Founder and Author The Accountants Millionaires' Club
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What matters when growing your firm to £500k

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For a small accountancy practice to grow from £250k to £500k, there are many key shifts that need to happen. The major shift is where the practice goes from being all about you to how well the team around you operates.

1st Nov 2021
Founder and Author The Accountants Millionaires' Club
Columnist
In association with
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Ahead of her AccountingWEB Live Expo panel on coping with sudden growth, Heather Townsend explores what really needs to happen if you are to take the leap in your practice and grow it from £250k to £500k in turnover.

You can register now to attend AccountingWEB Live Expo and pick up more proven tips to grow your practice at the event.

Your role and priorities will change

When your firm gets to approximately £250k in turnover, your ability to do more client-facing or short-term business development activities are severely curtailed.

If your firm is going to carry on growing, you are physically going to need more client-facing people in your business. At this point in a firm’s growth, this is often where they make their first expensive hire – the qualified accountant, who will be able to take technical and client work off the owner and be the first point of contact for part of the client portfolio.

Your identity will change

When you have a small accountancy firm that (to pay the wages and bills) heavily relies upon your level of chargeable time, it’s common to think about yourself as an accountant first.

The key shift to get to £500k is realising the identity of who you are and that your self worth needs to change; no longer just focusing on billing your own stuff, but taking responsibility for managing the whole business, and helping your team increase their chargeable time and value to the business.

It’s all about delegating

You’ve often nurtured your small firm from your kitchen table to the size it now is. As a result, it can be difficult to let go and delegate to others. But this is essential if you are going to stop working so many hours and grow your firm.

  • Just because you are the most qualified to do the work, doesn’t mean to say you should do the work
  • What got you here is not going to get you to the next stage of your firm’s growth
  • Doing it yourself because it is quicker is not the answer
  • The long term health and scalability of your firm is now dictated by how well you can delegate to others

You will need to establish a leadership team in your firm

When your firm is three to four people and everyone reports to you, there is no need for a leadership team. Nearly every member of the firm will attend all your meetings.

However, going beyond this amount means separating into operational units, as well as who needs to be involved in what decisions. If you carry on with everyone in every meeting, particularly if you have part-time members of staff, the efficiency of your firm will be handicapped.

People management is now your top priority

As you grow, it will become impossible to spend lots of time with every member of staff. This means putting in an efficient and effective people management structure. For example:

  • Regular 1:2:1s with your staff members
  • Quarterly review and reset meetings where you review the last quarter and reset the KPIs and objectives for your team members going forward
  • Setting a ONE BIG FOCUS for your business each quarter and helping team members translate what does this mean for them and their role
  • Regular updates to your team on the state of the business and how they have contributed in their role to the success (or not) of the business
  • Formal employment contracts

You need to get mentally stronger (and more resilient)

As the numbers get bigger, particularly your wages, this can impact your mental state. After all, you now have more to lose and more responsibility to pay your staff’s wages.

It’s not just about the additional responsibility. You may take a decision to grow your firm faster by hiring before you have the revenue to justify bringing in new people. Knowing that your firm is going to be making a loss and cash reserves are being eaten into can be stressful.

Practice efficiency is now essential to your bank balance

If you are to avoid your bottom line not growing in line with your top line, you need to keep a careful eye on your costs and the productivity level of your staff.

Your firm is now typically too big for you to keep track of everything on a spreadsheet or in your head. Unless you have organised your team to work one certain way, you’ll find that there are many ways your team keeps track of what needs to be done, ranging from pen and paper to the firm’s whiteboard, or the practice management system.

The impact of team members managing their task list differently can include:

  • Stuff slips through the cracks, which could mean clients’ deadlines get missed
  • Stress and anxiety for you as you don’t know what needs to be done
  • No management information, e.g. dashboards, reporting to help you plan capacity and resources
  • A potential backlog of work
  • Staff prioritising the work of clients who shout the loudest rather than the real priority

This is why working the right way is so important. It’s also much wider than just all using the same practice management system in the same way.

When the firm was just you and a few others, you didn’t need the formal procedures and checklists to the same extent. Whereas if you are going to sleep at night knowing that the firm is up-to-date with the workflow and it is done to the right standard, you will need these formal processes and checklists.

Your firm’s culture climbs up your priority list

The culture of your practice is how things are normally done around here. Now that your firm has more than five people, you can no longer dictate how stuff is done by the force of your personality, nor can you literally oversee everything.

This is why the culture of your firm starts to really matter as your firm grows beyond £250k.

From client emails not returned promptly to clients not being billed properly, each bit of bad behaviour you let go will become how your firm normally operates. These bad, poor or naive behaviours can severely curtail the healthy growth of your practice.  

What you will find is that new employees will soon pick up on the way the firm normally operates and adjust their behaviour to match. Good employees will go bad if you don’t have a healthy working culture in your firm.

Replies (2)

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Steve Edwards
By stevo5678
02nd Nov 2021 23:16

Great article Heather. I have just been through this and can say that your advice here is spot on.

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Replying to stevo5678:
Heather Townsend - accountant's coach
By Heather Townsend
04th Nov 2021 06:39

Thank you! Funnily enough we are doing much of these shifts in our business.

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