High Impact Lessons from My Client Casebook

Currently, my clients range from sole practitioner to some of the global firms with 40 or more partners in any one office. So where would you like to start? Let’s start small.

Sole practitioner

Approaching retirement and looking to transfer the accounting business to managers. 

Key issues: 

  1. Timing. We are working on a 6 month time frame to transfer from current owner to manager timeline.
  2. Manager training. In order to prepare the managers for the change in their roles and their additional responsibilities, they are studying IGNITE Practice Management covering one Module a month. There are six main Modules. See here for further information.
  3. Client awareness of the change of ownership. New owners are meeting with the top 50 clients over the ensuing months.
  4. Helping the founder and current owner to stand back. Accept a role as consultant and continue to serve until the new owners wave the founder into the sunset.
  5. Selection of other areas – purchase of shares, allocating admin responsibilities (hire an administrator), marketing planning, website updating, funding, working capital and so on.

Three partner firm

Working through fairly common firm issues. Here are a few:

  1. Time on – keeping partners on track for up to 1100 charge hours per annum. 
  2. Lock up – ensuring that lock up (debtors and WIP at realisable value) is less than 22 per cent of annual revenues.
  3. Staff – greet them every day, thank them for what they do at least once a week, praise them at least once a week (great work…), once a month socialise – maybe coffee or lunch. Brief them on jobs they do for you. Give them feedback on the work they do. Be flexible to their request to WFH. 
  4. Realisation. Second partner approval for any jobs with a write down exceeding 15%

Fifty partner firm with 80% of staff WFH

Managing Partner is working on:

  1. Work-life balance. Ensure that weekends are kept free – and that is a big challenge. Encourage partners and staff to restrict the hours they switch the computers on and off – some people access office mail for over 12 hours a day.
  2. Staff – Accept that you are likely to continue spending time online with your team. Remember they look up to you for leadership? Hold a team meeting and encourage all to participate. Do 5 minutes of fun stuff. There are loads of ideas online – start here – https://snacknation.com/blog/virtual-team-building/. Do you sense there are home frictions? Mental health issues? Overwork problems?
  3. Clients – Meet online with your top 5/10 clients at least monthly. Be prepared to meet outside of 9-5. Find out how they are doing? Problems? Successes? Profitability? Cash flow? Staff? Production? Management? 
  4. Lock up. Keep billing. Keep collecting – it is a weekly, maybe even daily, responsibility.

Ten partner firm – looking for a quick new client win?

This is going back about 25 years ago and therefore precedes the Internet, websites and Social Media as routes to win new business. But, as in so many sports, there is more than one way to goal.

Going back that long ago I was recognised by others as being the UK’s leading marketing guru for accountancy business owners. Why? I had started Practice Track and within five years had become the leading provider of marketing materials for accounting firms. I had won business from the two or three established firms by virtue of:

  1. Providing firm collateral materials (Client Newsletters, Budget Reports, Tax Cards etc) which were imaginative, written in client friendly language and, above all, printed in firm colours (others offered a choice of 3 standard colours only), and
  2. Establishing a portfolio of management and marketing seminars seeking to establish myself as a “Famous Person” in the accounting space and then presenting these to accountants all across the UK. By the time I had completed lecturing for three years my credentials were well established and I had built one of the UK’s largest marketing companies aimed at accountancy business owners.

So, let’s look at two strategies – one short term, and the other long term. Both have high yield potential in terms of new business.

Strategy 1 – Lost clients

My 10-partner client engaged me to improve the winning of new clients. In the early stages of the consultancy I asked the Managing Partner to provide me with a list of all clients they had lost in the preceding three years where (1) the fee was over a certain value and (2) clients that the firm would still like to act for. The data request was for the client name and the revenue generated by each client. The list was duly forthcoming – there were 18 clients in total – and duly handed back to the Managing Partner. But as it was handed back I asked him to call each of these former clients and invite them out to lunch. 

The purpose? To see how they felt about their current accounting service provider. Were they happy or maybe interested in returning to ‘the fold’?

The result? Of the 18 clients contacted 6 of them responded positively to the lunch invite.

