Make your new firm a success

Mark Lee explores some less well known measures that accountants can use to determine the success of their practices.

One of the first things any consultant to the accountancy profession needs to accept is that everyone has their own definition of success.

Not all accountants are looking to multiply the size of their practice or even to grow their client base. Some are very happy with the status quo. Start-up practices are different, of course, but they will still each have their own definition.

I recently met an accountant who seemed quite successful. He claimed to make a good living, having built up his practice over the past 20 years. He has three long-term contractors working for him on an outsourced basis (so no staff or employment issues to worry about), he plays golf 3 times a week and has no obvious cause to worry about negligence claims or the imminent loss of clients to his competitors.

When I congratulated him on what he had accomplished he was reluctant to agree he was successful. As far as he was concerned he was not a success as he doesn’t enjoy running his practice, he doesn’t really like the type of clients he has and he cannot see how or when he will be able to retire.

I have my own definition of success. I think you can claim to have a successful practice when you can honestly tick most, if not all, of these boxes because your practice:

  • is sufficiently profitable
  • is not hemorrhaging clients
  • is sufficiently rewarding from a professional perspective;
  • is not giving you regular cause to worry about staff, clients or HMRC
  • allows you to plan for your retirement (if this is likely to be within the next ten years); and
  • is sufficiently fun (in that you enjoy what you do).

If you are planning to set up on your own, do your plans reflect any of these measures of success?

Continued...

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Bob Harper's picture

How to define success

Bob Harper | | Permalink

@Mark - how the profession (or a start-up) defines success is very important and I'd suggest the answer is in what clients think. Get that right and everything else will take of itself.

The question is how many accountants survey their clients to find out?

Bob Harper

The Crunchers Network

But this is about the business owner...    1 thanks

justsotax | | Permalink

not the client and not the profession - of course they matter but in isolation surely what the owner considers a success is a pointer for what type of clients he likes/wants to attract (or doesn't for that matter)

bookmarklee's picture

It may be semantics Bob    2 thanks

bookmarklee | | Permalink

But I think what you are referencing is a different issue to the one I have focused on in this article.

Mark

Bob Harper's picture

Internal verses external measures

Bob Harper | | Permalink

@Mark - I don't think this is a different issue, just a different perspective/approach/measurement.

My point (with a profession which is internally obsessed) is to get firms (especially start-ups) thinking externally (about clients). The principle is focus on and help clients get what they want and you'll get what you want, whatever that is.

Happy clients = Happy Accountant.

Bob Harper

Crunchers Network

johnjenkins's picture

Ok Mark

johnjenkins | | Permalink

The good news first.

A very well written article which says it all.

Now the not so good news.

I don't actually see the point of the article because these aren't less well known methods of determining success they are actually how we determine our success.

Some of us get into a "comfortable" or "uncomfortable" ruts, as possibly the Accountant you met.

I am very pleased you mentioned having fun. IMO this is an enormous part of success.

The one you missed was to be totally blinkered. That will normally create success in sport, science or industry but not politics.

johnjenkins's picture

@Bob

johnjenkins | | Permalink

I certainly see where your coming from and on the surface it would seem that you are right. However if you are doing £5K's worth of work for £2k just to keep the client happy, could you class that as successful? Or you take the brunt of all your clients financial problems. Client happy - Accountant not so happy. If a client trusts you they will stay with you even if you can't get them whatt they want.

Bob Harper's picture

Trust

Bob Harper | | Permalink

@John - the client's level of trust is also a good measurement.

£5k "worth of work" with a £2k fee means the client makes £3k profit. That's the idea. Or, do you mean you "think" the work is worth £5k because your clock tells you so?   

Bob Harper

Crunchers Network

bookmarklee's picture

@johnjenkins

bookmarklee | | Permalink

Thanks as ever for your feedback.

Perhaps you missed the point that the article is aimed predominantly at the start-up ('new') practice and not at experienced practitioners such as yourself.

Mark

ps: The ref to 'less well known measures' was an editorial change made by AccountingWeb. It's not part of my original text.

bookmarklee's picture

@bobharper

bookmarklee | | Permalink

Actually on this topic I think I disagree with you. It is perfectly possible to have happy clients and yet not to be happy yourself.

