XU Magazine - Issue 11

What’s needed to take the first step to becoming an Advisory-led practice?

In this article, Heather Townsend, author of the forthcoming book ‘The Profitable Advisory Firm’, examines what’s stopping you from getting started with building advisory revenue…

Given the unprecedented amount of change to the accountancy industry you’d be forgiven for thinking that most  firms would be actively changing to remain pro table and sustainable in the future.

The stark reality for most firms is business as usual. Talk with any accountancy firm owner and they will typically tell you that practice needs to evolve beyond offering Xero to their clients… but they have not quite managed to find the time to start evolving. That’s the issue with industry disruption. The typical pattern is the disruption happens slowly and takes a while to properly gather pace before suddenly making a massive impact on an industry.

Accountants can learn the lessons from the world of book retailing

Let’s take the world of publishing as an example of disruption. When Amazon sold its first book online in 1995, the American bookstore chain Borders Books and Music had a thriving retail empire with a top line revenue of about $1.6 billion a year in sales. At the time Amazon started, people were more worried about the big bookstore chains such as Barnes and Noble, Waterstones, HMV and Borders squeezing out the small independent book retailers, than Amazon’s influence on the marketplace. Many analysts were predicting that Amazon would go bust like many of the early dot com companies.

What Amazon did, which its competitors didn’t, was lead the e-commerce and ebook revolution. This resulted in them changing the way we shopped and consumed books, music and films. Like other major industry disruptions, this disruption took time. It didn’t happen overnight. Although Amazon started in 1995, it didn’t cause a massive impact on the book retailing sector for at least 10 years. In 2005, ten years later after Amazon sold its first book, Borders, the second largest US book retailer, still had 15,000 employers, 1200 domestic and international stores. In 2011, the year when Borders declared bankruptcy, Amazon sold more ebooks than print books for the first time. Borders’ ebook device, Kobo, was introduced too late to save the retailer.

Borders and HMV paid the price for not changing quickly enough

Borders ultimately paid the price for not adapting quickly enough to the e-commerce and ebook revolution. Amazon changed the way we shopped. Cloud and digital technology is changing the way clients want to interact with their accountant. If you put your head in the sand and refuse to change how your firm works and services clients, the very same fate as Borders could be awaiting your firm.

Lack of time is normally the biggest barrier to getting started

The question is, what’s stopping you from starting to introduce advisory services to your firm? Time, or more accurately, lack of time is often the biggest barrier to getting started on the journey to becoming an advisory-led firm.

“Nothing is more exhausting than the task that’s never started, and strangely, starting is often far harder than continuing.”

Gretchen Rubin, Author of Better Than Before Be honest with yourself, how long have you been telling yourself that your firm needs to adapt for the future? But you’ve not managed to take the first step in adapting your firm. All those urgent AND important tasks keep on stopping you from starting. Perhaps you are tricking yourself into waiting for a quiet period to then get started. But when was your last real quiet period? Or enough of a quiet period to do more than take a break and recharge your batteries? That’s the problem, when we subscribe to the illusion of tomorrow, we never quite manage to take the first step and get started.

What’s needed to take the first step to winning advisory work? Leadership is often what’s missing. The leadership to prioritise adapting for the future. The leadership to take the tough decisions. The leadership to go outside of your comfort zone and take the first step in the process to becoming an advisory-led firm. But most importantly, the leadership to stop, take a pause and allocate the time to evolve to remain profitable and sustainable for the future.

If you want to have a profitable and sustainable firm both now and the immediate future, it’s now the time to step up and start the journey to becoming an advisory-led practice.

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About the author

Heather Townsend

Heather Townsend, the practice management expert, is the award-winning author of The FT Guide To Business Networking and The Go-To Expert. Over the last 12 months she has helped her clients add over £1 million GRF to their practices. To read more articles by Heather, visit growingyourfirm.co.uk