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…
Popularity: 5% [?]
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% [?]
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.
Popularity: 2% [?]
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…
Popularity: 17% [?]
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% [?]
In 1981 after being appointed CEO of General Electric Jack Welch asked Peter Drucker to visit him at the company’s headquarters. They spent a day together during which time Drucker asked Welch just two questions.
The first was: “If you were not already in this business (referring to each of GE’s business units) would you enter it today?” The second question was: “If the answer to the first question is no, what would you do about it? Read more…
Popularity: 11% [?]
Back in 1970 I started a small business with 2 of my work colleagues. Here’s the story about how it changed my life forever.
Popularity: 30% [?]
It took me 30 something years to fully appreciate what he meant but when I did it was a great lesson. When a new business (read accounting or advisory practice or any business for that matter) is started hunger for growth leads to the founder(s) being very active on the marketing front. They spend a lot of time working ON their business as Mr. Gerber says. Read more…
Popularity: 30% [?]
In 2002 I published a lengthy White Paper on the competitive landscape of the accounting profession. Ten years have now elapsed so I thought it would be an interesting exercise to review and update it. I’m pleased to say that for the most part my thoughts relating to the changes, challenges and opportunities faced by the profession have been close to what’s actually happened. I intend to release a revised White Paper in due course but I thought it would be timely to invite you to re-visit one part of the White Paper that I think is very important in the current economic climate. Read more…
Popularity: 22% [?]
As I have discussed in a previous blog posting, time and billing systems that are in general use masquerade as practice management systems but even those that have the potential to provide useful management information are not generally used for that purpose. The only “management” support they give is to monitor time charged by people for billing purposes. Read more…
Popularity: 35% [?]