Accounting lessons from drug dealing and cartels with Scott Scarano | Karbon Magazine
Accounting lessons from drug dealing and cartels with Scott Scarano
Scott Scaranoowns a Padgett Business Services franchise in Raleigh, North Carolina. He grew the office rapidly—from $90,000 to $500,000 in revenue within his first couple of years.
Scott learned firsthand the economic principles of business from dealing drugs in college. Though it was a risky business, he gleaned many valuable lessons.
Now in a leadership role at Padgett Business Services, Scott is spending time working on his true passion: leading change in the accounting industry through his podcast, Sons of CPAs.
Though that period in his life came with consequences, he used what he learned to look for less conventional opportunities in his career choices. Instead of taking the classic CPA firm corporate climb, Scott spread his roots at a Padgett Business Services branch, eventually buying the practice from the owner in 2015. There, he raised revenues from $90,000 annually to around $1.5 million today.
Referring to time as a “non-renewable resource,” Scott has encouraged his team to step back from the deluge of alerts and notifications that distract from deep work. Thanks to his attentiveness to productivity trends, Scott himself has carved out more time for his greater interest: pushing the accounting industry forward through a podcast.
In a lively conversation with Karbon’s Stuart McLeod on the Accounting Leaders Podcast, Scott sheds light on how his life experience translates into work wisdom. He also shares growth insights learned from technology, productivity hacks, and the joy he gets from his own podcast.
A rocky start, but not for naught
Though firmly rooted in accounting now, Scott wasn’t always the rule-following type. While in college at the University of North Carolina at Chapel Hill, he took an unexpected turn.
“I started selling drugs,” Scott tells Stuart on the podcast. “I totally went to the creative side, lost my way, got kicked out of school, and then had to shift back to accounting.”
Though a challenging period in his life, Scott was still able to pick up some lessons relevant to accounting.
“I learned a lot selling. I was [selling] three options back then with cocaine. My margins were great… [so I learned] margins, profitability, leveraging, investing, getting some inventory. Employees, stocking, and supply and demand… You learn how to deal with a lot of different people—all types, and across all paths.”
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Accounting Leaders Podcast
This article is based on an episode of the Accounting Leaders Podcast.
Join Stuart McLeod as he interviews the world's top accounting leaders to understand their story, how they operate, their goals, mission, and top advice to help you run your accounting firm.
Scott isn’t alone in finding lessons in the business of drugs. He and Stuart discuss the book Narconomics, which details how drug cartels and big business aren’t so different.
Despite such adversity in his career-forming years, Scott maintains a positive outlook. “I don’t have any regrets over anything I did because I obviously learned a lot from all of that. … That’s how I am who I am today—because of all those mistakes along the way.”
Overcoming a felony with accounting
Because of the felony on his record, Scott had some difficulty finding jobs where the employer would see his passion and talent over his conviction. After working at a couple of small CPA firms out of college, he took an interest in a local Padgett Business Services franchise, admiring the company’s structure.
“They were working with small businesses. It’s not very corporate. It wasn’t very much like a huge ladder that I would have to climb at a regular firm,” Scott recalls. “[The owner] wasn’t going to pay me a lot, but I saw it as a big opportunity for a revenue share to grow his practice, to grow his firm, and I saw that as a new opportunity.”
Scott entered that Padgett branch with a fresh perspective and quickly grew the firm’s revenues.
“Our firm or our office was maybe $90,000 a year in billings when I started working there. And we grew very, very fast. In a very short period, we went from there to maybe $500,000, maybe just in a year or two. And that’s because we were able to do a lot more with a lot less. We were able to take on a lot more and we had a lot of capacity because Xero made this exponential amount of time-saving lifts just through simple things that we take for granted now. But bank feeds and cash coding was just an entire game-changer for somebody that is doing a lot of write-up work.”
In 2015, Scott acquired the Padgett Business Services franchise from the previous owner and has since increased the company’s revenue to $1.5 million. He calls this his personal “stuck point” for growing the business—but rather than seeing that as a negative, Scott sees it as an invitation for more freedom in how he works.
“Sometimes I dip out and I’ll be traveling, or I just don’t really feel like going to my email, and so we just don’t have a lot of business that month,” Scott says on the podcast. “But then sometimes I’ve got to put my nose back in there and start closing some deals and we’ll close a lot of new clients, and then dip back out again.”
Podcasting to push accounting forward
Scott’s flexibility with Padgett has allowed him to explore his other passion: podcasting. Called Sons of CPAs, he teams up with co-host and fellow CPA Jason Ackerman to discuss all things accounting. His vision: push the industry forward.
“It’s a growth mindset of accountants that want to change and that aren’t stuck and marred in the inertia of, ‘This is how we’ve always done it and this is what works.’ Because there could be something that’s better that you just don’t know.It’s the metaphor for the next generation,” Scott tells Stuart. “The large majority of people are doing things a certain way, and maybe they don’t have any incentive to change or don’t know the way forward.”
Scott hopes Sons of CPAs will allow other perspectives to broaden the accounting industry’s horizons.
“We’re somewhat in a bubble of people that are doing things differently. We’re the next generation of accountants—and I don’t know all the right answers. That’s why I’m asking a lot of questions,” Scott says. “I don’t know what’s the best way to do something. I know what works for us now, but that could change.”
With multiple episodes per week, Sons of CPAs runs the gamut from reviews of popular accounting media to interviews with accounting thought leaders. Scott considers his greatest accomplishment of the last year to be landing his first sponsor for the podcast: “I cared more about that than selling a large deal at the firm.”
Ditching notifications for deep work
A devotee of the author Cal Newport, Scott cites the book A World Without Emailas a major influence on how he works.
“I started getting the team into being very intentional about their time,” he says. “It’s hard for most people to plan these days because we’re so reactionary to whatever comes up, this email or that. I want to be able to turn alerts off and just have them go deep into whatever job they’re doing and then pick up the next one.”
Scott also credits Karbon’s tools for helping him and his team better-manage their time. It allows workers to see how long a task should take them, which helps to budget time and pricing more effectively.
“It’s not [used] to bill the client and it’s not to reprimand anybody for spending too much time on something or too little. We want to be able to price effectively. So it’s reinforcing a price, or if we need to adjust something with a client, that’s an anchor,” Scott says of Karbon’s offerings.
Scott looks forward to connecting with other Karbon users at this summer’s Karbon X event, and promises to bring his podcasting microphone to capture all the great insights that are shared.
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It’s very interesting—the similarities between Walmart and a drug cartel in the way that they operate. Business is business. Demand is demand. People are people. And you have to listen to what the people are saying.
G2.com
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