Building A Better Practice

In the present business climate, finding new clients isn’t the problem faced by public accounting firms.

Managing the growth that this creates, however, can be something of a predicament for many.

Growth can be a wonderful thing, but it does bring problems.

The initial problem is usually finding good people to service these clients. There are, of course, services out there, to help with this. Consulting firms, like my own, who provide recruiting services to Canada’s public accounting firms can offer a solution to this quandary. Yes, there is a cost involved, but when compared to the alternatives, it’s usually money well spent.

So, let’s assume that you have a steady flow of good people joining your firm in step with the growth you’re experiencing, what other problems does growth bring?

Cash flow can be one. Just think about it. Winning a new client today may not lead to cash in the bank for about eighteen months. However, most smart firms now ask for a retainer upon accepting a new client to cover the initial costs in servicing them.

So, maybe cash flow is not the problem.

If finding staff and managing cash flow are not the big issues, then what could possibly be the problem?

Let’s get straight to the point shall we?

Quality of life, time with the family, firm profitability and partner compensation are some of the big issues that I see almost everyday in stressed out CAs, CMAs and CGAs.

In my last column, I spoke about creating time to create work/life balance, so this time, let’s focus on reducing stress and increasing firm profits.

Most stress felt by practitioners is self-induced. It basically comes down to accepting and continuing to serve high maintenance clients. These people are the ones who represent the bottom 20 percent of your client base, but who create 80 percent of your problems.

Call them ‘Prima Donnas’, call them ‘Pains in the Butt’, call them anything you like. I simply call them bad clients.

Bad clients are emotional vampires – they suck the will to live right out of us. Firms who continue to pamper these types of client are, coincidently, usually the least profitable of firms I see.
Their Partners are always totally stressed out, and this often filters through to their staff. That, in turn, creates a downward spiral. People get the ‘Sunday Night Blues’. Sick days go up. Client service levels go down. Client satisfaction, across the board, not just with the ‘bad clients’ goes down, and suddenly your practice is running you, you’re no longer in control of your own practice.

This, in turn, is detrimental to your own quality of life.

Walking around like a tightly wound ball makes us all downright miserable and not fun to be with.

So is this it? Is this our lot? Are we destined to be miserable for the rest of our working lives?

No!

There is a better way.

A way that creates time for us to spend with our families, while becoming a steadily more profitable in the process.

Do I have rocks in my head? Well, some might say so, but the above scenario is absolutely attainable. I know there are, because I work with many firms who have achieved exactly that.

What are they doing that is so different? How can they work less and make more money? How can their productivity go up and have more time off?

Well space restrictions prevent me from telling all here – it would take this entire edition of ‘The Bottom Line’!

But I can tell you one thing, and it’s a big one, they fire their bad clients!

There, I said it.

Letting bad clients go can be a very liberating experience.

Bad clients take more than their fair share of firm resources. These are resources that you should be devoting to your best clients, not your worst.

Give your client list to your most respected staff member and say to them ‘please put a line through any client on this list who you would be delighted never to have to deal with again’.

Three things will happen.

1. You’ve just made a new best friend.
2. Your staff will be delighted when they see you actually follow through and fire these people
3. You’ve now just created a chunk of free time for your staff and partners, time that you can devote to spoiling your better clients

The next thing is to look for better new clients than you might have accepted before.

Now you’ve got rid of the bad clients, the referrals they might have made will also disappear, and that’s a good thing too. Think about it, what type of new client do bad clients most often refer to you? Yes, more bad clients! So now you’ve fired them, the referrals of more like them dries up too. Great.

The next thing is to go out looking for a better quality of client, based on a set of criteria that only you can determine.

If this topic interests you, you might like to come along to a free seminar I am doing in September 2007 in Mississauga. ‘Best Practices For Building Your Practice’ brought to you by CCH Canadian Ltd and Scotiabank. If you’d like to come and join me for this free breakfast seminar, please visit www.cch.ca/bestpractice to reserve your place.

© MFA Group Inc, 2007