Join host Adam Larson in an engaging conversation with John Hewitt, a remarkable figure in the accounting world. Despite never taking an accounting course, John has built multi-million dollar companies like Jackson Hewitt and Liberty Tax. In this episode, he shares how his father inspired his entrepreneurial journey and offers insights into franchising and self-employment. Whether you're considering entrepreneurship or curious about building a billion-dollar business, John provides valuable advice on risk-taking, differentiation, marketing, and delivering exceptional customer service. Tune in for actionable insights and inspirational stories on this episode of the Count Me In Podcast
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Episode Transcript
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Adam Larson (00:20):
Welcome back to Count Me In. I'm your host, Adam
Larson. Today, we have a trulyinspiring guest with us, John
Hewitt. John's name has becomesynonymous with innovation and
success throughout theaccounting world, even though he
doesn't have a traditionalaccounting background. He's
built and sold billion dollarcompanies like Liberty Tax and
Jackson Hewitt, and he's beenrecognized as one of the most
influential figures in thefield.
(00:42):
In our conversation, John shareshis incredible journey, his
insights on entrepreneurship,and what it takes to stand out
in a crowded market. Whetheryou're considering venturing
into self employment orexploring the world of
franchising, John's story andadvice will offer invaluable
guidance. So let's dive in andlearn from someone who's been at
the forefront of the industryfor over five decades. Well,
(01:06):
John, I'm really excited to haveyou on the podcast today. And,
you know, when we were chattingearlier, you said you'd been
recognized as one of the mostinfluential people in
accounting.
And but your journey is not yourtypical background in
accounting, and you don't reallyhave a background in accounting.
So I figured we could startstart by talking a little bit
about your journey to thisrecognition and, you know, a
little bit about your backgroundand and what you're doing.
John Hewitt (01:26):
Yeah. In, on January 1, I'll be it'll be my
fifty sixth tax season. Istarted when I was at H and R
Block while I was in college.Loved it. And twelve years
later, I was running 250 H and RBlock locations.
My I'd never taken an accountingcourse, but my dad was, chief
financial officer of a publiccompany, and he had bought one
(01:47):
of the first Apple computers inthat were ever made. In fact,
it's in the Smithsonian today.So he liked it better than the
mainframe that was running thispublic company, and he decided
that we should computerizetaxes. It took a long time to
convince me, but after a year,we both quit our jobs and began
(02:08):
developing software. Wedeveloped in 1981 the first
software for an Apple computer.
No one wanted it way ahead ofits time. I got blessed and
found a company in VirginiaBeach called Mel Jackson Tax
Service. Mel had died. We boughtsix offices from his widow. Each
in our block had 9,000 offices,so I set my goal as to have
(02:30):
9,001 offices.
We were we needed to add 8,995offices, But we didn't quite get
there, but we did change thename to Jackson Hewitt. We went
public and sold it for fifteenyears later for 483,000,000 doll
I had a three year noncompete,but my noncompete didn't cover
(02:51):
Canada because Jackson knew Ihad never gone to Canada. And
having grown up in Buffalo, Idid Canadian tax returns. I knew
the Canadian tax systems. Weopened Liberty Tax in Canada,
and within three years became atop 100 retail chain.
So now I built one of the top100 in US and top 100 in Canada.
(03:15):
And that's when I was firstrecognized by Accounting Today
magazine as one of the most 100influential people in
accounting. And I, they gave methat award for twelve years even
though I've never taken anaccounting course. But came back
to United States in February, Imight not compete in it, and now
I had to compete against my ownname, my own software, my own
(03:37):
people, my own system. And yetnot only did we grow faster than
Jackson Hewitt, we grew fasterthan them and H and R Block
combined.
We opened 4,000 offices in 12,top 10 fast growing franchise or
ever. My second top 100 retailfranchise chain in The United
States. No one else has everdone that, again, in public. And
(04:02):
again, the stock became worth$500,000,000, and I sold my
stock. And now we startedLoyalty Brands.
And in Loyalty Brands, it's anumbrella of eight different
franchisors. We specialize inthree things, construction led
by our roofing, siding, andsolar, pets, everything pet, led
by our mobile mobile groomingservice, which is number one in
(04:25):
The United States already inthree years. It's called Zoom
and Grooming. And then, ofcourse, my oldie but goodie,
income tax industry, tax andaccounting led by our ATAX
brand. So that's my fifty fiveyears in a nutshell.
Adam Larson (04:38):
What what motivated you to kinda get into that
entrepreneurship? You know, youyou talked a little bit about
that, but what what was reallyenticing about getting out and
getting into business foryourself?
John Hewitt (04:48):
You know, I always give credit to that to my dad.
My my dad, I remember when I wasonly five or six years old. You
can't even imagine a worldwithout malls, but I saw my
first shopping center in innineteen fifty forty five. And
they weren't even shoppingcenters. Every shopping area was
a downtown area and in TheUnited States.
(05:10):
And I remember him with the nextdoor neighbors designing a brush
brushing kind of piece ofequipment that would clean clean
the the parking lot of the ofthe shopping centers. He always
wanted to be an entrepreneur,and problem is he had too many
children too quickly. And hegrew up poor, lost both of his
(05:33):
parents when by the time I wasborn, and never had a chance to
do it until until, I was I was,30 years old looking I was
working at block, and now he hadenough money and time to, become
self employed. So my dad draggedme into it. I was I was happy at
(05:54):
H and R Block, but I've beenself employed since 1981, and
and, it's turned out pretty wellfor me.
I found I founded a half abillion dollar company, a
billion dollar company, and nowthis third company is gonna be a
a billion dollar company.
Adam Larson (06:09):
Wow. I mean, that's that's really encouraging and
exciting to to hear your story.You know? And I think a lot of
people who listen or orespecially in today's day and
age, there's a lot of crazythings going on the markets. You
know, you look at the politicalscene.
You're like, what is gonnahappen in the future? And if
somebody's thinking about and Iknow you work with lots of
folks. You know, they're saying,hey. Should I go into self
employment? Should I maybe do afranchise?
