TFS Gulf 
- Hi, I am Ajay Sethi, Founder and Managing Partner of ASA. In 1991, at the age of 26, I began the practice in a small room with no far-reaching visions.
- The first three years were a struggle but fortunately with strategies and hiring the right team, we thrived.
- Today we are India’s top 10 firms with a 1000+ member team, over 33 Partners, presence in 8 locations in India, and 6 international desks.
- Here is our journey of building and scaling ASA.
Entrepreneurial leap
To be frank, my desire to do CA wasn’t there. It was a fluke.
My parents come from a colonial background, so for them being fluent in English and landing a good job were the two most important aspects.
My father, who was a banker, wanted me to either become a doctor, engineer, or architect. And I wanted to start my own business!
I kept pushing my dad to let me start a business, but obviously, he was not on board with the idea.
What now?
In a twist of fate, one of my friends who was studying to become a CA convinced me to give it a try. I took the plunge!
Fast forward to 1989, I qualified as a CA and joined Arthur Andersen, a major accounting firm. I spent two years there and observed that the CA profession was evolving and it seemed to be a great time for India.
Since I was a CA, I thought, ‘Let’s start my practice. At least that will satisfy my entrepreneurial desires.’
I got married very early and the thought of impressing my newlywed wife also drove me to leap.
As crazy as it may sound I quit Andersen and in 1991 at the age of 26, I began the practice in a very small room (8 feet wide and 10 feet long) with an asbestos-based roof and no inkling of what lay ahead.
Building the firm from scratch
After leaving Andersen, I soon discovered that the real world is much different with cutthroat competition.
We made no profits in the first three years. I just had to survive. However, those years were crucial for our learning.
I owe a great deal to Mr. K N Memani, the former Chairman and Country Managing Partner of Ernst & Young India. When I reached out to him looking for work, he gave me a small task. However, instead of just assigning the task, he provided me with invaluable guidance.
I will also be forever grateful to Mr. BR Maheswari, the former President of the Institute of Chartered Accountants of India. He too didn’t have much work to assign my firm, but he provided me with some invaluable advice which I follow to this day.
- If you are not changing your shoes every 6 to 8 months, you are not running enough. This indicated that I needed to be constantly on the move.
- If you are going through a bad situation, don’t complain to your clients, your colleagues, or your family because that gives off a negative vibe. Figure it out on your own.
- Never fall into the trap of accepting lower fees, with the hope of becoming a great practice in the future.
By God’s grace today ASA is a team of 1000+ professionals, 33 Partners, and operates in 8 offices across India.
Let me rewind a little bit and take you through some key developments that shaped the practice:
Bringing in Partners
At that time, I was good at taxation. I knew I couldn’t build a successful practice as a generalist, hence decided to bring in good Partners that would complement me.
Most of my Partners, such as Rajiv Arya, who was the first to join me in this adventure, are still going strong.
Collaborative business mode
I don’t believe in the concept that you kill what you eat.
I think if you come together as a family then you must have a sharing ratio and it should be from the global pool, not these split false Partnerships.
Global footprint
Just five years into our business we partnered with Japanese counterparts and began expanding internationally.
Transparency
When we entered the Japanese market, we realized that they put great emphasis on honesty and being straightforward. It rubbed off on us.
While talking to your clients, you don’t always have to be ready with the perfect answer.
I also believe in being fair to my Partners and the people around me.
Didn’t adopt a family-oriented structure
I also noticed that Indian practices weren’t thriving as expected. I pinpointed the issue: having family-owned structures and companies flocking to the Big 4.
Although the family-owned firms I encountered had some incredibly wise and skilled Partners and talent.
Despite this, some individuals didn’t see growth opportunities within these structures, leading to a lack of meritocracy in the organizations.
Independent Board of Directors
At the age of 35, I proposed changing the name from Individual to an abbreviation to remove personal bias.
When you are 35 you never imagine that you will ever grow to 60 or 65. However, I am now turning 60 this year. Reflecting on everything, I realize the importance of having a system of checks and balances for the managing partner, including myself.
That’s why I established an independent board of directors 28 years ago. I provide clear reports to the board about my actions and decisions. This ensures accountability for both my successors and myself.
Timeline of our journey
I believe clear thinking and strategic planning for the future have played a significant role in our success.
1991 – 2000: The ’90s were all about experimentation
- For the first three years, I only had one focus; the firm’s survival.
