If anyone had sat me down and said this is exactly what you need to do when I started my accounting practice, I probably wouldn’t have wasted so much time trying to figure out what would work and what wouldn’t.
My biggest challenge back in 2010 was that even if I had wanted to ask someone how to run a practice, no one was going to be able to tell me how to run a truly 100% cloud-only accounting firm.
Because it didn’t exist.
There was not a single accounting firm in Australia or the world that had decided to go all in on running a true cloud accounting firm. So finding a cloud accounting mentor at this stage of my firm wasn’t really an option.
Fast forwarding to today…
What a hell of a ride I’ve been on. Being able to scale Interactive Accounting from 1 person to 15 staff in 4 years, generating multi-millions in revenue and making our way into the top 100 accounting firms in Australia was amazing, and it felt truly rewarding.
We took this story on the road to try and tackle the notion of starting, growing and selling your accounting practice.
Let me give you some of my best advice and key points for what you should focus on when you start your accounting firm.
Starting a firm: (Also known as frame and scramble). Year 1-2: Frame & Scramble
Think about why you left your role at your last accounting firm. You probably had the thought, “I can do it better”; that’s where we all start. We get sick of working for the man, we weren’t given opportunities to progress and we weren’t able to influence the direction the firm was headed. (Keep this in mind as it’s important for when you go to grow and scale your firm.)
Your first goal should be to get to ‘Replacement Salary’, meaning you’ve earned enough in your first year of business to pay yourself a decent wage. For whatever reason, everyone’s magic number is normally around the 100K mark.
Set your hypothesis
This is really important to do when you’re just starting out, even if your plan changes over time (and it will). Your hypothesis allows you to create a plan and determine who you are trying to be, who you want to service and why you think they should be using you. Another way to say it is, you need to know your WHY? You need to pick your NICHE? And you need to understand what your VALUE PROPOSITION is.
I recommend you check out leanstack.com to get a lean canvas model that allows you to clearly lay out your hypothesis (and, as I said, it will change over time and that’s ok; you need to start somewhere).
You need to create a brand (Marketing).
My best advice. Don’t be a tightarse. I get it; you’re an accountant, you don’t know marketing and you’re counting every dollar. Don’t do that when it comes to your brand for your business. These days you can have a logo designed for just over £5 on fiverr.com, a website designed and built for a couple of hundred dollars. It’s not expensive and the barriers to creating beautifully crafted material for your business are very low.
My second piece of advice, “Take your name off of the F**King door.” If you want to build and scale your firm. You need to create a brand that your clients and team can buy into. I don’t want prospects, clients or anyone else calling Pearson & Co looking to speak to Mr. Pearson when they want to escalate or speak to the “main man”. Think of a brand and a name that resonates with you. At Xerocon you’ll be surrounded by hundreds of firms that have created amazing businesses around a brand. Think Accodex, Illumin8, Aptus Advisory, Consolid8, Two Sides. All amazing firms that have created a brand for themselves.
Starting your firm
Do it from home. At this point there’s no point shelling out cash you don’t have. Work from home, the cafe, the library and anywhere in between. The cloud allows you to meet people and work from anywhere; use it to your advantage.
The Tech Stack
This will evolve as you grow and scale your firm and it’s important to always review your tech stack every 6-12 months because technology changes so damn quickly these days.
Your practice management should be connected to your clients ledgers and the data should flow seamlessly. If you’re running Xero, to Xero Practice Manager and Xero Tax you’re on the right track at this early stage, as everything flows into the other seamlessly.
Look at apps and add-ons as full-time employees. I’ll reiterate my earlier point. Don’t be a tight-arse. Hiring your first employee will cost you anywhere upwards of 60K-70K full-time. Getting the right apps in your business to help automate all of the processes, and manual work you would pay an employee to do, is lucky to cost you 10K for the year. Even if you had Receipt Bank, BGL, Hubdoc, Spotlight, Fathom & Practice Ignition all running in your practice at the same time, it would still be cheaper than hiring a full-time employee. And, to be honest, you’d probably be operating a hell of a lot more effectively.
In this day and age it’s important to understand where you need a human resource versus technology. Technology is starting to replace the manual repetitive work. The other thing you need to realise is, even if you’re not paying for the app, you’re still paying for it in manual labor, your time and your wages. So, one way or the other you’re paying for it; may as well work smarter not harder, right?
My last couple of points on starting a firm
- False starts happen (That’s ok, just keep moving forward)
- Plan for success. Remember, this is chess not checkers
- Hustle, Hustle, Hustle
- Go up and never stop
So far I’ve taken you through how to START your firm and what I learnt going through the journey. If you want to read up on how to grow your firm, you can continue to read that here at https://landing.practiceignition.com/start-grow-merge-sell
Thanks for coming along on the journey.