(06:29):
Like, you know, franchise can beextensive or or can be
successful, or should I, youknow, stay as an employee? You
know, what's the right careerpath? Like, what what are what
are some questions they shouldbe asking themselves, and how
should they determine that?
John Hewitt (06:39):
You know, Adam, I did I do webinars occasionally,
and and I did a whole hour onshould you be a entrepreneur,
should you go out on your own.
Adam Larson (06:48):
Yeah.
John Hewitt (06:49):
So I can't cover it quickly, but I can tell you the
basics. Yeah. And I can tell youthis, that two thirds of
Americans almost two thirds ofAmericans want to be self
employed, and yet about half ofthem don't have the wherewithal.
They don't have the risk taketaking is huge. Financial
(07:09):
discipline is significant.
Get up and go. There's no onewhen you're self employed, no
one says get up and be at workat 6AM or 8AM, or you gotta work
six, five, six, seven days aweek, and there's no one
pushing. You you are you know,it's my favorite ten two letter
words. If it is to be, it is upto me. And most people need that
(07:32):
structure, need that guidance,need security.
And so most people, mostbusinesses fail. And one reason
is because too many people tryto go into business that were
never meant to be self employed.So and I feel good about that in
the sense that if I didn't haveworkers, then I would have to do
a lot more work. So I have Ineed people that that need a
(07:56):
structured environment, a youtoo, a paycheck every week,
guaranteed paycheck every week.I need those kind of people to
do the work.
And, so I thank god for them.But, yeah, it takes a whole
hour, but but think of those arethe key factors, self starting,
independent, driven, risk taker.
Adam Larson (08:15):
Would you say that's the same thing for
somebody who is going to sellemployment or franchising, or is
it different is it differenttype of person?
John Hewitt (08:21):
Well, franchising is a little easier because you
have your structure and yoursystem laid out for you. Mhmm.
So you know the rules, and youknow what time you have to open,
close, how much you charge, howmuch you pay the employees. So
we have a term in in franchisingcalled entrepreneur, not
(08:42):
entrepreneur. You're working byyourself but inside the system.
So more people can be afranchisee than be independent,
the like a mom and pop.
Adam Larson (08:53):
It's because you have that kind of that you have
that safety net a little bit ofthe of the overarching
organization.
John Hewitt (08:59):
Exactly. That that is is very meaningful and a a
huge difference maker to manypeople.
Adam Larson (09:06):
Yeah. Well and and based on your description, I'm
sure a lot of people listen tothat and saying, you know what?
I don't wanna be self employedbecause I don't wanna have to be
the one answering all thequestions. But then the other
people might get excited andsay, I'm willing to jump with
two feet. And it's hard becausethere's so many other factors.
If you have a family, you know,how much seed money, like, seed
all those different things thatyou have to consider.
John Hewitt (09:25):
Yeah. And when we evaluate a potential applicant
to join us, the first thing welook for is that to answer that
question. You know, that it'sare you meant to be self
employed? If you already have,then that answers it. Or if you
haven't, then we look for, arethere other factors like your
parents were self employed oryour siblings were self employed
(09:46):
or you did you showed signs ofself employment when you were a
child.
You mowed lawns or you had apaper route or you sold lemonade
or you did entrepreneurialthings throughout your life. So
we look for signs of that thatshow that you are meant to be
self employed.
Adam Larson (10:04):
Do you think that some people are more naturally
inclined to being self employedthan others?
John Hewitt (10:08):
Absolutely. There's no question about it. And it may
be I'm not sure it is. It's notinborn. I'm not sure.
You're not born into it. You canlearn it, I'm sure. But the
major characteristics tend tostart from from Mhmm.
Adam Larson (10:23):
Yeah. When when you and I are chatting previously,
you had mentioned a little bitabout, you know, advisory
services seems to be taking overthe accounting world. What
opportunities do you think isout there for especially for
accountants, especially fromwhat you've seen?
John Hewitt (10:35):
Yeah. There's so many regulations and rules and
and more and more in in ourgovernment that just paddling
through the water, just thejourney is so treacherous. And
sometimes you need guidance asto what to avoid more than than
guidance as to where to gobecause there are there are all
(10:56):
kinds of dangerous, treacherouswaters out there that you have
to avoid. You know, they say thepeople that that have been that
are the most successful havemade the most errors. So I think
that an advisory service cantake lessons learned and then
take them to the to theirclients and help them avoid the
(11:17):
deep deep water over here andthat and the white route of
rapids over here and the waterfall over there and teach them
to get to get through without awith a lot less risk and a lot
more prosperously.
Adam Larson (11:30):
Yeah. So one thing I was thinking about is you were
talking about your history,especially with all the
successful organizations thatyou've started and then sold.
When it comes to getting yourname out there, like marketing,
you know, what advice would yougive to somebody who is trying
to saying, hey. I wanna get intothis, but Yeah. How do I get my
name out there?
How do I do all those things?
John Hewitt (11:48):
You know, that is incredibly difficult. There are
there are 35,000,000 businessesin this country, and there's and
since since COVID, there's beena a record number of new
businesses per year that arestarting. And so when you think
about it, there's 35,000,000businesses trying to get your
(12:08):
attention, and and there's aboutone business for every 10
people. So here on VirginiaBeach, there's 50,000 people.
That means there's 65,000businesses trying to get your
attention, and they're allthey're all thinking the same
thing.
And how do I get how do I how doI build that brand name? So the
key is you have to havedifferentiator. Yeah. Do
something different. And we havea whole part of our of all of
(12:32):
our brands is it's calledGuerrilla Marketing.
And there's an excellent bookthat I read thirty years ago
called Guerrilla Marketing. So Iwould I would advise anyone, if
you're thinking about aninexpensive way to get brand
name, to read the book GuerrillaMarketing. I mean, you could do
it by showing up at parades, bychamber of commerce events, by
(12:55):
what we do a couple things thatvirtually no one else does, and
it's so simple. You know? When Istarted when I started Liberty
Tax, we had I I love the nameLiberty because it's so iconic.
