WHY DOES YOUR PRACTICE EXIST?
Welcome to part 5 in this Series. To read Parts 1 to 4, visit the The Accountants Blog.

I often do my best work at this time of the year. By that I mean the important strategic work.

The phones stop, the office is empty or I’m relaxing by the pool somewhere. I’m reading a good book that somehow sparks creative thoughts. I think about the year ahead and make lots of notes.

In this post, I’m going to expand on my previous article (Part 4) entitled “How to get what You want, by giving Clients what they want”.

I believe that accountants have the power to change the world of business. Seriously, I believe that.

I know that all clients need help with their business. Yes, all of them.

Furthermore, we know that clients trust their accountant.

Seems like a perfect match, right?

Sadly, not. The vast majority of accountants are delivering absolutely no value whatsoever to their clients. Clients (or anyone for that matter) don’t like to pay for things they don’t want. Do you like paying for parking fines?

Accountants bury themselves in regulations and compliance. They are ignoring the real needs of their clients and they are not equipped to provide holistic business advice.

Most Practising Accountants are de-facto employees of the Government. They are providing services to meet the requirements of regulators, not clients.

My mission, and that of TNG Global, is to change the paradigm. I believe that accountants can change the world of business, particularly at the SME level.

In previous posts, I questioned the usefulness of financial statements and the quality of SME audits. Moreover, SME’s don’t need audit and most cannot read or understand their financial statements.

“What then is the value of an accountant in public practice?”

I started my career in public accounting in 1981, and you may be surprised to learn that I have never had to conduct a company audit. In western countries, audit is pretty much limited to listed companies and very large private companies.

However, in most Asian countries, audit is still endemic, even for SME’s. Yes, there are some exemptions creeping into Asia, but the reality is that even though Company Law may exempt audit for an SME, the Revenue Authorities and Banks are still asking for audited accounts.

Audit Exemption in Asia
I’m no expert on audit – far from it. Audit has an important role in corporate governance to protect shareholders who don’t have day to day control or management of the company. Of course Asian accountants will be reluctant to let go of their audit ‘security blanket’, but the fact is that SME’s simply do not need audit and clients do not want it.

It’s sad to think that Govt taxation departments and Banks need protection via an audit. Of course I realise they are simply passing responsibility back to accountants as audits are a cost to the business owner, not the Govt or the Bank. Why not try to pass the compliance burden and risk back onto small business if you can get away with it! This is not how it works in western countries. The Banks and Govt have their own risk management processes and certainly never demand an audit.

In terms of reform, Singapore has been the leader of the pack. Malaysia is still watching from the sidelines, and Hong Kong has recently taken minuscule steps to simplify.

Singapore has taken the biggest steps starting a decade ago by moving to exempt small business from audit. The first stage exempted only a small proportion of SME’s. However, from 1 July 2015, the criteria for a company to qualify as “small” has been both simplified and loosened to include over 25,000 new companies (according to the Singaporean Senior Minister for Finance and Transport). The new eligibility requirements are as follows (exemption if two criteria are met):

• Annual revenue is less than SGD$10 million (previously $5million)
• Total assets not exceeding $10 million
• Less than 50 employees

These changes more closely align with the regulations in Australia and the UK.

In Malaysia, SME audits continue, however the SSM (Companies Office) in its 2008 consultative document “On Creating a Conducive Legal and Regulatory Framework for Businesses”, suggested using three criteria to determine whether an entity should be considered a small entity, as summarised below:

• Total revenue of not more than RM10 million;
• Total assets of not more than RM5 million; and
• Not more than 50 employees.

In Hong Kong all companies must also be audited, except dormant companies. However, from 2014 new rules allow certain SME reporting exemptions. For a company eligible for simplified reporting there is no requirement for an auditor to express an opinion of whether the financial statements present a true and fair view. A small company must not exceed any two of the following:

(a) Total annual revenue of HK$100 million
(b) Total assets of HK$100 million at the end of the reporting period
(c) 100 employees

Curiously, Hong Kong seems to have departed from the approach of western countries and that of Singapore. Perhaps this relates to ‘big brother’ Mainland China issues?

Asia is at least 20 to 30 years behind western counter-parts in terms of simplification of corporations’ laws and the drain that imposes on small business.

It’s all smoke and mirrors. SME’s are not interested in audit or regulations. They want to make money. When are accountants going to wake up? When will Governments take the brakes off small business which is the engine for a prosperous economy? As I have said before, accountants end up being squeezed in the middle between Govt regulations on one side, and client needs on the other.

The Solution: Blue Ocean Strategy for Accountants
Please don’t ever complain about competition. In the business advisory world, there is virtually no competition at the SME level. On the other hand, compliance and audit is a commodity, highly competitive, and if I were an SME I would shop around for the lowest price. It’s the ‘Blue Ocean Strategy’ concept. (Kindle version USD$17.00)

Here’s my advice. If I were to set up a Practice in Asia, I would tell my SME clients that the audit is free (or pick a low-ball figure). Furthermore, I would tell them that I will file your income tax return free of charge. How many clients will I get? It would certainly create a strong point of difference!

Of course, I would have clear terms of business. Terms designed to add value to my clients business. That’s where I would make my money. I would make money from delivering services that will help grow my clients’ profits and protect their wealth.

Now to be absolutely clear, I am not suggesting that you stop offering compliance/audit services. To the contrary, this is the foundation stone of your Practice. Don’t let clients choose your firm based on the price of audit and tax compliance services alone. Furthermore, I’m not suggesting that you cut corners. You still need to deliver professional, quality audit/tax services (as required by law).

To make this work, client selection is vital. In Part 3 of this blog series I talk about this and offer a free download – Strategy #101.

