Two weeks in 2022 – 50 more weeks of opportunity, and yes, I understand challenges as well.
Hello, I am Mark Lloydbottom, acclaimed as one of the world’s leading specialists in Practice Management. After 15 years of building my own accountancy business in Bristol, UK I was the founder of what grew to become the UK’s leading provider of marketing solutions to UK accountants. Then in 2000 when the Internet was growing into a force to be reckoned with, I was the founder of what became and still is the UK’s largest provider of accounting firm hosted and managed website solutions. Along that journey I have developed expertise on consulting with accountancy business owners worldwide. My clients include virtually all of the top globally branded firms – BDO, Grant Thornton, RSM. PKF, Baker Tilly. My clients also range from sole practitioners to 30+ partner firms. Enough about me.
I would like to share with you 7 habits of a highly effective firm owner. Yes, that is an approach adopted by Stephen R. Covey in his best-selling book – The 7 Habits of Highly Effective People.
1 Time on – AKA Chargeable time
What did your chargeable time look like in 2021? Was this down compared to 2019 or maybe even 2020? What is your target for the current year? The reality is that your time on is massively important to sustaining or maybe increasing firm profitability and your share of those profits.
When I started consulting way back in1985 the average annual partner chargeable hours were in the region of 1250 a year. That average has now reduced and is typically between 850 and about 1150. But you are NOT average, are you?
Some of your time is what I oft refer to as ‘Visible Time,’ that is when you are one on one with your client – either in person or online. Make sure to invest time, in person, with your clients.
Key Strategy 1: Set a chargeable hour target for 2022 that includes an element of stretch – maybe up to 100 more hours than last year.
Key Strategy 2: Don’t make the mistake of not reporting all your client time. Your time reporting system is not a billing system – it is merely a retail costing system. You need to know the true cost of serving clients. You are the owner of an accountancy business, not a charity! Therefore, do not donate time to clients by underreporting your work.
2 Staff management – give feedback, not criticism
OK, we are probably all guilty of letting a staff member know they have done something they should not have done and communicated with the staff in such a way that they are acutely aware. They are reprimanded – it can hurt and demotivate. And I know because I have been guilty of this in my early years of managing my accountancy business.
Key Strategy 3: Refrain from letting loose on your staff. Always find ways to praise them. If they have done something wrong wait until they are about to repeat the same process and ask them, “How do you plan to approach this job?” They will understand, hopefully without prompting, the reason for the question – and you may well be surprised that they know this time what to do differently. In this way you will have gained their trust, respect and confidence.
3 Take ownership of recovery
It is widely acknowledged that a well-managed profitable accountancy business realises 85% of time on. So, what is the realisation on your own client portfolio? If greater than 85% – keep up the good work – maybe add in two or three percent more?
Key Strategies 4: If less than 85% – maybe it is time to discuss a price adjustment with your client? Maybe the client’s staff could improve their record keeping? Do you need to improve staff briefing before they start a job? Review the jobs on which you recovered less than, say, 80% – would any of the strategies help improve realisation.
Key Target 5: What is your client portfolio realisation target for 2022?
4 Developing your expertise
If your role is compliance services, then allow me to assume that you are up to date and leading edge in all relevant aspects of legislation and regulation. But what specialist services do you offer? Do you specialise in an industry? If so, what can you do to make yourself more of a Famous Person? If your specialism in a service, e.g., VAT/Sales tax, management accounting, client accounting, estate planning, business advisory, financial services and so on – how can you cross serve (I prefer this term to cross selling which can put some partners off) other firm clients?
Key Point 6: What is your revenue target from your specialism(s)?
5 Your personal development
Your standard CPD usually accommodates your need to keep up to date, but what is your plan for personal development and service skill enhancement? The profession has never been at the crossroads as it is today. Technology companies are developing applications that can deliver accounting, reporting, analytics and remote filing…and much much more. But, to coin an old cliché, people do business with people. It is mission-essential to be up to date beyond compliance. Yes, you must be able to serve and file on a timely basis. But you should also seek to develop far wider skill sets than has been the case with previous generations.
My standard recommend is that you identify areas that are of interest to you that will enable you to engage your skills and knowledge that you can leverage into client service engagements.
Key recommend 7: I encourage my clients to invest between 150 and 200 hours in personal development. Please note that 200 does not have to be a ceiling.
6 Marketing – AKA business development
You may have a marketing team (or you may not of course) but do you have a Personal Marketing Plan? My ask of EVERY partner is to make a commitment to grow the business. If you are a firm founder, then you will know what it takes to build the business. If, however, you are second or third gen then your founders will tell you that clients come and go. Maintaining an active presence in the marketplace is essential.
Key recommend 8: Remember to ask your client’s if they “know anyone who needs a good accountant”?
Key recommend 9: I know some Managing Partner’s who will not entertain offering a partnership unless membership and commitment to a community organisation has been demonstrated.
7 Your habit
Allow me to give you space to come up with your own habit for 2022. You might not need to take on board all of my suggestions but you may know something within you that you wish to do differently. Unleash the power of your own thinking and ideas.
Finally, these are not new year’s resolutions – for often those fade away by the end of January. These are goals that are:
- Time Based
I wish you every success this year and may we all, somehow, see the end of these variants. Yes, all of us around the globe wish to return to whatever we regard as normal. Your clients need you more than ever. Do ALL you can to be timely with your work and to ask clients how you can serve them better. Your goal? To be the client’s Most Trusted Advisor in 2022 and way beyond.