition. And then we, you know, we got better and better and figuring out how to deploy it.

Anthony Codispoti (31:14)
Yeah.

Yeah, that was going to be my follow-up question is how exactly are you figuring that out since, you know, your clients aren’t the only ones having trouble hiring, you know, CPAs and accountants. How are you finding them now to, you know, become the outsource team for so many of your clients?

Tim Petrey (31:37)
And so what I realized through that process was that most of those CFO jobs are really, lot of the work that they’re doing is not all CFO level work, right? So it doesn’t require a CPA. It doesn’t require somebody that has intimate tax knowledge or intimate accounting knowledge. You know, a lot of that portion of the job can be done by, you know, payroll clerks, accounts receivable clerks, accounts payable clerks, ⁓ data entry people.

people that can just be trained. So what we did was we built a scalable system, underneath the CFOs so that the amount of time that the fractional CFOs need to spend with a client is on the best things. The amount of time that that fractional CFO is spending with their client is they’re talking about forecasting. They’re talking about strategy. They’re talking about the plan, but they’re not doing the actual books, right? They’re not hard coding any of the numbers in and not doing any of those types of things. ⁓ when they get it, they know that my

our process has been followed. They know that the books are very clean. They know that everything is in the right spot. And then they can use that to have the strategy conversation with that business owner to help them get to where they want to be. know, so that it was much easier to hire those people, right? We were focused on hiring people with great personalities that were coachable, that were trainable, and that would follow a prompt and follow a set of ⁓ instructions that we gave to them. And this was actually something that I took from the truck wash business.

⁓ and so I worked for blue beacon when I was in college, as I mentioned before, and they, they had a bunch of a wide variety people that work for them, you know, whether it was convicts or whether it was people that had issues in their life or it was young kids like me, but they had found a way to train people very quickly and very efficiently. And I took note of that and I saw, okay, well, everything that they do is exactly the same every time they do it.

There is know go in and figure it out yourself. It’s you wash this part of the truck, you wash this part of the truck. This is exactly how you do it. You have a process and a system for everything that you follow. So we tried to replicate the same thing in the accounting business ⁓ and create a process and a system and an inventory of how we handle everything so that that way as we grew and as we scaled, ⁓ know, I could put people with.

know, smaller amounts of experience and role and they would still be successful because they understood their part of the team. They understood their role on the team and what they were supposed to

Anthony Codispoti (34:11)
So this new branch of the business, OutSource Accounting slash Fractional CFO, was this something that you mostly started out offering to existing customers or was this something where you saw, wow, there’s a lot of potential outside of the folks that we’ve been serving in the past?

Tim Petrey (34:32)
So, I mean, it started off with existing customers. ⁓ So to take a step back, give you another kind of heraldism, lesson learned from Harold along the way was, the sales cycle in our industry as many is know like trust. You know somebody, you eventually like them, you eventually trust them. The real magic in the service industry happens when your clients trust you, right? So, you

we had an opportunity with some of our clients that said, Hey, I’m not really sure what I’m going to do here. I don’t want to hire this person. And I would come to them and I would say, Hey, we’ll do it. And they said, what do mean? You’ll do it. I said, know, know, we’ll figure it out. I mean, we, I feel this is something that is part of, is going to be an opportunity in the industry moving forward. You need this service. I’m willing to figure out how to do it. And you know, we, basically just took the time to work with those clients.

to figure it out for them. And then as we figured it out for those clients, as we figured it out for the people that already kind of trusted us, then we realized we had something that was more marketable externally to places that hadn’t known us previously.

Anthony Codispoti (35:46)
And where did the idea to start the payroll, white glove payroll service come from or was that through an acquisition?

Tim Petrey (35:53)
No, so the payroll business was actually as a result of Christmas lights. Weird story. So one of the original. Yeah. One of the original investors in Paychex lives about 10 minutes from my house. ⁓ Great human being. He is one of my favorite people.

Anthony Codispoti (36:02)
as every payroll company gets started from Christmas lights.

