Most Accounting firms I meet have just evolved. No grand plan, a hotchpotch of clients serviced, a treadmill of ‘busyness’, some mediocre people on payroll and financial performance which is OK but not stellar.
It’s predominantly Business by Default not Business by Design.
Here’s how business by default works.
You start your firm, you’re desperate for cash so you take on any client who walks through the door. The client base grows and you start hiring people – often anyone you can get. You get super busy offering services that the government mandates you must offer. You don’t spend enough time working ‘ON’ your business so your numbers are not great. You end up doing work you’d rather not do, dealing with people you’d rather not deal with, working longer hours then you want and life in general is not great.
The virtuous circle starts when you start the firm and it continues on over the years – just on a larger scale.
I’m exhausted just by writing about it.
If it sounds familiar, it doesn’t have to be that way.
You CAN redesign your business your way. Your clients by design. Your numbers by design. Your services by design. Your pricing by design. It’s no one else’s business but yours. As the owner, you’re taking all the risk. Shouldn’t you design it your way?
If you are going to redesign your firm, then I think it is a 5 step formula – in order:
- Your business life by design. Decide the working hours you want to work. Decide what type of work you’ll only do. Decide how many vacations you want to take. Decide that are the 3 highest dollar productive activities you will only do. It’s your business, you design your business life.
- Your numbers by design. Decide how much money you want to make then do the work back. Decide the revenue & profit (work n 60% profit before partner salaries). Decide the work in progress and receivables days. Decide your personal productivity and the firms average hourly rate. I think Partners should me making a minimum of $1M per year profit. It’s your business, you design your numbers.
- Your services by design. Decide the minimum service pack every client MUST buy to remain a client. Decide what additional value-added services you want to offer. Decide which current services you want to ditch. You don’t have to do everything. It’s your business, you design your service & product your way.
- Your culture by design. You decide the behavior of the team and document it. You decide the working conditions. You decide the level of proactiveness from everyone. You decide the customer service levels. Now you need to go and find people who you would enthusiastically rehire and who live by your culture. It’s your business, you design your culture your way.
- Your clients by design. You decide the niche market you want to play with. You decide the size of your ideal client. You decide the behaviour of your ideal client. You decide BEFORE you accept the next client. Only accept A class clients going forward. It’s your business, you design your ideal client and don’t accept any new ones who are not within these rules.
Business by design can be painful if you have an existing business with ‘legacy’ systems, people, behaviour and clients. There can be work to unravel.
However, it doesn’t need to be painful. You can ‘draw a line in the sand’ and going forward it’s your new rules. Over time you end up with the ideal business for you.
Or, you could sell what you’ve got and get a clean sheet of paper and start again!
Remember, it’s your business and no one else’s. Business should be fuel for your life – not to rule your life.
Have fun designing it your way.