Active readers of my blog will know that I built an MDP, a multi-disciplinary practice that worked very well for me. We did zero audit. Ziltch. So, apart from client selection, the range of services you offer is a key. We grew our average fee to over $30,000 per client. Clients paid monthly by direct bank credit or in advance. The bottom line is that clients came running to us, they were making more money, getting value, paying more fees (more promptly) and we had a Practice where it was satisfying and fun to work. In other words, you can get what you want, if you give your clients what they want.

To learn first-hand how make these kinds of strategic changes and many more, I’m currently running a series of events across Asia entitled “How to (massively) Increase Revenues and Profits with less Clients and less Effort”. Please visit: www.tng-global.com/tng-events/

Greatness and Inspiration
What makes great companies great? How do great leaders inspire? The answer is well documented, yet so few understand how great leaders inspire action. Steve Jobs knew it. Mother Teresa knew it, as did Martin Luther King and John F. Kennedy.

If you’ve read the great book ‘Built to Last’, you’ll already know the answer.

What is your purpose … beyond making money? Why does your Practice exist?

I found this TED Talk by Simon Sinek which covers this topic very well. Just watch the first 6 minutes.

Let’s tie these concepts together.

“People don’t buy what you do, they buy why you do it”

1. Why does your Practice exist? What do you believe? Surely it’s about helping people and making a difference.
2. How you do it? Your services, and what makes your firm different.
3. What you do? You’re an accountant in public practice (but no ordinary beancounter).

Perhaps your clients like you, so how you do it is relationship driven. That’s fine, but it’s not a smart business model in terms of leverage. Clients only want to see you, so as you grow, your life gets busier and busier. You only have so many hours in a day. Do you want a job or a business?

Strategically, if you are trying to build a real ‘business’, then it makes better sense to create an organisation that attracts clients and good employees driven by your sense of purpose, not your personality. The why.

So, Lesson 8 in this series is ‘Find your Why’. Why does your Practice exist (beyond making money)?

When I facilitate Strategic Planning for a business, we spend time on identifying and articulating the culture of the organisation. This includes corporate values, mission and purpose. It’s encapsulated in the Company Mission Statement.

Here is the Mission Statement of my Accounting Practice, The Bruce Partnership, developed in the mid 1990’s. You’ll notice our purpose is woven into the document, and you’ll notice it is timeless:

The mission statement is a vital business tool and when used effectively, is used daily, be it welcoming a new client or new employees, a vendor, or ongoing internal training to keep the organisation focused.

Concluding Remarks
The most successful companies on the planet, those companies that are ‘Built to Last‘, have a clearly defined sense of purpose. They know why they exist and where they are going, and they attract the best clients and the best employees.

Over 98% of businesses in the world have less than 15 employees. Two-thirds of accounting firms are sole practitioners with less than 10 employees.

SME’s need business advisory help and there is virtually no-one servicing this ‘Blue Ocean’ opportunity. Accountants have that opportunity, but they are living on a different planet, buried in regulations, trying to compete by selling audit and compliance ‘commodities’ to SME’s that don’t want these services.

Surely it’s time that we change the game plan?

By all means share this post with your partners and email me if you have any questions or comments.

To print a PDF version by clicking this link. To read previous posts go to the Accountants Blog.

Wishing the very best for the year ahead!

Marc R. Bruce
2 January 2016 (original post)
26 June 2018 (updated)

Suggested Plan of Action

1. Make time for planning and thinking ahead (12-36 months).
2. Lesson #8 – Find the reason why your firm exists. Your Purpose.
3. Attend my next seminar:
   Visit: www.tng-global.com/tng-events

About the Author
Marc Bruce is an Australian accountant, and the founder of TNG Global,
a Community for Accountants who are making a difference in the world.

HOW TO GET WHAT YOU WANT BY GIVING CLIENTS WHAT THEY WANT
Welcome to part 4 in this Series. To read Parts 1 to 3, visit the The Accountants Blog.

In this post I will uncover lesson #7 that helped me grow my Australian Accounting Practice from nothing to over $6 million in revenues in 5 years. Ranked in the late 1990’s by Business Review Weekly as the #1 fastest growing accounting firm in Australia.

To recap:
Lesson 1  Find a compelling reason for change – the 4 D’s.
Dissatisfaction. Desire. Determination. Discipline

Lesson 2  Develop new habits, starting with your reading. Commit to self-improvement. If you want more, you’ll need to get better.

Lesson 3  Become a brilliant Implementer

Lesson 4  Keep it real. Every business and every Practice needs improvement

Lesson 5  Create a clear, focused vision

Lesson 6  Take control of your calendar by planning ahead and blocking out important (not urgent) activities.

When making mistakes is a good thing
I’m an accountant that has made more mistakes than most.

There are many people that will judge me negatively by that benchmark. I like to read the blogs of other founders and entrepreneurs to learn from their mistakes.

In the past, entrepreneurs rationalised their mistakes as learning experiences. I accept that, provided the experience takes you in a new direction where you have learned something valuable to make better decisions.

I make mistakes because I try to innovate. I’m entrepreneurial which means I try things that have never been done before. As a result I make a lot of mistakes, but it comes with the territory.

The Pivot
The truth is, no-one ever succeeded at anything without some kind of failure. In modern day business school language we call this a ‘pivot’. This is a new term coined by Eric Ries who wrote the recent book: The Lean Startup (2011).

“Pivoting” is a familiar word in Silicon Valley startup world. When your first business model isn’t working (and this happens more often than not), the founder will pivot to plan B, then plan C, etc.

Here’s an example. When I started my Practice in Sydney in 1990 I wrote to everyone I knew, including clients and potential clients. The message was that I had started a Practice that would deliver more than just tax and accounts preparation. I used the phrase ‘management consulting’, meaning that I wanted to help clients beyond the numbers. A year later, our fees were still 99% tax compliance based. I failed.

Years later after trying different approaches, pivoting, I eventually got the model right. I was then overwhelmed often meeting 3 or 4 new clients per day!

