Short term thinking for accountants
The ebb and flow of being demand driven and its risks
Just when you had made some space to work on diversifying the practice away from its dependence on financial compliance and administration, a client problem flares up that demands immediate attention.
How do you juggle it…
Delay the diversification work?
Tell the client to wait?
Delegate the diversification work?
Delegate the client work?
Work through the weekend?
Struggle on and hope for some luck?
Or a key staff member resigns. How to deal with that…
Place urgent ads?
Outsource their work?
Do their work meantime?
Ask their clients for more time?
Or a big client switches to another accountant. What to do…
Beg them to stay?
Offer a price reduction?
Follow up all the quotes you made in the last year?
Raise prices to your other clients?
Or a system crash blocks client records and processing. Do you…
Switch back to manual?
Hire an IT consultant?
Work all night trying to fix it yourself?
Find another system?
Threaten the supplier?
I could go on; we’ve all been there.
These things are a fact of being in business and cannot be eliminated, but there is a balance to be struck between reaction and proaction if the practice is to progress.
Practices that focus on compliance and admin services are culturally reactive. Waiting for existing clients to express a need and for new clients to present themselves by referral and from Google, to which they are glad to respond.
That is their business model and way of thinking and I know some quite big practice owners who have a nice lifestyle based on the high volume of such business. But they worry about how sustainable it is given changes already happening in the market. And they also fret about the peaks and troughs in demand and workload through the year.
And so it is that they approach Runagood® in the hope that we can switch on a new and automated stream of revenue as a defence, if or when the need arises.
Well, it’s not that simple. It’s like the approaches I experienced from business owners in 30 years of consultancy work who would say, “I spoke to you about this possible problem two years ago and it’s now happened so I need an immediate solution” My answer would be “I’m flattered you think I have a time machine” eliciting the reply “Sure, I just hoped it was a blip not a trend”.
If I took the job it was in the knowledge of 12 months of agony and losses for us both, wholly cheaply avoidable.
By like token it’s a huge step to upscale from Compliance and Admin into Business Management, especially if it’s an emergency.
Like any successful diversification, or defensive strategy, it needs a realistic plan that sets out the way of working towards it by putting the building blocks into place early.
The most powerful strategy is to upgrade first into Financial Management services, by which I mean, management accounting, budgeting, cash flow forecasting, performance reviews and financial strategy. These experiences develop basic consultancy skills and crucially reorient the practice from clients’ pasts to their futures, developing ‘trusted advisor’ status.
This is fairly quick to implement (months) and brings in ready new revenue from existing clients at better margins.
And the biggest bonus is the culture change in the practice that it brings about. It makes it outward looking and future thinking by association with these very same issues you are dealing with in client businesses.
So, to help practices wishing to upgrade from compliance and admin we are introducing a first stage in the form of a Financial Management services conversion package go here to register interest.
Meanwhile, what about all those crises I mentioned at the beginning, does a Runagood® partnership get rid of them?
Sadly no, but it does give you the ‘can do’ attitude to see them coming and fix them fast!