And so, I mean, it gives you apositive feeling. Right? And and
people think of the Statue OfLiberty. So what we did is we
(13:16):
put costume Lady Libertycharacters dancing out in front
of our locations. Well, when youthink about it in Virginia
Beach, the there's 65,000businesses, but there's only two
or three that have costumecharacters standing out in front
waving.
So do you wanna be one of thethree or one of the other
65,000? So you need to finddifferentiators, and, Guerrilla
(13:40):
Marketing is one way to do that.And we we have specialized in
growing brand name rapidly. Andso for our new ATAX brand that
competes with H and R Block andLiberty, We have an a Eagle
costume, and we love the Eagleconcept because it's such a
powerful, renowned it's the youknow, it's the American bird.
(14:02):
Right?
It's the bald eagle. And so wehave a again, it has a friendly
feeling, you know, and we haveeagles out on the street
dancing, and and so we gainbrand name very quickly. We pass
hundreds, if not thousands, ofbusinesses on their way to work,
the people that do go to work.Most of them can't name 10% of
(14:23):
it. But if you saw, eagle wavingat you every day from January 1
to April 15, boy, that'd be oneof the businesses you'd
remember.
Adam Larson (14:32):
That's for sure. Well, I think the the hard part
nowadays is a lot of people areat home. They're not necessarily
driving around all the time, andtrying to make yourself a
differentiator on online is evenharder because there may be
65,000 businesses in VirginiaBeach. But on the web, there's
probably billions.
John Hewitt (14:48):
Right. Everyone in the world is trying to get your
attention.
Adam Larson (14:50):
Yeah. And so it's even harder. So finding that
differentiator has gotta be evenmore difficult in the online
space, I'm sure.
John Hewitt (14:56):
I'm sure. No doubt. But we have I mean, we have we
do things different. Can't tellall my secrets, but we do have
things that that we think ofthat are not. Yeah.
Adam Larson (15:08):
Of course. Of course. So when somebody's
looking at being anentrepreneur, going into self
business, or even franchising,you know, there's one thing that
you said, you wanna challengepeople to be all they can be.
Are there times where you'vefelt that challenge or felt that
pressure and you've had to getout of your comfort zone? And
and what are some lessons youlearned from that?
Because I'm sure it wasn't allsunshine and roses the whole
time you were building theseorganizations.
John Hewitt (15:29):
Are there times I'm uncomfortable? I'm uncomfortable
every day. And I think that Ithink that's the key word is to
if you do what you'd always did,you get what you ever got. So
you have to do things that aredifferent. You cannot be
extraordinary without beinguncomfortable.
You I mean, you cannot beextraordinary without suffering.
So if you wanna be normal andavoid discomfort and do the same
(15:53):
old same old, well, you can dothat, and most and,
unfortunately, most people do.More than half of the people do
that. But if you wannaaccomplish the be the greatest
you can be and change the worldand make it a better place and
be be extraordinary than you.You said the keyword.
You have to be uncomfortable.
Adam Larson (16:12):
So what does that look like for somebody who says,
I wanna do this. I feel like Ican do this, but they're not
quite in a leadership role. Theymight not be quite ready to go
out on their own. What adviceyou give them to take those
steps forward?
John Hewitt (16:23):
What we try to do with people that are in a
decision making situation is wesay, the least you should do is
come and work in one of ourbranches for a week or two
weeks. Take time off. Could bebe all on weekends. It could be
take a week or two off fromwork, but come and we will
immerse you in we will immerseyou in the we will you can you
(16:48):
can try it. Try before you buy,and that will ensure that it
fits with your comfort zone.
I mean, we had a person come totraining. This is the first time
that it ever happened to me thatand I've been doing this for
fifty five years. But a personcame to train two months ago,
and they were so scared thatthey went home and and sat in
(17:08):
the closet. And, I mean, theywere just petrified, and so we
gave them their money backbecause the the prospect of
being self employed was just sooverwhelming. They just were, I
mean, just horrified.
So, yeah, they put your toe inthe water. Mhmm. Come and work
with us. Come and work in theenvironment that you're seeking.
(17:31):
I mean, we all can we all canspend some time exploring
opportunities and explore theopportunity.
Adam Larson (17:38):
Yeah. Well, it it it it's not really a decision
you can just make. Say, alright.I'm gonna be self employed
tomorrow. It takes time.
So I I like that thatdetermination of saying, hey.
Just go dip your toe in thewater. Try it out. Because you
might try it out and say, youknow what? This isn't for me.
I might need to do somethingelse.
John Hewitt (17:53):
And probably half the time you will.
Adam Larson (17:54):
Yeah. Well and and your first everybody's first go
doesn't become a, you know, halfa million dollar organization
either. It takes time to buildthings.
John Hewitt (18:02):
Yeah. Only 5 percent of the the country
become millionaires. So, I mean,you gotta be in the top
percentage of of people to butthe good news is if you get to
be part of a great franchisesystem, you have the tools
because half of the half of thetools of making it is having a a
(18:22):
excellent system. And the otherhalf is peep
Adam Larson (18:25):
So you have the system, and then you have to
hire people. So when somebodycomes and has a franchise, do
they, you know, buy into thefranchise, and then did they
hire the people after that?Like, how does that can you walk
me through what that looks like?
John Hewitt (18:36):
Yeah. Almost always. Occasionally, people
will come with a group of ofemployees already from some of
their I mean, for example,someone that worked at at H and
R Block had with had two otherfriends that worked at H and R
Block. And so they acquire a taxfranchise, and then the friends
come along with them. So there'san occasion that but that's
(18:57):
rare.
It's mostly just a singleindependent person or two that
partner. Sometimes there'spartners, and they'll come on
board. But but bringing inemployees probably only 5% of
the time. Mhmm. Mhmm.
So you have to hire fromscratch, which is a good thing
in the sense that they don'thave any bad habits. And I find
(19:18):
that if we're doing thingsdifferent and you've been doing
things a different way, boy,that's it's really true about
not being able to teach an olddog new tricks.
