When my eldest son Hugh was 8 we had the ‘profit’ conversation. I told him that a profit was the selling price minus the buying price. Sell take buy he said. A couple of hours after educating him on this most important concept I asked him what profit was. Profit is good he told me! A little while after that I asked him how much profit we should make. As much as possible was the reply!

Hugh is now 15 and wheeling and dealing whatever he can. His favourite saying is ‘let’s do a deal’.

Well it seems that my daughter Harriet has the Entrepreneurial spirit in her as well. Today is election day in Australia and about 150 meters down our road is a polling station and as such there have been loads of people walking past all day today to pledge their vote. Harriet and her friend got the idea that they would capitalise on the opportunity and set up a lemonade stand and sell home made lemonade to the thirsty voters walking past. They started by juicing about 20 of my limes (that were supposed to be for my Corona beer and sparkling mineral water) and the first version was Lime based lemonade – hideous it was.

After a few initial sales I was sent to the shop to get some lemons. So with a new recipe business flourished and 51 cups later they had made $25.50. Only problem was I did not have the profit conversation with her. I paid for everything and they kept all the money!

Girls Lemonade stand

This marks my 17th year helping Accounting firms grow and develop their businesses. I am not an accountant by training – in fact I left school when I was 16 so I do not have a ‘formal’ peice of paper to my name.

I fell into the Accounting profession in May 1994 when a lovely man called Ellis Ryan turned up to one of my seminars in Dubbo NSW. It was a very very small seminar (by today’s standards) with only about 8 people in attendance. Ellis was an Accountant from Coonamble (population circa 2,500) which is about 2 hours north of Dubbo. He said to me ‘will you come to my town and do this seminar for my clients’.

Never one to miss an opportunity I grasped at the idea. he would promote my event to his clients, I’d collect the profit and he would get the kudos.

He had 126 clients. After 2 mailers (email not invented back then) 56 people turned up to the Coonamble RSL club. They loved it and I made a profit of $2,500 for the night. I was hooked on Accountants. They could fill a room based on their credibility and they could lower my marketing costs to almost zero. After that event I scrapped all other direct marketing (TV, Radio, Press, Mail etc) and started cold calling Accountants offering them a Value Added seminar which cost them nothing.

We started filling rooms. And as they say the rest is history. After over 1,600 speaking engagements, 4 companies, countless articles, books, products, software, web technology, learning tools and thousands upon thousands of lives positively effected I started to realise why Accountants.

All of my work has been centered around helping Accounting firms run better businesses for themselves and their clients. It was about 10 years ago the penny dropped. Every single business in the world is connected to a trusted advisor – their Accountant.

If we can help enough Accounting firms sort their businesses out (cashflow, profit, growth, reinvesting back into the community) and then we can help them go to all of their clients and help them with cashflow, profit, growth & community then we can make a positive impact – on the world.

We can change the world by helping the Accountants. That’s why Accountants!

Accountants are funny in the way that they hire people. They would much rather hire more accountants and let the accountants do the administration work rather then hiring professional administrators to do the administration work. After interviewing about 5,500 accountants over the past 5 years I have determined that an accountant spends on average 1.5hours per day on ‘administration tasks associated with the accounting job’.

Amazing – 1.5 hours per person per day. If you have 10 accountants at an average hourly rate of $200 that works out to be $675,000 of potential capacity. 10 x 1.5 x 5 days per week x 45 weeks for the year. You could hire 2 full time administrators at a cost of $100,000 to do that work. Spend $100k to free up (new capacity) $675K – go figure!

And it gets worse. I meet partners of firms who are doing more admin work then they need to. Some are doing the ‘practice administration’, some have the euphemistic title of ‘marketing partner’ and some attempt to look after the firms IT. Give me a break. I have never met a partner of an accounting firm who is an expert in these areas.

If a partner of a firm is mucking around doing 2 hours of ‘practice administration’ versus meeting a client for 2 hours and finding some new business – then they are wasting their time. A 2 hour meeting can generate (in a lot of cases) $5K or more of new business. A full time business administration on the firm can be hired for $50 – $75 per hour. New business generation at $2,500 per hour or administration work @ $50 per hour. Go figure.