The accountant I mentioned at the start of the article has happy clients who, apparently, think the world of him. But he doesn't consider himself to be a success. And I think he is right as he has let his practice grow in the wrong direction so it doesn't give him the satisfaction he craves.  Indeed many start-up practices make exactly this mistake. It is NOT sufficient to simply "focus on and help clients get what they want".  If you build up a practice with the wrong clients, you're stuck. 

I read @johnjenkins question differently. In effect he is making the same point as me. A practice could have loads of clients paying low fees that they are very happy with but which the accountant feels are too low. As a result the accountant doesn't feel successful - and, again, I would agree they aren't successful. Their clients are NOT sufficiently profitable.

Thank you for helping me to clarify this point.

Mark 

Kent accountant's picture

Tick all the boxes

Kent accountant | | Permalink

Hi Mark

I'm less than 18 months in and I managed to tick all the boxes but do I consider myself successful?

Ask me again in 12 months time, too early for me to answer that. 

I know there's still room for improvement mainly because I do push myself pretty hard and like to do better than just ok.

Bob Harper's picture

Strategy

Bob Harper | | Permalink

@Mark - I am working on the basis there is a plan which includes things like a well defined value proposition, a definition of an ideal client and the use of Value Pricing is used to capture value.

If this is in place (which it should be before the accountant does anything) they will be happy with financial and non-financial returns. They can then focus on the one thing of helping clients get what they want.

This way the client and accountant are fully aligned which is the basis of a happy relationship. 

Bob Harper

Crunchers Accountants

 

johnjenkins's picture

@ Mark    2 thanks

johnjenkins | | Permalink

Why do you let Aweb mess about with your article?

Interesting point from Kent Accountant. Is there a point in time where you can consider yourself successful? This poses the question can a business go through phases of success?

In my own case I have noticed the difference since compliance and rigidity have re-placed common sense and flexibility within HMRC, causing more IMO uneccessary work. So you can have a successful business and then with outside influences you may feel that you are not so successful.

@Bob. Sorry Bob I don't see a place for your kind of spiel in the Accountancy world that's not to say that Accountants who go for that sort of strategy won't be successful.

Bob Harper's picture

Strategy, plans and clients

Bob Harper | | Permalink

@John - interesting, no place in the Accountancy world for strategy, planning and focussing on clients.

Bob Harper

Crunchers Network

johnjenkins's picture

@Bob

johnjenkins | | Permalink

Well trained Accountants do it automatically without all the hype. This is why China will eventually take over the business world.

I don't wish to talk on johns behalf...    1 thanks

justsotax | | Permalink

but perhaps when saying 'spiel' he was referring to statements like 'well defined value proposition'....rather than strategy, planning or client focus. 

 

Sorry John....you beat me to the post....

Bob Harper's picture

Language

Bob Harper | | Permalink

@JustSoTax - I use the phrase "transfer to a Limited Company" but I say "Incorporation" to accountants. But, the point is the important issue, not the words used.

@John - well trained, what does that mean?

90% plus of  accountants I speak with admit to not having a strategy, do not have a documented plan and measure their time rather than what the customer thinks of the service. Perhaps you are in the 10%.

Bob Harper

Crunchers Network

 

 

i am sure that is a phrase    1 thanks

justsotax | | Permalink

well used in marketing circles.....but means nothing to me.....just sounds like its gonna cost me a lot of money....

Bob Harper's picture

Money

Bob Harper | | Permalink

@Justsotax - not having one will.

Bob Harper

The Crunchers Network

johnjenkins's picture

@Bob    1 thanks

johnjenkins | | Permalink

There you go Bob we are well trained in Accountancy you are highly versed in spiel and as I have said some Accountants will go for that. Perhaps some Accountants don't need to have a "plan" in "black and white" and prefer to "play by ear" that is sometimes just as good a "strategy" as selling them 2kg of spuds for 3p Reds of course. As I also said before if a client trusts you they will stay with you because they know that you are doing the best for them.

