Scaling your firm: 9 surprising things!
Starting a business is hard. But scaling it puts you onto an even bigger roller coaster. And scaling an accounting or Portfolio FD firm is no exception. Just because these businesses have the luxury of recurring annual/monthly income doesn’t make it any easier to scale.
Here are some of the things that myself and our Accountants' Growth Club members didn’t anticipate or realise they would need to do to scale:
Put their prices up.
There comes a point in every business’s journey where the business model, you put in place now doesn’t work. This normally means looking carefully at the pricing you are charging. There isn’t enough spare profit after wages have been paid to invest ahead in people, software or premises. It’s either that or don’t pay yourself an income…
Learn how to trust others to do the work, particularly when it comes to client relationships.
When it’s your clients, your business, and your name on the door, it is very hard to let others do much more than the basics. But if you are going to find the time to work on the business, you need to relinquish some of the client-facing work to others.
Get good at recruitment.
There isn’t any business that I know in the scaling phase that hasn’t had the pain of a revolving door of employees. You soon realise - the painful way - that you need to make the right hire, even if your firm is screaming out for more people to help get the work done.
Put themselves first.
Your business growth typically only moves at the pace of the energy you can give it. If you start working too hard or burning out your business growth starts to stall. When scaling a business, you soon learn that you can’t drink from an empty cup.
Managing your anxiety at payroll time.
My monthly payroll and associated costs are now more than my monthly revenue was 2 years ago. My monthly payroll cost is also more than 30% of my worst year of annual trading. That can really do your head in… After all, you are now playing a completely different ball game. But if you are going to scale confidently you need to have a plan to ensure you can always pay your staff’s wages. For most firms that means ensuring that their monthly recurring revenue is more than their payroll and fixed costs each month. Indeed this was the reason we created the Accountants' Growth Club. It gave us the ability to build up monthly recurring revenue and long-term relationships with our members. Rather than short-term assignment work which is the bread and butter of most coaches.
Structure your business so you grow a strong leadership team around you.
This lack of leadership team means that eventually you get overwhelmed as everything goes through you - clients, suppliers, team etc. Think of this as you being the hub of a wheel. All the spokes lead to you. Decision fatigue is real. And if you are taking all the decisions in your firm you will run out of energy. Until you have started the journey to build that top team and get other people taking decisions, your firm will struggle to get over £500k.
Recreate new working patterns and habits at work.
What helped you get your business where it is now, is often preventing you from taking it to the next stage. For example, you will not have enough time to take on and work with every client that your business wins.
Creating and streamlining your business processes
When it was just you and a handful of others, you could keep a lot of stuff up in your head. After all, you were reviewing and approved all the work before it went out to the client. You can't be all over everything as you scale. This means capturing everything, documenting it and getting the team to adhere to the process. These processes go right from client delivery to new team member onboarding through to financial processes.
Your practice management system is essential
After a while, there are just too many moving parts to use a google doc or set of spreadsheets to run your practice. There needs to be one source of truth about what needs to get done. That is your practice management system. Not updating it now becomes a serious performance management issue for your staff members.
If you want to talk through the challenges of scaling your accounting firm or Portfolio FD business, then pop along to see us on Stand 70 at Accountex. I'll also be speaking twice:
- 10:00 on wed 10th May with Lorna Leonard on how to scale your Portfolio FD business without cloning yourself in the Accountants in Industry theatre
- 14:00 on wed 10th May in the Practice Growth and Resilience theatre talking about how to recession-proof the growth of your practice
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