The truth is along the way, I lost some clients. I lost money. I lost employees. I didn’t know the word ‘pivot’, but I needed to do something differently.

I’ve mentioned this previously, but here are a few things that started to work:

• I focused on the needs of my clients. I took an interest in my clients’ business.
• I changed my reading habits. I learned new skills like strategy, management, HR and marketing
• I went through a re-branding exercise. It’s called positioning in the marketing world
• I hired people who had different skills to me eg marketing advisors.

“To improve is to change; to be perfect is to change often” – Winston Churchill

Entrepreneurs fall in love with their original ideas, but fail to pivot because they can’t admit it’s not working. Successful entrepreneurs have to know when it’s time to change focus in order to stay in business.

One of the most famous examples of successful pivoting is Steve Jobs. When he returned to Apple in 1997, the company has annual losses of over $4 billion. What did Steve do? Apple had to rapidly innovate to keep up with the changing technology. He saved Apple by cutting their product line by 70%, focusing on only four main products.

Famous Pivots
Apple
Then: They were a company that revolved around selling elementary computer kits.

Now: They make beautiful computers, phones and iPads. The most valuable company on the planet.

Co-founders Steve Wozniak and Steve Jobs (left)

Wrigley
Wrigley didn’t always sell gum.

In fact William Wrigley Jr. stumbled on the value of gum while giving it away for free. Mr. Wrigley Jr. moved to Chicago in the 1890’s and took up work as a soap and baking powder salesman. He got the idea of offering free chewing gum with his purchases, and the gum proved to be more popular than his actual product. Wrigley went on to manufacture his own chewing gum brands, Juicy Fruit, Spearmint and eventually Doublemint.

Today the company grosses billions in revenue and is one of the most recognizable brands in American history.

Starbucks
The coffee shop which now inhabits every street corner (and sometimes two on each street corner) did not always sell fresh-brewed coffee to customers. They started off in 1971 selling espresso makers and coffee beans, which Howard Schultz (current chairman, president and CEO) fell in love with on first taste. After his visit to Italy in 1983, Schultz was determined to actually brew and sell Starbucks coffee in a European-style coffeehouse, and transformed Starbucks into the nationwide java sensation it has become today.

Facebook
Then: It was Facemash, a site comparable to HotOrNot.com, putting two pictures of people next to each other and asking the user to identify which one was “hotter.”

Pivot …

Now: It’s Facebook. Do I need to explain more?

Founder: Mark Zuckerberg (left)

Microsoft
Then: They created BASIC interpreters for the Altair 8800.

Now: They became the architects behind Windows in 1984 and it’s now the most popular operating system in the world.

The 1978 Microsoft team (Yes, Bill Gates bottom-left corner)

Product-Market Fit
How do we avoid failure? How do we launch a new product or service and make it a success?

Without going too deep into Startup business models, the short answer is aligning the product or service with the needs of the customer or client. It’s also called product-market fit. It’s called listen to the customer. Do you really know what your clients want? Let’s explore that in a little more detail.

With this in mind, things get very interesting when you try to apply this Silicon Valley ‘guru’ methodology to the accounting profession!

The Research
All of the research and surveys I have ever read over many decades across several continents say this about practising accountants and their clients:

Challenges that Accountants face:

• I feel fee resistance from my clients
• Keeping up to date with regulations and managing deadlines – struggling with work-life balance
• Keeping up with technology (Cloud Accounting)
• Attracting new Clients/growing
• Finding and keep good employees

On the other hand the Clients say this:

• My accountant is not responsive
• My accountant does not understand my business
• I need a partner to provide proactive strategic advice
• Expertise (a Specialist)
• Current and efficient with technology
• 20% of clients are dissatisfied with their accountant

Did you notice something really interesting? Clients do not rank fees at the top end of the list!

Seriously. How can that be?

Accountants feel resistance to fees and yet clients don’t rank it as a top issue. Huh?

“In my view, accountants don’t understand the needs of their clients.
They are totally out of sync”

I’ll go a step further. The only reason accountants have a business at all is because of Government regulation. The very thing they complain about is their lifeline. Without regulation accountants would be dead.

Consider this. Accountants are not charging enough, which is resulting in clients being under-serviced and neglected. It’s a level of incompetence. It’s a disgrace.

It gets worse. Sadly, many business owners see little direct value from statutory accounts so, while recognising they have to be produced, regard them as historical and out of date.

Accountants admit the Financial Statements are Flawed – a UK Study
A few years ago a UK group surveyed 250 accountancy firms and found that 73% of the Partners in Public Practice acknowledged that there were fundamental flaws in the annual accounts.

The Partners were not saying that the accounts are wrong or didn’t comply with all the relevant laws and standards. What they were saying is that annual accounts are of little or no use to the business owners. They didn’t give business owners the information they really need to grow and manage their business.

Whilst SME audits are not mandatory in most western countries, there are still audits required for SME’s in many Asian countries. I seriously wonder about the quality of these ‘audits’ given the low fees being charged. Knowing the usual material importance of inventory to the profitability of a company, I wonder if proper stocktakes are really being conducted, for example.

The Accountant of the future
SME’s need help. Who can they turn to?

Can accountants step up and provide the support so badly needed by their clients? Accountants need to consider getting the balance right.

The challenge for the accountant is to move up the economic value chain and provide higher value services as we move deeper into the technology and global knowledge age. There is a growing band of accountants around the world, who are making the great transition, but it’s still very small.

Today, the modern accountant’s role (and responsibility) is to improve organisational strategic and commercial performance. There is a growing trend for others in the finance team to have commercially focused roles. The scope of this type of work can be broad and includes determining strategy and business plans, reducing costs, negotiating sales contracts, systems development and improving human resources policies.

If accountants are to be regarded as business leaders, and valued advisors they have to meet the challenge. To be effective, leaders need to learn, read and think across a wide range of topics.

