The journey so far
If you have read my earlier articles you will know that thus far we have covered:
In my first blog we looked at aspects of making your initial client meetings more effective, moving out of your comfort zone, having a higher charge rate for advisory and the ice cream lesson.
In my second blog we took a look at aspects of growing your advisory services, the restraining impact of high lock up, developing service and industry expertise and a series of opportunities and threats to take note of.
In my third blog we explored the importance of making advisory services a core component of client service and two essential non-compliance services – (1) client accounting (including payroll) and (2) your business advisory meetings. We also looked at Graham Lamont, the founder of a three partner firm, who provides advisory meetings to 200 of his clients. Finally, we looked at the importance of setting goals and then regularly monitoring your targets.
In this my final article (well at least for now) I would like to explore Five Essential Client Meeting Agenda and Plans
1. Life plan for the year ahead (probably not a fee-earning opportunity)
This comprises your own personal plans and goals. Background: I create an annual plan every year toward the end of December and I always focus on the next 12 months with no overall emphasis on my long-term agenda. That is, of course, a separate plan. In my life plan I have a series of sections with my intentions and objectives for personal development, personal finances, budgets, health, weight, exercise, travel, spiritual goals, social goals, sporting plans, family goals, cultural and entertainment goals. The key with regard to these intentions is to find my own purpose and direction and also to ensure I set time aside to include my family in the exercise. Work life balance starts with a good plan and then adhering to it. I come across too many accountants to admit to being stressed out.
Zeal and commitment
Where does my zeal for planning come from? This has developed over the years as I found that it really works. Probably the quote that says, ‘If you don’t know where you are going any route will get you there’, has been a reminder of the benefit of life planning. I probably deliver each year on about 95 per cent of my plans, which is why I intend to keep up my annual planning routine.
Key Relevance: How is this relevant? I share this aspect of my personal planning with clients. This creates real interest and connection that leads into sharing how the next four plans are 100% relevant to all your business clients.
2. Business plan (fee potential – 10+ hours)
After leaving my role as Managing Partner of my accountancy business I founded Practice Track and PracticeWEB. These two highly successful and leading edge companies are devoted to delivering management and marketing solutions to the accounting profession. Both companies have business plans that are updated annually. Incidentally, while I was owner of those companies they both significantly increased their turnover and profits consistently year-on-year over a 15-year period. Did my commitment to planning help? Yes. My planning time provided an essential opportunity to focus and plan strategy. In the same way as a sports coach lays out their tactics before a game, so I would prepare and review my business blueprint with all the team members, who incidentally could access all these plans on the network and see the detail that lay behind the Executive Summary of Business Planning for the year.
Should you be involved with your clients and their business planning? 100% yes. But as with all these plans, it is important to make sure you have one first. If you do you are a wiser adviser and a more persuasive advocate of planning. I have surveyed accountants at my seminars over many years and asked, ‘How many of you have a written and up-to-date business plan?’ The response leads me to conclude that less than half of accountants have such a plan. So, if you do not have a plan, maybe you are not committed to planning?
But, if less than half of accounting firms do not have a plan, then maybe 50 per cent or more of other businesses do not have a plan either and may not be easily be persuaded to commit to a plan. Is there an alternative? Yes. Use a Key Performance Indicators plan.
Key Point: If you commit to your own business planning it will add much greater credibility when trying to highlight the importance of this with your clients.
2 Key performance indicators (KPIs) (fee potential – 8+ hours)
Key Client Proposition: Let’s assume that your client’s do not opt for the business plan. Here is what I say to that, “OK, but every business must then have a KPI plan”.
One approach you could adopt within your firm and recommend to clients is to use, manage and monitor key performance indicators (KPIs). KPIs are quantifiable measurements, agreed to beforehand, that reflect the critical success factors of an organisation. KPIs enable a business to define and measure progress towards its goals.
KPIs will differ depending on the organisation. A business may have as one of its KPIs the percentage of its income that comes from return customers. A school may focus its KPIs on graduation rates of its students. A customer service department may have a KPI of percentage of customer calls answered in the first minute.
