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Managing your business

A Christmas message for new practitioners from John Haylock, BankLink's Practice Performance Manager.

BankLink was the main sponsor of a recent new practitioner's course. I was delighted to attend the event and I met many people who were about to become owners or part-owners of a practice. Owning an accountancy practice is a great achievement. In most cases it is the culmination of many years of hard work.

Last December I wrote an article on the factors that set apart those accountants who own a practice from those that don't. I noted five key factors:

1. Being in the right place at the right time ie where the opportunity exists
2. Personal circumstances ie where you can take advantage of the opportunity
3. Having a sound technical ability
4. Having a hard working attitude
5. Being good with clients

Having attended the new practitioners' course I thought the time was right to follow up that earlier article with some thoughts on what it takes to run a great practice once you become an owner.

To me there are two basic strategies that you should adopt to run a financially successful practice. You need to work harder and work smarter. In theory the two strategies are not mutually exclusive. In practice they usually are. That's because people who work exceptionally hard find it difficult to invest the time to work smarter. And those who work smarter usually do so because they don't want to work exceptionally hard.

It will be no surprise that I am a fan of the work smarter strategy and believe that ultimately it delivers better all round results than simply working long and hard.

So what does a work smarter strategy involve? I think there are seven key components:

1. A strong focus on finding out exactly what your clients want - You need to find out what services your clients want and what standard of service they expect. Please don't assume they want what they have always been provided with. You need to ask your clients questions and listen to the responses you're given.

2. The development of systems to deliver what your clients want - By asking the right questions and developing the right skills and confidence, accountants can turn a $2,000 compliance client into a $10,000 added value client. As long as value is provided, some clients are happy to pay much more than they do at present. To take advantage of the opportunities you need to show that you can run a great business yourself. Your clients will help you identify the areas where you can improve. You can also source support from those parties providing services to accountants.

3. Enrol your team in the process - Most employees want to work in successful vibrant businesses. Taking advantage of that latent enthusiasm requires involvement. Give your team responsibility for improving systems and respect their initiative.

4. Focus on throughput - Getting jobs finished quickly drives client satisfaction, cashflow and improves productivity. There are three keys to improving throughput: set short turnaround targets, plan work so that targets can be achieved and minimise the number of jobs on the go at the same time.

5. Charge upfront for value not time - Break the link between the time spent on a job and the fee charged and you will be free to gain the benefits of improving your systems. You'll also focus on providing outstanding service.

6. Invest in continuous improvement - Don't just develop new systems and think you've got it all sorted. You haven't. The best organisations have a culture of continuous improvement. When they are confident their systems are as good as they can make them, they go and learn from unrelated businesses and discover new ideas. Join a coaching group - not only will you learn new ideas you will be motivated to achieve an even higher level of performance.

7. Plan to put the balance back into your life - Remember it's not all about work. You need to plan time for the other components of your life - your family time, your leisure time and your holidays. Turn your phone off this Christmas and enjoy what your business has allowed you to achieve.

This article first appeared in The Journal. It is reproduced with the permission of the NZICA.