Most accountants decide to run their own practice because of the “promise”. It is the reason my dad worked for himself as a tax technician (until he retired this year), and it’s why most accountants want to do so too.
The “promise” is made up of 3 things.
When you decided to run your own firm it is probably because of one of these three things:
The first reason is Independence. When you run a successful practice, you gain independence and have the freedom to work in a way that suits you and your family. My Dad knew that he didn’t want to be tied to the corporate desk, and I’m sure you felt the same way.
The second reason is Impact. The thing I love most about accounting firms that are making an impact, is the contribution they are bringing to businesses and the results they are getting. If you care about making a difference I am sure thats why you made the leap from a day job.
The third reason is Income. Running your own firm can create incredible cash flow. You can earn a great living, lead a great lifestyle and fulfil your dreams.
Despite best efforts, the majority of Partners I run into aren’t achieving these three goals. In fact most of them are overworked, underpaid and not able to run the firm they dreamt of when they escaped the rat race. It’s tough to make an impact when you can’t make a living.
Of the firms that are doing well, most are exhausted from fighting fires and before long exhaustion turns into resentment. This can then lead to depression and burnout.
So why is this the case for so many partners in accounting firms?
1. Referral Marketing
The first reason is that the marketing that accounting firms do is too passive and patchy.
They think “We built our business on referrals, we can continue to do so, I don’t need to do marketing”.
Or they might do marketing in spurts. When it’s not the busy tax season they will explore SEO marketing or write a couple of blogs. But after a while they take their foot off the accelerator and ease back.
The simple way to know if you are relying on referrals is if your marketing is too passive and you don’t get enough high value leads.
2. Not Clear On Value
Wouldn’t it be nice if all this talk of being commoditised would just go back under the rock that it crawled out from. Unfortunately it has been spoken about so much that firms and their clients are starting to believe it.
Firms often know that they do a great job, they know that clients are unable to do what they do, but the problem arises because they can’t articulate how awesome they are and how they actually help their clients.
This inability to highlight value in prospects eyes means firms compete on price. They have many clients paying too little for the value they provide and no cash-flow to hire more staff.
3. Unscalable Model
The third reason isn’t a marketing problem or a value problem but a model problem.
The reason there are exhausted partners of accounting firms is that the model they bought into when they started their firm is broken. Their model is based on time for money. Whilst on paper it may seem like a good hourly rate, the problem arises as they run out of time.
Understanding why they are not earning the money they want to, and why they work too many hours leaves firms with a choice to make.
You can continue doing things the way you have always done, relying on referrals, not sharing value and working too many hours for too little money. But there is a cap on how successful you will be, because it’s too hands on, and labour based. It’s unpredictable, slow and effects home life as well as business life (which can make you miserable).
The other choice is the opposite of unpredictable, slow and miserable. It is predictable leadflow, a scalable practice and freedom.
Which would you prefer?
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