Cutcher & Neale in Newcastle was at the very first coachingclub meeting on February 28 2006. They are still in coachingclub and have never missed a dinner, a meeting or a conference. Compared to today we didn’t know what we were doing back then. They joined with a healthy degree of HOPE.

It worked.

When they started I always remember David Carpenter (Managing Partner) saying to me “we’re going paperless, cleaning out our old files and we will free up an entire floor of space. We intend on adding 20 or so more people”

They never did it. In fact their team size today of 80 is about that same size as it was 4 1/2 years ago. In the same time period their revenue has so far increased by 70%. They started at about $7M in revenue and have infrastructure in place to grow 4 times that.

David was very kind to write me a note yesterday. They are very committed to success, they contribute to the community in many ways, they are a wonderful team and they have changed the way they do business forever. Even for a large firm they ditched charge rates ($1 per hour) last September.

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“We have been working with Rob Nixon since February 2006 at which time our business had a turnover of approximately $7m. During this time we have completely restructured the way over business operates from a services and resourcing perspective. We are now fully operating in a less paper environment with excellent management reporting systems. We have fully identified all the service offerings we have and are working with the value pricing model. Having thrown away charge rates our staff are committed to achieving the best results they can for both the client and ourselves. We are now training our people on selling these services to both new and existing clients.

Working in the coaching club environment has enabled me to interact with wonderful accountants and we have learnt many invaluable lessons from them on a day to day practical level. We have shared many internal tools that have improved efficiency within the business.

The business is now in a very organised position. With a concise business plan in place and action plans specifically focused on achieving these goals we will see our business grow to 4 times its original size but with a vastly improved efficiency.

The coaching environment has been crucial in changing our mindsets and focussing our attention on implementing those strategies that truly allow us to deliver an unparalleled client experience.

We would not have taken our business to this level without the support of Rob and his team”.

David Carpenter, Managing Parnter, Cutcher & Neale, Newcastle, NSW

There has been much chatter on my private forum regarding existing clients and nurturing them. I.e: visiting them with improved customer service. Find out what they need and then deliver it. Many firms have met with a few and had some success yet no firm has met with all of them.

When you do this let’s remember a few things here:

1. Clients WILL say no. When you pitch ideas to them not all will accept. If you have done the best job possible, if you have the clients best interests at heart and you have given them some ideas with the greatest of sincerity and care – and then they say no. Not your problem. Get over it and move on.

2. My definition of a ‘good client relationship’ is when clients call you before they do things related to your speciality – finance, planning, tax etc. If they call you before they do whatever then you have a chance to advise them otherwise – or reassure them. How many clients do you have of that nature? Small percentage I would guess.

3. If you do not build a good relationship with your clients then someone else will

4. As I said to my 10 year old daughter before she had to give a speech to assembly….. remember these 3 rules with speaking..

1) You have the microphone and as such you are the most powerful person in the room

2) You always give 3 speeches – the one you intend on giving, the one you actually give and the one you give to yourself later

3) The audience doesn’t know what you are going to say so whatever you say is correct.

You have the power here – the trusted relationship. You already have the microphone!

Every year I organise a father & sons camping trip. Real camping with tents and no power. Mind you someone did describe our style as ‘glamping’ to me the other day (glamour camping) due to the fact that we have a camping wine rack, cheese & wine tasting, awesome coffee and the best food. We may rough it in a tent but we do not rough it in the food & beverage department.

This year marks year no. 8 in a row. It’s one of the highlights of the year for both dads and the boys. Special bonding time and a whole lotta fun. We fish, we laugh, we swim, we climb giant sandhills, we play beach sports, we tell stories, we toast marshmallows on an open fire and generally have a very wholesome time. Every year we have a ‘gadget of the year’ award. I thought I was sure fire winner this year with my new camping ute and boat (we caught decent fish for the first time) however I was outdone by a pair of $50 fluorescent lights. Lighting is always a problem – not any more.