Tim Petrey (36:19)
And he does this amazing Christmas light display every year. I mean, it’s his whole street. He takes a month to set it up. And my kids are really little. I took him down there and I saw his Christmas lights. And it just at that time in our firm, we were doing some payroll work. had one large client that we were doing a lot of payroll work for. We weren’t great at it, but we were good at it. And I realized, you know, we needed to do something.

And that something was either, let’s sell off the payroll to ADP or paychecks and focus on what we’re best at, or let’s start to get serious about it and hire more people so that we didn’t have just one person doing it. Like there was a lot of concentrated risk there because it was one client at one person that knew how to do it. And so I come in the office the next day and I tell my partner, said, Hey man, ⁓ I think we should think about growing the payroll business. And he’s like, Timmy, there’s, there’s know money to make in payroll.

You know, the margins are too thin. There’s know issue. There’s too many issues. There’s too many compliance, this, that, or the other. And I said, man, the Christmas lights I saw last night begged to differ. There’s money to make in payroll. Right. And so, you know, we really put our heads down and started taking seriously then, and really started to think about the opportunities that existed in payroll. It allowed for us to have some stickiness with our clients. We were in, we were now more engaged with our clients throughout the year. So it gave us an opportunity to like,

see what was happening in their business, right? One of our payroll people would notice, hey, they lost a key employer. They got this new contract and they’re really busy. They’re really hiring up. So then we’d be able to take that information and use it to do better tax planning and do better advisory services as a result of it. So, you know, we started to realize that there was more opportunity in payroll than we originally thought. And then, you know, we needed to find the right software and tech stack to do it. So we invested quite a few years into exploring that.

And then started to build out the team. then once, once we had a good tech stack there and, you know, good core group of people, it really, it really kind of blew up. ⁓ and, and the business is doing really well. ⁓ the, the team is completely remote. ⁓ it was built on the idea of hiring, ⁓ stay at home moms. So we realized that that was an underserved part of the labor market. and there were some really great people that we wanted to continue to employ.

⁓ But they were having kids and going through some of those different changes in their life. So we said, know, the payroll business makes a lot of sense because I can scale you down and you can do one or two payrolls from home. And then as the kids get older and get into school, then you can scale back into it. And you don’t have to come to an office nine to five, as long as you’re responsive to your clients. Like that was the whole kind of thesis when we started building that business. ⁓ And then again,

Anthony Codispoti (39:04)
Interesting.

Tim Petrey (39:08)
I kind of realized, well, these people love what they do. They’re doing a great job. The clients are really happy. We have something here. And then it started to compound ⁓ in terms of what we were learning from that business.

Anthony Codispoti (39:20)
But this grew way beyond sort of the Youngstown, Northeast Ohio area. As I understand it, you guys are in 40 plus states. How do you grow from, you know, small Rust Belt town in Northeast Ohio that you’re very proud to be from, rightfully so, into being across 40 states with this payroll service?

Tim Petrey (39:41)
I mean, requires constant effort. It requires a good leadership team and a good group of people that, know, really, really want to improve and really want to grow. ⁓ you know, it’s like, you gotta have a group of people that are comfortable just constantly breaking things. Like we are constantly breaking things in our process to try to make them better. And as a result, it’s, it’s never any sense of complacency around here. Like it is.

We’re always going back to the team and asking them, what can we be doing better? We’re pushing them to challenge us and to say know and not just agree with us and say, I need this. We need to be looking at this differently. We need this new training. We need this new software. So really trying to create that mentality of long-term ⁓ success was really where it was at. mean, we weren’t, we didn’t make money in the payroll business for a long time because we were just pouring.

everything back into that business. And so I think that was a huge part of it was that, we were truly embracing delayed gratification here. We knew that if we did this right long term, it would be a very great business. And we also knew what the cost of that was going to be. We knew that it was going to require a lot of effort of all of us. And we knew that it was going to require a lot of investment of all of us. And we continued to do that. And it’s continued to, you know, show the fruits of its labor.

