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?