This week I was contacted from someone wondering what the impact of coaching would have had on his Accounting firm – over a 17 year period. Good coaching is about Accountability, Learning & Sharing. It’s about keeping people ‘on the straight & narrow’ and continually stimulating them with new ideas and ‘best practice’.
My company specialises in Accounting firms and we coach in groups of 8 firms at a time. That way we can get extra learning to each member firm and have them share among each other. My company has been operating for 7 years we can see some trends as to how firms perform if they are in the right environment and getting the right advise over a period of time.
My contact this week, we’ll call him Fred (because that’s his real name) was asking about expectations over a 17 year period to his firm. It’s hard to determine exactly what Fred’s results would be like over a 17 year period so I will use a weighted average of the firms we coach.
In 1995 he tells me he had 25 business clients and 30 personal clients. Assuming around $300,000 in revenue in 1995 and an average hourly rate of $80 in 1995. If Fred focused on just a few strategies over an extended period of time his results would be dramatic. Strategies such as:
- Client increase of net 5% per year
- Average hourly rate increase of 10% per year
- Keeping Accountants ‘productivity’ or ‘utilisation’ at 1250 hours per year – so in 1995 Fred would have needed 3 Accountants including himself
- Pricing every job upfront
- Introducing value added services every year to clients
- Value pricing services outside of compliance
So for Fred some simple marketing to get net 5% client growth and then focusing on top line pricing, value added services and efficiency driving would make a dramatic impact on his business.
If Fred did that his business in 2012 would look like:
- Business clients – 60
- Personal clients – 72
- Revenue – $1.6M
- Average hourly rate – $445
- Accountants needed – 3
For a great look at accountability in action just watch the reality TV show “The Biggest Loser”. In case you have not seen it is a weight loss competition. A group (around 20) of overweight and obese people are put into 4 teams each with a personal trainer. For 12 weeks they live together and every day they are trained (some would say pummeled by the trainer and they only eat healthy food.
The objective of the competition is to lose as much weight as possible – measured as a percentage of their starting weight. It is not uncommon for the winner to lose as much as 40%- 50% of their starting body weight. Before coming onto the show every contestant confesses to trying diets, eating plans and various forms of exercise. Obviously with limited results. Each week people are eliminated based on peer voting and strategy. There are tears, fights, heartache, cheating, back stabbing and celebration. It makes for compelling TV viewing!
What I find most fascinating about the Biggest Loser program is that everything they are doing over the 12 week program to lose excessive amounts of weight and get healthy can be found in a single issue of a $4 health & fitness magazine!
The overweight issue in every country will never go away with more magazines. It will only go away with more accountability.
It’s no different in business. Why are publicly traded companies larger and more profitable (generally) than privately held companies? There are many reasons and one of them is accountability. Public companies have a board of directors and a chairperson to keep the executive team accountable and give them guidance.
It’s all about accountability, learning & sharing. Check out how we can help you by clicking here.
Thanks Fred – good question.