I don't believe sales techniques should be used in the Accountancy world otherwise it could well end up like the banking industry. Have you ever been to the counter to do an off-line transaction and been told that your mortgage would be better placed in the new superdooperpooper account which will "maximise" the hidden ratio of LTV against Equity should you suddenly snuff it.

My clients do not want to hear that crap. If they want something they will ask. 

it may well Bob....    1 thanks

justsotax | | Permalink

but unless you can convince me that i need it (much the same as when i see opportunities that client's don't see and therefore it is for me to sell to them), there is not much to do.

 

Putting it in plain English may leave it looking unsexy in your opinion....but may help sell it to the masses who can understand and quantify to the value of it to their business.

johnjenkins's picture

My understanding

johnjenkins | | Permalink

of being an Accountant is that (maybe because I was well trained) apart from the number crunching you sat down with the client whenever and discussed business, threw ideas about and client would decide where you go from there. This is a natural part of being an Accountant.

Bob Harper's picture

 

Bob Harper | | Permalink

 

@John - I appreciate you have vast experience but professional/consultative selling is not what the banks do/have done. 

When I train/coach selling the focus is about clients getting what they want, the money/sale/deal is just a part of the journey. 

Is your business model for accountants based on a) the client knowing what is going on and b) coming to you and ask you to do it for them?

Bob Harper

The Crunchers Network

johnjenkins's picture

@Bob

johnjenkins | | Permalink

That is exactly what the banks did do although they got carried away and did it all wrong. However what they didn't do was focus on the customer at all but focused on maximising profits and this is what happens when sales techniques are introduced. When the relationship between the Accountant and client developes naturally then client business and Accountants practice will also grow.

If an Accountant needs professional/consultative selling advice then really they shouldn't be in practice cos that's not what the profession is all about.

Bob Harper's picture

Times have changed

Bob Harper | | Permalink

@John - we are not going to agree. Sales techniques are never the issue; skills add value to the relationship as they help the client see/experience new perspectives. The issue is always culture in which they are introduced.

Bob Harper 

The Crunchers Network

bookmarklee's picture

Simple

bookmarklee | | Permalink

johnjenkins wrote:

Why do you let Aweb mess about with your article?

It's their site and they are the editors. Authors/writers (and indeed journalists) rarely, if ever, have editorial control over headlines or sub-editors' whims. I am quite used to this as it happens with every journal, website, magazine etc I have ever written for.  I'm proud of how little of my content seems to require editing but I also accept that I'm not perfect.

I especially tend to accept that they generally know better than me re headlines and intro paras. Occasionally we may disagree, but not often.

Mark

Bob Harper's picture

Only 55% of people trust you

Bob Harper | | Permalink

@John - I've just read the ACCA report "Closing the value gap" and it suggests the profession think again about how we see ourselves - 75% of accountants think the public would describe them as trustworthy but only 55% do!

The profession is behind architects, professors, engineers, medical professions and pilots. But, we are above lawyers, bankers, civil servant, journalists and politicians!  

Bob Harper

The Crunchers Network

Where do sales/marketing    2 thanks

justsotax | | Permalink

Consultants sit....?

bookmarklee's picture

Bob, re: That ACCA report

bookmarklee | | Permalink

Having checked out the method and samples used of contributors from around the world I'm not sure the results are statistically robust enough to draw valid conclusions (or even 'suggestions') re accountants in the UK. 

You may be right that only little over half of clients trust their accountants but it would be a sad indictment of our profession were that to be the case.

Mark

Bob Harper's picture

Sales people

Bob Harper | | Permalink

@JustSoTax - I would think sales people are just above Politicians and rightly so because many use old-style double glazing style, hand up your back to "close". 

Good job I'm an accountant;)

@Mark - it's just something for the profession to bear in mind but I wonder what the results of this question would be:

Do you trust your accountant to do everything they can to show you how to reduce your costs of dealing with your year-end accounts and reporting obligations?

What percentage of clients do you think would say yes?

My suggestion is start-up accountants is to focus on their client's success first (and measure it) and use these measurements to drive their own success. 

Profit is a consequence of doing the right things and so is happiness.

Bob Harper

The Crunchers Network

 

well you can count yourself    2 thanks

justsotax | | Permalink

as one of those just above politicans......way to go ;-)

Bob Harper's picture

Counting

Bob Harper | | Permalink

@JustSoTax - I knew I could count on you to saying nothing less.

