From a small shared space to a 250+ member firm specializing in Indirect Taxation: the story of CA Madhukar N Hiregange.
- Hi, I am Madhukar N Hiregange a Chartered Accountant and Entrepreneur from India.
- I decided early in life that I wanted to become a CA and after several challenges, I qualified in 1988 and soon started my own firm specializing in "Central Excise".
- Fast forward, in 2002 after coming out of a failed partnership, I built my firm 'Hiregange & Associates' from scratch. Today we have grown to 250+ team members with 12 offices across India.
- Here is my story about how I built my firm by specializing in Indirect Taxation and while remaining honest in every dealing.
Growing up in a small city and deciding to be a CA
My father was an engineer - an upright honest officer, dead against corruption, and hence got transferred to places where nobody wished to go. So, I grew up in multiple cities.
In early school, I was not into reading or playing however when we moved to Patna (back then it was a smaller city) with the guidance of Fr. Starr & Fr. Murphy, I excelled in my academics.
I realized early in life, that I wanted to become a CA and so in 9th grade (1974), I moved to a metro city, Bangalore (India).
Coming from a smaller city, had its own challenges - one being poor in English! So in school, I was the target of many jokes.
Fast forward, as decided, after my graduation, I joined the CA course from ICAI (The Institute of Chartered Accountants of India).
I got an opportunity to do my articles at a leading CA firm "Brahmayya & Co" which changed everything for me!
After a few failures, I qualified as a Chartered Accountant in 1988.
Starting my own firm and specializing in central excise
Being average at academics at that time, and wishing to make a name like my father, I was looking for an avenue to shine.
I soon discovered the only way to excel was by having my own firm and through specialization. After some analysis, I saw an opportunity in Central excise.
I also happened to meet Shri KS Ravishankar in 1988 and asked: "whether I could have an honest practice in Central Excise". He paused for a while and say "why not". The conviction in his tone encouraged me to pursue a career in Central Excise!
In 1989, I started my own firm as a sole proprietor with a focus on Central Excise.
In 1990, I started with the idea of doing only Central Excise Audit - Knowledge of CE + audit. (I was a pioneer in Central Excise Audit in India!)
TTK group (an Indian business conglomerate) gave me an opportunity and I provided great value-added services. The news went around and I had clients flocking in!
Roller coaster ride
From 1989- 1995, I was tottering along with limited services only in indirect taxes and a bit of the traditional practice.
In 1996, I stopped other service areas totally and focused only on Central Excise.
I also started publishing articles and writing books to get clients without having to sell my services. This strategy helped and brought me a lot of success and of course clients!
(The moment you write a book and become an Author your career gets 10 years ahead.)
A few years later (2001), on the insistence of a few friends and with the intention to grow my firm, I decided to enter into a partnership model. A big decision considering my independent nature.
Unfortunately, it did not work out and when I came out of the failed partnership in 2003, I had to start from zero.
By now I had written a couple of books and built a reputation as a problem solver.
Quickly clients started streaming in and we had to move out of the 500 sqft office space to one which was 3 times the size! A couple of years later added 2500 sqft and in 2019 another 2500.
In the meantime, we expanded geographically with CA Sudhir as the backbone. Another partner also supported greatly but he moved out somewhere in 2017.
Today our firm 'Hiregange & Associates' is in 12 places in India with a team of almost 250+ plus members with 14 plus Partners and 50 qualified professionals.
When I started out I decided that I would not ask my friends and relatives for work! So the entire process of starting my firm and running it was not easy! (After I was stable, I did do their work as I was satisfied that I would be able to do justice.)
I decided early on that I would always be "honest" in every dealing. However, I went in for a rude shock when none of my Central Excise registrations (for my clients' premises) were getting done in spite of repeated follow-ups as they wanted a bribe! (This was in the early 1990s, times were different!)
I was losing clients and started to have doubts if I would be able to take care of the family in time to come. I started escalating the matter to senior authorities in written letters and guess what this worked like magic!
I also suffered a heart attack in the late 1990s, (I had some contributing habits which unfortunately are there even today) and so had to make some life changes and reinvent myself.
In 2010, I decided to contest the elections at Central Council ICAI. However, in between, I lost on a lot of good Partners and clients as I was not willing to dedicate any time to my firm. But in 2015, I had to step in and eventually got the firm back on track.
I also faced severe criticism from other Chartered Accountants, but that did not stop me.
So, all in all, it was a roller coaster ride but absolutely worth it.
Complete Timeline of my growth journey
- Starting my Sole Proprietor firm and realised specialization is the way forward
- Started focusing on Central Excise Audits.
- The firm was a small one with a shared space in another CA office. Used to go home at 5.30 every day.
