Our Business History and Learning from Errors
1. Ancient History (Skip to Point 4 if you don’t like history)
In 1988 I was appointed by the (Thatcher) government of the day to lead the setup of national business improvement networks and to design and implement support schemes for them that would reach 1m small businesses and ultimately would raise their international competitiveness from 21st to 7th place.
In 2010 the outgoing Labour government left a message on the desk of the incoming Chief Secretary to The Treasury which read “there is no money”. And so it was that all the funding we were using to help small businesses was fully cut at 3 weeks’ notice.
I suddenly didn’t have a business and was then obliged to consider either retirement, which was affordable but terrifying, or the course actually I took which was to develop affordable ways that small businesses could continue to access good advice. And thus keep the UK advancing up the international competitiveness table.
The obvious route was automation. But having spent 22 years telling clients and trainee consultants that the work we do was unique and bespoke, I was forced to consider how much of our consultancy work was actually repetitive. And mortified to discover that the answer was 90%.
So, I put into Excel, the processes that I had refined through training several thousand consultants which they had used with 1m clients and stratified the resulting business performance database into ‘whole business’ measures.
By coupling the two with expert algorithmic help I was able to build a prototype to generate automated comparative outputs and corrective actions from simple manual inputs as follows:
Benchmark the performance and potential of any business
Forecast its value options and their feasibility of achievement
Generate performance improvement plans
Apply specific action plans and procedures
Coach business owners through implementation programmes
I field tested these with 50 business owners and the paid uptake that followed was 70%, given the revelations and the affordability that such an approach made possible. Since small businesses make up 94% of the population this opens a £10bn pa market based on current business advice spending levels.
So, I sold a property and invested £1m in unique software development to make it available online and started test marketing.
Error 1
Despite getting 600 businesses to self-use the Business Dashboard® assessment tool only 10 proceeded to buy or implement the performance improvement software that followed. The rest did not have a good enough grasp of business strategy to see the benefit of proceeding, even at £50 per month for use of the whole system.
So, I decided that intermediaries were needed to explain the benefits to business owners and to coach them through long term implementations. The obvious choice was consultants who find it very hard to persuade owner managers to spend £500+ per day on anything but crisis management. I reasoned that by giving them automation and readymade solutions their ability to make the same profit at charges from £10 per day would be an obvious winner and lead them into long term recurring income.
We embarked on a national recruitment campaign and ran sessions for 1000 self-employed consultants. But only 5 ‘got it’ and are now representing us in 5 regions of the UK as Area Directors. The rest were unwilling to spend anything on training or software licensing. Nor do they wish to change their business model.
2. Medieval History (Skip to Point 4 if you don’t like history)
I ran focus groups with the whole marketplace of business advisors, and accountants emerged as the clear favourites.
They had:
Business owner client bases
Trust from business owners
Need (as software competition eats into their margins)
The ability and desire to learn
So, we acquired the accountancy practice database for the UK (18,000) and commenced mailing them.
We quickly booked and trained 200 who were then given Runagood® software licences to use, but only 10% did so with their clients. On examination this 10% turned out to be practices that were already into ‘Financial Management’ services I.e: budgeting, forecasting, management accounting, performance reviews.
Error 2
It’s too big a jump of skills and culture to go from ‘Compliance’ to ‘Business Consultancy’ without first passing through ‘Financial Management’ services.
Error 3
One days’ training is not enough to master the software’s philosophy.
Error 4
Most accountants dislike the selling needed to introduce new services to clients.
3. Modern History (Skip to Point 4 if you don’t like history)
Products
We introduced a 12-month weekly training and coaching programme last year with mixed modules on Technology use, Consultancy skills, Practice Marketing which gave us lift-off and we appointed a new practice every month, 80% of whom persisted and are now into ROI.
The year was packed with Zoom training, workshops, coaching
The 20% that didn’t persist, or struggled, were compliance-only practices so we started turning this type of applicant away as unlikely to make it. But then a radical solution occurred which could greatly increase our supply of Partners.
Representation
We ended 2021 with Partners in areas of:
East London
Kent
Sussex
Southeast London
Shropshire
Durham
North Yorkshire
Worcestershire
Ireland
Essex
West Wales
…mostly entrepreneurial accountants and a few consultants who ‘get it’
4. Future History
Products
In Q1 of 2022 we will introduce ‘Financial Management’ products and services training for Compliance-Only practices. This isn’t ‘teaching grandma to suck eggs’ but a recognition that most practices wish to break out of that dependency and need a better route map for doing so.
We will launch training and technology modules that integrate with existing practice software to provide for any business, services in: budgeting, cashflow forecasting, management accounting, review meetings, advice, fractional FD.
…and how to market and sell it the services.
As ‘Compliance Only’ practices gear up to the Financial Management level, they will then graduate to the ultimate Business Management level, at their own pace.
This works for any practice Because Financial Management services is a relatively short step from Compliance, and from there another relatively short step to ‘Business Advisory’.
Representation
We will commence 2022 welcoming new Partners in:
Wiltshire
Hampshire
Manchester
Tyneside
Northumberland
Black Country
…more entrepreneurial accountants and one consultant who ‘get it’