Category: Efficiency

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Does 2% feel like nothing? 

It’s a pretty small increase but increasing your prices by 2% will increase you turnover, your profits, and your cash.  

Reducing your costs by 2% will increase your profits and your cash. 

Increasing your clients by 2% will increase your turnover, profits, and cash. 

This is the sort of thing that we identify when we carry our Clarity reviews for clients. We hook Clarity HQ software up to Xero etc to see where they are today and then play with scenarios to improve the business’s profitability, cash, valuation, and efficiency. But we’re not the sort of accountants who just tell you what you need to do, our business advice goes much further. 

We advise on how to do it and help clients by agreeing an action plan, any additional support they need (from us or our network of associates), and accountability to make sure that it gets done. 

Tech does so much of the day to day work which means that accountancy has moved on and isn’t just about measuring last year’s numbers. Instead of number crunching we like to CHANGE THE NUMBERS. 

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Which CRM? 

After last week’s post I was asked which CRM we use.

As I run three businesses (Minerva Accountants, Hudson Business Advice, and Minerva Technology) we use two different systems.

You can start off with a free CRM or even set up your own spreadsheets of contacts and actions but at some point you will (hopefully) grow to a point where you need something with a bit more oomph and functionality so you will need to invest a bit of money. Fortunately most CRMs have the ability to import a spreadsheet of contacts and data so it’s easy to migrate. What takes more time is setting up your workflows and funnels.

At the moment we use Active Campaign (AC) across all three businesses because it has good email campaign functionality and we can set up different tags and funnels for each business. This includes sending out these weekly Top Tips to two different mailing lists. It connects with Outlook and we can set up sales funnels and keep notes. We use this primarily for prospects and running the coaching and tech business which have simple workflows.

To run the more complex business of Minerva Accountants we use Bright Manager (BM). Running an accountancy (or bookkeeping) business comes with all sorts of deadlines and checklists which BM can handle. The software comes with predefined workflows but you can tweak these or create your own. There are many competitors at the moment, all with their own strengths and weaknesses, and the market is changing rapidly. For us the downside of BM is the reporting and, with no API available, we have to pull out reports into Excel and manipulate them there. I have spoken to their product team about this so watch this space. Having a separate workflow system means that personal, essential emails and reminders are separate from the general ones. Clients are enrolled on both systems so they still receive the Top Tips and any bonus offers through AC.

Specialist software for accountants includes Engager, Karbon, FYI and others but, in my opinion, there is plenty of room for somebody to sweep the market at the small business end.

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How to create a budget for your business

How to create a budget for your business

Businesses and individuals with plans are more likely to achieve those results. But how do you go about it?

  1. Personal objectives – the objectives of owner managed businesses are often a subset of the owner’s personal objectives.
  2. Business objectives – what do you need from the business to meet your personal goals?
  3. What products/services do you have to sell?
  4. Who is your ideal customer?
  5. What do you know about your competition and how you can differentiate yourself from them?
  6. Sales plan – what and how much do you need to sell? Is this realistic?
  7. Investment plan – What investment do you need to make in staff, training, marketing, equipment, and technology
  8. Will this achieve the desired results?
  9. What actions do you need to take (and when) in order to stay on track to meet your goals?

You can do this on your own but, if you’d like more help, then we have a budget workbook and accompanying videos.

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How to work faster 

Why do some people work faster than others? Sorry, I have no idea but I did hear of a study that discovered that manual work rates could double between slow and fast workers. The more complex the work, the higher the multiple so that a software engineer might be 16 times faster than a peer.  

When I set up my first accountancy business my plan assumed that everybody worked at the same pace as me. When I started recruiting (good) staff I found that this wasn’t the case and that I was a lot faster than others. I had to adjust my business model accordingly. We still keep approximate timesheets to track individuals’ work rates for planning purposes. 

So how can you help slower workers to speed up? 

  • Have proper processes so that everybody knows the most efficient way to do things 
  • Training and processes help people to get started sooner on each task with less planning time 
  • Help them to find the best time of day and working environment for them to do their ‘deep’ focused work and fit simpler tasks around this 
  • Build in controls and reviews so that faster work doesn’t become sloppy work 

When building your business cost model consider cheaper, slower trainees/junior staff vs more expensive but faster qualified/senior staff. When could you use different staff? 

Plan your work and your resource accordingly. Most of our accounts work is carried out by other members of the team and I only review it. This also means that all year end accounts have the benefit of at least two sets of eyes. BUT if a client needs something quickly, I often do it myself. The costs are passed on to the client if the extra speed is needed because they have delayed. 

Any other ideas on how to speed up work rates? 

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How much do you charge?

I’m always tempted to say “let me get my tape measure out and work out the length of that piece of string” but somehow, I bit my tongue and explain that, like a builder, I can’t quote until I understand the job.

First, I need to understand the starting point:
• Type/complexity/size of business
• Limited/partnership/sol trader (we don’t handle personal tax except for directors of our business clients)
• Bookkeeping quality and software

Then I need to understand the desired end point. What services they want /need.

This helps me to understand the level of staff required, how much time they will spend, and any specific skills or tech the work needs.

