Kep Kepner

The following transcript has been lightly edited for readability. Filler words have been removed and sentences cleaned up while preserving the speakers' meaning and tone.

Henry Harrison: Welcome to the Henry Harrison Podcast — Entrepreneurs, Business, and Finance. We're very happy today to have Kep Kepner. I'll have to ask about the nickname — Kepner and Kep — but we'll see if there's any history to that. Kep is a repeat entrepreneur, and he presently has two companies: Kepner CPAs, which makes sense since that's his last name, and another one called Mindsmarts, which I'll let him explain. Hello, Kep.

Kep Kepner: Hi, Henry. Thanks for having me on. I've always known I was going to be in business for myself. My dad was a small business owner. He manufactured awnings, windows, storm doors — those kinds of things — in Wichita, Kansas. I worked for him during the summers, made a lot of mistakes, and learned about business. So I've known from the start of my life that I was going to be in business for myself.

Henry Harrison: That's great. So you had a good role model and some good examples to learn from.

Kep Kepner: He wasn't the best role model. He also taught me that I didn't want to be in his business. When you have a family business — and a lot of my clients are family-owned businesses — there are family dynamics involved that can really mess with the business decisions that need to be made.

In my case, it was a blessing when my dad said he couldn't afford me after I got out of grad school. I went out on my own and started my career. He wasn't the best business role model, but working in his company was great. I made mistakes when I was 15, 16, 17, and through college on summer jobs — mistakes I didn't have to make again in my 20s.

Henry Harrison: You're obviously doing very well with these two companies, and I want to get to that. But since you mentioned mistakes and role models, you have a non-traditional path. Share a little about that, and about your real estate ventures before you started your accounting firm.

Kep Kepner: I started out in sales with a division of IBM called the Service Bureau Corporation. I found out I was a marginal salesman, which was a scary thing to face. I thought, "Okay, I've got all these skills, I'm a reasonable communicator, and yet I'm marginal."

I think I see this in a lot of younger people today — I was chasing the next greatest technology. I went to about four different technology firms, and in each case I was a marginal salesman. I was intuitive enough to say, "This isn't working. I don't want to do it a fifth time."

I found a CPA firm in Dallas called Alford, Maroney & Company and went to work in their consulting department. At that time, one of the things we did was design and implement computer systems for small businesses. That was where I could use my ability to communicate combined with my technology background.

What I learned about myself was that when I was selling something I had control over, I could sell like crazy. When I sold something for somebody else, I was marginal. I don't know what that says about me, but when I went to Alford, Maroney, I was suddenly able to sell all kinds of business. I think it had to do with the fact that whenever I said something to a client, I could make sure it happened — and that wasn't always the case in other jobs I'd had.

We later merged into Arthur Young, and I became an Arthur Young partner.

Henry Harrison: That makes a lot of sense.

Kep Kepner: Everybody thinks that's the pinnacle of success in the accounting world. For me, I didn't belong there. They were working with companies like TI and other large companies in Dallas. I was used to dealing with the business owner directly, seeing their successes and their flaws. Even though it's prestigious to be a partner in what was then the Big Eight, that wasn't the place for me.

So I raised venture money and bought a company that built bank buildings. That was a real departure from my consulting work. The tax law changed, and at the time I entered that marketplace they were building new banks everywhere, real estate everywhere — and then we hit a downturn. If somebody wanted a new bank, they would just take the end of an unleased shopping center, put a drive-through in, and be in business. They didn't need a building of their own.

I had six venture partners. The lead investor was the 20th-largest bank in the U.S. — Republic Bank in Dallas — and there were five other big venture firms backing the purchase. It was the right business at the wrong time. The market dried up, and we weren't able to shift well enough to another marketplace.

When we closed that business down, we still had assets. We didn't go bankrupt. But these wonderful venture capitalists — who had been all in favor of the deal — they wanted me to sign a note for about $200,000, just in case I made some money in the future. That's when they earned the name "vulture capital" in my view.

When you think about what happens to business owners using third-party money — in addition to the market change — my sponsor at Republic Bank was the guy who brought me in. Republic merged with Interfirst, and Interfirst had a bigger M&A program. My sponsor was looking out for himself. He didn't want to carry something into the new bank that might reflect on him later. So it really came down to that single person trying to cover himself.

Henry Harrison: For those who don't know, this was in the late '70s and '80s in Texas — the savings and loan crisis. There were mass bankruptcies. Famously, former governor and treasury secretary John Connally filed for personal bankruptcy. Sometimes it doesn't matter how smart you are or who you know. How many buildings did you build by the time it ended?

