I recorded this quick (<12 minutes) 15 step video on building a better accounting business. As you go through each step rate yourself out of 10 using the following scale: 0 - 2 = Poor 3 - 4 = Reasonable 5 - 6 = Good 7 - 8 = Very good 9 - 10 = Outstanding Enjoy...

We’re in the middle of school holidays here in QLD so we have shipped the kids off to my brothers where they are going skiing for a few days down south.

With the kids off our hands Nat & I decided to head to glorious Noosa. The weather is perfect – about 20 degrees Celsius – with not a cloud in the sky. We picked a luxury hotel right on the beach and our suite has 3 bedrooms, 2 balconies and a spa on the roof top balcony.

Our days are filled with a sleep in, a long breakfast, spot of shopping down fabulous Hastings Street, lite lunch, reading on the beach then dinner at a fabulous restaurant. Last night we dined with friends at a ‘top 20’ restaurant in Australia called ‘Wasabi’ and tonight with my business partner and his wife at Sails – right on the beach.

The shops are quiet and for the first time in years there are ‘for lease’ signs on the windows on Hastings Street. One shop keep told me that the region has been hit hard this year because of 3 factors.

1) Japanese Tsunami

2) New Zealand earthquakes

3) Brisbane floods

The weather is perfect this time of year – come visit Noosa. The region needs an economic boost – we’re doing our bit at least!

Hotel

Prawns on the beach

Relaxing at the beach

Roof top spa

Slurpee, drinks or coffee anyone

View from our suite

Every year I organise a “Dads & Lads” camping trip. This year is the 9th year in a row. We go to the same spot on Moreton Island (the Northern end called Yellow Patch) every year and our record is 11 dads and 17 boys! This year we had 7 dads and 11 lads.

It is an epic event over 5 days that takes months in the planning. We take everything we need as there are limited supplies on the island. The island is 35 km’s off the coast of Brisbane and it takes 1.5 hrs to get their by car ferry. All roads are sand tracks (4WD vehicles only) and it is the 2nd largest sand island in the world and it has the highest sand dune (on an island) in the world. We do a day trip that includes climbing the very large sand hill.

Our days are filled with critical decisions like “is it too early for a beer?” and “when are we going fishing?”

For the first time this year I backed it up with the inaugural ‘Dads & Daughters’ trip with a very modest 3 dads and 3 daughters.

Although we go to a very remote location and we are practicing ‘real camping’ some would say that it is more like ‘glamping’ – glamorous camping! We have the usual things like no running water, tents, sleeping bags, wood fire etc however we back it up with some of the finer things in life..

  • Generator – so we have power for lights
  • Proper fridge – gotta keep the beer cold
  • 4pm wine and cheese tasting
  • The best food – some comment that they eat better on camp then at home
  • BBQ – can’t cook a good steak on anything substandard
  • Wine rack – always a hit that sits proudly in the middle of the table
  • Quality wine to go in the rack – this year one of the dads had a $500 bottle of Grange on offer! He can come again
  • Small run about boat (‘tinny’) – good for fishing, tubing and general skylarking
  • A gadget of the year contest – which for the first time I won with a $20 rubbish bin – there are strict rules around this.

And the best 4WD vehicle set ups you have ever seen.

Each year something ‘eventful’ happens. It was my turn this year. Among minor cuts and abrasions I was tossed out of the ‘tinny’ by a rogue wave (mind you I was not holding onto the steering bar at the time) and it went round in circles on full lock for 15 mins before it conked out. And on top of that I was driving my epic ute (4WD truck) through a small creek and it bogged in soft  quick sand. The water came 8″ into the cabin and it killed the winch and the electrics – it is currently at the smash repairers to see how much damage it got. Luck for us we were saved by 2 fisherman who towed us out of the rising tide.

The 2 incidents are the videos – the other pictures show the beauty of the location.

The beast

Where we camp

Grange camping

All dads & lads

Most firms plan their year by capacity.

They work out like this……We have X number of people this year, we expect X % of productivity (chargeable hours per person), the charge rates will be X each and the write offs will be X%. Less of course labour and overheads and hey presto – a budget.

It’s a really dumb way to plan. It is entirely internally focused (where is the client?) and typically charge rates are determined by salary levels, the method does not reward efficiency, there are write offs involved and as a result the firm does not improve it’s profit % as it grows in size.  Most times the profit % goes backwards over the years. This method will keep you in the poor house.

A better way is to focus on the clients.

No. of clients X Average project value X no. of projects per client per year = revenue.

If you focus on clients, marketing, sales & services then the revenue will look after itself. If you focus on value based fees, pricing up front and being super efficient then the margins will look after themselves.

Most firms know what their productivity, average hourly rate and write offs are. Yes it is important to know what these numbers are – but whatever you do – do not manage your business by these numbers.

Most firms do not know how many (exactly) clients they have. Fewer will know the average project value (hint: divide revenue by number of invoices) and fewer still will know how many projects (on average) each client buys from you each year.

