7 Jun · 47 min
Mikk, host of the Buyers and Builders podcast, interviews Brett Kelly, founder and CEO of Kelly Partners Group, an accounting firm he started on 6 December 2006 that has completed more than 90 acquisitions, compounded revenue at more than 30% a year, and gone from roughly A$400,000 of EBITDA in 2009 to a projected A$50m in 2026.
Brett Kelly tells his origin story: washing cars and mowing lawns from age 14, going into accounting at Pricewaterhouse as an undergraduate at 18 after a financial controller embezzled money at his father's business, reading Warren Buffett and Charlie Munger from 17, and losing his job in investment banking at 22. His father gave him How to Win Friends and Influence People and Think and Grow Rich, and he wrote to 80 prominent Australians with 11 questions, making about 3,000 phone calls in twelve weeks, then self-published the book after publishers told him he was not famous. He describes reading about 3,000 books, publishing a book of wisdom every seven years for 28 years, being Australia's youngest accredited professional speaker at 22, and speaking at the National Press Club in Canberra twice. A friend, Scott, asked him to run the business side of his accounting firm, which produced the 51/49 partner-owner-driver model; in June 2006 his boss told him he would be offered 10% rather than half the firm, and his wife Rebecca pushed him to start his own firm.
On the business itself, Kelly says he modelled Kelly Partners on Google and Disney for people, McDonald's for process, Four Seasons, Ritz-Carlton and Apple for clients, and Berkshire Hathaway for financials, and that Charlie Munger is his big hero. The firm's Progress Pyramid sets out 12 parts of a business and its system for accounting firms has 204 documented steps. Acquisitions follow Jack Welch's GE approach of buying the number one or two firm in each area, taking 51% with partners keeping 49%, doubling profits, cutting working capital needs by two thirds and giving partners back 25% to 40% of their time. Kelly says Kelly Partners has bought all or part of 95 firms, that the average self-reported accounting firm EBITDA margin is 18% (really about 15%), and that the biggest lever in doubling profits is leadership, not software. He explains the 2020 listing, the decision not to raise much capital — only A$17m over 20 years — and his view that private equity mandates are really three to five years, creating a mismatch with the velocity of accounting businesses. He argues AI will not remove the need to lead people, says accountants should do about 80 things for a client group but do about eight, describes the firm's 17-step hiring process, and says his biggest current challenge is financing growth without dilution. He plans to list on an appropriate exchange with a dual-class structure, raise 15-year debentures, take the model into every market that invites the firm in, and grow from 35 owned firms to 1,000. He closes on focus, fanatical commitment, working 3:30am to 7am and 8am to 11pm in the early years, and building on a "well of meaning", and notes revenue growth of 30% and book value growth of 35% over 20 years, staff turnover one third of the industry average, and the highest Net Promoter Score of any accounting group at scale.
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