Bob Harper

The Crunchers Network

to be fair...    1 thanks

justsotax | | Permalink

it was you who decided to use those stats

johnjenkins's picture

I don't believe that only    1 thanks

johnjenkins | | Permalink

55% of clients trust their Accountants. I would put it at 75% maybe even 80%. Yes Bob it is always the sale techniques that are the issue. Years ago I could never understand why, if you signed a life insurance policy that night, you would get a free canteen of cutlery. Times haven't changed that much. What's that saying "same shit different day". With all the scams coming to light more people are aware of "sales techniques". No doubt you are aware of this and have already come up with plan B which is more than can be said for the Government (you did put yourself just above politicians didn't you?).

 

johnjenkins's picture

@ Mark

johnjenkins | | Permalink

As you let the article go I assume you agree with the headline? It's the "less wellknown measures" that don't bode well with me.

Bob Harper's picture

Belief

Bob Harper | | Permalink

 

@John - you maybe right but what you "think" business owners think matters as much as what JustSoTax thinks about me. 

Bob Harper

The Crunchers Network

 

 

johnjenkins's picture

Ah Bob    1 thanks

johnjenkins | | Permalink

I don't worry about what other people "think," I deal with reality. It's what people do that is important. It's what you do and how you do it that builds a relationship and trust with a client. I'd like a pound for everytime I've heard the phrase "don't go there (Accountants) he's too straight".

Profit and happiness do not always go hand in hand. There you go Mark, a new headline for you.

 

@bob...you will be glad to hear    1 thanks

justsotax | | Permalink

I don't think about you.....and indeed i don't really have an issue about what you say.....just the implication that your way is the only way.  Anyway thats off topic...think the point began with what makes a pracitioner consider himself to be successful and shockingly it will depend on that individual his outlook/requirements etc.....

Bob Harper's picture

Implication

Bob Harper | | Permalink

@JustSoTax - I have never said or wanted to imply my* way is the only way.

I know time based billing works (and is profitable). I also know accountants can have a "successful" practice with a crap Website. But, hand on heart, I do believe what I say is the best way (for everyone) otherwise I wouldn't bother commenting.

*When I say my way I mean what I have learned from others.

Bob Harper

The Crunchers Network

johnjenkins's picture

@ Bob    1 thanks

johnjenkins | | Permalink

I don't wish to sound "know it all" but perhaps what you learned from others might not be what you should have learned. One thing is certain Bob and that is there is no room for gimmicks etc. in this profession.

Bob Harper's picture

Good and bad

Bob Harper | | Permalink

@John - I am not sure what you mean by gimmicks but if you mean template Website and fancy logos then I agree.

On the other hand, if you mean Value Pricing and consultative selling then one thing I learned recently was that there is such a thing as negative knowledge. That's basically sticking to old ways of thinking/working and not being opened minded to new ways of doing everything.

Bob Harper

The Crunchers Network

johnjenkins's picture

@Bob    1 thanks

johnjenkins | | Permalink

"negative knowledge" knew one on me. Is that like "reverse psychology"?. Accountants never stop learning and I would think most of us are very open minded. Although open mindedness will reject something that isn't condusive to our work methods, selling being one of them.

Selling methods (aprt from "cold calling"), or whatever you wish to call them are artificial. We deal with real situations which need real answers.

Bob Harper's picture

Real    1 thanks

Bob Harper | | Permalink

@John - negative knowledge is not the same as reversed psychology.

One way to think about the difference is that the first something you do to yourself (to stop yourself benefiting), the other is what someone does to you (to manipulate you). 

So, it seems you are very open minded, provided everything fits with your map of the world?

Selling is really real. When done well the vendor goes into the buyer's reality and then helps them experience a new one. The buyer can then decide to stay or move.

Bob Harper

Jargon....    2 thanks

justsotax | | Permalink

....the verbal sleight of hand that makes the old hat seem newly fashionable; it gives an air of novelty and specious profundity to ideas that, if stated directly, would seem superficial, stale, frivolous, or false."

johnjenkins's picture

Selling is    1 thanks

johnjenkins | | Permalink

only real when it's done as a cold call. If you feel you have to change the method to indirect manipulation then your not a good salesperson.

