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Practice Tips - with New Year resolutions in mind

15th Jul 2005
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I said in my last tip that I'd be writing about planning for an accountancy practice in the New Year. And indeed, I will. But there is an important opportunity for reflection before then as there's nothing like a holiday to amplify feelings of dissatisfaction and a desire for change. Just getting away from the desk is enough for many people to realise how frustrating is the time spent at it.

This happens to tie in rather conveniently with thoughts on planning. Any plan has to reconcile two quite difficult sets of objectives. The first is the commercial plan. The second, and I would suggest more important, is the personal plan.

Five years ago my partners and I made the decision to sell the practice I was then senior partner of. As a result I had little choice but plan a major change in my career. To assist that process I wrote a plan. It was, unambiguously a plan for me. The only person I have shared the detail of it with is my wife. Despite that the necessary act of writing it was incredibly important for several reasons:
1) it meant I had to think about it clearly, and rationally;
2) it meant it was available to refer to, if only as a benchmark;
3) by showing it to at least one other person I had to make sure I could justify it in discussion, and as a result had to make sure it was coherent;
4) to let me review progress.

There are two further things I'd stress about the plan:
a) it is short - amounting in all to only just over two pages of A4 - and given my love for spaced bullet points much of those pages is white space;
b) it is not numeric.

I cannot emphasise the last enough. Inevitably (well, at least in my case inevitably) the plan was reduced to a budget and a cash flow, but that was a follow on, and not an integral part of the initial, personal plan. Of course I identified business goals which implied numeric achievements e.g. I wished to provide for my family - but that was not seen as a fixed goal in itself but as a combination of the other factors that made up the plan.

And as it wasn't a numeric document the words were fairly significant. These I grouped under the following headings, each describing a different set of goals:
1)    personal;
2)    business;
3)    financial;
4)    time;
5)    career;
6)    ethical.

Under each up to ten bullet points were listed but of all those only two spread onto a second line, and none onto a third. I’d add these few clarifications:
•    business goals referred to the type of client I wanted to service and the type of work I wanted to supply;
•    financial goals involved more than business issues, they also covered issues such as saving, pensions, and so on;
•    having a time plan reinforced my commitment to not working at weekends, and as far as possible, in the evening;
•    career goals are different from business ones. I’m now on my third practice and I’ve been involved in more than ten businesses as well. My career goals are separate from these and relate to professional development;
•    ethics might not be on everyone’s list, but they’re pretty central to me. You may have different options to add.

As you can see, this was much more than a business plan. It was pretty much a life plan. If you’re cynical you might think that such planning cannot work, but I've been doing this since I was at university 25 years ago. And in my experience it does work because it helps to:
1) sort out what is important;
2) stop me having to continually re-plan as a reaction to many of the apparent trifling issues that arise in life, because I know what the big issues are and therefore only have to change the details;
3) determine when a big issue has arisen that does need to be decided upon meaning the plan has to be changed, as of course happens. That then means appropriate time is therefore given to those issues.

If you want to think about New Year resolutions then, I suggest you think about making a five year plan instead. Your list of headings might be different from mine. But, whatever you do, write it down and share it with someone. Nothing will help you plan your business, career, work / life balance and personal objectives more in my opinion.

That's why it is worth thinking about this Christmas holiday.

Richard Murphy
AccountingWEB contributing editor Richard Murphy is a sole practitioner chartered accountant but was previously senior partner of a firm for 11 years. He has also been chairman, chief executive or finance director of 10 SMEs. A collection of previous articles by Richard on practice management themes is available in Practice Management Zone



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