KPIs include regular reporting of such numbers as unit sales, production volumes, margins, number of customers, average spend per customer, visitor numbers – the key numbers that are important in the business and that inform management about business results.
KPIs focus on your key goals
Whatever KPIs are selected, they must reflect the organisation’s goals, they must be key to its success, and they must be quantifiable (measurable). The decision as to which numbers to monitor could be taken alongside you as the accountant. Accountants are after all the ‘masters of measurement’ and should be intimately involved. The selection of KPIs is one that clients find interesting as KPIs are not limited to financial targets. For example a restaurant might focus on the number of diners in a week; a travel company might wish to focus on the number of enquiries and the conversion rate; an internet business might monitor site unique visitors and so on. Having selected the KPIs, the business must develop and manage information systems for gathering the data as well as a plan to either ‘nudge up’ the numbers or drive them down. KPIs are influential numbers and their movement impacts profitability; position yourself so you can work with clients on a plan to manage their KPIs.
I once worked with Dr. Gerry Faust, a San Diego based consultant and entrepreneur who suggested that you can monitor and drive any business forward by managing five carefully selected numbers. I have thought about that over the years since and while I do not believe that five is a sacrosanct number, I have found the principle a sound one in that if you choose the most important numbers and manage them, many other areas fall into place. For example, in my accountancy business, I personally managed and monitored these five numbers:
- Monthly chargeable time – mine and the firm’s
- Total time – mine and the firm’s
- Number of meetings with clients – mine
- Number of meetings with advocates/referrals – mine
- Combined lockup in debtors and WIP – the firm’s.
If a client does not wish to commit to a business plan, spend time helping them develop their KPI plan, agreeing with them what they should track, the benefits and how this plan will be implemented and monitored.
Key KPI for an accountancy business: A further KPI that I think is important is to measure the value and percentage of additional services sold to clients. Start by looking at what additional services you have sold during the last 12 months. Then, if this is less than 15 per cent of your current gross income set a target that adds in a fair degree of stretch.
3. Retirement plan (fee potential – 8-15+ hours)
There is frequent media reference and regular communication from government and wealth management companies about the need to save more for retirement. In many, not not all, countries the pandemic has resulted in debt being downsized and savings increased. In some countries business owners have had to take out business recovery loans which will need to be repaid at some point in the future. A review of news and financial websites confirms many countries face similar challenges for retirees with the inadequacy of their income in retirement. Many business owners live in an era of high average personal debt, lower returns from investments than was the case in the first 20 years of the 21st century, and relatively low interest and annuity rates. As a result there is a general consensus that this is a problem that needs addressing. If we assume it is not government that will solve the problem we must assume the responsibility individually, and your role as accountant with your financial and business expertise becomes pivotal, regardless of whether or not your firm offers financial services advice.
Key tactic: Ask your clients what they think they will need to live on in retirement. Then ask them if they think that their current plans will deliver according to the stated needs. And then there is always the need for a good margin. How can you assist them develop plans that will enable them to achieve their goals?
4. Wealth plan (fee potential – 10+ hours)
How will clients further build their wealth? What will this look like? What role does investment advice and tax efficiency have to play in this? What gifts should be bestowed on family and others along the way? What is the effect of the pandemic and the recessions that many countries now face?
Key advice: How can the business be developed in order that it can enable the business owner to achieve or even exceed those goals?
5. Estate plan (fee potential)
Who are your client’s heirs? How will children in a blended family (children from more than one marriage) be dealt with in the estate? What tax planning opportunities are there? What is the role of life insurance? Who will be the Executors? What are the implications for the succession of the business? How do charitable matters, guardians for minor children, and so on, affect the plan? What legacies should be included? What role should trusts play?
Key point: In the UK it is often said that 1 in 7 people do not have a Will. That may, or may not, be the case. But I am convinced that only 1 in 7 people have a Will that is up to date and reflects their current wishes and intentions.
Contact me: As promised, I will leave the topic of business advisory services and will return to this in due course. My thanks for those who have emailed me – I appreciate your encouragement. If you do wish to share your thoughts and the actions these articles have provoked do please contact me – firstname.lastname@example.org.