Building a Multi-Disciplinary Practice (MDP)
Here’s the way we positioned client services at True North Group in Australia.

We created distinctly branded divisions with people possessing a wider range of skills from marketing to human resource management.

Clients are interested in growing their business, creating and protecting long term wealth. Of course they also want to minimise taxation along the way

Let me share with you a real life client case study from when I was in Practice to demonstrate what is possible.

Case Study – ABC Computer Repair Business
Here’s an example of how the MDP concept worked for my firm.

ABC Computers was a new client, referred by another client, a Law firm.

Upon meeting with the directors of ABC I made a mental note. If you have read Strategy 101 you will understand when I tell you they were a ‘C’ class client. A quick scan of the prior year’s Financial Statements showed an amount of $800.00 for accounting fees. OMG. Not good. Definitely a ‘C’ or worse, a ‘D’.

Not wishing to judge a book by it’s cover, I continued with the initial client meeting process (which is a Course available for members of TNG Global).

ABC Computers repaired computer hardware and printers. They had 12 employees. A typical small business but they had ambition and a dream … ‘spark’. My gut said they had something special, so I decided to visit them. Their previous accountant had never visited their premises.

As part of our new client on-boarding process I offered them business advisory services (beginning with strategic planning and marketing support). They accepted.

We offered them our personal financial planning service, and they accepted.

Fast forward, a year later our fees were running at $36,000. Yes, $36,000 per year, recurring. I’m sure the previous accountant would not believe this story. Here was a client that had been trained by the previous accountant that $800 was the market value for accounting services. I’m also sure that the client thought “Oh, that’s expensive” for filing a tax return.

Here’s the thing. ABC Computers continued to pay us $36,000 per year for many years. When the owner visited our office he literally skipped down the corridor to greet me with open arms and a warm hand shake. He was sooo happy to see us. I’m guessing he saw us as valued business partners and advisors.

Let me repeat one more time in case you missed the lesson here. Lesson 7 is:

“Accountants feel resistance to fees and yet the clients don’t rank it as a top issue.
Accountants don’t understand the real needs of their clients”

In my experience, clients want help to grow and manage their business and they are willing to pay handsomely for such advice. In the process you will build stronger relationships and more loyalty.

Beyond delivering value added services to clients, there are several other strategies TNG adopted in response to meeting client needs. Things like billing methods and service standards. We’ll cover these topics in future posts.

You can share this post with your partners and email me if you have any questions or comments.

Print a PDF version by clicking this link: How to get what you want, by giving Clients what they want.

All the best!

Marc R. Bruce
2 December 2015

Suggested Plan of Action

1. It’s time for accountants to pivot (change direction to meet the needs of clients)
2. Lesson #7 – Listen to your clients and deliver services to match their needs.
3. Develop a Strategic Plan for your Practice and create a range of value added services beyond tax, audit and compliance.
4. Target the right type of clients. To begin extracting the ‘gold’ in your Practice, download Strategy #101 by clicking this link.

About the Author
Marc Bruce is an Australian accountant, and the founder of TNG Global,
a Community for Accountants who are making a difference in the world.

Lesson #6

Despite Hollywood portraying accountants as nerds, geeks, and financial manipulators, I personally believe accountants can make a difference in the world. Underneath your shirt/top is a special suit with a big ‘SA’ logo … the Super Accountant.

It’s in your DNA.

Perhaps you don’t realise your powers just yet. I’m here to tell you that you can make a difference in the lives of business clients. You are the super hero, but clients just don’t know you have such powers!

OK, perhaps I’m bringing a little humour to the argument, but in fact my message is sincere. I’m here to help you unlock that potential and take you down a path most accountants will only dream about. But, first, you need to work on yourself.

In Part 3 of this series we’re going to help you find more time.
Accountants are busy people, overloaded, and in many cases bored. Bogged down with compliance deadlines and bored of the same routines year after year after year. Unappreciated.

It’s time to make a change.

In my case, yes, I grew my Practice at an amazing pace (ranked #1 fastest growing firm in Australia), moving from a rank of #10,000 to a Top 50 position over a period of 5 years. But more interestingly, I reduced my productive hours from over 1,000 hours to less than 200 hours. I picked up my kids on Wednesdays after school at 3.00pm. I did not go to the office on Thursday. I exercised on Tuesday and Friday mornings. I decided never to sit in a traffic jam ever again! I changed my whole weekly schedule. I took more holiday breaks.

This series is not about me, it’s about you. What do you want for your life and your Practice?

My purpose in this Series is to provide you, step by step, with proven strategies to grow and improve your Practice, and make a difference for your clients. In my previous blog posts I delivered Lessons 1 to 5, answering the question: “How I grew my Practice from Nothing to over $6million in 5 years”.

Lesson 1: Find a compelling reason for change – the 4 D’s. Dissatisfaction. Desire. Determination. Discipline.

Lesson 2: Develop new habits, starting with your reading. Commit to self-improvement. If you want more, you’ll need to get better.

Lesson 3: Become a brilliant Implementer

Lesson 4: Keep it real. Every business and every Practice needs improvement

Lesson 5: Create a clear, focused vision

Let’s move on to Lesson 6. How can you make more money with less effort? Accountants are incredibly busy people, often stretched to the limits with deadlines and serving the needs of clients.

I’m loathe to use the phrase time management to describe this section as it’s become a cliché. One of the best resources I can recommend to you is Stephen Covey’s Habit 3 “Put First Things First”. This comes from his book, The 7 Habits of Highly Effective People. It’s seriously good stuff. There is also an entire book with the same name devoted to this topic.

The Peter Ritchie story
Before we get into the “how to’s”, let me share a quick story that had a memorable impact on me early in my career. Like many of you, I make donations to those in need. I never hand over money to door-knockers, and as you might expect, I take a strategic approach to making donations. I focus on children (the helpless), and I focus on credible organisations that don’t charge big fees or commissions (meaning the money goes to the cause, not the administration).