- During this period we also got kicked out of our office, which was a basement. But we stood on our feet shortly.
2000 – 2005: In the 2000s, we rode the wave of India’s open market economy
We became more established and started attracting foreign clients, especially from Japan.
Our fees increased, we formed a board, and budgeting systems became imperative.
We began planning with standard operating procedures (SOPs).
Now, onboarding international clients is a money-spending game. So if you think you have the skills then go ahead. However, you should remember that it’s not going to be possible with a single visit to the clients. You must have a game plan.
For instance, if you’re interested in working with the Netherlands, you should consider the local chamber of commerce, and the people you’ll be interacting with, and plan a visit to the country.
It’s also crucial to identify potential companies you can collaborate with, as building relationships is a two-way investment.
2005 – 2015: We went into a massive expansion mode
We questioned ourselves, “Why are we only focusing on small components? Let’s start considering multiple possibilities.” This led us to pursue mergers, expand our portfolio, and approach things from a different angle.
We realized that giving and shedding shares was not a major concern as long as our overall growth continued.
Gradually we expanded to include internal audit, risk advisory, due diligence, business advisory, foreign company setup, and eventually insolvency.
It took us 15-20 years, to evolve into a multidisciplinary practice where separate Partners began handling traditional accounting, tax, and audit.
2015 onwards
Currently, we are in a phase of simultaneously exploring new ideas and adapting to a changing market.
We are consolidating our previous efforts and identifying weaknesses to replace commoditized products with high-end services.
In 2023, we joined the network of Baker Tilly International, acquiring a global reach through 700 network offices and 42,000 professionals.
Even when we were not affiliated with any international network, 70% of our clients originated from foreign companies.
Frankly speaking, I am now juggling so many responsibilities, that sometimes I wonder, “Why did I set the retirement age at our firm to 65, instead of 60?”
Navigating challenges
Now let’s talk about the challenges that I encountered during all these years. The list can go on but here are a few:
Our offices shutting down
The biggest challenge that I have faced to date is when our offices in Delhi were shut down by the Municipal Corporation Of Delhi. It was a nightmare.
I called my clients and Partners to inform them about my plans and how I intended to handle the situation. Thankfully our work in Japan was intact. And thus we survived that blizzard.
The key was to effectively communicate with our partners and clients.
Partners quitting
To make the situation worse, a Partner and the team at our Bombay office chose to depart simultaneously as our Delhi office shut down.
It is common for close partners with whom you shared personal connections to leave for valid reasons. So you have to accept and move on.
Working with the Partners in tandem
Handling a group of Partners from 19 different states is my biggest challenge.
It can be difficult when you have so many different ideas running around your mind and you want to align them with that of your Partners.
Onboarding new Partners
Previously, when I tried to onboard a Partner located in Southern India, I faced challenges convincing him that I was not trying to deceive him.
Today, people are more connected. Now it would be easier to find partners who share the same vision and goals as mine.
What would I do differently?
If I were to begin my practice today, I would not do anything different per se, as I am very satisfied with whatever I have achieved. However, I have some practical tips for those just starting,
Collaborate
I would focus on collaborating with like-minded individuals as soon as possible.
Service lines with high-profit margins
Instead of focusing on traditional areas, I would pay closer attention to tax advisory, ESG, and digital services.
Even younger professionals are shifting from traditional accounting practices to digital or ESG which are extremely specialized and have very high profit margins.
Huge opportunity in Audit
I would closely examine the assurance/audit field. Despite the high risk involved, it has the potential for high financial returns.
As the Big 4 firms continue to delegate work, auditing will become a significant practice area.
Toss out your fear
As a Chartered Accountant, you will never go one day on an empty stomach. But if you don’t take risks, your mind and heart will starve.
I will quote Sholay’s Gabbar, “Jo Dar Gaya Woh Mar Gaya” which means those who are afraid will surely perish.
It will be a tough start, but there are ways to overcome it.
At the end of the day, it is Professional Services. Only a few people in this profession will perform well.
Will all of us end up buying Rolls-Royce and farmhouses? I doubt it. But you will be wealthy enough to do well in life.
Secondly, unlike your peers who will move to the industry, and unless you are as silly as I am you could retire at 75.
To all the Chartered Accountants, it will be a tough start, but there are ways to overcome it.