⁓ but now, you know, we are, we are the only payroll provider on, the ascend platform of firms, which is 21 CPA firms across the country. ⁓ so we now have an opportunity to compound that growth of what we’ve found our firm individually, and then, you know, offering those services and teaching those firms how to offer the similar services even, even stronger across the country.

Anthony Codispoti (41:27)
You mentioned ⁓ private equity partnerships, and now you’re talking about the Ascend platform. Can you speak more about that? How did this opportunity come about? What exactly is this?

Tim Petrey (41:38)
Yeah, so we had grown to a point where things were tricky, things were getting interesting. We had gotten to the point where we were doing, you know, six, seven million in annual revenue. It was a great business. were, you know, finding our own semblance of success and profitability and all those things. But I realized that we weren’t going to be able to make it much further on our own. We were going to be able to grow, but not not in the growth trajectory that I was hoping to move through.

because I really wanted to have and see the opportunity that was given to me. I wanted to be able to see that same compounding, know, a multiple of 10 X return on investment to the others that had been building this business with me. And I needed, I was tasked to figure out how I was going to accomplish that. And we looked around and met with a

bunch of different firms to potentially merge into because it’s very common in our industries. You get to a certain size and you merge into another firm. You take your ownership of your firm, basically traded for ownership in their firm. And then, you know, the compounding larger firm then grows at a maybe more exponential rate. And I did not love that concept. I didn’t love the idea of merging in with another firm that was

less progressive than me that had a bunch of retiring partners that had a bunch of challenges that were going to slow me down. Quite frankly. ⁓ you know, I was, I was moving very quickly and realized that joining a firm like that was going to be like paralysis by analysis. And we were just going to get stuck in that deliberation death cycle. Right. So I needed something different and, really kind of backed off the idea of merging in with other firms and started to think about, okay, well, what if I just put up my own capital and really try to,

go crazy here and go all in again, put all my chips on the table again. What if I went and got investors? What if I did this, that or the other? I could really grow in a more meaningful impact. And then I went to an accounting conference and I’m sitting down at the table with one of my buddies and I look over and this guy sits down next to me and he has a ⁓ name tag on and the company name at the bottom of his name tag was my company. They misprinted his company name tag.

and put my company name on it. And I look at him, I said, man, who are you? Did you get hired without me knowing? And why are you here? Yada, yada. And he said, I made a mistake. And as a result, that guy that was wearing the wrong name tag was working for a private equity firm ⁓ out of San Francisco that was researching the industry. And they were thinking about making a pretty substantial investment. He and I became friends. He asked me a ton of questions about

you know, what I would want in a partner. was just like weird, perfect timing because I had in that moment had just a week prior to that had walked away from a pretty substantial merger and, you know, realized that I wanted something different than this guy shows up out of nowhere. And, you know, we, we talked for about a year. ⁓ They expressed interest in us joining at the very beginning.

And we both kind of looked at each other and said, you know, I’m not really ready for this. I don’t think you guys are really ready for us. Like you should really go get a firm that’s like more stable. We’re really in a different growth place. We’re figuring a bunch of stuff out, you know? And so they did. They went and acquired a firm, Ophsl-Dawson in Washington, as the first firm on the Ascend network. And then they went and did a few more and then they called me back and said, Hey, we’d really love to have you come and join the group.

So I think we were maybe the fourth or fifth firm to join the network. But the concept that Ascend is, which is very unique, is the opportunity to maintain your own personal regional brand commitment. But all of the things behind the scenes that we’re all struggling with in terms of making investments, whether it’s AI, cybersecurity, talent recruiting, learning and development, ⁓ &A capital and growth capital.