Of the six who agreed to meet – here is what transpired:

Returning client 1 – This client had transferred to one of the Big 6. They had been lured with the prospect of better value and a higher quality personal service. The promise had been a hollow one. Passed from pillar to post, increasing fees and a sense that this firm was not all it was cracked up to be. “Why did you not make contact with us,” the Managing Partner enquired. “I was not so sure I was up for admitting I had made a mistake” was the reply. The client gladly reappointed this firm and has remained for over 25 years. Here comes the BIG value in this strategy. The annual fee back then was £25,000 ($35,000 US). In the intervening years fees have increased and my client (yes, I still serve the firm) confirms that total revenues from this resigned client amount overtime to over £1 million. This first consulting success was achieved in the first phase of the consultancy and so you can imagine how everyone felt – the cost of my service had been fully covered with this one piece of advice.

Returning client 2 – This client had transferred to a smaller firm. They agreed to reappoint my client for an agreed price of £8,000. After 5 years this client’s business faltered due to a recession and so the revenues earned were nowhere close to the above client. But nevertheless £45,000 in firm revenues was regarded as a great success. 

Key action: Follow the steps above – you have nothing to lose and potentially a lot to gain. Be sure to establish why the client left. Maybe there was a disconnect with the partner or staff? Maybe their service needs were not fully met?

Strategy 2 – Famous person

What is your claim to fame? What is your service expertise?

It is a fact that most people probably think that all accountants are mostly the same. Why would they think differently? But, there is no doubt that clients want to know they are dealing with someone who is a specialist in the area of service they require. 

Sector specialism 1: When I was managing my own accountancy business I specialised in acting for two industry sectors. The first was transport companies the second was residential care homes/nursing homes. How did this happen? No secrets – it was really very straightforward. Go back to the day I took on my first transport company client. They had a fleet of 16 lorries. I became involved in (1) providing supporting documentation for fleet replacement funding and also (2) in presenting calculations to support the client’s negotiations for rate increases. This client knew a lot of other hauliers and was happy to recommend my services. The result? 14 transport companies over a period of 10 years.

Sector specialism 2: My second was in the care home business. I acted for a care home owner who was the Chair of the local county residential care home association. The result? Over 15 years I accumulated 15 care home businesses as clients.

Both these areas of specialisation required me to identify staff who gained industry expertise and all of these clients were at least 50% above my average fee per client. Six of the transport companies featured in my top 15 clients by fee size.

Key recommend 1: If you do not have any area of sector specialisation – look at your client base and take a view on the industry expertise you have gained. Which clients have the potential for above average fees? How can you promote visibility in your chosen sector? Which clients or referrals could be of assistance? What are your market penetration strategies?

Point of interest: I once worked with the Managing Partner of a US firm who specialised in chicken farming clients. Their fame was such that they were engaged by chicken farmers around the world. Their brochure (yes, this was back in the 1980s) had an image of a partner with plastic covered boots and surrounded by chickens. The wording on the brochure, “We specialise in s**t.” (Not recommended but they must have thought it was a good idea) Having remembered this from over 30 years ago I decided to revisit their website. Today they have 20 partners (from memory they had about 6 when I met the MP. Their top expertise now is shown as “Food processing and Agriculture.”

Key recommend 2: Service specialisation. We have looked at being famous by service sector but you can also be specialist by service line. For example, you could specialise in an area of tax, or in client accounting, or wealth management – there are many to choose from. The key? Start by looking at the service expertise you have. Evaluate the market potential. Business development strategies? 

Key reason: In earlier blogs we have explored the post Covid challenge presented by tech. companies. Developing your service expertise is essential in order to grow top and bottom lines. By example, the firm I refer to above has these services in addition to compliance:

  • Animal welfare
  • Special asset management
  • Employee benefit services
  • Cyber advisory services
  • Strategic services
  • Estate and succession planning

As a final PS to my client casebook. I am currently working with a two partner firm and their transition. After three meetings one of the partners said, “This is all very interesting. I have a number of my clients for whom I could deliver the same service that you are giving us.”