Work out the new numbers and you will be astounded as to the results. From there set some targets in these 3 areas then introduce marketing, sales, services & efficiency to make it happen. Oh, make sure you price every job upfront and value price them if possible as well.

When planning the future of your firm you need to remember the following success formula for a thriving Accounting firm….

Success Formula

So what does that mean?

* LPP = Low partner productivity. Make sure partners are doing the right things. 1) High end chargeable work for a low percentage, 2) Nurturing Existing Clients, 3) Leadership – driving performance, new ideas, working ON, sales etc

* GP = Great people. There are no excuses for having anything but the A team on your team. There are that many great people hired in the profession – they just don’t work for you right now. Make it your mission to weed out the non-performers and handbrake team members.

* FP = Fabulous Products. Over and above compliance make sure that your products (services) are really adding value to your clients. After compliance products need  to be focussed on helping your clients in 7 critical areas: 1) Growth of revenue or wealth, 2) Profit improvement, 3) Cashflow Improvement, 4) Asset protection, 5) Tax minimisation, 6) Succession or selling, 7) Financial Retirement. Make sure your products are Easy to understand, Easy to buy and Easy to implement.

* M = Marketing. Without marketing your great products are going nowhere. Have a structured marketing plan that develops and promotes a wonderful brand and importantly a marketing plan that delivers new leads / enquiries

* S = Sales. After marketing comes sales. Make sure you follow through and you deliver on your promise. Sales is a skill that any person can lean – if you have the inclination. Sales is about asking the right questions, using effective language and listening.

* VP = Value Pricing. Your existing compliance work has typically been priced on time X rate system. Even if you are pricing upfront this is not value pricing. Value pricing is coming up with a price based on the value that you add to your client. The price needs to be a great ROI for the client and equitable compensation for you. Like sales, it is a learned skill that we can teach you.

* LC = Low costs. With cost control I am not talking about being an absolute ‘tight wad’ where the office facilities / equipment are below par. The main area that Accounting businesses blow out on is far too many people for the revenue they are doing. The old way of thinking would be about $150K per full time equivalent person – all people including partners and administration. We have many firms that are over $300k per FTE and many approaching $500k and $600k per FTE.

* CFM = Cash flow management. Great cashflow in an Accounting business is a function of high profit, low WIP balance and low debtor balance. We have many coaching clients with negative WIP and negative Debtors. It’s your business not your clients remember – you set the rules.

* FE = Fix Everything!

Make this year the year of fixing everything. If you need help go to the links below….

For marketing and sales training & events

For coaching help

Most Accounting firms do not plan to be a major success from the outset. It seems business just happens and over the years you end up with a collection of…

  1. Clients who are mis-match to who you really love working with
  2. Systems that are done differently by each person in the firm
  3. Pricing mechanisms that are all over the place
  4. Services that are at best a grudge purchase – aka compliance services
  5. No rules – on how you work with clients – they seem to control things
  6. People who are plodders and not high achievers
  7. Income streams that are not conducive with what you need to live a fulfilling lifestyle.

The good news you can change this – or if you are starting out you can change this from the outset. If you are prepared to treat your business like a how you progress on a set of monkey bars (clue LET GO) then you will have a big chance of success. As my friend Michael Sheargold says “A breakthrough often happens after a breakwith”.

Maybe you need to let go of some old habits, methods, people, clients, systems to be a big success. When you re-design your future think of these critical parts:

  1. What rules do you want your clients to play by – remembering it is your business not theirs
  2. What client types / classification do you want to serve?
  3. What geographical locations do you want to serve?
  4. What services do you want to deliver?
  5. What service delivery model do you want to follow?
  6. What pricing formula do you want to use?

It’s your business life and your risk that you are taking. You decide.

Monkey Bars Small

Accountants hold the status (without even trying) of ‘trusted advisor’. By virtue of training and a certificate on the wall we trust you. We trust you to be impartial, accurate, non judgmental, and non biased. We put our family and business affairs in the guidance of you and we are very loyal to you. We trust that you are giving us the right advice.

So if we trust you to guide us then it is my hope that you are more ‘sorted’ than we (your clients) are. Otherwise how could we trust your advice? If you are advising businesses and individuals on what they should be doing then I sure as well hope that you are doing them as well – and doing them better than us!

Some questions to ask yourself (Accountants) as you advise your clients:

  • Are all of your partners wealthy?
  • Do you have all of your financials up to date?
  • Are your wills, estate planning and insurances up to date?
  • Do you have any outstanding issues with the taxation department?
  • Do you have a budget and a cashflow plan?
  • Do you have a marketing plan that works?
  • Do you have a client nurturing program?
  • Do you have a sales program?
  • Are your stock levels (WIP) under control?
  • Are your accounts receivable levels (debtors) under control?
  • Is your team working well together?
  • Do you have great facilities and superb logistical (workflow) management?
  • Are your profit levels above the highest quartile in your industry?