Anyway, my firm sponsored a charity auction evening for children with MS (multiple sclerosis) and Peter Ritchie was the special guest speaker. I remember bidding for, and purchasing, a red player autographed Sydney Swans football jersey (Australian Rules football).

Peter Ritchie AO (Order of Australia, a bit like ‘Sir Peter’), was an accountant working in a Chartered Accounting firm in the 1960’s. In 1971, he was the founding employee of McDonalds Restaurants in Australia, and undertook training in the United States.

Did you know that Australia was the first ‘export’ country for McDonalds outside the United States? As the story goes, the Americans used Australia as a test case cause it was on the other side of the world, and if things didn’t work out, then chances are no-one would ever know! No doubt for the same reasons, the first McCafe was opened in Melbourne in 1993.

In fact, McDonalds Australia lost money for many years, before Peter Ritchie as Managing Director turned the business into an ‘overnight’ success. Of course, it was hard work to build the brand. Later, he helped establish McDonald’s in most of the countries in Asia and the Pacific including Hong Kong, Singapore, Malaysia, Indonesia and New Zealand. He was a founding Board Member of McDonald’s Hong Kong, Malaysia and New Zealand. Remember, he’s a Super Accountant!

Anyway, after all this success, on the evening of the Charity fundraiser, he talked about his greatest regret in life. There was silence in the room. How could such a great success story carry regrets? He said he worked hard for decades climbing the corporate ladder, but literally missed his children growing up. His regret was not attaining balance in his life.

With that story in mind, let’s move on with Lesson 6.

The CCTV
I’m pragmatic. I want to make an impact on you. I want you to get results. I want you to be happy and have a rewarding professional life. I want you to take action, so let me paint a picture. Imagine that a video camera is installed in your office. It’s in the top corner and directed at you and your desk.

Imagine that we record your every movement from the time you arrive at your office in the morning, till the time you leave at night. What would we observe? I’m sure as we play this back you’ll notice certain habits and you may even cringe. Human behaviour naturally falls into set daily routines. We are creatures of habit (good and bad). The question is ‘what routines?’. Some routines are good and some are literally a waste of time.

We need to recognise our bad habits and routines and make changes. This comes back to Lesson 2 ‘Develop new habits’ (e.g. reading habits and content outside of tax and accounting standards!).

For example, how do you start your day? A cup of tea of coffee? A chat with the staff? Read the newspaper. Do you then sit at your desk, check your email, check your appointments and return phone calls? Is this the best approach? How to improve?

The First Step
Stephen Covey talks about separating activities into ‘Urgent’ and ‘Important’. That concept works for me. When the phone rings, we answer it. It’s certainly urgent, but is it important? Usually not. The phone often distracts us from important tasks.

The smart question to ask yourself is therefore: ‘What is important?‘

The answer is fundamental. It’s starts with Lesson 5 “Create a clear, focused vision”. How can anyone possibly make good decisions day to day unless they know where they are heading, and then implementing those activities that have been ranked and prioritised i.e. Lesson 3 “Implementation”.

Here’s a habit I developed with my calendar. What is most important in your life (not urgent). Family time? Losing weight and getting fit? Growing the Practice? Implementation of your Strategic Plan. Whatever it is for you …

At the beginning of each year I blocked out segments of my calendar for important personal events. School holidays. Football events. Concerts. My fitness program. Birthdays (wife and children). Family holidays, etc. Most importantly, I allocated time for the annual strategic planning process, implementation and review (also known as ‘Working ‘ON’ your business).

Fridays, I blocked time for internal meetings and social time with my team.

Over the weekend, I set goals/objectives for the week ahead, and blocked my calendar for the most important activities. Here is a screenshot from my calendar from 1998 (time slots blocked out in advance):

This ‘time management’ process became a routine, a habit. By the way, working ‘ON’ time means strategic work to build my Practice. Working ‘IN’ means productive time working on client matters. These terms came from reading Michael Gerber’s ‘E-Myth Revisited’. The blank spaces in my calendar were for everything else that my secretary and staff used to fill for me!

Other habits that changed my life: … I cut back on watching TV during prime time. I sat down for dinner at least 5 nights a week with my family. I read more, particularly online content. I love movies and quality television, but I took control of where and when I watched, and cut out commercials (a one hour TV show is actually 41 minutes of real time).

Once you set these priorities, it’s easy to develop the habit of saying ‘no’. ‘No’ is a powerful word. It’s a discipline based around doing what is important in your life, not what is urgent.

Delegation is another powerful time management tool. It’s too important to quickly gloss over it here, but learning the art of effective delegation will make a huge difference to your professional life.

Strategy #101
Let’s get very specific.

I want to leave you with arguably the most powerful strategy of all that will change your professional working life. If you have an established Practice, then I literally guarantee this strategy can double the size of your Practice and your income over the next 3 years. I’m not exaggerating.

While it takes some serious mental effort to implement, the benefits are immediate. You will instantly make your Firm more profitable, and you will free up a huge chunk of your time. Happy days!

Strategy #101 is about client selection and it’s a huge step towards extracting the gold hidden inside your Practice.

Strategy #101 is TNG Global members only copyright content, so please do not distribute to parties outside your own firm, OK? Thank you. Once you click on the button/link below, you’ll first need to register as a free subscriber to TNG Global, where you’ll get detailed instructions for the download.

Download

It’s one of the most powerful strategies that an Accountant with an established Public Practice can ever apply. I hope you agree.

By all means share this post with your partners and email me if you have any questions or comments. You can print a PDF version by clicking this link: Part 3 (Lesson 6).

Until next time, have a great day!