Adam Larson (19:27):
Oh, yeah. I'm sure. And when you're hiring new
people, you have a chance tostart at the ground level
building a good foundation foryour or the franchise that
you're a part of.
John Hewitt (19:34):
Right. And to understand your philosophy of
exceeding customers'expectations. And, really,
that's what this is all about.You know, one of my favorite
authors, Stan Phillips, wrote awrote a book on customers and
the way you treat customers. Andfirst of all, he said, no one
arrives at a meeting exactly ontime.
You're either early or late. Soif the meeting's 06:00, you're
(19:57):
there at 05:54 or 06:02 oralmost no one comes in exactly
at the strike of six. He said inthe same manner, you don't meet
customers' expectations. Youeither exceed them or fail to
meet them. You rarely exactlymeet their expectations.
So each owner has a level ofexceeding customers'
(20:19):
expectations that they strivefor, and each employee
responsibility is to understandthat and help them get to that
level.
Adam Larson (20:28):
So how what are some strategies to to kinda
build that that culture withinan organization? Say, hey. We're
here to exceed theirexpectations every single time.
John Hewitt (20:36):
Yeah. I learned that. And Tom Watson senior said
it founder IBM said it extremelywell. He said, give me a hundred
great engineers or give me ahundred people with great
attitude. He said, I'll take thepeople with great attitude.
You can teach engineering. Youcan't teach attitude. And so
when we look to hire new people,we don't look at their skills
(20:58):
first. We look at their attitudeand see if they'll fit in with
the culture of our organization.And because different people
have different different ideasof acceptable customer service.
I mean, I love doing thisexample. When I'm teaching a
group, sometimes I'll say, Iwant you 10 right here to tell
(21:18):
me if you went into arestaurant, how long and you
went to the front desk, how longwould it take and there was no
one there, or, they were on thephone? How long would you be
acceptable for before they wouldrecognize you? You have to tell
it in seconds, and you can't useround numbers like five or 10 or
(21:41):
20 or 30. And they'll give me 10answers, and they're amazingly
different.
Some people will wait fiveminutes, and they're not upset.
Some people won't wait twoseconds, and they're upset. So
if that's the way they feelabout being treated themselves,
then that's how they're gonnatreat customers. Mhmm. And so
you hire for attitude, and youjudge them on what's acceptable
(22:04):
to them and the way that theywanna be treated.
And do they have just thehighest level of expectation, or
do they think, well, if theperson gets around to me in five
minutes, I'm fine with that.Then that's to me, that's not a
great a great likely greatcustomer service theater.
Adam Larson (22:22):
Well, that's not something I mean, I guess you it
is something you can teach somepeople, but not everybody can be
taught that, especially when itcomes to customer service.
John Hewitt (22:29):
Exactly. There are some people that that you're
just never gonna change and aregonna be complacent, and they
just are rule followers. Youknow, I believe that principles
are more important than rules.And and we set we make that
clear in our companies. Forexample, one time, I had a rule.
I let the CFO make a rule thatthe franchisees could only call
(22:52):
the departing, the accountingdepartment and talk to an
employee from two PM to 4PM. Oneof his new clerks, I mean,
accounts payable clerk gets acall at 04:15, and somehow the
franchisee had got through theswitchboard and got to them past
the magic 4PM. And she said, Ican't oh, it's after four. I
(23:12):
can't talk to you and hung upthe phone. And that's that
violates our principles, but sheclearly put the silly rule above
the customer.
And the principle is happy,successful franchisees. That
does not make a happy,successful anything when you
hang up the phone and then sothere was repercussions for that
that you need to most people ormany people will fall back on
(23:37):
rules to avoid offeringexceptional service. And I'll
tell you that the exceptionalservice in The United States has
declined every year as long as Ican remember since long before
you were born. That every year,the the quality of service goes,
down on average goes down anddown and down. And I could
speculate on
Adam Larson (23:56):
we could speculate on why that's happening, I'm
sure, for a long time. But it'sit is interesting, especially
with the instant gratificationthat our society brings with
with all the technology that wehave. Everybody wants something
right now. And it's it's abalance of principles versus
rules versus just understandingthat somebody has a different
situation than you, and youshould just take a breath before
(24:17):
you blow up at them. And I thinkit's it's a and that's a that's
a individual thing.
That's that's hard to teach. Youhave to learn that.
John Hewitt (24:24):
Yeah. It's it's frustrating to me to be you
know, I had one girl that that Idated a long time ago, and she
would frequently send the mealback when she got it. It was too
hot, done incorrectly, dirty,plagued. I mean, she and and or
she would complain. And I said,I'm not gonna put up with your
(24:44):
complaints.
It makes me uncomfortable. Solet's say that they that you did
they served you something youdidn't like, then just ask them
for another dish or anotherversion and don't complain about
it. Just let it go. I mean,let's say that she didn't like
the fish. Well, then instead ofcomplaining about it and whining
about it, just say I'd like asteak and get a steak.
(25:07):
I'll pay for the I'd rather payfor the the extra fish than make
a scene in a restaurant. That'sso uncomfortable for me. And I
would I pick. I choose to definemy support of a of a business by
my by footsteps. So if I get badservice, I'm just not going
back.
(25:28):
I mean, I will I will. I'm notgonna and I I'm not gonna
complain to someone who's justthe clerk. I mean, it's just the
waitress or the or the maitred'. I mean, they have no power.
Why am I I mean and I'mbothering everyone around me,
and it's just that I I mean, thewaitress didn't cook the food,
and you're why are you why areyou making that?
(25:49):
So that I feel that very I feelvery uncomfortable about that.
And but some people love doingthat. They love they love
teaching teaching businesses alesson.
Adam Larson (25:59):
John, I think this has been a great conversation. I
really appreciate you coming onthe Count Me In podcast and just
sharing a little bit of yourknowledge and a little bit of
your wisdom with our audience,and I just, you know, thank you
again so much for coming on.
John Hewitt (26:09):
It was a great pleasure, Adam. Thank you.