- Got into Rotary and was the President in the centennial year.
- Did niche work for limited clients!
- In 1997, I wrote a book on Modvat with CA V. Raghuraman and that was followed by Central Excise law & Procedures. This was the defining event that changed me from average practitioners to those perceived with more.
- I wrote more than 20 books on Central Excise, Service Tax, IDT audit ALWAYS with a co-author.
- In 2000 took up DISA and failed. I became a laughing stock with my children however, the next attempt completed that as well as CISA – which shut them up.
- 2002: Came out of a failed Partnership and started all over.
- 2003 onwards was a golden period of growth. Started a branch at Hyderabad. Had 5 partners.
- Income was great and clients coming in all the time through a reference.
- We stuck to core competencies, looked at value add. Our Partners were speakers and we share our knowledge (CAs felt that they needed to protect their insights, we were the opposite).
- Started looking at geographical expansion in Pune, Delhi, Vishakapatnam, Chennai, etc.
- I decided to stand for the elections of The ICAI (The Institute of Chartered Accountants of India)...hence, I gave up all bank audits.
- Did this more as a contribution to the nation as we were strict and did not want to be compromised in this service project of mine.
- Was elected as the Chairman Indirect Tax Committee in 2012.
- Since I was so focussed on my professional commitments to ICAI, I failed to give enough time to my firm.
- By now 2 partners had quit and income had nosed dived, the CE/Service tax audit wing was forced to close after 22 years. Clients may never forgive me for that.
- My Bangalore partner could not keep the velocity despite his best. There was no other source of income. Had to get back to practice.
- Got the firm back on its feet, established 4 additional branches.
- In 2015 was ready to get back to the unfinished agenda at ICAI and won the ICAI elections again with hardly any real effort (as my earlier contribution was not forgotten by the members).
- GST came along and was able to make history by bringing out a training manual for the officers in August 2016 which was well appreciated.
- After that, for 3 years the IDTC was the toast of all CAs across India as we enabled work in GST filing with sufficient online and physical workshops. We also got accolades from PM Modi and the then Finance Minister for our GST contribution on 1st July 2018.
- We worked on SOPs for the firm, the knowledge edge. We did around 100 days of training for our clients, the general public as well as internally.
- On 1st April we announce a 25% deduction for all 1st quarter work for our clients as a measure of solidarity.
- Even today we have 3 branches not opened and use IT to monitor the work from home.
Questions I get asked most often.
“Should I go for Specialization only?"
- This decision may be taken considering the town/ city in which you practice and the level of economic prosperity in the region.
- In smaller towns, all services may have to be provided with maybe one area of specialization.
"How to choose the area of practice or specialization?"
- Consider how many others are practicing in that area and how long it would take for one to compete effectively with the seniors.
- The areas where service is not existing or at a very low level – can be a good indicator.
- It may also be seen which is the area where one could be a profit center (contribute to clients) rather than a cost center. This would directly impact the ease of economic compensation as well as respect/ regard for the clients. Very importantly your focus would be on getting the client long-term benefits within the framework of the law.
“Setting your professional goals.”
- We did not have a written goal for 2 decades of practice. Once this was put in place, the growth was exponential...so goal setting is key.
- While setting goals look beyond self – keep service as your goal No.1, the money will follow.
“Biggest lesson from a failed partnership?
- If you are flexible then get into a partnership...if rigid like me then the partnership is difficult.
- Post-2003, I built a partnership with mostly homegrown partners and a few from outside.
- My advice would be to be "clear in recording the terms in writing" and think through and "look at the exit policy".
- Be Patient. It takes 3 years to build sustainability and a decent name.
- Read every day for 1 hour. Every Saturday is an academic day, no clients work other than in the peak periods.
- Start and continue with service in mind, money follows automatically.
- Stick to ethical practice – it may take time but then you have pride in the profession.
- Every job especially at the start will define who you are. Once accepted, do the job excellently. Do not get linked to the fees.
- Get complementary professionals to join you as staff or partners as far as skills and experience is concerned.
- Always keep a bench and train them from day one. Monitor their progress, mentor them. They will keep you free to do bigger things.
- Keep a work-life balance. No late working, no working on Sundays.
- Give back to society. Our firm started supporting economically challenged children for the last 20 years. I have enjoyed mentoring about 150 professionals within and outside the firm. The joy is priceless.
Madhukar N Hiregange is the Founder and senior managing Partner at Hiregange & Associates. He has co-authored about 23 books in Indirect Taxes with 3 new books in the pipeline. He was a Central Council Member of the Institute of Chartered Accountants of India for the term 2010-13 & 2106-19 and in 2012 Chairman of the Indirect Tax Committee and Vice-Chairman Board of Studies.
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