Practice growth - what's the next step?

Practice growth - what's the next step?

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I have built up my small practice from scratch and moved from working from home to a small office.

I still work on my own, which I don't mind but too much of my time is spent on non-chargeable activity. I can not accept any new work because I don't have the capacity.

I should have thought about this before I reached this stage and would be interested to know what others did next. For example, is the next step to employ an admin assistant, a bookkeeper, or hook up with a like minded accountant?

Thanks in advance.

Simon

Replies (8)

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By User deleted
02nd Feb 2010 11:31

What do you want from the practice?

It depends on where you want to go with your practice.

Do you intend to stay small and in control, or do you want to take a back seat and get staff in to run the business.

I was in your shoes a few years back, although did also have several staff, my practice grew like wild fire and I hated it, ended up selling it and starting again much smaller scale.

If you want a lifestyle business I'd cherry pick the clients you want and get rid of the others so that you have a  highly profitable managable client base. If not you now need to get some staff in asap. You may find this quite a challenge handing over control to someone else - make sure you have standard systems and procedures in place as far as possible.

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By User deleted
02nd Feb 2010 11:38

Great Question

I am at a start up stage and the worry all the time if I will have enough clients to earn a living from this. Thanks for posting this question, it gives me hope! Well done for building up your practice!

I am sorry I am not the right person to give advice on this. One point you may want to consider is getting rid of low fees/headache clients by doubling the fees. If they stay great at a much higher fee.

 

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By Ken Howard
02nd Feb 2010 12:22

Downsize, catch your breath then move forward

As many others, I've been in your shoes.  Was too busy, too many clients, to be able to take on anyone, i.e. no time to even recruit or train someone and no time to set up systems needed for when someone came to work with me.  I ended up taking on a part time self employed book-keeper, p/t s/e administrator and p/t s/e accounts clerk, but it didn't really work as I couldn't monitor them properly.

My first stage was to embark on a relatively long period of downsizing - over 3/4 years, I've got rid of the dead-wood clients and concentrated on the quality clients in terms of increasing their fees and training them to keep better records, bring things in on time, etc.  Over this period, I doubled my average fee from £400 to £800 and halved the number of clients, so my practice turnover is the same, but I've half the work and few overheads as all my s/e subbies were let go.

This was the first January where I've been quiet and I've used it to my advantage to write an in-house practice manual with checklists, work instructions, etc., which I've used alongside new filing systems etc., all with a view to being very efficient for the work I do, both admin and chargeable but more importantly, I wrote it with expansion in mind so that the procedures etc I've put in place for myself have also been written with a view to support staff, so basically, I now have a set of manuals and procedures that I can make available to any future staff for them to follow, so hopefully, the work I get back will be in standard format and completed from standardised work instructions, all in all, should mean that staff (or subbies) will know what's expected of them and as long as they can follow the procedures, their output should be good and in the right manner for me to review and complete.

I'm now ready to take the plunge to either staff or subbies again.  The difference now is that I'm not spending all my time fire fighting and will be able to do a proper induction/training program for workers.  My long term plan is now to get staff to run the practice and do the work, leaving me clear to do the top end technical work, meet the clients and do the marketing etc., i.e. as they say, so that I can work "on" the practice instead of "in" the practice. 

Just don't underestimate the amount of time it takes to turn the practice around.  Every year I've been saying "next year", but it took four years to make it happen - you really do have to downsize a lot and that takes time if you're not wanting to reduce your turnover. 

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By User deleted
02nd Feb 2010 12:48

Just take it steady

I built my practice up over the last 20 years and for the first time feel really in control of it with staff doing what they are meant to and budgets being met. Being organised and planning ahead is most important and I now spend less time doing chargeable work and managing the practice. We have up our fee income and profits.

Just take it steady and try it if it doesnt work learn from it - good luck

 

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By Jason Dormer
02nd Feb 2010 13:13

Growth problems

As others have said, the answer depends on the question of what you want from your business.