Announcer (26:13):
This has been Count Me In, IMA's podcast providing
you with the latest perspectivesof thought leaders from the
accounting and financeprofession. If you like what you
heard and you'd like to becounted in for more relevant
accounting and financeeducation, visit IMA's website
at www.imanet.org.
Welcome back to Count Me In. I'm your host, Adam
Larson. Today, we have a trulyinspiring guest with us, John
Hewitt. John's name has becomesynonymous with innovation and
success throughout theaccounting world, even though he
doesn't have a traditionalaccounting background. He's
built and sold billion dollarcompanies like Liberty Tax and
Jackson Hewitt, and he's beenrecognized as one of the most
influential figures in thefield.
(00:42):
In our conversation, John shareshis incredible journey, his
insights on entrepreneurship,and what it takes to stand out
in a crowded market. Whetheryou're considering venturing
into self employment orexploring the world of
franchising, John's story andadvice will offer invaluable
guidance. So let's dive in andlearn from someone who's been at
the forefront of the industryfor over five decades. Well,
(01:06):
John, I'm really excited to haveyou on the podcast today. And,
you know, when we were chattingearlier, you said you'd been
recognized as one of the mostinfluential people in
accounting.
And but your journey is not yourtypical background in
accounting, and you don't reallyhave a background in accounting.
So I figured we could startstart by talking a little bit
about your journey to thisrecognition and, you know, a
little bit about your backgroundand and what you're doing.
John Hewitt (01:26):
Yeah. In, on January 1, I'll be it'll be my
fifty sixth tax season. Istarted when I was at H and R
Block while I was in college.Loved it. And twelve years
later, I was running 250 H and RBlock locations.
My I'd never taken an accountingcourse, but my dad was, chief
financial officer of a publiccompany, and he had bought one
(01:47):
of the first Apple computers inthat were ever made. In fact,
it's in the Smithsonian today.So he liked it better than the
mainframe that was running thispublic company, and he decided
that we should computerizetaxes. It took a long time to
convince me, but after a year,we both quit our jobs and began
(02:08):
developing software. Wedeveloped in 1981 the first
software for an Apple computer.
No one wanted it way ahead ofits time. I got blessed and
found a company in VirginiaBeach called Mel Jackson Tax
Service. Mel had died. We boughtsix offices from his widow. Each
in our block had 9,000 offices,so I set my goal as to have
(02:30):
9,001 offices.
We were we needed to add 8,995offices, But we didn't quite get
there, but we did change thename to Jackson Hewitt. We went
public and sold it for fifteenyears later for 483,000,000 doll
I had a three year noncompete,but my noncompete didn't cover
(02:51):
Canada because Jackson knew Ihad never gone to Canada. And
having grown up in Buffalo, Idid Canadian tax returns. I knew
the Canadian tax systems. Weopened Liberty Tax in Canada,
and within three years became atop 100 retail chain.
So now I built one of the top100 in US and top 100 in Canada.
(03:15):
And that's when I was firstrecognized by Accounting Today
magazine as one of the most 100influential people in
accounting. And I, they gave methat award for twelve years even
though I've never taken anaccounting course. But came back
to United States in February, Imight not compete in it, and now
I had to compete against my ownname, my own software, my own
(03:37):
people, my own system. And yetnot only did we grow faster than
Jackson Hewitt, we grew fasterthan them and H and R Block
combined.
We opened 4,000 offices in 12,top 10 fast growing franchise or
ever. My second top 100 retailfranchise chain in The United
States. No one else has everdone that, again, in public. And
(04:02):
again, the stock became worth$500,000,000, and I sold my
stock. And now we startedLoyalty Brands.
And in Loyalty Brands, it's anumbrella of eight different
franchisors. We specialize inthree things, construction led
by our roofing, siding, andsolar, pets, everything pet, led
by our mobile mobile groomingservice, which is number one in
(04:25):
The United States already inthree years. It's called Zoom
and Grooming. And then, ofcourse, my oldie but goodie,
income tax industry, tax andaccounting led by our ATAX
brand. So that's my fifty fiveyears in a nutshell.
Adam Larson (04:38):
What what motivated you to kinda get into that
entrepreneurship? You know, youyou talked a little bit about
that, but what what was reallyenticing about getting out and
getting into business foryourself?
John Hewitt (04:48):
You know, I always give credit to that to my dad.
My my dad, I remember when I wasonly five or six years old. You
can't even imagine a worldwithout malls, but I saw my
first shopping center in innineteen fifty forty five. And
they weren't even shoppingcenters. Every shopping area was
a downtown area and in TheUnited States.
(05:10):
And I remember him with the nextdoor neighbors designing a brush
brushing kind of piece ofequipment that would clean clean
the the parking lot of the ofthe shopping centers. He always
wanted to be an entrepreneur,and problem is he had too many
children too quickly. And hegrew up poor, lost both of his
(05:33):
parents when by the time I wasborn, and never had a chance to
do it until until, I was I was,30 years old looking I was
working at block, and now he hadenough money and time to, become
self employed. So my dad draggedme into it. I was I was happy at
(05:54):
H and R Block, but I've beenself employed since 1981, and
and, it's turned out pretty wellfor me.
I found I founded a half abillion dollar company, a
billion dollar company, and nowthis third company is gonna be a
a billion dollar company.
Adam Larson (06:09):
Wow. I mean, that's that's really encouraging and
exciting to to hear your story.You know? And I think a lot of
people who listen or orespecially in today's day and
age, there's a lot of crazythings going on the markets. You
know, you look at the politicalscene.
You're like, what is gonnahappen in the future? And if
somebody's thinking about and Iknow you work with lots of
folks. You know, they're saying,hey. Should I go into self
employment? Should I maybe do afranchise?
(06:29):
Like, you know, franchise can beextensive or or can be
successful, or should I, youknow, stay as an employee? You
know, what's the right careerpath? Like, what what are what
are some questions they shouldbe asking themselves, and how
should they determine that?