Those are the things that we can all now share a combined pot of money essentially at the ascend level and make much, much better well-informed decisions about how to deploy that capital. As opposed to, you know, my $10 million firm in Cleveland doing it one way and a $20 million firm in New York City doing it another way. We’re all kind of chipping into that pot and being able to hire the best of the best in all of those categories and just make, you know,

better decisions related to how we’re going to handle those kinds of things. So the way that I described, you know, the Ascend network to people is, I think, ⁓ is like an equity alliance where we all have ownership in our own firms across the country. We’re all incentivized to work together. We’re all incentivized to share best practices and how we’re doing things. And then we have that supercharged superpower behind the scenes at Ascend where they’re making their own great decisions about how to deploy capital in those areas that are so important to us.

Anthony Codispoti (46:39)
Hmm. Makes you wonder how would life be different if that name tag hadn’t been misprinted.

Tim Petrey (46:47)
There’s a lot of things in this story that how different life would be had Joe not made that referral to Harold, had we walked away from that M &A, had that Nate, it’s just, those are those things that you look back on and realize like things happen for a reason. You’ve got to show up and just keep your eyes open to the opportunities that come in front of you. I mean, there’s a bigger plan in place here.

Anthony Codispoti (47:14)
And how long have you been part of the Ascend

Tim Petrey (47:18)
about a little over two years now.

Anthony Codispoti (47:21)
OK, so this is still relatively new, getting off the ground, but it sounds like it’s growing pretty quickly. Yeah, I had another guest on here a few months back that’s part of the platform as well, Gary Fry from BGW. ⁓ Yeah, yeah, he’s a great guy. I got introduced to him from another guest because we were talking about this idea of imposter syndrome, and Gary actually wrote a book on the imposter syndrome.

Tim Petrey (47:27)
Yeah, yeah, it’s going. ⁓

Yeah, Gary’s awesome.

Yep.

Yep.

Anthony Codispoti (47:50)
kind of brought a lot of things full circle. But is there, has there ever been, or do you think there is the potential for, you know, these different firms on the platform to step on each other’s toes? Like you might be talking to a bigger national client and maybe they’re talking to, you know, somebody else on the Ascend platform too.

Tim Petrey (48:10)
I’m sure there is potential that that happens. ⁓ But at the end of the day, we’re all in ownership of one another’s firms, right? So it allows for us to say, if there’s an opportunity for a client and Gary’s firm in Carolina is better suited to work on this client than I am, and we both by some chance are talking to them at the same time,

I’d be more than happy to flip over and say, what can I do to support to make sure that the BGW wins that relationship? Right. Because at the end of the day, all boats rise. Right. Is this is one of those scenarios where I’m just as much excited about when BGW wins or when LMC in New York wins or ATKG in San Antonio wins as much as when we win because we all win together when that happens. And that’s, that’s just, that’s a, you know, I think akin to the

the fact that they structured this thing the right way and they made it where, you know, we’re all finding ways to help one another and finding ways to share ideas and, and do things better collectively as a group. think the challenge becomes if this, if this does continue to grow along the same level of magnitude, you know, regionality gets a little bit tricky down the road. You know, if you’ve got firms to platform firms too close to one another and what happens with that down the road. right now, I mean,

You know, I think that there’s still room for a lot of continued growth. have very little of those circumstances where firms are really kind of on top of one another. And there’s, there’s an opportunity across the country right now. I mean, the what’s happening in the public accounting industry is, pretty remarkable. This is a, you know, a core pillar business of our society. And it’s going through a huge evolution because there’s so many baby boomers that were in this industry that are on their way out.

And there’s know great succession plan in place for a lot of these traditional firms. So there’s a tremendous amount of work out there and available for the firms. our firms that are part of the Ascend network are growing rapidly, are able to take on a lot of that new work. And if you talk to your traditionally owned, one to $2 million regional accounting practice, they’re struggling to take on any new

They’re struggling to hire people. They’re struggling to deal with all those challenges. So I think that the likelihood that that becomes an issue of any magnitude, I think at this stage is probably pretty small.

Anthony Codispoti (50:46)
Tim, as you look back over the course of your life, what’s a big serious challenge that you had to overcome, personal or professional? How did you get through it? Who’d you lean on? And what did you learn coming through it?

