Leadership practice: Know your limits

1) I know that Sarah-Jane knows that employing someone is a good idea. My suggestion to quantify the opportunity cost is because it may change things...maybe a £5,000 golden hello would increase the number of enquiries?

2) If Sarah-Jane's business model means that she will lose clients if she doesn't deliver the service herself then some (me) would say her models is fundamentally flawed.

3) You use the phrase "certain clients" which suggests to me that there may be some big demanding clients. These could be drawing Sara-Jane into an operational capacity and contributing to her problems as while paying the bills?

4) Birds of a feather flock together and losing recommendations from big demanding clients seems a good idea to me.

5) The E-Myth is not a suggestion - it's an opinion and you either agree or disagree. It's about business serving your life rather than the other way around. Being tied to client engagements is contrary to the E-Myth.

6) Helping clients develop their business is a job. Being successful means you end up with a well paid job, not a business.

Bob
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Bookkeeping franchise

Bob

I think I should probably respond to your points on practice development, although Sarah-Jane may have comments of her own, but mine are:

1.Sarah-Jane has identified the requirement for a full time qualified person and does not have issues with cost – we are agreed that the opportunity cost is far greater – the delay in recruiting such a person is, as she says, in finding the right person;

2.I agree with part of your point – that Sarah-Jane has a responsibility to grow her business, and that is what we have been doing over the last 6 months. However if she loses certain client relationships, then she will lose those clients, because they require her insight and knowledge. She will also lose potential recommendations from those clients. I have read the E-Myth and as a practice we have implemented a number of the suggestions, however in my experience, in a professional practice where a practice head has good technical knowledge, good ability to translate that technical knowledge for his clients’ benefit, and good client relationships, it will be to the detriment of the practice if that person ceases to help plan their clients’ affairs to solely concentrate on the growth and development of their own business. Indeed helping to develop clients’ businesses actively develops your own business.

3.We need to consider the options available and discuss quarterly coaching and other options to agree which is the best way forward for Sarah-Jane.

Lesley

I can’t resist a reply and will be careful how I phrase it because I don’t want to offend and don't expect answers.

I asked if you’ve worked out what it cost because when you do you it may change things. For example, if you were free to build you business and added £75k of new business this year, which resulted in extra annual profit of £20k for 7 years, you’d end up investing a year’s salary (say £40k) in return for £140k worth of profit. The new clients would probably make referrals so this could be worth another £100k. That’s a quarter of a million plus £200k of practice value when you sell!

The price of the lost opportunity is much bigger than the investment in salary, especially when the market is so ripe for growth.

I question why you see losing client relationships as a downside. As the business owner you have a responsibility to grow and develop your own business rather than help plan your clients. I’m amazed after six months of coaching you don’t recognise this. Have you read The E-Myth?

I’m not sure you can overly communicate value...that’s like telling a client you’ve saved them tax but not revealing how much.

Why talk about doing quarterly coaching...just sign up and do it?

Bob

I would love find someone, I’ve been recruiting for this role for months and just can’t find the right person – not just technically but someone with the right personality to fit into our team. So, if anyone out there knows someone who could fit the bill, or if you want to relocate to the south west, please let me know

I am only too aware of the time this could save and yes, I could be gaining potential new clients. But, there is a downside to working like this because I currently do a lot of planning work for clients, which means I have close working relationships and don’t want to loose this. Plus having a resource like that comes at a price and I need to ensure I have built up a pipeline big enough to justify that outlay – I effectively need to have enough “special work” as I call it to keep myself busy and therefore cover the cost. And returning to my last point, finding the right person to fit in with the culture of my firm, even if it is just a few people, is proving very difficult. So it’s not that I don’t see the value of this role, it’s just ensuring I have the foundations in place to support the arrival of such an individual.

I would also like to answer a couple of Lesley’s questions-

The last 6 months has been very intense and I don’t think I could sustain the pace of another 6 months. Lesley set me a very long to do lists each month and I have been combining this with day-to-day work plus juggling my 3 small children. I think I need to absorb what I’ve learnt, reflect on what we have achieved, and embed the change properly into the firm. So actually, what I do need is quarterly sessions with Lesley to help me to consolidate and implement everything properly before we go to the next level. That’s what we are talking about doing next.

Lesley did not have to overly communicate the success of her consultancy, as the results were very quickly evident.

I’ve got a couple of questions for Sarah-Jane:

What’s stopping you employing a full time accountant to be the operational director?

Think about what would happen if you had someone what sits in the office and NEVER speaks to a client. Just builds and refines systems and review accounts.

How much time would this save you?

What could you do with the time?

What would that be worth over the lifetime of the practice?

I’ve got a couple of questions for Lesley:

What did you do to help communicate and quantify the value of your consulting?

Is Sarah-Jane going to pay £10k for another six months?

Bob