We are creatures of habit and go the same spot every year. Yellow patch on the northern end of beautiful Moreton Island – a short ferry ride + 1hr 4WD drive from Brisbane. This year we had 8 dads and 14 boys – although the photo only shows 7 (one left early) – and every year it fluctuates between 6 – 12 dads. Very special time. Enjoy the photos!

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In the past 3 weeks I have asked 37 Accountants about the status of their client relationships. The question was ‘how many clients do you have a good relationship with’?

A good relationship defined as ‘the client calls you before they do things where you are an expert on‘. So that means they call you before they do anything to do with:

* Finance
* Major spending – incl CAPEX
* Tax
* Accounting Systems
* Budgeting
* Cashflow
* Investments
* Debt
* ATO / ASIC matters
* Debtor collection
* Planning
* Growth of business
* Wealth planning
* Property transactions

And anything else that you are the expert on. Do they call you first or do you find out later what stupid things clients have done?

With the 37 Accountants the highest was 35% of clients we have a good relationship with (not rapport) and the lowest 1%. Let’s call it 20% for the sake of it.

20% you have a good relationship with
80% of clients are at risk of someone else developing a better relationship than you.

This is sooooo bad and very risky. Clients are not calling you before they do things which could impact their future.

What are you doing this year to enhance your client relationships?

At our annual coaching conference in February (Hamilton Island, QLD) I am flying out the global leader in developing client relationships (Andrew Sobel) for professional services firms. Do not wait until Feb – start by proactively communicating more frequently – NOW.

If you are a coachingclub member and are yet to register for the conference you can do so here.

How well aligned are you and your partners/director shareholders? It’s a question worth sorting out. Often I get to meet owners where they have different agendas. Some of the owners may want to forge ahead with aggressive growth plans and others with sombre ones. Some owners are driven ‘by the dollar’ and others driven for a greater / different cause.

The worst ‘misalignment’ is when some of the owners are hungry and others are comfortable. This breads indecision and erratic behaviour. If you can come to a common ground where everyone agrees what you all want to achieve then that’s when you can create greatness.

If there are 168 hours in a week and if you sleep for around 58 of them, then you are going to be awake for around 110 hours per week. Simple maths. Out of 110 waking hours how much time is spent either getting ready for work, getting to work, at work, coming home from work or thinking about work?

More than likely half. About half of your adult waking, working life will be associated with work. HALF your life.

I hope for the benefit of your clients, your fellow team members, your loved ones at home and most importantly yourself that what you do excites you. I hope it enriches you and you are thoroughly fired up about what you do. If not it’s a long time doing something you don’t like. Do something else if it does not interest you. It’s not too late. You only have one life.

I said that to a sole owner of a small accounting firm in Western Sydney once. She told me she didn’t like owning an accounting firm and she wanted to sell it. I encouraged her to sell it. She did – the next day for $750k – cash. Take massive action.

In my office there is a bell. A big ships galley bell. It’s a sacred bell. It only rings if someone has made a sale. It is sacrosanct. You are not allowed to ring the bell unless there is ‘irrevocable ink’ or ‘money’. Everyone knows the significance of the bell. When it rings there always a clap or a loud ‘woohoo’ from the team. It is in the middle of the office so everyone gets to hear it. When the bell rings the team want to know what is going on, who the client was and what the details are.

When we have visiting clients and the bell rings they always ask what’s going on. We tell them and many love it.

It is very exciting. As the CEO I often ask ‘how many bells today’. I know the average sale value so I can work out how the day was. You’ve heard of ‘management by walking around’ – this is ‘bell management’.

Do you need a bell? I think so. It’s a form of celebration. Give the bell a reason for being. It could be a sales bell, a workflow bell, a debtors bell, a new enquiry bell. And don’t buy a little tea bell – buy a thumping BIG bell that makes a lot of noise. Bunches of accounting firms now have bells – I was in a office today and their bell was 100% bigger than mine. Hmmm