Marc R. Bruce
9 November 2015

Suggested Plan of Action

1. Lesson #6 – Take control of your calendar by planning ahead and blocking out important activities. As Peter Ritchie recommends … get balance in your life. No regrets.
2. Read Stephen Covey’s Habit 3 ‘Putting First Things First’ from his book The 7 Habits of Highly Effective People (Kindle USD$12.00)
3. Working ON the Practice. Lock-in time for important activities like Practice improvement
4. Download Strategy #101 by clicking this link.

Lessons #3, 4 & 5

My purpose in this Series is to provide you, step by step, with proven strategies to grow and improve your Practice. In my last blog post I delivered Lessons 1 & 2, answering the question “How I grew my Practice from Nothing to over $6million in 5 years”. Click here to read Part 1.

Lesson 1: Find a compelling reason for change – the 4 D’s. Dissatisfaction. Desire. Determination. Discipline.

Lesson 2: Develop new habits, starting with your reading. Commit to self-improvement. If you want more, you’ll need to get better.

In Part 2, I’m going to deliver to you three more secrets … or lessons.

Some of you are just getting started and looking to set up a Practice. Others have mature Practices. The information in this series is appropriate to both of you. It’s important to remember that I’m an accountant, just like you.

Do you recall your first few weeks working in an accounting office? I started my career in spectacular fashion, spending days upon days in a small, windowless room, cutting, pasting and filing minutes and resolutions into Company Registers. I ran errands around town including the taxation office, securities commission and did the firm’s banking. Sometimes we don’t understand how all the pieces fit together as we travel through life.

I’m reminded of a speech by Steve Jobs, the founder of Apple, entitled “Stay Hungry, Stay Foolish” which was delivered at Stanford University on June 12, 2005. You can watch here. The timing of the speech was interesting.

Steve was diagnosed with pancreatic cancer in 2003. It was very serious and for 9 months Steve refused treatment. In 2004 he agreed to surgery but not radiation therapy. At the time of this particular address he was in remission. Sadly, the cancer returned and he died in October, 2011.

There are 3 lessons to be learned from Steve’s address. Steve talks about passion and loving what you do, through good and bad times. But, the key point I wish to draw out for you today is: “connect the dots”. When I first started work I simply did not understand why I was stuck in a small windowless room, pasting minutes into company registers. There are turning points and events in your life that one day will make sense to you, and prepare you for success. For Steve, believe it or not, it was calligraphy classes!

I’m going to take you on a journey. It’s the same path that I took, and a tried and tested ‘best practice’ approach that I’ve used over the past 20 years with professional firms, as well as other types of businesses across multiple countries. I’m going to help you connect the dots in your accounting life. Be patient as all the pieces will start to come together and make more sense as you follow along with this Series.

There are no excuses. The journey we’ll take crosses cultural boundaries, it works in Asia (including China), it works in Europe, it works in North America, and it works ‘down-under’. The approach is based on principles. Yes, cultural differences are valid, however, strategies can be adapted, fine-tuned, but this is not the reason for failure.

There is only one major reason why you will not succeed.

Don’t worry, of course, I will provide you with the underlying principles, processes and strategies. In fact, I look forward to sharing my story with you and providing information to drive Practice performance. But, here is the biggest obstacle to your success … Larry Bossidy describes it best. Larry was the CEO of Honeywell (awarded CEO of the year in 1998 by CEO Magazine) and co-author of Execution: The Discipline of Getting Things Done. Honeywell had a great plan, but it wasn’t working. You can have the greatest strategies on the planet, but you will fail unless you become really good at implementation. So, it comes back again to one those 4 D’s – Discipline.

My best clients and the most successful are the ones that are the best implementers. We agree upon an action plan, and by the set date, they got the job done, no excuses. Lesson 3 – be a good implementer.

Hey, wake up! Are you already falling into this trap. Have you started thinking about your life and your Practice and the change process? (Lesson 1) Have you visited my eBook List? What books are you reading? Have you download the free Kindle reader? Click here to view the TNG eBook list. (Lesson 2) Not sure where to start? Click below and you’ll be taken direct to Amazon (Kindle prices quoted at 23 January 2017 for immediate download).

• The E-Myth Revisited (price US$11.00)
• How to Win Friends and Influence People (price US$7.56)
• 7 Habits of Highly Effective People (price US$6.00)
• Built to Last (price US$11.22)
• Traction: Get a Grip on your Business (price US$9.96)

Hmm … still procrastinating? Gosh, what can I say! Seriously, if you are not prepared to invest $10.00 on a book or two, then you honestly don’t have the mindset or commitment to move to the next level. If you want my help and have questions, become a member of TNG Global and send me a message. I’m here to guide you and support you on your journey. I’m also here to sometimes crack the whip! I’ll provide more information about TNG’s Membership below.

So lesson 3 is, be a brilliant implementer. Now, I’ll admit something to you. I’m OK at this implementation thing, but I’m certainly not the best. I’m better at creating ideas, the mess. There are people around you that are really good at organising, and follow through. In the book ‘Traction: Get a Grip on your Business‘, the author recognises this issue and suggests two leaderships roles: The Visionary and The Integrator. We’ll talk about delegation, roles and responsibilities on another day.

Keep it Real (You don’t know, what you don’t know)
Lesson 4 ‘Keep it Real’, is the last foundation stone before we get to the ‘meat’, meaning ‘the how’.

In my experience, the majority of people (including myself) are deluded. When someone asks you “how’s business?”, how do you answer? We’re polite and gloss over the real facts.

A few years ago I met with a potential client in one of the best hotels in Hong Kong (‘Mr & Mrs SME’). They had a good business and plenty of money. Everything was fine, right? Well, they were certainly not in a crisis. They looked good and they had all the trappings of success. Here is the thing. People often don’t know that they don’t know. I teach accountants how to be Business Advisors, which is beyond the scope of this series, but I can tell you from experience that you don’t have to be in a crisis to need help with your business (Practice).