Finally, I need to understand if we’re the right accountant for them:
• How tech savvy are they so that we can automate more work?
• What is their attitude towards paying tax?
• Are they looking to grow their business or make other changes where they can benefit from our business advice?

Only then can I produce the magic number from my costing spreadsheet.

In the meantime, we try to give a ballpark figure and put some sample packages on our website. We’re not cheap but, according to our testimonials, we’re worth it.

How do you set your prices? Do you quote one single price for an identical item, or does it need to be tailored to the specific customer?

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What recruitment crisis? 

On the one hand I hear people (accountants and other businesses) complaining about the lack of suitable recruits, on the other hand I see my kids’ clever school leaver friends working hard in short term jobs because they can’t find apprenticeships to launch their careers. 

I don’t know about other industries but in accountancy we have created our own crisis. We have a shortage of qualified, experienced accountants today because firms cut back on their training budgets a few years ago.  

Personally, I like taking on trainees as I can train them to do things the way I think they should be done. No ‘bad’ habits to unlearn from previous workplaces. And they’re usually pretty tech savvy to cope with our modern processes. 

In a relatively short time, you’ll have a fabulous employee, an excellent return for your investment of time and money, AND you’ll have made a positive contribution to somebody’s life (all my previous trainees are now in management positions and some on the cusp of partnership). For us their full-time availability during college holidays balances the additional time off required by our part timers who require additional time off with family at this time. 

If you’re really struggling the apprentice minimum wage is peanuts but hopefully you can afford a little more. 

So here are just a couple you might like to have working for you in the Bristol/Somerset area. 

One talented photographer looking for something that uses their analytical skills.* Currently doing pub work. 

One interested in tech/business looking for cyber security or similar. Currently stacking shelves. 

*I’m currently looking for 21 new clients to cover one trainee salary. Happy to accept referrals for coaching and/or company accounts. If you can offer a suitable job before I can then there are plenty more school leavers for me to recruit (I just happen to know these two) 

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Should you be selfish in business?

I believe that you should be selfish in business, but perhaps not in the way that you think.

When you set up your business you gave up regular income and security in order to run the business of your dreams. Your dreams may be similar to mine or perhaps not, but the point is that we want something out of our business in the form of work-life balance, profit, or passion.

And we should be selfish about structuring our business to achieve our personal goals.

I see far too many business owners who are working long hours for below minimum wage or just not enjoying whatever their business has become. Some of them come to me for coaching. They are worse off than if they had stayed in their imperfect employment and they need something to help them out of the rough and onto the fairway towards their original goal. (And there, as a non-golfer, my golfing analogies end!)

Are you where you want to be in your business? If yes then give yourself a round of applause, if not then reply to this email for news on our various coaching programmes.

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Doing business on Deep Space 9 

I’m a bit of a scifi geek and I love the Quark character who owns the bar in Deep Space 9. He has some great business traits. And some bad ones! 

The good news is that Quark tracks his KPIs (on an hourly basis which is probably overkill!).  

In Season 2 Episode 10* Quark has enlisted a musician to draw more visitors to the bar BUT the musician is so good that nobody is actually drinking or buying food. He talks about his indicators which feed into his projections which in turn lead to profits.  

In one of my businesses I track speaking events because the more I speak, the more enquiries I get for coaching and courses. In another I track networking and ‘coffee’ meetings as relationship building leads to more referrals. 

What lead indicators do you track in your business that you know will lead to more profits in time? 

*in case you want an excuse to watch it  

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The problem of growing too fast

It sounds as though it’s a nice problem to have but many small businesses fail at this stage

  • Overtrading – lack of cash to cover your higher costs while you wait to collect those higher debts. Clamp down on your credit control to ensure that you have sufficient working capital
  • Lack of systems – don’t reinvent the wheel but create a system for anything that you’re likely to do more than once. I’m running a live webinar for accountants on Tuesday 16th so email us for the link
  • Unable to find the right people – you will probably need more staff but you may also need different staff for a scaleup rather than a start up. If you prefer to do the work then you could employ a manager to run your business. I like to train my own team as we work very differently to many traditional accountants but you will have more choice in recruits if you offer REAL flexibility on hours and location.

What have you found helpful as you grew your business?

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How I manage to run three businesses (and still sleep 8 hours a night!)

People often ask me how I manage to run three businesses.

It started 15 years ago when I set up Hudson Business Accountants and Advisers to fit around my small children in just 25 hours per week. There was a lot of juggling parenting and business responsibilities to get the balance I wanted. I sold this business for 32% above average as it was set up to run efficiently without me.

Roll forward a few years and those small children have now left home for university and I run three new businesses

  1. Minerva Accountants does what you might expect: accounts, tax, bookkeeping and business (not just tax) advice
  2. Minerva Technology is a small fintech startup
  3. Hudson Business Advice is mainly me speaking, writing, and coaching other accountants and business owners how to run their own business more efficiently and profitably.

So how do I do it?
• I employ people better than me
• I am happy to delegate to these and other experts and subcontractors
• I invest in technology (hence why I had an idea for the tech business!)
• I choose clients that are a good fit for our services and don’t try to service unsuitable clients.

How could you manage your business more efficiently and profitably?

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