In the business services sector, the name of the game this year is growth. Many major firms, from accounting services to nonprofits, saw movement: growth in their firms, clients and in the economy.
Central Kentucky has a strong cluster of support services. From the smallest startup to massive multinationals, there are Central Kentucky companies with the proven expertise to get the job done.
“There’s a tremendous amount of work and a tremendous amount of growth,” said David Bundy, president and CEO at Dean Dorton, which serves and advises the equine, healthcare and construction sectors, among others, from major offices in Louisville and Lexington. “To me, it speaks of a good economy. A lot of our clients are doing very well.”
For its part, Dean Dorton added another 75 new employees in the first three quarters of 2023 and was named a Top 100 Firm and Best of the Best Firm by INSIDE Public Accounting for the first time ever.
The industries Dean Dorton serves seem to be growing across the board, Bundy said. The firm has added family service offices—essentially, outsourced office management—for growing clients, and consolidation across the state is leading to growth in several industries.
“We see that in healthcare, we see that in a lot of the others,” he says.
At Baldwin CPAs, 2023 was a year of transition, with Lisa DeVaughn Foley taking the reigns as managing partner, succeeding G. Alan Long, who had served in the role since 2004.
Baldwin is looking into new niches to foster growth across the industries it serves, she said, noting plenty of growth in the healthcare sector.
“We’ve had great growth over the last 20 years,” Foley says. “We’re working to keep that going. We’re also looking at our service offerings and figuring out where that growth can be.”
One challenge, however, is the ongoing “talent war”—finding more accountants to add to Baldwin. The firm could immediately hire 10 new team members if they were qualified and available, she said, with additional needs on the horizon. The problem is finding them. Foley attributes the shortage to natural attrition: Baby boomers are retiring and fewer people are going into the accounting profession, in part because certified public accountants are required to have 150 college credit hours—30 more than a normal four-year degree requires.
Foley also cited another big challenge facing firms like Baldwin CPAs heading into 2024: Beneficial Ownership Information Reporting. BOI Reporting essentially is a new regulation designed to catch CEOs of smaller companies in money laundering and requires financial reporting separate from basic IRS reporting. Fines for not being in compliance can be $500 per day, and penalties could even include jail time.
“It’s a big deal,” Foley says. “It should get people’s attention.”
Help in navigating new laws
At Dentons, which serves legal clients across 80 countries worldwide, final touches are being added to a new office in Lexington that opened in October, according to Kimberly O’Donnell, the Lexington office’s managing partner. The firm has seen internal organic growth by adding several new lawyers and associates, and external growth is happening due to a new practice area.
“We have seen a growing interest in cannabis in Kentucky as a result of Gov. Andy Beshear signing into law Senate Bill 47 to legalize and regulate medical cannabis in Kentucky,” O’Donnell says. “We’ve put together a team of lawyers with experience across practices—including cannabis, corporate, tax and real estate—to help our clients with the complex legal issues they may face as they seek to enter the medical cannabis market in Kentucky.”
Last May, Dentons launched a partnership with Link Legal, a leading law firm in India, which O’Donnell identifies as “a vibrant and fast-growing market.”
“India has long been a key market for Dentons,” O’Donnell said. “We have many clients that operate in the country, and this combination allows us to continue to help them as they seek to grow, protect, operate and finance their business wherever they need us.”
In a different type of growth, Lexington-based nonprofit Community Ventures entered phase 3 of its ongoing work in Millersburg, which began in 2017. Millersburg is a small town northeast of Lexington that had fallen on difficult economic times with the closure of its largest employer, the closure of the town’s elementary school and the closure of an historic tourist attraction in the Millersburg Military Institute.
Community Ventures took on the town as a pet project of sorts to, as President and CEO Kevin Smith terms it, “create an economic engine” in the town. The former military institute was completely renovated and renamed Mustard Seed Hill and is now a prime wedding and events venue. The firm has begun helping turn the town back into a visitor destination and phase 3 of the plan is to begin rebuilding and remodeling historic properties.
Community Ventures also purchased eight historical structures in the town, and renovations have begun on three; Smith said the plan is to have them all completely renovated within six months. Part of this phase is to create lodging and attractions like restaurants to keep visitors coming back to the historic town, which Smith says is already attracting some 80,000 visitors per year.
“There’s nothing more satisfying,” Smith says of the transformation in Millersburg. “When you come into a very thriving community that is no longer thriving but the people remember what it used to be and you can make it come alive again—that’s the goal.”
Community Ventures is also involved in a similar project in Western Kentucky following the devastating tornadoes that swept through the region two years ago, leaving devastation in their wakes. In late October, Community Ventures announced it was awarded more than $2.5 million from the Kentucky Housing Corp.’s Rural Housing Trust Fund for ongoing repairs to and rebuilding of homes in the region.
As a result of that ongoing project and its efforts to finance rebuilding in the area, Community Ventures has opened two new offices in Western Kentucky. Smith said he expects Community Ventures to be involved in the Western Kentucky rebuilding projects for the next five to 10 years.
“When you go into Mayfield and you see blocks and blocks of downtown streets with no buildings on it, it takes your breath away,” Smith says. “You think, ’How does this happen?’ All these people had full-time jobs to start with, and now they have to rebuild a town on top of it. They love their towns so much that they are giving night and day to it.”
Another major 2023 project for Community Ventures involved the launch in August of an agricultural loan program intended to boost the meat and poultry growers in Kentucky. The program provides low-interest loans—usually with a 4%-6% interest rate—to meat and poultry producers, with the goal being to grow the industry in Kentucky for local producers. Another long-term project is Community Ventures’ Equity Boost program, which is designed to fund minority-owned businesses. The program has raised roughly $12 million thus far, Smith says.
“How do we begin to boost our Black business owners and help them grow?” Smith says of the program. “And to get more Black homeowners. That’s a huge piece of what we’ve been doing the past year.”