Kep Kepner: We probably built about 30 buildings over the course of several years.

Henry Harrison: And they still wanted that last $200,000, which would be worth closer to half a million or more today.

Kep Kepner: They were looking out for themselves. Fortunately, before I started that company — when I was at Alford, Maroney — we were required to have our CPAs even on the consulting side. So I had mine. When the building company went down and I got "booted up" to chairman of the board with no salary, I started Kepner CPAs in my bedroom. That's how this firm got started. There are eight people here now.

Henry Harrison: I met some real estate developers from that era. They were partners with savings and loans — banks were financial partners in deals, which wouldn't happen today. Then the RTC took over the bank and called the loans. The developers got wiped out.

Kep Kepner: Absolutely. It happened every day. Fortunately I had a little money and was starting to build my accounting practice, so I wasn't financially devastated, but it was very hard on my family. During that period, I had two car wrecks. Neither was my fault — but probably because I wasn't paying attention. When somebody has that kind of stress in their life, things happen. When you have an entrepreneurial spirit, you figure you'll get through it, but it's harder on the family than on the entrepreneur.

Henry Harrison: That had to be a very stressful time. Your sense of perseverance and optimism pulled you through.

Kep Kepner: Yeah — I lost my family during that time. Went through a divorce. That's what happens sometimes. The word "vulnerability" has a really bad meaning to a lot of business people. They don't want to be vulnerable. But I subscribe to Brené Brown, who says vulnerability is the most measurable action of courage that exists.

When somebody starts a business, they really are at their most vulnerable. They're giving up a job, security — all of that — and going into the unknown. There's a Zen principle called shoshin that defines vulnerability as a period of not knowing. The entrepreneur is at their greatest strength when they recognize their vulnerability. They go out and risk everything — their psyche, money, effort — to start a business.

Business owners are vulnerable when they're starting up, when they're undergoing massive change like AI, when they're at the end of their career thinking about selling, even when they're hiring employees. At all of these moments, they don't know how it's going to turn out — but that's actually their time of greatest strength.

I was very vulnerable when I started the building company, and very vulnerable when I started my CPA practice in my bedroom with no clients. Entrepreneurs are a different breed because when you're vulnerable, that's when your creativity takes hold. That's when you see things other people don't see. That's what lets you start, build, grow, and eventually sell or pass on a company.

I'm a big believer in the American entrepreneur. Most build companies that can be trusted. The few bad apples only ruin their own barrel — they aren't ruining everyone else.

Henry Harrison: Do you have a lot of clients who are entrepreneurs and small business owners? I bet that informs your perspective.

Kep Kepner: Yes. I have about 700 clients. Some are CPA firms, some are just tax clients, but more than 100 are small business owners — some with multiple businesses. I get a ringside seat at the entrepreneurial world. I can see how decisions get made, what works, and how it affects them and their families.

Henry Harrison: You provide tax services, but you also have other services. What are those?

Kep Kepner: I'm so proud, Henry — this year I only did one tax return myself.

Henry Harrison: You have a team.

Kep Kepner: Yes, we have a really strong team here. We've trained them well. When you're a CPA working with small businesses, you have an opportunity to learn how you fit into the life of your clients. We start with strong accounting, add CFO-level guidance, and add Mindsmarts high-performance brain training for better decision-making.

Henry Harrison: Let me pause for a second to make sure we frame this clearly. Your CPA firm offers software help, financial consulting, business advisory, and Mindsmarts is part of that — but Mindsmarts is also a separate company. And your CPA firm itself is not traditional. You've structured pricing differently from how most people experience working with a CPA. Talk about that.

Kep Kepner: It's becoming more popular to think about fractional CFO or fractional controller work for a small business. In those cases, we work on a retainer basis and define what the workload looks like. We become part of the company in the sense that we're their financial people.

I've always felt that I wanted the smallest business client we have to have available to them the same kind of financial knowledge a Fortune 500 company has. Entrepreneurs are sometimes unprepared for the financial side of their business, and when we act in that role, we become their financial vice president.

But we're still independent. We're not employees. That's important. If somebody hired me to be their controller, that'd be a lousy decision, because when you become an employee, you become part of the problem. As an outsider, you have objectivity, you're serving other clients too, and you have the platform to tell people the way you see it. You can solve problems for a company instead of being inside them.

