August 1, 2004
The Buddy System
Friendship is the glue that binds Benford Brown & Associates L.L.C. Alyssia Benford-Lee, Katrina Bumpers, and Timothy Watson met while attending Florida A&M University and had known each other since 1988. So there was a high level of trust when they decided to form a full-service CPA firm in December 1996.
Benford Brown & Associates performs audits, accounting services, tax services, and business consulting. Located in Chicago, the 18-employee firm generated revenues of $830,000 in 2003. The firm’s client list includes State Farm Insurance, the Chicago Housing Authority, and the Illinois Department of Human Services.
Startup costs were minimal since the business relies mostly on the accountants’ expertise rather than equipment. “Our original startup costs [for] the first year [consisted of] a business license, which was $125; the purchase of software for $30; and paper. We borrowed the computers,” explains Kimi Brown-Ellen, another partner at Benford Brown & Associates. “In the second year, when two partners came on board, we bought more expensive software that cost in the thousands. But the original startup costs were no more than $250.”
During the firm’s early days, Brown-Ellen and Lee prepared tax returns part time so that they could generate extra income. By 1998, Watson, Bumpers, and another partner, Michele Simon, came aboard. But with five part-time partners and no staff, the work piled up. It became apparent that staff were needed.
The five friends then had to build up a clientele. But that was also a challenge. All the partners are in their early 30s. “People thought we were too young,” says Simon. “We had to convince them we could do the work.” To get their initial clients, they had to underbid and offer lower prices. To recruit clients, the partners contacted firms that they had worked for in the past. Therefore, they were able to obtain subcontract work. Search engines were also used, which told them about upcoming requests for proposals. In addition, the firm was certified as a minority- and women-owned business in the city of Chicago and the state of Illinois. This qualified the partners for the state and city lists to get requests for proposals.
Networking was another major tool. The firm is affiliated with the Financial Center, which is also located in Chicago. Watson teaches classes for the center. He often attracts clients from these classes. “For the most part, the clients we obtain are coming to us as a result of networking,” said Watson. “We all have different types of experiences that mesh well together. We have all taken advantage of the networks that each of us has. We keep in mind that everyone we come in contact with has their own personal network [that we can] connect to.”
Looking ahead, Benford Brown & Associates expects revenues for 2004 to total $1.2 million, and $1.8 million is projected for 2005. The partners plan to expand into Indiana and continue to form joint ventures with established CPA firms.
Benford Brown & Associates L.L.C.; 2319 E. 71st St.; Chicago, IL 60649; 773-752-7078; www.benfordbrown.com