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How many times have you heard someone say, “Mind your own business?” For accountants, especially in these economic times, that just may be sage advice.
We have seen many practitioners get so wrapped up “in their practice,” they never seem to spend any time working “on their practice,” often leading to missed opportunities, errors and sub-par results.
While it is easy for professionals to get caught up in the daily ins and outs of their practice, especially in smaller firms, finding a good balance is key. That is not to say you should not focus a substantial part of your energies on client work: preparing financial documents, providing timely client support, and delivering excellent quality work. But a single-minded approach toward always working “in the practice” could be holding you back and keeping your accounting business from becoming all that it could be. To be truly successful, accountants must allocate time each and every month to work “on their practice” and focus energies on developing their book of business.
So what do we mean when we say working “on the practice?” Working on the business aspects of the practice includes changing your perspective and taking a bird’s eye view to really look objectively at all the key areas of your accounting business. It is important to spend time on the business development, marketing and client servicing areas of your business. A thorough review must always be accompanied by an in-depth financial analysis of your practice as well.
It is often said “if you fail to plan – you plan to fail”. A great way to get started working “on the practice” is by developing a basic but solid business, marketing and business development plan. Start by preparing your initial plan in a draft form, which does not need to be deeply thought through or for that matter encyclopedic in nature. In fact, if you are just starting out, less is more when it comes to developing your business and marketing plans.
Several pages, perhaps a maximum of 10 pages, should probably do it. The plan needs to be specific about your targets. For example, which clients and potential clients and what types of engagements do you plan to focus on, along with the markets or segments you intend to reach.
When you have identified your primary targets, consider the ways to best reach these targets, and outline those methods you intend to undertake to secure their business. We also recommend developing and integrating Key Performance Indicators into your plan to allow an opportunity to measure your success versus your business plan. KPIs are an excellent way to establish criteria for measuring success prior to a specific engagement and then assessing achievement against these KPIs to benchmark the progress and eventual outcome of the engagement.
The next absolute requirement is to make time available every month. We recommend that you spend a minimum of eight hours every month working on your practice, especially in business development. Another good tactic is to pre-schedule your calendar with time blocked out every month for this work. Colleagues, employees, and clients—yes, even clients—requesting time to meet with you should be told that you have a prior commitment and schedule meetings and activities around your business development time. If finding time in a large block to dedicate to your practice development activities is difficult, another option may be to try scheduling several smaller blocks of maybe two hours a week instead. In any event, whenever working on business development, always allow at least an hour of uninterrupted time so you can focus and maximize productivity.
The key is allocating the time investment each month, not whether it is scheduled in a few shorter periods or one long one. Try to avoid Monday mornings and Friday afternoons for phone calls to clients. Just as you are winding up at the beginning of the week and winding down at the end, so too are many of your clients and prospects. They will appreciate it and you will avoid wasting time unnecessarily.
Let’s face it; as an accountant you already know that understanding the financial elements is critical. While most every accountant has a thorough understanding of the financial aspects of running a practice, they must also strive to become a smart business person too. This business person needs to determine what aspects and measurements will define your accounting practice as successful. Thoroughly review your P&L to see what is going on in your practice month to month and quarter to quarter. Engage your partners, trusted business advisors and/or business coach in a discussion about your business and the information you have.
Do not take things for granted. Challenge yourself with questions about your profits, margins and expenses. Why are the numbers as they are? What can you do differently? What can you do better? We are often surprised by the lack of budgeting that is prevalent amongst accountants! It appears the adage, “the cobbler’s kids always seem to have the worst shoes” is apropos here! It is important to create an annual expense budget for your practice at the beginning of the year and stick to it!
If you are a sole practitioner or are just getting ready to strike out on your own, building a support team of professionals to help you is a smart course of action. The challenges for sole practitioners are somewhat different, especially if you are coming from the relative comforts of practicing within a larger organization.
Since you are or plan to be on your own, it is understood that you are confident in your ability to handle the financial matters of your clients. However, the nuance is that while you are working with clients, you will still need to assure the correct handling of the day-to-day responsibilities required to run the business, often without the benefits of other available hands. Therefore, assembling a solid team to work with you will significantly help to improve your level of success.
Many accountants starting out in private practice make the mistake of trying to do too much. While you may be inclined to “do it yourself”, unless you are experienced in a particular area, do not do it! Set your mind toward building a professional support team. Start by identifying and securing a legal advisor and any other professional resources you may need. Ask for referrals from colleagues, friends and even clients. Make the time to interview several professionals before you select the ones that are right for you. It is important to find people for your team that have the right combination of experience and personal chemistry that matches with you.
Next, secure staff to help with the administrative tasks such as data entry and client billings. Use the same methodology to select your staff as that used to secure others for your professional team. While a part-time person may be sufficient when starting out, continuity is essential. Determine at the outset if this person is flexible enough to provide additional time as your practice grows, perhaps even becoming a full-time employee. If not, you may want to select another candidate.
In a commoditized field such as accounting, finding ways to differentiate yourself and your firm is extremely valuable. Look for any opportunity to improve a client’s experience with you and your firm. There is an oft quoted statistic that says for every time a person receives great service, they may tell one or perhaps two others about their terrific experience. Conversely, for every bad service received, the recipient may tell as many as ten or more about how poorly they were treated. That is correct: 10 or more!
It is with this in mind that you would do well to consider ways to exceed your client’s expectations in everything you do—from an initial call to delivery of the final product and everything in between. Always be incredibly thorough and accurate by checking and rechecking all client work before the client ever sees it. And return client phone calls unbelievably fast.
Do not let the issues or problems du jour become your single focus. While you must be involved in the practice day to day, it should not be the only thing you do. Make the time to build your practice and rely on your team. Minding your own business is not only a great idea, it is essential, and you should thank everyone that reminds you to do so. After all, if you don’t mind your own business, who else will?
FEBRUARY 25, 2014
BY BILL TAYLOR