As we sipped upon the finest English tea in Hong Kong (the most expensive anyway), I asked Mr & Mrs SME a question. “Are there any key challenges in your business right now?” Mr SME smiled confidently: “Everything is fine”. Mrs SME just looked at him, and starred grimly.

Yes, the business made good money. However, as I observed Mrs SME’s body language, I turned to her and asked her to elaborate. “My husband works 24 hours a day, 7 days a week. He travels constantly. We don’t have a family life”.

Later, after securing the engagement and analysing their financial data, I learned that the business had plateaued. A business that has stopped growing is not a healthy business. There was a problem.

After two decades of working with business owners, here is what I know. The truth is, I have never ever met a business (including an accounting practice) that doesn’t require some kind of improvement. It may not be a crisis, but business is complex and people are, well … they are people, emotional and proud, and sometimes often deluded.

So, please don’t tell me that everything is fine in your Practice. I know that is a lie. Let’s keep things real.

Lesson 4 is therefore, recognising that every business and every accounting practice needs improvement. I know that that you have some challenges and frustrations. I’m fairly confident that you have problems that you are not even aware of right now. I also know as a fact that there is ‘gold’ in your Practice. Gold that can be extracted when you are open to think differently. (Here is a clue … you have clients that desperately need your help)

How to extract the gold? How to help my clients? How to improve my Practice? How to get more balance in my life? Answer: … well, there is a large group of you that will do nothing. You are not sufficiently dissatisfied or motivated to change. However, there is a group that wants more from their professional life. This series is designed for you. TNG Global is built for you.

Begin with the End in Mind
Lesson 5 is my personal favourite.

Tom Watson, founder of IBM, attributes his success to having a clear focused vision of where he wanted the company to be 5 years ahead. I’m a huge fan of Stephen Covey, author of “7 Habits of Highly Effective People”. You may recall Stephen’s second habit is ‘Begin with the end in Mind’.

This is the essence of Lesson 5. Let me prepare you mentally …

Forget your current circumstances. For this exercise, set aside the blood and the guts of every day working life. Take out a clean sheet of paper (or your tablet!).

With one exception, I want you to distance yourself from your current problems and circumstances. The exception being that you are confronted with a ‘life and death’ crisis. If you have a crisis situation, then you’ll need to address that urgently. I’m going to assume that you are not in a crisis.

Close your eyes … picture your future, five years from today. Dream … remove the shackles. Avoid getting sucked back into your current circumstances, and don’t look back. Look forward and imagine the ideal life you wish to create.

Where are you living? What kind of work are you doing? Where is your Practice located? How many employees? What are your revenues, profits? How many days do you work? Create a clear, focused vision. Please don’t worry about ‘the how’ at this point. Just focus on the future and your dream lifestyle.

A few years back, I was working with the Board of a PVC (plastic) pipe manufacturing business in Malaysia. They were looking for a new direction. Competition from China was killing margins. The process I use for this task is Strategic Planning. It’s at the core of my consulting work over the past 20 years. For those interested, I have a course inside TNG Global called “The Accountant as Business Advisor” where I teach Strategic Planning, among other consulting skills.

Anyway, after a month of working with the PVC pipe business, here is what we (the Board) decided. The company was located close to the Thai-Malaysian border. At that time, free trade agreements resulted in an upswing in cross border traffic. The company had a fleet of a dozen trucks which were in heavy demand. The Board decided to move into the logistics business! A bonded warehouse was built, and the fleet was expanded. The following year the fleet had increased to more than 50 trucks!

Now, I admit that decision was pretty radical. It’s a rare outcome, but anything is possible. In reality, as I mentioned above, I think you have enormous potential to grow. Accountants are literally sitting on a gold mine. I’m genuinely excited for you in terms of creating the future. Lesson 5.

It goes without saying that my advice to you is to create a Strategic Plan (SP) for your Practice. Here is a table of contents for the process I use at True North Group. Clearly this blog is not designed to teach you strategic planning, but bring awareness to the fact that it is a wonderful process.

Ideally, I recommend that you have the SP process independently facilitated. I realise that’s a serious investment (expensive) as it takes 2-3 months, usually longer. It’s a comprehensive process.

In the previous blog post I promised a solution to your relationship issues. As a sole practitioner, you’re unlikely to have this problem, but partnerships, like marriages, are always going to be a challenge because people have different personalities, different working styles, and they are emotional. The solution I was referring to is Strategic Planning, and here’s why it works.

It’s about alignment. When I walk into a business, its common to find Partner ‘A’ (Director A) heading north-east. Partner B is heading south, and Partner C is off in another direction. I remember working with a 4 partner law firm in Sydney. It was like herding cats. Each partner had their own agenda and fixed in the way they did things. Getting alignment was a huge challenge, but we eventually got it done. I also remember working with a family run furniture retailer. The father wanted to exit and hand over to the children. Sadly, this is a case where the father (and founder) simply could not let go. In frustration, the eldest son quit the business and created his own company.

The essence of Strategic Planning, in terms of how I facilitate the process, it to find ‘True North’ for an organisation. Yes, that’s why I called my firm True North Group, and used the tagline ‘giving your business direction’. Once you find ‘north’, once you get alignment in an organisation, it’s a beautiful thing to watch a business literally take off. It’s the concept of 1 + 1 = 3, meaning the whole is greater than the sum of its individual parts.

It’s not about changing a person’s work habits or their personality. In very rare cases, where partners cannot find common ground, alignment, I’ve seen partnership splits. I think that’s healthy. On more than one occasion I’ve worked with husband and wife businesses where the parties are literally in tears and on the verge of divorce. It’s a reality of life, and people are leading lives of desperation and frustration. The husband was out on the road doing sales calls and having lunch. The wife was back in the office managing the budget and trying to find enough money to pay the weekly wages.