Tim Petrey (50:59)
Um, I can think of a couple of moments. Um, you know, one of those moments was in college, um, where I had, I was lucky enough to start college early. Um, I, I leveraged a program called the SB 140 program and I started going to college when I was in high school. Uh, and they helped pay for my college. Once I then got into college, uh, the, GPA that I had gotten in college and the GPA that I got in high school got blended together.

And as a result, I had a little bit of scholarship money and that scholarship money went away because those two things averaged together. So it really forced me to then have to work more than I was anticipating and also do things that were probably not advisable during my college career. There was multiple times where I would schedule classes at the exact same time and I would pick which class I could go to ⁓ because I had to financially. I did not have a choice. ⁓

There was also times where I could only take summer classes. ⁓ And as a result of those, I could take summer classes during the day. So I still needed to work. So I would work the midnight shift. I would work from midnight until eight in the morning. I would give myself a bath or a shower in the sink of the truck wash. And then I’d go to class and I would sleep in the parking lot. I’d sleep in the study hall. I’d go back to work and I’d do that all over again. So I did that for an entire summer.

I worked the midnight shift at the truck wash, slept in my car, slept in study halls. and, know, just kind of kept the wheels on the bus that way. And, know, in, those moments, that’s when I think, you know, I was programmed to understand that there isn’t much that you can’t figure out. ⁓ you know, I was lucky to be healthy. I was lucky to have people to lean on when I needed them. But at the end of the day, like,

Sometimes you have to just find out what you’re made of and what you’re capable of doing on your own. And that is like one of those really empowering moments of saying, there isn’t much that I can’t accomplish. ⁓ you know, I learned a lot through that period of time. I also learned like, there’s a, there’s a small group of people that you have in your life that you can truly rely on. And, ⁓ you know, I think that was a valuable lesson early is that, you know,

I had my girlfriend at the time who is now my wife, who through this process was my rock. Again, like telling me, you’ll figure it out. You will help. We’ll do whatever. There was a period of time shortly after that summer semester where I lived in her parents’ basement. They gave me a place to stay ⁓ during that period of time. And ⁓ they took me in as their own. My wife’s family brought me in as their own. They treated me like I was one of their own.

Um, and, and that, know, ultimately changed the trajectory of my life was people that gave me that opportunity to say, Hey, we’re to give you a warm bed to sleep in. We’re going to give you some food. We’re going to help you out. There’s a shower here. So you’re have to shower in the sink. Um, and, know, they, they ultimately, you know, showed me that, you know, uh, people are genuinely and inherently good. Um, so it was, that was the first time I think that I had really gotten comfortable with like relying on someone else.

and was very independent and was kind of, wasn’t a good, like, ⁓ what didn’t, ⁓ thrive in like team environments. I thrived in one-on-one environments, not so much team environments, cause I was used to being on my own. ⁓ that was one of those moments where I was going through this and realized I can’t do this on my own. I need other people around me. I need a team of people. ⁓ which then ultimately was a good foundational lesson for, you know,

getting into the professional world and understanding that you can only go so far on your own. You can get somewhere fast if you go somewhere on your own, but if you want to keep going and you want to go somewhere really far, you got to do it as a group.

Anthony Codispoti (55:06)
And I love so many elements of that story, Tim. I mean, you showed that resilience, that perseverance, you know, that time that you’re describing, you work the midnight shift, you shower in the sink, you go to class, you’re sleeping in the parking lot study halls. You know, that’s hard stuff. A lot of people throw in the towel, you know, when that comes in, or at least throwing the towel on part of it. I just need to go work. I can’t, you know, do school, I got to pick one or the other, but you push through it.

But the other really cool thing that you pointed out was, you know, going through that experience and having your girlfriend, now wife, support you and her family take you in really highlighted to you the importance of togetherness, of being around other people, of accepting that support. you know, wow, laid the foundation for what you’re continuing to build today.

What’s your superpower?

Tim Petrey (56:00)
you know, I’ve always genuinely believe that real superpower is when you can take something really complex and make it simple. ⁓ And I think that that’s something that I’ve I’ve done a decent job of in my career. I am not, your classically educated person, you know, that I might be coming across a lot of in my industry.