John Hewitt (06:39):
You know, Adam, I did I do webinars occasionally,
and and I did a whole hour onshould you be a entrepreneur,
should you go out on your own.
Adam Larson (06:48):
Yeah.
John Hewitt (06:49):
So I can't cover it quickly, but I can tell you the
basics. Yeah. And I can tell youthis, that two thirds of
Americans almost two thirds ofAmericans want to be self
employed, and yet about half ofthem don't have the wherewithal.
They don't have the risk taketaking is huge. Financial
(07:09):
discipline is significant.
Get up and go. There's no onewhen you're self employed, no
one says get up and be at workat 6AM or 8AM, or you gotta work
six, five, six, seven days aweek, and there's no one
pushing. You you are you know,it's my favorite ten two letter
words. If it is to be, it is upto me. And most people need that
(07:32):
structure, need that guidance,need security.
And so most people, mostbusinesses fail. And one reason
is because too many people tryto go into business that were
never meant to be self employed.So and I feel good about that in
the sense that if I didn't haveworkers, then I would have to do
a lot more work. So I have Ineed people that that need a
(07:56):
structured environment, a youtoo, a paycheck every week,
guaranteed paycheck every week.I need those kind of people to
do the work.
And, so I thank god for them.But, yeah, it takes a whole
hour, but but think of those arethe key factors, self starting,
independent, driven, risk taker.
Adam Larson (08:15):
Would you say that's the same thing for
somebody who is going to sellemployment or franchising, or is
it different is it differenttype of person?
John Hewitt (08:21):
Well, franchising is a little easier because you
have your structure and yoursystem laid out for you. Mhmm.
So you know the rules, and youknow what time you have to open,
close, how much you charge, howmuch you pay the employees. So
we have a term in in franchisingcalled entrepreneur, not
(08:42):
entrepreneur. You're working byyourself but inside the system.
So more people can be afranchisee than be independent,
the like a mom and pop.
Adam Larson (08:53):
It's because you have that kind of that you have
that safety net a little bit ofthe of the overarching
organization.
John Hewitt (08:59):
Exactly. That that is is very meaningful and a a
huge difference maker to manypeople.
Adam Larson (09:06):
Yeah. Well and and based on your description, I'm
sure a lot of people listen tothat and saying, you know what?
I don't wanna be self employedbecause I don't wanna have to be
the one answering all thequestions. But then the other
people might get excited andsay, I'm willing to jump with
two feet. And it's hard becausethere's so many other factors.
If you have a family, you know,how much seed money, like, seed
all those different things thatyou have to consider.
John Hewitt (09:25):
Yeah. And when we evaluate a potential applicant
to join us, the first thing welook for is that to answer that
question. You know, that it'sare you meant to be self
employed? If you already have,then that answers it. Or if you
haven't, then we look for, arethere other factors like your
parents were self employed oryour siblings were self employed
(09:46):
or you did you showed signs ofself employment when you were a
child.
You mowed lawns or you had apaper route or you sold lemonade
or you did entrepreneurialthings throughout your life. So
we look for signs of that thatshow that you are meant to be
self employed.
Adam Larson (10:04):
Do you think that some people are more naturally
inclined to being self employedthan others?
John Hewitt (10:08):
Absolutely. There's no question about it. And it may
be I'm not sure it is. It's notinborn. I'm not sure.
You're not born into it. You canlearn it, I'm sure. But the
major characteristics tend tostart from from Mhmm.
Adam Larson (10:23):
Yeah. When when you and I are chatting previously,
you had mentioned a little bitabout, you know, advisory
services seems to be taking overthe accounting world. What
opportunities do you think isout there for especially for
accountants, especially fromwhat you've seen?
John Hewitt (10:35):
Yeah. There's so many regulations and rules and
and more and more in in ourgovernment that just paddling
through the water, just thejourney is so treacherous. And
sometimes you need guidance asto what to avoid more than than
guidance as to where to gobecause there are there are all
(10:56):
kinds of dangerous, treacherouswaters out there that you have
to avoid. You know, they say thepeople that that have been that
are the most successful havemade the most errors. So I think
that an advisory service cantake lessons learned and then
take them to the to theirclients and help them avoid the
(11:17):
deep deep water over here andthat and the white route of
rapids over here and the waterfall over there and teach them
to get to get through without awith a lot less risk and a lot
more prosperously.
Adam Larson (11:30):
Yeah. So one thing I was thinking about is you were
talking about your history,especially with all the
successful organizations thatyou've started and then sold.
When it comes to getting yourname out there, like marketing,
you know, what advice would yougive to somebody who is trying
to saying, hey. I wanna get intothis, but Yeah. How do I get my
name out there?
How do I do all those things?
John Hewitt (11:48):
You know, that is incredibly difficult. There are
there are 35,000,000 businessesin this country, and there's and
since since COVID, there's beena a record number of new
businesses per year that arestarting. And so when you think
about it, there's 35,000,000businesses trying to get your
(12:08):
attention, and and there's aboutone business for every 10
people. So here on VirginiaBeach, there's 50,000 people.
That means there's 65,000businesses trying to get your
attention, and they're allthey're all thinking the same
thing.
And how do I get how do I how doI build that brand name? So the
key is you have to havedifferentiator. Yeah. Do
something different. And we havea whole part of our of all of
(12:32):
our brands is it's calledGuerrilla Marketing.
And there's an excellent bookthat I read thirty years ago
called Guerrilla Marketing. So Iwould I would advise anyone, if
you're thinking about aninexpensive way to get brand
name, to read the book GuerrillaMarketing. I mean, you could do
it by showing up at parades, bychamber of commerce events, by
(12:55):
what we do a couple things thatvirtually no one else does, and
it's so simple. You know? When Istarted when I started Liberty
Tax, we had I I love the nameLiberty because it's so iconic.
And so, I mean, it gives you apositive feeling. Right? And and
people think of the Statue OfLiberty. So what we did is we
(13:16):
put costume Lady Libertycharacters dancing out in front
of our locations. Well, when youthink about it in Virginia
Beach, the there's 65,000businesses, but there's only two
or three that have costumecharacters standing out in front
waving.
