Happy New Year! I trust you have had an enjoyable break and ready to attack the new year with gusto. Over the break I was thinking about what professional services firms (PSFs) should be focused on for 2013. I have 5 key areas of focus for every Accounting/Consulting/Coaching/Legal firm around the world – no matter how well…
With 1 day to go before nearly every firm we have spoken with is closing for 2 weeks it’s time to reflect on 2012. As you plan 2013 there are 3 questions only that you need to ask yourself and your team: What are you going to start doing? What are you going to stop…
This Saturday I am abseiling off a 36 story building for charity. I have sky dived, bungy jumped and if you are a regular reader of my blog you’ll know I am off to space – but never abseiled off a 135M building! This will be awesome. The charity is Save the Children – they…
Yesterday I celebrated my 20 year wedding anniversary. It’s been a great relationship – complete with extreme lows and massive highs. The highs outweigh the lows by an order of magnitude – that’s why we are still together. We are still in love and looking forward to the next 50 years together.
As you can see by the photo I was very young. Guess my age in the comments.
Anyway, I got to thinking about how Accountants select their business partners. Being in a partnership is like a marriage. It’s an interesting process that you go through. You have employees who come through the ranks and then they are “made partner”. This is business by default. Often not much thought goes into the individual, what they will be doing and how they will be doing it. As a result of this very weak selection process we have a glut of partners who are overpaid Accountants!
And don’t get me started on mergers. It seems like a good idea at the time. However, in most cases you just end up with more of the same. Here is a 21 point checklist of the ideal business partners. See how many you can tick off for your current partners!
- Brings something to the table – complements existing partners
- Is a good cultural fit in the firm
- Is a good communicator at the partner level
- Is a good communicator with team members
- Is a good communicator with clients
- Is stable – emotionally and financially
- Is profit and growth motivated
- Has a good work ethic
- Is reasonably fit and healthy
- Is at the same stage in life mentally.
- Shares similar values and ethics
- Has an ability to respect other partners
- Knows what they want – goal orientated
- Is supportive of new ideas
- Is flexible in their thoughts and actions
- Is a good business builder
- Is fun to be with
- Shares the vision
- Walks the talk not just talks the talk
- Acts in the best interests of clients and the firm at all times
- Can bring in new business.
If your partners do not stack up then maybe you need a divorce. I don’t!
Attention the Virgin Australia CEO – Mr John Borghetti:
Dear Mr Borghetti,
Let me state this. I am a massive Virgin fan. I love everything the brand stands for and my wife even bought me a ticket into space on Virgin Galactic for my 40th birthday – no. 293 in the world and flying sometime soon. I even got to run with the big big boss (Sir R) in the London Marathon last year and to hang with RB for 4 days last year at his retreat in Morocco was just awesome.
So big fan yes. However, last night I was a first time customer on Virgin Australia Business Class. The seriously delayed Brisbane to Perth flight – arrived at 1:40am into Perth!
Onto the story.
I have been flying business or first class domestically and internationally for the past 17 years. I have had millions of frequent flyer points/miles accumulated predominantly on Qantas or affiliates. I do about 100 – 130 flights per year for business or leisure. Rarely am I down the back and I think I am the type of customer you are targeting with your new Business class produce.
So last night was my first time Virgin flight on Virgin Business class. I have been on all the major airlines, the best aircraft and so called best service. Virgin has some of the best service around. Sarah my flight attendant was just super. She couldn’t have been better with what she had to work with. Mind you, I would have liked to have seen her in action on a full cabin – I was the only one in business class!
Good service – not a great product.
If you want to woo the travelling business & political community you have to provide something better than your competitor(s). Not just providing young vibrant types with nice smiles and service but a better product as well: For example…
• I checked into the Brisbane lounge at 7:15pm and asked for a Gin & Tonic – response was ‘no spirits’ – beer or wine only.
• The food in the Brisbane lounge from 7:15m – 9:15pm (flight delayed out your control) was at best ordinary. Toast, soup or make your own sandwich. Cheese & crackers ran out at 8pm with no replenishment. Not sure what was there for dinner time. Some ‘time poor’ travellers like me actually use the lounge as a meal replacement service you know. The food needs to be good.
• Wine selection was pretty substandard as well – no wine glasses at one stage.
• Your new planes have seats that don’t go back very far – not sure what the pitch is but 10% would have pulled it up. For a 5 hour 20 minute flight to Perth – not good enough.
• The lamb meal was cold and when I said a ‘red’ wine a tumbler like glass appeared with whatever was in it. No selection offered.
• With new planes what an opportunity to put power for laptops and wireless technology in. Alas – it’s economy with a larger seat and multiple the times the price.
• There is no inflight entertainment – not even a drop down screen.
• And last but not least there was no pillow. I had to ask for one and 10 minutes later it seemed like the only pillow on the entire plane arrived.
As a ‘full freight’ paying business class passenger I expect more. I gave it a try but I am in no hurry (other than my booked flight home) to give it another. You need to work out who you are serving. Are you the leisure market, the commuting market or the business market?
You have an opportunity to do better. I hope you do.
AKA – weary traveller
What a day it was yesterday. During the day at my “Sales Success” workshop with 120 Accountants I had the legendary Paul Dunn speak to my group. And during the night I sat next to our former (and the most successful of all time) Prime Minister – the Hon John Howard AC at a charity dinner.
What a day!
Paul is 68 years old this year and he enters his 5th decade educating and inspiring people. He spoke for 100 minutes on the meaning of ‘being remarkable’ and creating ‘WOW’ experiences in your business.
Paul has been instrumental in my career (I have known him for 25 years) and over the years he has inspired >10,000 accounting firms over the years to greatness. His energy is second to none and he was genuinely interested in making a difference- not just going through the motions.
Mr Howard is an absolute master. It was the first time I have met him and at 72 years old he is still the consummate professional who made an effort to meet as many people as he could.
I was speaking to the leader of the QLD opposition (Campbell Newman) whilst Mr Howard was ‘working the room’ and I said “Look at this Campbell, he’s 72, he doesn’t need to do this and he is making everyone so welcome”.
Mr Howard spoke to the group for 28 minutes covering leadership, team work and political topics. Over dinner we spoke privately and extensively, about the state of the political arena, sporting leadership and some of the more interesting people he has met in his illustrious career.
What a day – 2 legends to be inspired by!
It was awesome to be the keynote speaker at the first ever Xero partners conference in Melbourne. 170 Accountants from all over Australia got to see first hand what is happening with cloud accounting.
At Nixon Advantage and through our Proactive Accountants Network we are 100% aligned with what Xero are doing. In fact, we are creating our own cloud product which will enable our certified member firms to offer a KPI monitoring service to their clients. The software solution will offer real time benchmarking and valuable data that is “alerted” back to the accounting firm. We are already providing advisory content that our members use with their clients and with this new product (which is ‘skinned’ as your product) it will enable you to connect much better with your clients and offer them something they cannot get anywhere elsewhere.
Watch this space.
In the meantime enjoy the Presentation from yesterdays keynote.
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.
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…
- Clients who are mis-match to who you really love working with
- Systems that are done differently by each person in the firm
- Pricing mechanisms that are all over the place
- Services that are at best a grudge purchase – aka compliance services
- No rules – on how you work with clients – they seem to control things
- People who are plodders and not high achievers
- 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:
- What rules do you want your clients to play by – remembering it is your business not theirs
- What client types / classification do you want to serve?
- What geographical locations do you want to serve?
- What services do you want to deliver?
- What service delivery model do you want to follow?
- What pricing formula do you want to use?
It’s your business life and your risk that you are taking. You decide.
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.