Mojo, according to Marshall Goldsmith, is that “positive spirit towards what you are now doing that starts from the inside and radiates outside.” My interpretation of this is that you feel great about what you’re doing because you’re accomplishing personal goals, it’s taking Read more…
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One of the most valuable services a business advisor can offer is Key Performance Indicator monitoring. Read more…
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Mark Cuban, a self made billionaire owns among other assets the Dallas Mavericks, the 2011 NBA Champion Team. He bought the franchise in 2000 from Ross Perot for $285 million. According to Forbes, it’s now worth $438 million. Here’s what he did to add a cool $153 million to his net worth which now stands at about $2.5 billion and some thoughts on what you might do for your firm and your clients. Read more…
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I recently read an article about U2′s soon-to-be-released re-issue of its Achtung Baby album. These guys, or their business advisers, certainly know how to price and/or leverage all of their considerable talent and content.
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In the course of a conversation with one of our members he said “in these tough times you really have to keep your eye on the competition.” I asked him who he saw as his competition and predictably, I suppose, he said “other accounting firms of course!” Read more…
Popularity: 6% [?]
At 99 degrees water is merely hot, at 100 degrees it turns to steam and can move locomotives. Just one degree—a one percent change—makes the difference. This is a great metaphor for business. It is always the little things, the small improvements, that yield big results. Let’s take a look at the impact that small improvements in the key drivers of profitability have on the bottom line–you could have a conversation with your clients along these lines. Read more…
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I’ll get to this question in a minute but I first want to relate a story.
Somerset Maugham wrote a short story called “The Verger”. It was about a middle-aged a man named Albert Foreman who had been a verger for most of his adult life at St. Peter’s Church, Neville Square in London. The church council discovered that he could not read or write so he was fired. On his way home, disenchanted with life and uncertain of what he was going to do, he craved a cigarette but to his dismay he couldn’t find a shop to buy a pack. Thinking that he was probably not the only person in London looking for a shop to buy a packet of cigarettes he decided to establish a newsagency and tobacconist store. It was an immediate success so he opened and other, then another until ten years later he had 10 stores and was very wealthy.
One day his banker needed him to sign some papers and when he told the bank manager he could not read or write the manager was shocked. The banker said “do you mean to tell me that you have made your fortune without being able to read or write; what would you be now if you had been able to?” ”I’d be the verger at St. Peter’s, Neville Square” he replied.
There’s a lesson here.
Several years ago one of our members in Sydney lost 30 percent of his fees when the firm’s largest client was acquired by another company. This experience reminds us of the danger of having an unbalanced portfolio of clients but that is not the reason I’m relating this story. When this happened our client’s initial response was one of disbelief. He told me his felt totally depressed and even contemplated leaving the profession because, in his words he’d “worked so hard to develop the relationship with the client that [I] could not face having to do this again.”
However, in keeping with Thoreau’s advice that “all misfortune is but a stepping stone to fortune”, he re-grouped and within 18 months not only had the lost business been replaced but the firm’s bottom line had increased by 25 percent because the previous client had so much leverage over the firm, the margin earned on the work (which included a significant audit component) had been cut to the bone. Not only that, the client didn’t treat the firm’s team members very well so there was a big improvement in morale.
Let’s take a closer look at this.
What he accomplished in 18 months was a 43% growth in fee revenue which is equivalent to 27% per year! This was for a firm that for the past 10 years had averaged about 10% per year. Of the 43% revenue growth, about half came from additional services and pricing adjustments for existing clients and the remainder came from new clients.
No less important was the fact that the team members were happy to see the last of the client despite being concerned for their jobs in the first instance. Further, because the fee loss had been replaced with a number of new clients the firm’s risk exposure from client loss was dramatically reduced (although having had this experience, the loss of the big client turned out to be the best thing that could have happened—remember, good is the enemy of great) and its pool of potential referrals significantly deepened.
But what is truly amazing is what can be achieved when adversity looks you in the eye. Annual revenue growth of 30% is extraordinary but, as proven by this firm, it’s possible any time you’re willing to give it a shot.
And that brings me to the title of this post, what might you be able to do if you decided to rid yourself of all of your low level tax work? Perhaps you’d be able to achieve 30% revenue growth and 25% profit growth.
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One of reasons some accountants are reluctant to offer business advisory services to their clients or prospective clients is a fear that their credibility to act in this capacity may be questioned. I don’t believe this should be an issue so I’ve put together some thoughts on how you could respond to the questions that may occasionally be raised. Read more…
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I was shocked today to hear that a dear friend, and previous partner of mine when I was at Rutherfords, died suddenly last Friday. He was in the prime of his life. Read more…
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For the last 40 years I have been passionately interested in the factors that are associated with practice profitability. I’ve seen some fabulously profitable practices (e.g. where owners are making in excess of $1 million each per year) and some extraordinarily unprofitable ones where, even after many years in the business, the owners are putting in just as much effort as their colleagues in highly profitable firms but they are making only a fraction of the income. Read more…
Popularity: 14% [?]