So do you wanna be one of thethree or one of the other
65,000? So you need to finddifferentiators, and, Guerrilla
(13:40):
Marketing is one way to do that.And we we have specialized in
growing brand name rapidly. Andso for our new ATAX brand that
competes with H and R Block andLiberty, We have an a Eagle
costume, and we love the Eagleconcept because it's such a
powerful, renowned it's the youknow, it's the American bird.
(14:02):
Right?
It's the bald eagle. And so wehave a again, it has a friendly
feeling, you know, and we haveeagles out on the street
dancing, and and so we gainbrand name very quickly. We pass
hundreds, if not thousands, ofbusinesses on their way to work,
the people that do go to work.Most of them can't name 10% of
(14:23):
it. But if you saw, eagle wavingat you every day from January 1
to April 15, boy, that'd be oneof the businesses you'd
remember.
Adam Larson (14:32):
That's for sure. Well, I think the the hard part
nowadays is a lot of people areat home. They're not necessarily
driving around all the time, andtrying to make yourself a
differentiator on online is evenharder because there may be
65,000 businesses in VirginiaBeach. But on the web, there's
probably billions.
John Hewitt (14:48):
Right. Everyone in the world is trying to get your
attention.
Adam Larson (14:50):
Yeah. And so it's even harder. So finding that
differentiator has gotta be evenmore difficult in the online
space, I'm sure.
John Hewitt (14:56):
I'm sure. No doubt. But we have I mean, we have we
do things different. Can't tellall my secrets, but we do have
things that that we think ofthat are not. Yeah.
Adam Larson (15:08):
Of course. Of course. So when somebody's
looking at being anentrepreneur, going into self
business, or even franchising,you know, there's one thing that
you said, you wanna challengepeople to be all they can be.
Are there times where you'vefelt that challenge or felt that
pressure and you've had to getout of your comfort zone? And
and what are some lessons youlearned from that?
Because I'm sure it wasn't allsunshine and roses the whole
time you were building theseorganizations.
John Hewitt (15:29):
Are there times I'm uncomfortable? I'm uncomfortable
every day. And I think that Ithink that's the key word is to
if you do what you'd always did,you get what you ever got. So
you have to do things that aredifferent. You cannot be
extraordinary without beinguncomfortable.
You I mean, you cannot beextraordinary without suffering.
So if you wanna be normal andavoid discomfort and do the same
(15:53):
old same old, well, you can dothat, and most and,
unfortunately, most people do.More than half of the people do
that. But if you wannaaccomplish the be the greatest
you can be and change the worldand make it a better place and
be be extraordinary than you.You said the keyword.
You have to be uncomfortable.
Adam Larson (16:12):
So what does that look like for somebody who says,
I wanna do this. I feel like Ican do this, but they're not
quite in a leadership role. Theymight not be quite ready to go
out on their own. What adviceyou give them to take those
steps forward?
John Hewitt (16:23):
What we try to do with people that are in a
decision making situation is wesay, the least you should do is
come and work in one of ourbranches for a week or two
weeks. Take time off. Could bebe all on weekends. It could be
take a week or two off fromwork, but come and we will
immerse you in we will immerseyou in the we will you can you
(16:48):
can try it. Try before you buy,and that will ensure that it
fits with your comfort zone.
I mean, we had a person come totraining. This is the first time
that it ever happened to me thatand I've been doing this for
fifty five years. But a personcame to train two months ago,
and they were so scared thatthey went home and and sat in
(17:08):
the closet. And, I mean, theywere just petrified, and so we
gave them their money backbecause the the prospect of
being self employed was just sooverwhelming. They just were, I
mean, just horrified.
So, yeah, they put your toe inthe water. Mhmm. Come and work
with us. Come and work in theenvironment that you're seeking.
(17:31):
I mean, we all can we all canspend some time exploring
opportunities and explore theopportunity.
Adam Larson (17:38):
Yeah. Well, it it it it's not really a decision
you can just make. Say, alright.I'm gonna be self employed
tomorrow. It takes time.
So I I like that thatdetermination of saying, hey.
Just go dip your toe in thewater. Try it out. Because you
might try it out and say, youknow what? This isn't for me.
I might need to do somethingelse.
John Hewitt (17:53):
And probably half the time you will.
Adam Larson (17:54):
Yeah. Well and and your first everybody's first go
doesn't become a, you know, halfa million dollar organization
either. It takes time to buildthings.
John Hewitt (18:02):
Yeah. Only 5 percent of the the country
become millionaires. So, I mean,you gotta be in the top
percentage of of people to butthe good news is if you get to
be part of a great franchisesystem, you have the tools
because half of the half of thetools of making it is having a a
(18:22):
excellent system. And the otherhalf is peep
Adam Larson (18:25):
So you have the system, and then you have to
hire people. So when somebodycomes and has a franchise, do
they, you know, buy into thefranchise, and then did they
hire the people after that?Like, how does that can you walk
me through what that looks like?
John Hewitt (18:36):
Yeah. Almost always. Occasionally, people
will come with a group of ofemployees already from some of
their I mean, for example,someone that worked at at H and
R Block had with had two otherfriends that worked at H and R
Block. And so they acquire a taxfranchise, and then the friends
come along with them. So there'san occasion that but that's
(18:57):
rare.
It's mostly just a singleindependent person or two that
partner. Sometimes there'spartners, and they'll come on
board. But but bringing inemployees probably only 5% of
the time. Mhmm. Mhmm.
So you have to hire fromscratch, which is a good thing
in the sense that they don'thave any bad habits. And I find
(19:18):
that if we're doing thingsdifferent and you've been doing
things a different way, boy,that's it's really true about
not being able to teach an olddog new tricks.
Adam Larson (19:27):
Oh, yeah. I'm sure. And when you're hiring new
people, you have a chance tostart at the ground level
building a good foundation foryour or the franchise that
you're a part of.