@justsotax what happened to plain old honesty? How can a direct statement seem false?

@Bob. Open mindedness means that you are open to any suggestion (which I am). You then decide if that suggestion fits in with you work ethics. Nothing you have stated has encouraged me to adopt your methods. Now I don't know if that's because you really aren't a good salesperson or your ideas aren't suited to the Accountancy profession - only you will know the answer to that one.

I'm not having a dig at you personally just the idea that selling has a place in our profession.

@john...    1 thanks

justsotax | | Permalink

not actually my interpretation of jargon but i thought hit the mark.....but i guess in regard to direct statements that seem false.....anything that sounds too good to be true? 

 

'negative knowledge' and 'consultative selling' in one sentence.....really....if i want to be bamboozled by word play that is supposed to impress me i know where to go....

Bob Harper's picture

Selling

Bob Harper | | Permalink

@John - I suspect the issue is your definition of selling is very different to mine.

So, my guess is that I'll probably agree with you that there is no place for your definition of selling, but there is for mine!

@JustSoTax - you can choose to react the new phrases in a negative way. As an educated person I find your reaction a bit immature but assume it is a defence mechanism. But, you could choose to be curious, you never know you may learn something. 

I find there is a lot to be gained from being challenged and learning new things. But, it does require you to be comfortable with new words and phrases. For example, the latest research from the fields of positive and evolutionary psychology, cognitive science and neuroeconomics can not only help you but also your clients.

Bob Harper

Crunchers Accountants

 

johnjenkins's picture

@ Bob    3 thanks

johnjenkins | | Permalink

Come down from the clouds and enter the world of reality. Selling is selling, people just have a different patter or spiel. You just have to look at the adverts. Anti wrinkle cream is just polyfilla but has added hydronogised wf867 and a dash of neurodevapourised moliscules extracted by a revolutionary process from the bullshit plant hidden deep in the seminars of "all that is jargon" etc. etc.

Im sorry Bob but there is no place for your definition of selling in our profession. Straight forward talking and honesty has always been the backbone of our profession. We are let down by a few who "consultative sell" artificial (legal) schemes at "value pricing" but giving the client "negative knowledge". Just ask Jimmy Carr.

Bob Harper's picture

Approach

Bob Harper | | Permalink

@John - as you say, your definition of selling is based on patter or spiel, mine is based on questioning and listening.

Your attitude is typical of traditional accountants and the high of arrogance towards a) another profession and b) your clients who all sell fro a living.

The good thing is that I know you won't get upset by me because (even though you may not agree with me) you are open minded and I am being just straight forward and honest, which I know you appreciate.

Bob Harper

Crunchers Accountants

 

johnjenkins's picture

@Bob    1 thanks

johnjenkins | | Permalink

It's the objective that is the problem. Once a selling routine comes in to being then the focus of what you are trying to achieve becomes tainted.

You are wrong in saying I have a high of arrogance towards other professions. I admire salespeople who go knocking on doors etc.I certainly couldn't do it.

You may well think that your client could do with (a) (b) or (c) but if your approach is anything but staightforward and honest the objective is lost, unless, of course the objective is to make sure you "sell" it to the client regardless of wether they think they need it.

If your in the business of selling a product then you ain't bothered who buys it as long as you get a sale = money in the bank etc. However our profession isn't selling anything. It's a two way thing between client and Accountant not "how to boost fees" etc. etc. Once you go down this track you WILL lose sight of what we are really about.

Bob Harper's picture

Focus

Bob Harper | | Permalink

@John - we are all selling all the time.

My style of selling is not about accountants thinking about what their clients could do with but all about what clients think.

What if what the accountant was selling things like higher profits, better cashflow, less stress and more free time. And, what if the accountants fee was linked to what the client thinks and/or the results?

Far from the objective being lost it becomes very clear. The accountant is aligned with their client's interests and is encouraged to go out and find things that can help clients.

Look back up the thread, this was my point. If accountants focus on what their client's want then everything falls into place.

Bob Harper

Crunchers Accounants

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