After three failed startups this millenial CA started his own firm Daftery & Associates and eventually found success
After qualifying as a Chartered Accountant Anuj joined a Big 4 firm, but he wanted to go the startup route. Several failures later he turned around his life and started his own practice at 23.
- Hi! I am Anuj Daftery, a Practising Chartered Accountant and founder of Daftery & Associates, a Mumbai-based firm.
- After qualifying as a CA, I joined a Big 4 Accounting firm and simultaneously started an e-commerce portal called DafLabs.
- In a short span of 14 months, I realised the Big 4s are not for me and I quit to begin a startup venture.
- Unfortunately, my startup did not work out and after three failed attempts, in 2015 I decided to start my own CA practice.
- Here’s my story of how I turned around in life despite all the failures and started my practice at 23.
First-person in my family to become a Chartered Accountant
None of my family members were Chartered Accountants but my childhood and lifetime mentor is a Chartered Accountant who built his career from scratch.
So, inspired by him, I decided to pursue CA and started working as an intern immediately at my mentor's office after clearing my class 10th exams.
Since I always had an acute interest in business and was an avid reader since childhood (thanks to a simple 40-page reading rule per day imposed by my father!), it helped me clear the CA exams.
Fast forward to May 2013, I qualified as a Chartered Accountant!
Changing roles and companies as a CA Fresher
As soon as I qualified as a CA, I joined a real estate developer. But after working for 15 days, I quit as I was pushed to the accounting profile and the role didn’t allow any growth opportunities.
After that, I interviewed at EY Mumbai (EY is a Big 4 Accounting firm) and was selected to join the Corporate Tax team.
On the personal front, I was working on an e-commerce portal called DafLabs which sold microcontrollers, sensors, and everything computing-related across our own platform, Amazon, and Flipkart. I was also helping friends, family, acquaintances with their business setup, regulation, business modeling, as well as regulatory queries on weekends.
Fast forward, 1.5 years later I realized I wasn’t cut out for a job.
Against popular advice of quitting so early, I left the job with no visible plan of what I wanted to do in my life except with a plan to start a venture of my own.
Three failed attempts at starting a business-led me to start my own practice
The big question was – What Next?
After a lot of brainstorming, I ran into the idea of running a startup in the space of foreclosed properties as a result of the High NPAs.
It seemed like a great business model and we received a lot of support as well but just when we were about to develop our MVP, the State Bank of India and the Government of India announced their own portal for disposing of foreclosed properties!
This pushed all PSU banks (where the major chunk of NPAs lay) to tie up with them thus strangling open market supply. For obvious reasons, we shut the venture down without launching the MVP (who would want to compete against the government!).
My second attempted venture was in the space of seized vehicles found near multiple towing yards, police stations, etc. (You guessed correctly, I am always thinking out of the box!)
The high levels of corruption, non-response, and absence of a formal mode to interact with said institutions led us to close this venture at an early stage.
My third attempted venture was slightly traditional. I spent some time studying the agro commodities market and realized that cashew nuts were an area where a sizeable business could be developed across the entire value chain.
Spent months to get the processing house in place for processing the raw material, negotiating, and finally making a deal to purchase cashew fruits directly from the farmers. But the farmers backtracked at the time of harvest asking for a 20% higher price rendering the entire business unviable for me who started out without much capital.
All these failed attempts at scaling a business led me to go back to my core qualification as a Chartered Accountant and I eventually started my own CA practice.
A challenging but fulfilling beginning for our firm
My journey as a Practising Chartered Accountant started from a single seat (not even a desk) provided rent-free by my father in his small transport office and 0 employees.
Despite the knowledge developed during articleship in the fields of M&A, ESOPS, FEMA, International Tax, Fundraising, and other boutique areas, I struggled to get assignments.
No successful organizations or startups were comfortable giving work to a 23-year-old practicing CA.
What followed was a lot of hard work, actively engaging with acquaintances, providing free consultations, and building a reputation.
I started with traditional practice areas of Tax, Assurance & Accounting and eventually worked in the boutique areas.
As work picked up, I rented our first small office, got our first employee, our first article, and kept growing our clientele base.
In 2017, after three years running the CA Practice as a Sole Proprietory firm, I persuaded and cajoled Sneha Daftery, my wife to join the Firm as a Partner. (Sneha is a Chartered Accountant and Lawyer. She used to work in a midsized CA firm where she had grown to the ranks of a Manager pretty fast due to her knowledge and amazing dedication to service Clients.)
