Director Telfords Chartered Accountants
Columnist
Share this content

I wish I didn’t make these mistakes when starting my practice

Mark Telford explains why he regrets not identifying an ideal client earlier and racking up software subscriptions without using them.

30th Jun 2020
Director Telfords Chartered Accountants
Columnist
Share this content
Rolling dice
istock_pxel66_aw

In the last article, I talked about three of my biggest mistakes. I’ve added another two more to the list.

I make mistakes every day, but the important thing is that I learn from them. The big ones are usually easy to spot, but often not straight away. This is especially true when we’re running our own business, we’re busy doing what we do and don’t see the warning signs until its too late.

These mistakes are the things I would definitely change if I started again. If done differently this would have made life so much more enjoyable in the early years, and enabled me to get where I am now much quicker, easier and with less effort.

Paying for subscriptions to software packages and then not using them

It’s very easy to get dazzled when we first see new software, hear about how others are using it and think it’s a ‘must-have’ to use in our business and wow our clients with.

We sign up on impulse and start paying for the software. We have a quick look, think how great it looks. We then get back to work; after all, we’re all busy thinking, “I’ll look at that later”. That later often doesn't happen for several weeks, if at all.

It's comparable to the January gym membership, where we sign up as a signal we’re starting a new health regime. We go a few times, we then get busy, we’re tired, it's cold, and we go straight home. Several months later we’re still paying for the gym but haven’t used it for ages. It's the same with software.

We blame the software, saying “it doesn’t work…” and we then finally cancel the subscription.

Truth is, we are often to blame. We should have used our time better, tested the product properly so we can reach a well-formed view and not a gut reaction.

So a few tips on how and when to trial software:

  • Allocate time to have a proper demo of the software from the vendor. This should include a follow up a week after the original demo.
  • Allocate time for you to test the software after the original demo. Ideally the same day but at least two hours within a few days.
  • If you have team members, get them to become the product champion for that bit of software. They learn how to use it and then show the rest of your team.
  • Have a client service in mind when signing up for the software - eg cashflow forecasting
  • Don’t be afraid of testing the software with a client and saying this is a new product, can we give you a free demo of it (for what will become a paid-for service).
  • Don’t be afraid to say no to the software if you’re too busy and don’t have time to properly evaluate/test/implement it. But do make time to revisit in several months.

Not identifying my ideal clients early enough

I’m not talking about niching. There’s a lot said about niching your practice and I can see benefits to this – but often, it's only once you’re established, and have been working with clients for at least 12 months that you have a good idea of the type of client you enjoy working with.

To be honest I’ve never niched and don’t intend to.

  • Only using Xero isn’t a niche.
  • Only working with ‘ambitious’ business owners isn’t either.
  • I do specialise in several sectors:
  • Property and construction
  • Professional Services
  • Fintech

But I’d never refer to one of these as a niche. What is far more important to me is working with clients:

  • Who I enjoy working with
  • They appreciate, listen to and value your advice
  • They do what they say they will
  • They don’t quibble over fees

It’s the mindset and personality that matters. So, don’t panic about niching, but do get a good idea of the type of client you don’t want to work with.

This could be:

  • Sole traders: Don’t work with these if management reporting is your sweet spot – they don’t want it and can’t justify the cost.
  • Clients using the ‘wrong’ software. If you don’t want to use desktop software and the client isn’t prepared to change – walk away – if you want to provide a real-time cloud solution this won’t work. 
  • Wrong industry: There are some complicated sectors – travel agency, car sales – both can have complicated vat schemes – do you want to do this? Personally, these are two I do avoid.
  • Be prepared to walk away rather than compromise your principles and standards just because of the potential fees you could earn.

So more mistakes and I expect quite a few people reading this will recognise these mistakes. As always, the key is we learn from them and try not to repeat them.

On the next episode of the Practice Mechanic on 9 July, Mark Telford will be joined by AccountingWEB legend Glenn Martin. In a wide-ranging discussion, Mark and Glenn will talk about the reality of being in practice. What it was like starting out, how it is now and plans for the future. Sign up for the AccountingWEB Live session here - spaces are limited! 

You can watch the first episode of the Practice Mechanic on-demand on AccountingWEB Live, where Mark tells his story to editor Richard Hattersley. 

Replies (7)

Please login or register to join the discussion.

avatar
By mkowl
30th Jun 2020 10:25

I agree totally on the client part - I always have a proper chat with a prospective client. You might be being assessed but I am also assessing them.

Software - I always say no one as re-invented the wheel, don't believe the hype and don't forget the basics are still critical

Thanks (0)
Red Leader
By Red Leader
30th Jun 2020 10:28

Good article. I think defining the clients you don't want is a valid way to end up with the clients you do want.

Thanks (1)
avatar
By CJaneH
30th Jun 2020 11:22

To software selection I would add avoid software suppliers who do an on line demo but will not let you trial it.

Thanks (0)
blue sheep
By NH
30th Jun 2020 11:30

Having been in practice a very long time, I think it is easy to say "only work with ideal clients" after you have been well established, but when you first start off a) you dont know until you try different sorts of clients and b) generally you need to take whatever comes your way

Thanks (1)
avatar
By ColA
30th Jun 2020 12:24

Agree totally about software - I ended up using only about 25% of what I initially subscribed for, mainly on the grounds of user-unfriendliness, despite having several decades of familiarity with IT.
On the question of client harvesting I realised at 9.30 one Sunday evening that clients are only selfishly interested, having taken a call from one an hour earlier about his tax affairs - early decision followed to ditch him and wind up the practice a year later.

Thanks (0)
avatar
By johnjenkins
30th Jun 2020 12:56

Mark, I have this client who is trying to get £10m out of his business. The only way he can do it is by subscription. He has heard that you like paying out subscriptions before you know what you are actually buying so if you give him your bank details via myself he will set up a subscription that you receive said £10m, whereby you can keep 25% and send the rest, by subscription, to me. Everything is legal and above board and the subscriptions are tax deductible. Look forward to receiving your bank details.

Thanks (2)
bike
By FirstTab
30th Jun 2020 19:30

Total change in direction from accountants are no good. Anything for a buck.

Thanks (1)