Youngstown State University is a great college, has a great accounting program, tends to get the sideways look when you go up against somebody that went to Ohio State or Notre Dame or Harvard or Yale or this, that or the other. ⁓ So, my job was always kind of to be gritty and to be in a position where I could speak the right language. I had common sense, I street smarts.

I was able to take something that is in the internal revenue code, which is about as dry as anything can be and explain it to somebody that welds metal together for a living and say why this means something to you. Or take their financial statements and take something that you see in those financial statements or conversation that they have and bring it to their own relatable terminology.

So I think that if I had to pick something that I could call a superpower, being able to do that with our clients, being able to do that with my team members and explain to them, hey, if you do this, this is what this means for your career and try to help them understand and navigate these early years of their career and try to get them to understand what it takes to find the success that they want, their own relative definition of success in their lives.

Trying to just take that complicated thing and boil it down into something that’s a little bit more relatable and understandable and motivatable is something I think I’ve prided myself on over the years.

Anthony Codispoti (57:57)
It’s a powerful skill, 100 % agree. What’s something fun you like to do outside of work, Tim?

Tim Petrey (58:04)
Um, I love the opportunity to coach my kids in sports. Um, my nine year old loves basketball. We go to basketball games together. Uh, we’re big Cavs fans here in Northeast Ohio. Um, you know, we, go to our camps together. We, we try to go to as many practices we can together. Um, I’ve, I’ve always really found a tremendous amount of fulfillment and joy in being able to coach kids sports.

⁓ When it’s not the kids, traveling with family is something that we love to do. My wife is a huge Disney junkie. We love to get down to Disney. We try to get down once a year for that. ⁓ When it’s just me, I love to play a little bit of golf and ⁓ see some beautiful parts of the country while doing it. I don’t get to play a lot of golf anymore. ⁓

⁓ It’s really now more like quality over quantity. So enjoying, you know, being able to see some beautiful places and see some beautiful golf courses.

Anthony Codispoti (59:11)
That’s great. Tim, I’ve just got one more question for you. But before I ask it, I want to take care of three things. First of all, anybody who wants to get in touch with Tim, you can find him on LinkedIn, Tim Petri, P-E-T-R-E-Y. And you can look for HD Growth Partners. Also, you can find the firm at HDGrowthPartners.com. And they’ve got a great newsletter that you can sign up there. produce all the content internally themselves.

And as a reminder for listeners, if you want to get more employees access to benefits that won’t hurt them financially and carries a financial upside for the company, reach out to us at addbackbenefits.com. Finally, if you’ll take just a moment to leave us a comment or review on your favorite podcast app, you will hold a special place in my heart forever. Thank you. So last question for you, Tim, a year from now, you and I reconnect and you’re celebrating something really big. What’s that big thing you hope to be celebrating one year from today?

Tim Petrey (1:00:07)
I think the big thing that we’re hoping to celebrate is that we’ve, we’ve both grown our business substantially over that period of time, but just as importantly in that period of hyper growth that we’re going through, we’ve maintained an unbelievable culture compared to everybody else in the industry. ⁓ so that’s always been our goal is we want to grow as much as we can.

but we want to maintain the amazing culture that we have within our practice and within our business. So hopefully we’re celebrating a year from now, another, you know, well into the double digit growth category and also maintaining, if not exceeding our internal NPS scores and all the different measurements of success that we have for our own internal culture.

Anthony Codispoti (1:00:56)
Tim Petri from HD Growth Partners, I wanna be the first to thank you for sharing both your time and your story with us today. I really appreciate it.

Tim Petrey (1:01:04)
Thanks for having me, man. This was fun.

Anthony Codispoti (1:01:08)
Folks, that’s a wrap on another episode of the Inspired Stories podcast. Thanks for learning with us today.

10 That was awesome. ⁓

Tim Petrey (1:01:18)
Thanks, man. That was great.