John Hewitt (19:34):
Right. And to understand your philosophy of
exceeding customers'expectations. And, really,
that's what this is all about.You know, one of my favorite
authors, Stan Phillips, wrote awrote a book on customers and
the way you treat customers. Andfirst of all, he said, no one
arrives at a meeting exactly ontime.
You're either early or late. Soif the meeting's 06:00, you're
(19:57):
there at 05:54 or 06:02 oralmost no one comes in exactly
at the strike of six. He said inthe same manner, you don't meet
customers' expectations. Youeither exceed them or fail to
meet them. You rarely exactlymeet their expectations.
So each owner has a level ofexceeding customers'
(20:19):
expectations that they strivefor, and each employee
responsibility is to understandthat and help them get to that
level.
Adam Larson (20:28):
So how what are some strategies to to kinda
build that that culture withinan organization? Say, hey. We're
here to exceed theirexpectations every single time.
John Hewitt (20:36):
Yeah. I learned that. And Tom Watson senior said
it founder IBM said it extremelywell. He said, give me a hundred
great engineers or give me ahundred people with great
attitude. He said, I'll take thepeople with great attitude.
You can teach engineering. Youcan't teach attitude. And so
when we look to hire new people,we don't look at their skills
(20:58):
first. We look at their attitudeand see if they'll fit in with
the culture of our organization.And because different people
have different different ideasof acceptable customer service.
I mean, I love doing thisexample. When I'm teaching a
group, sometimes I'll say, Iwant you 10 right here to tell
(21:18):
me if you went into arestaurant, how long and you
went to the front desk, how longwould it take and there was no
one there, or, they were on thephone? How long would you be
acceptable for before they wouldrecognize you? You have to tell
it in seconds, and you can't useround numbers like five or 10 or
(21:41):
20 or 30. And they'll give me 10answers, and they're amazingly
different.
Some people will wait fiveminutes, and they're not upset.
Some people won't wait twoseconds, and they're upset. So
if that's the way they feelabout being treated themselves,
then that's how they're gonnatreat customers. Mhmm. And so
you hire for attitude, and youjudge them on what's acceptable
(22:04):
to them and the way that theywanna be treated.
And do they have just thehighest level of expectation, or
do they think, well, if theperson gets around to me in five
minutes, I'm fine with that.Then that's to me, that's not a
great a great likely greatcustomer service theater.
Adam Larson (22:22):
Well, that's not something I mean, I guess you it
is something you can teach somepeople, but not everybody can be
taught that, especially when itcomes to customer service.
John Hewitt (22:29):
Exactly. There are some people that that you're
just never gonna change and aregonna be complacent, and they
just are rule followers. Youknow, I believe that principles
are more important than rules.And and we set we make that
clear in our companies. Forexample, one time, I had a rule.
I let the CFO make a rule thatthe franchisees could only call
(22:52):
the departing, the accountingdepartment and talk to an
employee from two PM to 4PM. Oneof his new clerks, I mean,
accounts payable clerk gets acall at 04:15, and somehow the
franchisee had got through theswitchboard and got to them past
the magic 4PM. And she said, Ican't oh, it's after four. I
(23:12):
can't talk to you and hung upthe phone. And that's that
violates our principles, but sheclearly put the silly rule above
the customer.
And the principle is happy,successful franchisees. That
does not make a happy,successful anything when you
hang up the phone and then sothere was repercussions for that
that you need to most people ormany people will fall back on
(23:37):
rules to avoid offeringexceptional service. And I'll
tell you that the exceptionalservice in The United States has
declined every year as long as Ican remember since long before
you were born. That every year,the the quality of service goes,
down on average goes down anddown and down. And I could
speculate on
Adam Larson (23:56):
we could speculate on why that's happening, I'm
sure, for a long time. But it'sit is interesting, especially
with the instant gratificationthat our society brings with
with all the technology that wehave. Everybody wants something
right now. And it's it's abalance of principles versus
rules versus just understandingthat somebody has a different
situation than you, and youshould just take a breath before
(24:17):
you blow up at them. And I thinkit's it's a and that's a that's
a individual thing.
That's that's hard to teach. Youhave to learn that.
John Hewitt (24:24):
Yeah. It's it's frustrating to me to be you
know, I had one girl that that Idated a long time ago, and she
would frequently send the mealback when she got it. It was too
hot, done incorrectly, dirty,plagued. I mean, she and and or
she would complain. And I said,I'm not gonna put up with your
(24:44):
complaints.
It makes me uncomfortable. Solet's say that they that you did
they served you something youdidn't like, then just ask them
for another dish or anotherversion and don't complain about
it. Just let it go. I mean,let's say that she didn't like
the fish. Well, then instead ofcomplaining about it and whining
about it, just say I'd like asteak and get a steak.
(25:07):
I'll pay for the I'd rather payfor the the extra fish than make
a scene in a restaurant. That'sso uncomfortable for me. And I
would I pick. I choose to definemy support of a of a business by
my by footsteps. So if I get badservice, I'm just not going
back.
(25:28):
I mean, I will I will. I'm notgonna and I I'm not gonna
complain to someone who's justthe clerk. I mean, it's just the
waitress or the or the maitred'. I mean, they have no power.
Why am I I mean and I'mbothering everyone around me,
and it's just that I I mean, thewaitress didn't cook the food,
and you're why are you why areyou making that?
(25:49):
So that I feel that very I feelvery uncomfortable about that.
And but some people love doingthat. They love they love
teaching teaching businesses alesson.
Adam Larson (25:59):
John, I think this has been a great conversation. I
really appreciate you coming onthe Count Me In podcast and just
sharing a little bit of yourknowledge and a little bit of
your wisdom with our audience,and I just, you know, thank you
again so much for coming on.
John Hewitt (26:09):
It was a great pleasure, Adam. Thank you.
Announcer (26:13):
This has been Count Me In, IMA's podcast providing
you with the latest perspectivesof thought leaders from the
accounting and financeprofession. If you like what you
heard and you'd like to becounted in for more relevant
accounting and financeeducation, visit IMA's website
at www.imanet.org.
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