Either way, if you do not have the capacity for any further work then there is an opportunity cost to you - is it worth at least getting part time support in for administration purposes leaving you time to either serve more clients or spend time on the buisness?

I had a crossroads a while back and changed from a one man band into a team of seven.  You may be interested to read my blog on the experience: http://www.seahorseuk.co.uk/index.php?option=com_content&view=article&id...

Regards

Jason Dormer

Seahorse (UK) Ltd - For accountants and bookkeepers

www.seahorseuk.co.uk

 

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By lyonandco
02nd Feb 2010 13:43

Subcontractor available

Good afternoon

I wondered if you had considered outsourcing some of your bookkeeping/accounts prep work? If so I am available straight away on a part time basis, working from my home based office in Kent. I am ACCA and AAT qualified with over 13 years industry experience. You can contact me on [email protected]

Kind regards

Teresa

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Teignmouth
By Paul Scholes
02nd Feb 2010 14:09

Agree with above

Hi Simon - it's good to see a steady stream of good advice on an AA thread.

Whatever you do always build in spare capacity, ie if you think you need someone for 15 hours a week make it 20 hours instead, work flows rarely stay constant so you will need the extra from time to time and to provide for growth.

Both as you are at the moment and certainly if you take someone on make sure you have the best systems you can.  I don't know what sort of work you do but I'm a general practitioner and if I wasn't fully Iris'd I'd need one or even two more staff to handle the work, so the £4K - £5K pa I pay is well worth it and it can handle extra people joining. So it's worth analysing some typical jobs & procedures and seeing if there's a better way to do them.

Analyse what you do between client work and admin and, being as honest as possible, work out what you do most of that could be done by someone else, this will help you decide whether you get a fee earner or admin person.  There are people about who can do both, I have one, but you usually get someone with one skillset and train them on the other.

If you do take someone on plan it so that you have a lot of free time for at least the first month to coach & supervise them.  There are books written on delegation & coaching for good reason, if you don't get it right at the start it's pointless taking someone on.

Unless you know someone well and they do have spare capacity you can use to mutual best advantage, I would stay clear of partnerships, joint ventures etc whether like minded or not, ie if you found a Simpon clone around the corner, joining forces would double the hassle of no capacity, overwork etc.

But, as others have said, keep your mind on what you want out of the practice, when is enough enough?  The income from mine is half what it was 3 years ago and on paper it's not enough to support me but I made other changes to make it enough and have a far better home/work balance.

All the very best

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By Bob Harper
02nd Feb 2010 19:31

Think before you act

I agree you should have thought about this before it happened and my guess is that you did but didn't commit to actions before it was too late.

You are asking what the next step (and your question is about growth) so my guess is that you have already decided on a destination.  Have you done personal goals so you know exactly what you are after?

When you do this you may find the next step is obvious.

What I can tell you is that some accountants struggle for years because they never make a commitment, others form partnerships because they are too scared to make the commitment.  The brave expand and employ people.

For example, Jason invested time and money in himself and his practice and sorted out a strategy which he now successfully implementing.

You say you are spending too much time on non-chargeable activity...maybe you are not spending enough?  Why not employ someone to do the chargeable work leaving you to do development work?

A few actions you can consider:

Review your personal goals – get a personal coach to help youDevelop a practice strategyAudit your existing business - maybe you should get rid of some clientsPut together a marketing plan with a sales and cashflow forecast based around your resources

You are too busy to do this but you have money so buy yourself some time and get some expertise in.  It's a one-off investment which will benefit you for the rest of your life. 

I’m not sure about 20 years!  A firm we work with has gone from zero to £400k in 4-5 year and is still growing...the secret is taking on the right clients in the right way and being organised.

My tip based on my experience and a few words from firms I have worked with - employ people before the curve, have systems ready for them and make sure you get the resources you need not what you can afford!

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