Henry Harrison: That leads to Mindsmarts, which most people probably don't expect from their CPA. You're bringing a consulting mindset into the firm. Explain it.

Kep Kepner: It's not unusual for a business owner to be trapped in their own business. If they're making half a million a year and living the life, maybe that's fine. But many businesses are making a nice living while their owners have forgotten why they got into business in the first place. They've lost the spark.

One sign of it: if you go home tired because you worked hard, that's normal. If you go home tired and feeling unfulfilled, that's evidence you're trapped by the business.

Part of the reason owners get trapped is what I call the "I've got it" syndrome. Something comes up and they say, "I've got it." So they build a cage around themselves — trapped by busyness, by doing the same things, trapped by the familiar.

I went to the Center for BrainHealth at the University of Texas at Dallas and asked what they had for the healthy brain of a business owner. I didn't know what a brain center did. I learned their protocols, took their training, and it was so good that I had everybody in my firm take it. Then I went back and signed a contractual agreement to deliver their science through Mindsmarts to business owners — my own clients and others.

The science says that when you learn to think differently about things that are important to you, you actually grow brain cells. If you want to build your bicep, you grab a dumbbell and work the muscle. To work your brain, you have to take on strong, important, difficult challenges that move your needle. It's not about handling 200 emails today — you'll have 200 tomorrow. It's about getting real clarity on where you're going and planning things daily that move you a step closer.

Some of it is the same stuff your grandmother told you, but it has a scientific backbone. Your brain is a small part of your body, Henry, but it takes 20 percent of your nutrients every day, 20 percent of your hydration, and about 12 percent of your blood flow. It's a hungry organ. When you learn to use it properly, you make better decisions. You analyze problems more deeply and more broadly. You bring in your experience, your knowledge, and even your emotional read on the situation. You come up with better problem definitions and better alternative solutions.

A Mindsmarts approach also strengthens curiosity and innovation. So instead of being a stodgy old CPA firm, we drink our own Kool-Aid. We use our brains differently, and that's how we come up with solutions and individual products for clients.

I've traveled to 22 countries, but my journey into my own brain was one of the strangest, most interesting, and most challenging trips I've ever taken.

Henry Harrison: I'm glad you got on the soapbox. It's a company you've built, and it's integrated with your CPA firm. Sometimes the obvious gets overlooked — and one of the most important things is how you think, because it determines everything. I actually spent five years as an NLP certified practitioner and trainer. Different approach, same idea: the brain is everything.

Kep Kepner: People ask me — particularly when the latest big tax bill came out — "Kep, why are you talking about the brain? Shouldn't you be reading the tax bill every night?" I already know most of it, and I know how to find what I don't. The brain is fascinating, and it's a beneficial activity to start paying attention to it.

Mark Cuban recently said, "Whatever you do, don't lose your curiosity." When you learn to think well and open your mind to different patterns, you become more curious — or you strengthen the curiosity you already have, along with your innovation. Everything we do starts with a thought. If we think differently about things that matter to us, we grow brain cells, and we become better decision-makers.

Henry D Harrison: Maybe a good time to wrap up — unless you have a story. I know you have testimonials on your website. A client who made changes, got their personal life in balance, made more money, that kind of thing.

Kep Kepner: I'll tell you two stories. The first is my own. Once I paid attention to brain health, we doubled our profits. We had 25 percent revenue growth without adding people, and I saved a third of my time in the CPA practice. I've reinvested that time into Mindsmarts and other forward-looking work — but the key is that it gave me time to think instead of just being busy.

The second story is a client whose business was waiting on the next sale. They weren't retail, but they were waiting for a particular type of customer to come in. When those customers didn't come in, they had losses. We concentrated on developing a wider net, with a plan for handling overflow. They didn't have a way of compensating for the underloading of their facilities and staff before.

It's a great little family-held company doing about $2.5 million a year, and there's been a big change in profitability — just by changing how they cast their net and by building part-time resources they can pull in for surges. They're no longer sitting around waiting for the next customer.

I'm also coaching a couple of financial advisors right now. One of them is 60 and said, "I've got one more shot to really build my business." We're defining what that shot looks like, and he's thinking strategically about his business instead of just selling the next client. That's the shift — from transactional to strategic — and great benefits come from it.

Henry Deimel Harrison: Wonderful. KepnerCPA.com — K-E-P-N-E-R. A real pleasure to spend time with you on the podcast. Thank you for coming on.

Kep Kepner: Thank you very much for having me, Henry. I appreciate it.