Mistakes to avoid if you want your practice to flourish and grow
Starting your accountancy practice is exciting, isn’t it?
At last, you’re your own boss! You get to choose who you work with, the kinds of services you provide, the technology you use. In fact, you get to choose everything, from the name over the door to the biscuits in client meetings.
While starting up is exciting, it can also be overwhelming. So many decisions to make, so little time. And now it’s up to you to find the fees that will cover your bills. The pressure’s on.
It can be tempting to just get on with it, to get your head down and churn out the work. That way there’s at least some income coming in, right? Even if you end up working way too many hours, for clients who don’t really appreciate you, for fees that aren’t really what you deserve.
So, in the end, it feels like you aren’t choosing the way you run your accountancy practice at all: it seems to be running you instead.
I’ve seen this happen time and time again in the 25 years I’ve been working with accountants. Starting an accountancy practice the wrong way leads to all kinds of issues further down the line. There are three big mistakes you simply must avoid if you want your practice to flourish and grow.
Big mistake 1: the wrong mindset
Many accountants who start their own business believe that they are the business, the product, the solution. They believe that their clients are buying them. They retain an employee mindset, as if the business is dictating what they can and can’t do, the hours they work, the income they take. Even though they’re the one in charge.
This becomes a self-fulfilling prophecy. If you run your business with this mindset, the business will always rely on you. No matter how much you grow, no matter how many team members you recruit, you become more and more overwhelmed with the demands placed on you.
The business owner mindset thinks differently. They understand that clients are buying the solution that they, the business owner, have created. They ensure that their team delivers to a consistently high standard. They put the mechanisms in place from the outset to ensure true scalability and reduced reliance on themselves. So, they continually shift from working ‘in’ the business to working ‘on’ the business.
Holding onto a business technician mindset turns you into a bottleneck. It eats into your personal time and can lead to stress and sleepless nights.
Big mistake 2: no clear picture of success
The focus of any new business is to get more clients and keep going. But many accountants don’t stop to think about what they’re aiming for.
If you don’t invest time in defining a vision of what success looks like for you, how will you know when you get there? How will you know if you’re making progress?
You need to have clarity on the income you want to earn, the hours you want to work and your timeline for exiting (yes, even when you’re just starting out). What kind of accounting business do you want? Will it be scalable? Will it deliver advisory services and added value? Will it work with high quality clients or offer cheap, budget services?
With a clear vision, timely goals and milestones it’s easier to measure progress, put strategies in place, define your key performance indicators and make decisions.
Without a vision, your focus is often on taking on any client to build revenue. And you win those clients by promising them the earth, negotiating on fees (and losing) and accommodating them as much as possible.
This quickly leads to a full client list but at low, unprofitable fees. Soon, you’re swamped with work, lacking the profit to hire help and tied to clients who demand instant service.
Big mistake 3: the wrong pricing strategy
As in mistake two above, when you’re starting up your practice, you need all the clients you can get. So, it can be tempting to go down the cheap route and price your services very low.
But those prices don’t necessarily reflect the value you can bring.
Remember that most people only care about the value. They aren’t actually price sensitive; they’re value sensitive.
We’ve all heard expressions like … ‘you get what you pay for’ and ‘if it’s cheap, it’s probably poor quality’. Accountants who under-price their services tend to end up with clients who are price-sensitive nit pickers. You don’t enjoy working with them and you soon start to feel like their slave.
Think about how you could add value to everything you do in a high impact, low effort way. This will help you to sell your services for significantly higher fees than your competitors.
Starting your own practice is a massive achievement and it really is one of the most exciting times of your life. Avoid these mistakes and make the right decisions now and you’ll be creating a business that’s profitable, enjoyable and sustainable well into the future.
These are the big three, but actually there are four more mistakes that are really common when starting an accountancy practice. I’ve created a free guide that explains all seven mistakes and shows you how to avoid them; download the guide. There are also guides for the other stages of an accountancy practice, right up to when you’re ready to exit. And I’ll be looking into the mistakes accountants make at all these different stages over the next few months.
Shane Lukas – AVN for Accountants