Steve Pipe takes a closer look at Woods Squared to find out what makes the Practice Excellence Awards small firm winner so successful.
Alan Woods is a sole practitioner from the Wirral who started his practice Woods Squared from scratch in January 2007. Since then Woods Squared has attracted 30 clients with average fees of £8,900 per client. It now employs five people, including Alan.
Woods Squared’s other notable achievements include:
- Turnover grew by 21.3% in 2009 and 60.2% in 2010
- 100% of its clients are on a fixed fee and pay in advance
- Client satisfaction feedback scores are currently averaging 9.32 out of a maximum of 10
- The firm beat nearly 50 rivals to win the small firm Practice Excellence Award in 2011.
Key steps that helped achieve these successes
Asked about the keys to his success during the last two years, Woods discussed the question with his team and was able to point to a sequence of planned initiatives. “These are the nine key new steps we have taken in the last two years,” he says. They were not necessarily big steps, but even baby steps can take you a long way if you take one after the other!”
Step 1 – In early 2009, he presented his vision for the business to a “Mastery” group of partners from other accountancy firms that he meets with regularly to share ideas and insights. “This was a great exercise for us, since it really forced me to think about what I wanted to build and achieve, and what was most important to me. It gave me an enormous amount of clarity and focus. And the constructive criticism from my peers was also invaluable in weeding out sloppy thinking. So our vision became much sharper, incisive and inspiring as a consequence.”
This process resulted in the team:
- Identifying its core values as “Quality, Innovative, Fun, Supportive and Proactive”.
- Articulating the core purpose as “To work with owner managed businesses to help them grow and achieve their business and personal goals”
- Setting out a 20-year goal as “To become the Aston Martin of our industry”.
Step 2 – To make this vision a reality, Woods followed up that meeting with his first monthly one page plan. Some of the things he started measuring on it were:
- Percentage of jobs completed within 30 days
- Client and team member happiness scores
- Number of improvement suggestions received from the team
- Number of referrals received
- Value of extra work orders generated from existing customers
- Lowest fee (which at the time was £600; the firm set themselves a target of £1,500)
- Average fee per client
- Average grade of client
Step 3 - In March 2009 he carried out a client grading exercise, discovering that 27% were As, 41% were Bs, another 27% were Cs, and 5% were Ds. “We set a target of having no D clients and fewer C clients. By September 2009 we had stopped acting for every single D client and two thirds of the C clients,” he reports. “We carried out another client grading exercise in January 2011, and now 92% of our clients are As and Bs, with the other 8% being Cs.”
Step 4 – Next they clarified the structure of the business and the services that they wanted to offer to their clients. “We knew that we wanted to concentrate on added value services. And we also knew that we wanted a structure that was based on fewer clients per client manager – so we set an ideal limit of 25 clients per client manager paying us an average of £10,000 each.”
Step 5 - To tie in with these plans Woods Squared introduced a minimum service level for all new clients – so no one can now become a client unless they are willing to have (and pay for) BoardView meetings with Woods Squared at least once a quarter, and a tax planning review on an annual basis.
Step 6 – Next they started to communicate the changes to the market by, among other things, getting a lot more press coverage.
Step 7 – When the recession started to bite at the start of 2010, the firm launched a new “access to finance” service to help clients obtain finance and funding. “We have had a huge amount of interest in it, and I am proud to say that we have a 100% success record in using it to help our clients actually obtain finance. This service is offered on a fixed fee basis and offers huge value as it includes all meetings/discussions with the various funding organisations, which allows us to tailor the information provided in each situation rather than us just preparing another pretty (useless!) report,” says Woods.
Step 8 – The firm resolved in early 2010 to further invest in its people, starting with a thank you trip to Lapland for what they had already achieved. The firm also psychometrically profiled its team using the DISC system. “The insights this has provided to everyone in the team about how best to work together have been invaluable,” says Woods. “So much so, in fact, that we now also use it as part of our recruitment system, and we even offer it as a service to clients.”
Step 9 - In the summer of 2010 the firm moved to bigger and smarter premises in a listed building. The team now have a much better working environment, a kitchen, a chill out room to watch TV or read, a games room for pool and darts, a gym area and shower facilities to even give them the option of cycling or running to work. “The move has had a really positive impact on morale,” says Woods.
There are also three meeting rooms, including one that can be used for seminars for up to 30 people. “We also invite clients and contacts to hold their meetings in our meeting rooms as another form of added value,” he continues. “This has already helped one of them to secure a huge contract.which they might not have won if they had been forced to cram seven people into their small office.”
Other keys to their success
In addition to the above nine steps, Woods laid out other intitiatives that continue to contribut to the firm’s success. They include:
- Measuring team happiness – “We use software called Team Matters to systematically measure real time and monthly team member happiness scores, and also to capture their ideas for improving the business. Not only does this show that we care and value their input, but it also allows us to deal with problems and capitalise on opportunities very quickly, which is great for morale and profitability. Our latest team happiness scores were 5.6 out of a maximum of 6.”
- Fixed price agreements – “We use pricing software to produce fixed price agreements for all our clients, and I think now more than ever that this has helped us be different in the eyes of the new clients that we have been signing up. Crucially those fixed fees are paid in full before we start the work, so debtors and cashflow are never a problem.”
- Diagnostic reports – “Every year every client receives a Key Improvement Possibilities report created with diagnostic review software. As part of this process we also benchmark them, and talk them through our findings and reports at their year end accounts meeting. We also ask them for nagging rights to make sure that they actually do the things on their action plans. If they don’t do them we then offer our support to help them get things done. Not only is this genuine proactivity in action, which clients love, but it often also results in them wanting to buy additional support and services from us.”
- Incorporation tax planning software – “Shockingly, we find that there are still many businesses that have not been properly or fully advised on the benefits of incorporation. So we have often been able to obtain new clients by using software live in front of them to demonstrate the savings they can make from incorporation.”
- Window of opportunity charts (WOO) – “WOO charts are one of the most important and at the same time simplest tools that we use. Essentially they are just a spreadsheet that lists all of our clients down one axis, and all of our services and solution on the other axis. We then colour in the boxes that represent the things each client is currently buying from us, and the blanks are our windows of opportunity. Because we know that all of the services on the chart will all add huge value to our clients, it does not feel at all pushy when we mention these services to our clients, and they are always grateful that we are identifying other ways that we can help.”
- Network membership – “The tools, software, insights, systems and training we have received as a result of our membership of AVN have been central to our success. Put simply, we wouldn’t have been able to achieve anywhere near as much without them. For example, they provided the Mastery group in Step 1, the one page plan system in Step 2, and the client grading system in Step 3. They also created the diagnostic review software, pricing software, tax planning software, sensitivity software and Team Matters software that we use to make our lives so much easier and our service so much better. But perhaps most importantly of all, they have provided the inspiration, motivation, encouragement and support we really needed to actually make things happen.”
© June 2011 - Steve Pipe FCA
Steve Pipe FCA is one of the world’s leading strategists on the commercial issues and opportunities facing practitioners. This article is one of the 41 case studies in his book “The UK’s best accountancy practices”, which is available on www.stevepipe.com. You can contact him on [email protected], and connect with him on LinkedIn.