Yes, I took them through the SP process, and I can tell that that this couple today have an industry award winning business and still happily married with a nice new waterfront home.

That’s why I have created an accountants training course entitled ‘Building a Better Practice Series’. It’s an online, video based eLearning course for members of TNG Global. The first module covers Strategic Planning. Needless to say, it’s incredibly valuable and affordable to everyone, thanks to the technology available these days.

If you are interested in ‘face to face’ consulting with me, I’m available. Simply email me and we can set up a time to chat and discuss. If you don’t have my email address, go to the Contact Form at the bottom of our home page at: www.tng-global.com

If you wish to learn more about becoming a member of TNG Global, click the button ‘Join TNG Global‘. Become a ‘Blue’ member for just USD$39.00 per month. SAVE more by subscribing to the annual membership.

Join TNG Global

Accountant Case Studies
To repeat what I said in Part 1 of this series:

Changing the direction of your Practice and your life is a bit like a New Year’s resolution to give up smoking or weight loss. It cannot be done unless you are fully committed. No excuses. That takes time, it takes discipline, and … having good reasons for change.

It’s vital to make a long term commitment.

Lesson 5 is about creating a clear, focused vision and that is best achieved via a strategic planning process. Just this week I was chatting with a North America accountant that went through a strategic change process a few years ago. We met in 1999 and he attended one of my training programs. He says:

“As part of the change, I divorced my two business partners, sold all my real estate and jumped into a new way of life, and business. Basically I moved with my two key staff to an independent location, invested in paperless office software and am now able to do everything I need to do online, with visits to the office to do face to face meetings with clients. My goal in the medium term is to sell the main practice to the staff or an outsider. In the meantime I’m for the most part still having fun. I’m always looking at new things to learn and new ways to do business – so I’m hoping to get some inspiration from TNG Global.”

Let’s talk about creating a vision for an accounting practice. In Part 1, I promised I would share with you some facts and figures about my own Practice during the growth period. I’ll also use another accounting firm as a case study as I worked closely with them over a number of years.

What are the key drivers to improve performance? Profit is not a driver, it’s the result of certain actions. Beyond profit, there are a small number of key metrics that drive the performance of a professional services firm.

What’s more important is to monitor trends over time. Make decisions based on facts and fine-tune strategy. For example, our average fee per client increased from less than $5,000 to over $30,000 over a 5 year period. That’s huge. I can hear you screaming at me “my clients wont, and cannot afford to pay those kind of fees”; “you must have different clients to my firm”. Well, that’s simply not true. I started growing my firm from a base very similar to you. My clients were nothing special, but like many businesses, they had great potential to grow if guided.

The solution is marketing. But wait …

Accountants are cost conscious. I get that. Cost cutting is the most primitive and simple strategy to increase profit. However, focusing on costs alone to grow a business is really dumb. If I hire a qualified accountant and pay them $100,000 then I expect a return. Something above $300,000 in billables, right? The same applies to marketing.

Very few SME business owners and accountants I’ve ever met (and I know a lot of them) understand how to run a corporation. There is a reason why 98% of the worlds’ businesses are SME’s with less than 15 employees. Marketing is like oxygen to a business. Without marketing, it will die. Now, I can hear you saying things like “it’s unethical”, “accountants aren’t allowed to advertise”; “I’ve never needed to spend money on marketing in the past”; etc.

Accountants already have a de facto ‘marketing department’. It’s the thing they complain about often. The Government. It’s these mandatory rules and regulations that keep you in business. If it was suddenly optional to file an income tax return, where would your Practice be today? Write a thank you letter to Inland Revenue!

Seriously though, it’s true. I’m sure you understand by now that I think differently. One of my ‘secrets’ is marketing. It’s such an important issue that we’ll devote specific time to it in a future post.

So, the TNG growth path accelerated from less than 10% per annum, to around 50%, and the reason is marketing. The question is: “grow what?” What kind of Practice do you want? A colleague in Sydney and a partner of one of the Big 4 accounting firms said to me: “Marc, I’ve spent the past 20 years climbing the ladder to success. The problem I now realise is that the ladder was propped up against the wrong building!” Lesson 5 addresses this question and the recommended solution is strategic planning.

I’ll mention one more metric that I’m proud about, and that is collections. Accountants are notoriously bad at managing accounts receivable. It’s not unusual to find average collection rates beyond 90 days and in some cases 6-12 months. Hey, I actually worked with a Malaysian accountant who often collected fees after 12 months. Clients handed over a cheque the following year when the books arrived to start the next year’s work! OMG.

In my own case, I managed to get collections below 14 days, and often the client WIP ledger was negative. Can you imagine that? I certainly believe I can add tremendous value to a firm strategically in this aspect of their Practice. I’m an advocate of value based billing and fixed fees, but it’s not as simple as that. You guessed it, that’s a topic for another day. Remind me to tell you the story of how I billed a client (and collected) $99,000 over a 48 hour period. Yes, from start of the engagement, to completion and banking!

My point is this. You need to conceptualise and create your ‘dream’ Practice. Anything is possible.

By all means share this post with your partners and make comments. You can print a PDF version by clicking this link: Part 2 (Lessons 3, 4 & 5). Feel free to email me with any questions.

In my next post, I’m going to help you find more time. Accountants are busy people, overloaded. I get that, so we’ll address that next. Till then, start dreaming, and … together, we can make a difference in the world.

Have a great day!

Marc R. Bruce
31 October 2015

 Suggested Plan of Action

1. Lesson #3 – Be a great implementer. More action, less talk. Just do it.
2. Lesson #4 – Keep things real. Be honest in assessing your current circumstances. Organise facilitation of a Strategic Planning session for your Practice. Use the resources available to your here at TNG Global
3. Start conceptualising a clear focused vision for your business and your life – Lesson #5.
4. Join TNG Global today!