You see, the trusted advisory business should be running a better business than those that they advise. Not bigger, not more profitable. But better!

You want to advise us on wide range of issues and opportunities. Who is advising you? If you are advising others then isn’t hypocritical not to be advised and coached yourself?

To be able to coach a client and give proper advice you (and your firm) needs to be coached as well. Our groundbreaking coachingclub program will help you get sorted, get your firm on the right track, provide the tools and training to your people and it will also show you how to take value added (advice based) services to your clients.

We’re here to guide you to your success. Make an enquiry today.

In Australia the Accounting profession is about to start a new financial year. You need to come ‘out of the blocks’ early and get off to a great start with your compliance work.

This means being organised with pricing upfront, administration people taking admin away from Accountants, checklists and scheduling all work in for the year ahead.

A trap for young players is bringing all of your work forward for the year. You need to use your deadlines to your advantage and spread the work out. You need to take the ‘lumpiness’ out of the revenue by being organised.

You really only have 1 major deadline in Australia – May 15. Oh, it’s actually June 6! use the deadlines. If the client work is not urgent then spread it out. You need capacity all through the year so you can handle additional ‘value added’ work as you sell it.

Have a good end of year Aussie firms. Make next year count.

If you are an Accountant and you are keen to make a difference to the financial performance of your firm and you want to make this happen for your firm NOW, then you need to visit us in Brisbane next week.

You see next week we are running a coachingclub experience day. We have a choice of dates in June for the 14th or the 16th, both in Brisbane – come up and enjoy our warmer weather! It will be led by myself, my business partner Colin Dunn and our senior coach, Owen Howells.

The agenda for the day is:

09:00am start to 16:30pm finish – so you can fly in and fly out.

  • Understanding your business objectives
  • How to sort out internal issues – workflow, WIP, etc.
  • How to get capacity
  • Insights and strategies that you can implement to achieve your goals
  • What is possible in your firm – planning your revenue and profit
  • How to grow your firm – the key things (foundations) you need to get right before growing
  • How to implement ‘upfront’ pricing from July 1 onwards
  • How to implement ‘client service coordinator’ strategy and make it work
  • How to sell value added services to clients – based on value based fees
  • The inner workings of coachingclub – why it works and how it works
  • Meet your support team and your coach
  • The resources of coachingclub – tools behind the concepts
  • Ask fellow coachingclub members a question – we will have a panel of existing firms there in the afternoon – and you can ask them any question you want

There will be a small number of firms attending that day (in our office at our purpose built coaching facility) so you can see how we run a coachingclub meeting at the same time.

There will also be a lot of content in this day and there will be a lot of information on how we help you implement. We would normally charge $3k – $5k per firm to attend however, if you are serious about being part of our community and you commit to bringing all partners, we will waive the fee. We only do these days if all partners are attending – otherwise the partners that don’t attend will not be on the same page as you and cannot contribute to your firm goals for the year.

We have limited spaces left on both days so please contact Lexi on 07 3607 6614 or lexi.mcdermid@nixonadvantage.com to secure your place. I look forward to working with you and your firm to help implement your growth strategies.

Last week I led a coachingclub group of Accountants (8 firms in the room who act as a non-exec board of directors to each other with a coach/chair) and I sensed that they were uneasy about 5 key strategies I was suggesting they implement:

  1. Price every job – not matter how big or small – up front and in writing
  2. Increase all prices immediately
  3. Asking clients for a deposit (as a minimum) or the full amount before commencing work
  4. Visit every client proactively and promote additional value added services
  5. Asking some clients to leave the firm who are not suited to the new vision/direction

When I put these on the board I could see more than uneasiness – it was F.E.A.R. So I dug a bit and found out they were scared of the following: My comments are in brackets….

1. “What if I get the price wrong?” (You will – all the time. The price is always wrong while ever they say yes. With practice and courage you’ll get better)

2. “What if they say ‘no’ to my new prices?” (Guess what? Some will – get over it. You have been too cheap for too long. You are not a charity or a community service and you do not sell commodities. You are worth more. Once you believe it you’ll put your prices up)

3. “We have never done that before” (And that’s one of the major reasons your cash-flow is up the gazooba (technical term) – what other people think of you is none of your business. Give it a try – you’ll be pleasantly surprised)

4. “What will they think?” (So let me get this straight. You are under-servicing your clients and many are willing to buy additional services from you – and you are wondering what they think of you …. give me a break. At worst these visits are a good customer service call)

5. “But they have been clients for the last 10 years”. (yes they have and for all those years you have been writing the job off and putting up with the clients BS. Life is too short to put up with clients who do not fit your ideal client profile)

F.E.A.R

False

Evidence

Appearing

Real

C’mon. It’s time to toughen up. It’s not your clients business. It’s your business. You’re taking the risk with your butt on the line – it’s you who should be setting the rules.

Thee who makes the rules, wins the game.