Three big mistakes to avoid when running a practice
Practice owners make mistakes every day, but the important thing is to learn from them before it’s too late. Mark Telford reveals what he’d change if he could start again.
I make mistakes every day – the important thing is what I learn from them. The big mistakes 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 it’s too late.
By the time we spot the mistake, it has usually become a significant one and we realise that we should have made changes much earlier. We beat ourselves up for being stupid and not realising what we were doing. However, when we’re working incredibly hard to build our businesses it’s only natural that a few mistakes are made.
To hopefully help you spot some of these mistakes earlier and maybe avoid them completely I’ve listed three of my biggest mistakes in this article. Things that if done differently would have made life so much more enjoyable in the early years and would have enabled me to get where I am now much quicker, easier and with less effort.
These are the things I would change if I started again.
1. Not planning enough before I started
In 2009 I left full-time employment. I was Group FD for a Construction Group. It was the height of the property market crash and business was incredibly tough.
For the last 18 months, my role had been one of constant firefighting. A constant battle to ensure there was enough cash flow to pay the weekly wages of 400 workers.
Often driving home on a Wednesday evening thinking “we don’t have enough cash to pay the wages on Friday”.
In June 2009, I’d had enough and resigned and started working with a boutique financial consultancy. This lasted around nine months and from here I decided to run my own FD consultancy providing high-level financial support to small businesses as a part-time FD.
This work was okay but very unpredictable. It was in 2011 after a period of consistently meeting small business owners who were getting poor service from their accountants but couldn’t afford a part-time FD that I had the “light bulb” moment and decided to start an accountancy practice.
Four months later there I was doing it. Next to no planning other than getting registered as an agent with HMRC, getting a practising certificate and PI insurance.
No thought about ideal clients, the software I would use, no idea – literally about the fees I would charge and exactly what services, apart from the obvious, that I would provide.
I had to learn on the go. 80+ hour weeks became the norm, seven days a week. Doing consultancy/subcontract work during the day and working on my practice evenings and weekends.
I didn’t have the luxury of a cash fund to keep me going, I needed money to flow in from day one. Hence the crazy hours, it had to work, mortgage and family dictated that.
Looking back this was crazy. I should have planned it far better.
2. Not learning to say “no” early enough
In the early days, I would take on any work. I would go and meet any prospect, crazy car trips, train journeys, bizarre locations – there wasn’t even the concept of doing a discovery call to see if they were suitable. It was just “yes, another opportunity, let’s grab it”.
If they weren’t suitable, I found out the hard way.
There were those who would just lie, prevaricate, promise the earth, disappear and re-appear at the 11th hour (or 31st January). Making your life uncomfortable, stressful and impacting on your personal life.
It took years before I managed to hone my bullshit detector through lots of trial and error. I became proficient at identifying the bullshitters, liars and cheapskates. The types of D grade prospects you should avoid at all costs.
So no, I’m not saying niche but you have to have a reasonable idea of who you want to work and don’t accept anyone who doesn’t fit all or most (remember you need clients and there’s a good chance you can turn an ok client into a superstar client).
When you need the cash coming in, you need to be brave to say NO to someone. Yes, you’ll read and hear lots of advice that you have to say no, but thinking about it and doing it are very different things when you have strong emotions shouting, “take the money”.
3. Not taking on proper help early enough
So, I was the business. I did everything answering the phone, opening the post, all the admin, and that before we even start on the fee earning work.
Bookkeeping, company secretarial, payroll, vat returns, annual accounts and tax returns.
Here are some tips:
- If you’re too busy but can’t afford a full-time employee, use a part-time freelancer. There are lots out there – whether it’s a qualified accountant, bookkeeper or admin assistant.
- Take on the right level of support for you that will free up your time. You may think cheap or low-level support is the best, but do you have the time to train that person – initially taking up more of your time. Would you be better paying a bit more and finding someone who can hit the ground running?
- Systems and processes – make sure you have processes documented. Word documents, video, process documentation system – so you can point your new team member to that.
- First help you should get:
- VA to help manage your diary and inbox
- An experienced accountant who can deal with all compliance work
- A bookkeeper who can complete client bookkeeping far quicker than you. Especially if you use Xero or QBO plus ReceiptBank, AutoEntry or Hubdoc.
These aren’t the only mistakes but if I had sorted these out earlier it would have made the early years much easier.
So better planning, knowing what’s right for you and your business and what isn’t. Plus getting support when it's needed will make a big difference to you and your business as it grows.
In his AccountingWEB Live session, on Thursday 25 June, Mark Telford will talk to AccountingWEB editor about his journey. Mark will also take your questions live. Register now and take advantage of this chance to talk with one of the UK's leading accountancy trainers.
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