Our very positioning as the Jack of all Areas (Trades) really helped us grow quickly after the introduction of GST, Demonetization, RERA, and multiple other changes in 2017. Since the entire business framework changed, we were in demand for providing the most cohesive advice entirely in-house without the client having to appoint multiple consultants.
By the 4th year, all the hard work started paying off and we became known for our workable solutions across spheres.
We were also one of the few CA firms that were adept at giving legal guidance on Startup Fundraising, corporate agreements, and real estate transactions.
Overall, it has been a tough but fulfilling journey, and what started as a traditional practice rapidly transformed into a vast spectrum of knowledge-based services.
Overcoming the obstacles
At the beginning of our practice, being a young CA, I had to face a lot of challenges.
The top five challenges that we faced are:
1. The “how big is your firm” Challenge
This is was a major challenge faced by us early on as the first question that was asked to me as a young CA was whether or not I had a team to handle the workflow.
But I was always earnest and let the clients decide the fee at the end of work. This helped develop trust and respect for our Firm.
2. The “how old are you” question
Being a thin lanky man who looked like a teenager didn’t help in making a lasting impression.
So, while meeting possible clients for the first couple of times, I would ask my father to accompany me while I conducted the client meetings. This helped in building an impression of a seasoned person and helped in securing assignments.
3. Established firms hunting for our high-growth clientele
We realized early on that there was no way we could retain our high-growth clientele without continuously building the team’s skillsets and continually improving.
For clients that were only conscious of pricing, we made the difficult decision to let them go since in the long run, they wouldn’t be our supporting crutches. In our experience, we have found quite a few returning clients who believed in our service quality and stayed with us.
This proved to be a challenge early on as nobody wished to join a small firm with hardly any employees. Coupled with that, budgeting constraints made it really tough to recruit new talents.
But we overcame this challenge as soon as we moved to a larger office space with good infrastructure and increasing word of mouth recommendations.
5. The pressure of offering services at cheaper prices
This is an untold problem that runs throughout the industry. We made it a point from the very outset that despite being a new firm, we would not run our practice based on aggressive pricing.
We tried to onboard clients who had a preference for quality overpricing. This ensured that we built a loyal clientele base from the beginning who appreciated our work and were our biggest promoters.
Timeline of our Firm’s journey
- It was difficult to develop networks and contacts and we were stressed due to the limited work.
- But we acquired our first major client who believed in our ability and gave us work and trusted us.
- Also, we hired our first employee who believed in us with very limited clients/work and experience by our side.
- Work started picking up and we realized that we had a penchant for difficult projects and resolving them for our clients simply by not giving up.
- Started realizing the importance of networks/connections, and started socializing.
- Although lack of infrastructure was a major challenge and investing in the business took some time, we bagged a couple of large clients and were able to increase our work scopes and client engagements.
- This was the year we actually started delivering to our potential clients.
- We received a Due Diligence and Fraud Check assignment from a client who was impressed with the results.
- We also received proposals from different businesses as service providers for their individual business ventures.
- We also onboarded our partner who helped us ramp up our GST practice. Soon, we started practicing indirect taxes, and that coupled with our Firm’s interest in RERA-related work, helped us boost the real-estate-related business and we started dabbling in legal work.
- Having failed in the startup world earlier helped in growing the business as we could offer actionable insights and our firm became a go-to Firm for startups.
- We purchased our first office premise which was double our existing office space and hired more staff members. This helped us develop a bigger and diverse set of clientele apart from better helping the existing clientele.
- We didn’t look back this year with our foot on the gas and increasing clientele, work areas like valuation, transactional support, legal support for startups pre and post fundraising, and other areas
- Positive news about our startup clients getting funded with us lending transactional support, developing new work areas for the Firm.
- We completed 5 years of being in business and had plans to expand with a new partner which we hoped to announce on 1st April 2021. But the sudden and complete lockdown sent our business in a downward spiral for a couple of months.
- We had to keep the new partner onboarding and aggressive expansion plans on hold.
- Near zero revenues for a couple of months forced us to rethink the way we did our business.
- Post the 1st quarter of lockdown, after aggressive business development efforts, our firm started operating again and we were able to bring back normalcy at least in terms of operations.
- We serviced our payroll and vendor commitments timely despite the entire lockdown and economic situation without a single pay cut or anyone's salary being held back even for a single day.
- By the end of the year, we were able to register solid growth despite no business in an entire quarter.
We had to overcome a lot of failures and faced challenges but the journey is what has made us the Firm that we are today.
My only message is: Success needs a Start!.
Now It's Your Turn...
As a CA in your early 20's would you start a CA Firm? Comment below and let us know.